UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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☑¨  Definitive Proxy Statement
☐¨   Definitive Additional Materials
¨ Soliciting Material Pursuant to Section 240.14a-11c or Section 240.14a-12
AGILYSYS, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement)
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NOTICE OF 20162019 ANNUAL MEETING OF SHAREHOLDERS

To be held on September 15, 2016August 9, 2019


Please join us for the Agilysys, Inc. 20162019 Annual Meeting of Shareholders to be held on Thursday, September 15, 2016,August 9, 2019, at 8:00 a.m., local time, at the company'scompany’s offices at 3380 146th Place SE, Suite 400, Bellevue, Washington 98007.98007.

The purposes of the Annual Meeting are:

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To approve an amendment to the Company's Amended Code of Regulations ("Regulations") to declassify the board of directors;

2.1.To elect the director nominees named in the attached Proxy Statement;

2.To approve amendments to the Company’s Amended Code of Regulations and Amended Articles of Incorporation to require a majority vote, in uncontested elections, for director nominees to be elected;

3.To approve an amendment to the Agilysys, Inc. 2016 Stock Incentive Plan;Company’s Amended Code of Regulations to reduce the threshold for shareholder removal of a director from a two-thirds supermajority to a simple majority;

4.To vote, on a non-binding advisory basis, to approve the compensation of our named executive officers set forth in the Proxy Statement;

5.To ratify the appointment of Grant Thornton LLP as our independent registered public accounting firm for the fiscal year ending March 31, 2017;2020; and

6.To transact such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof.

Shareholders of record at the close of business on July 28, 2016,June 25, 2019, are entitled to vote at the Annual Meeting. It is important to vote your shares at the Annual Meeting, regardless of whether you plan to attend. In addition to voting by mail, you may vote by telephone or Internet.internet. Please refer to your enclosed proxy card and the Proxy Statement for information regarding how to vote by telephone or Internet.internet. If you choose to vote by mail, please sign, date, and promptly return your proxy card in the enclosed envelope.

By Order of the Board of Directors,

Michael A. Kaufman
Chairman of the Board of Directors

August 15, 2016
July [ ], 2019







Important Notice Regarding the Availability of Proxy Materials
for the Annual Meeting of Shareholders to be held on September 15, 2016.August 9, 2019.
The Proxy Statement and our Annual Report on Form 10-K for the
fiscal year ended March 31, 2016,2019, are available at www.agilysys.com.





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PROXY STATEMENT
20162019 ANNUAL MEETING OF SHAREHOLDERS
September 15, 2016August 9, 2019




ANNUAL MEETING INFORMATION


General Information

This Proxy Statement and the enclosed proxy card are being provided in connection with the solicitation by the board of directors of Agilysys, Inc., an Ohio Corporation ("(“Agilysys,"” the "Company," "we," "our,"“Company,” “we,” “our,” or "us"“us”), to be used at the Annual Meeting of Shareholders to be held on September 15, 2016,August 9, 2019, , and any adjournments or postponements of the Annual Meeting. The Annual Meeting will be held at 8:00 a.m., local time, at the Company'sCompany’s offices at3380 146th Place SE, Suite 400, Bellevue, Washington 98007. Our principal executive office is located at 425 Walnut Street,1000 Windward Concourse, Suite 1800, Cincinnati, Ohio 45202.250, Alpharetta, Georgia 30005. The purposes of the Annual Meeting are stated in the accompanying Notice. This Proxy Statement, the enclosed proxy card, and our Annual Report on Form 10-K for the fiscal year ended March 31, 2016 ("20162019 (“2019 Annual Report"Report”), are first being mailed to shareholders and made available electronically on our website at www.agilysys.combeginning on or about August 15, 2016.July [ ], 2019.

Record Date, Voting Shares, and Quorum

Shareholders of record of our common shares at the close of business on July 28, 2016,June 25, 2019, the "Record“Record Date,"” are entitled to notice of and to vote their shares at the Annual Meeting, or any adjournment or postponement of the Annual Meeting. On the Record Date, there were 22,939,102[23,495,028] common shares outstanding and entitled to vote at the Annual Meeting.vote. Each share is entitled to one vote. The presence at the Annual Meeting, in person or by proxy, of the holders of a majority of the common shares outstanding at the close of business on the Record Date will constitute a quorum for the transaction of business at the Annual Meeting. We will include abstentions and broker non-votes in the number of common shares present at the Annual Meeting for purposes of determining a quorum. A broker non-vote occurs when a nominee holding shares for a beneficial owner has not received instructions from the beneficial owner and does not have discretionary authority to vote the shares. Our common shares are listed on the NASDAQ Global Select Market under the symbol "AGYS." AGYS. References within this Proxy Statement to our common shares or shares refer to our common shares, without par value, the only class of securities entitled to vote at the Annual Meeting.

How to Vote

If you are the record holder of common shares, you or your duly authorized agent may vote by completing and returning the enclosed proxy card in the envelope provided. This year, youYou may also vote by telephone or Internet.internet. Telephone and Internetinternet voting information is provided on your proxy card. A control number, located on the proxy card, is designed to verify your identity, allow you to vote your shares, and confirm that your voting instructions have been properly recorded. Please note the deadlines for voting by telephone, the Internet,internet, and proxy card as set forth on the proxy card. If you vote by telephone or Internet,internet, you need not return your proxy card. You may also attend the Annual Meeting and vote in person; however, we encourage you to vote your shares in advance of the Annual Meeting even if you plan on attending. If your common shares are held by a bank, or broker or any other nominee, you must follow the voting instructions provided to you by the bank, broker, or nominee. Although most banks and brokers offer voting by mail, telephone, and the Internet,internet, availability and specific procedures will depend on their voting arrangements.



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Unless revoked, common shares represented by a properly signed and returned proxy card (or other valid form of proxy), or as instructed via telephone or Internet,internet, received in time for voting will be voted as instructed. If your proxy card is signed and returned with no instructions given, the persons designated as proxy holders on the proxy card will vote as follows:

FOR the election of each director nominee named herein (proposal 1);

1FOR the amendment to the Company’s Amended Code of Regulations and Amended Articles of Incorporation to require a majority vote, in uncontested elections, for director nominees to be elected (proposal 2);
FOR the amendment to the Company’s Amended Code of Regulations to reduce the threshold for shareholder removal of a director from a two-thirds supermajority to a simple majority (proposal 3);
·FOR the amendment to the Company's Regulations to declassify the board of directors (proposal 1);
FOR the approval, on a non-binding advisory basis, of the compensation of our named executive officers (proposal 4); and
·FOR the election of each director nominee named herein (proposal 2);
·FOR the approval of the 2016 Stock Incentive Plan (proposal 3);
·FOR the approval, on a non-binding advisory basis, of the compensation of our named executive officers (proposal 4); and
·FOR the ratification of the appointment of Grant Thornton, LLP as our independent registered public accounting firm (proposal 5).

The Company knows of no other matters scheduled to come before the Annual Meeting. If any other business is properly brought before the Annual Meeting, your proxy gives discretionary authority to the proxy holders with respect to such business, and the proxy holders intend to vote the proxy as recommended by our board of directors with regard to any such business, or, if no such recommendation is given, the proxy holders will vote in their own discretion.

Revocability of Proxies

You may revoke or change your vote at any time before the final vote on the matter is taken at the Annual Meeting by submitting to our Secretary a notice of revocation or by timely delivery of a valid, later-dated, duly executed proxy by mail, telephone, or Internet.internet. You may also revoke or change your vote by attending the Annual Meeting and voting in person. If your shares are held by a bank, broker, or other nominee, you must contact the bank, broker, or nominee and follow their instructions for revoking or changing your vote.

Vote Required, Abstentions, and Broker Non-Votes

If a quorum is present at the Annual Meeting, the affirmative vote of two-thirds of the voting power of the Company's outstanding common stock will be required to approve proposal 1, the amendment to the Regulations to declassify our board of directors.  Abstentions and broker non-votes will have the same effect as votes against the proposal, although they will be considered present for the purpose of determining a quorum.

If a quorum is present at the Annual Meeting, the nominees named herein for election as directors in proposal 21 will be elected if they receive the greatest number of votes cast at the Annual Meeting present in person or represented by proxy and entitled to vote. Abstentions will have no effect on the election of directors.

For proposal 2 (amendment to the Company’s Amended Code Regulations and Amended Articles of Incorporation to require a majority vote, in uncontested elections, for director nominees to be elected) and proposal 3 (approval(amendment to the Company’s Amended Code Regulations to reduce the threshold for shareholders to remove of 2016 Stock Incentive Plan)a director from a two-thirds supermajority to a simple majority), if a quorum is present at the Annual Meeting, the affirmative vote of two-thirds of the voting power of the Company’s outstanding common stock will be required to approve each proposal. Abstentions and broker non-votes will have the same effect as votes against these proposals, although they will be considered present for the purpose of determining a quorum.

For proposal 4 (advisory vote on named executive officer compensation) and proposal 5 (ratification of independent registered public accounting firm), if a quorum is present, the affirmative vote of the holders of shares representing a majority of the common shares present in person or represented by proxy and entitled to vote will be required to approve each proposal. The effect of an abstention is the same as a vote against each proposal. If you hold your shares in street name and do not give your broker or nominee instruction as to how to vote your shares with respect to proposals 1, 2, 34 and 4,5, your broker or nominee will not have discretionary authority to vote your shares on proposals 1, 2, 34 and 4.5. These broker non-votes will have no effect on proposals 2, 34 and 4, but will have the same effect as votes against the proposal on proposal 1.5.

Cumulative Voting


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Each shareholder has the right to vote cumulatively in the election of directors if the shareholder gives written notice to our Chief Executive Officer or Secretary not less than 48 hours before the Annual Meeting commences to our Chief Executive Officer or Secretary that he, she, or itthe shareholder wants its voting for the election of directors to be cumulative. In such event, the shareholder giving notice, or a representative of such shareholder, the Chairman, or the Secretary, will make an announcement aboutannounce such notice at the start of the Annual Meeting. Cumulative voting means that the shareholder may cumulate his, her, or its voting power for the election of directors by distributing a number of votes, determined by multiplying the number of directors to be elected at the Annual Meeting times the number of such shareholder'sshareholder’s shares. The shareholder may distribute all of the votes to one individual director nominee or distribute the votes among two or more director nominees, as the shareholder chooses. In the event of cumulative voting,
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unless contrary instructions are received, the persons named in the enclosed proxy will vote the shares represented by valid proxies on a cumulative basis for the election of the nominees named herein, allocating the votes among the nominees in accordance with their discretion.

Proxy Solicitation

The cost of solicitation of proxies, including the cost of preparing, assembling, and mailing the Notice, Proxy Statement, and proxy card, will be borne by us.the Company. In addition to solicitation by mail, arrangements may be made with brokerage houses and other custodians, nominees, and fiduciaries to send proxy materials to their principals, and we may reimburse them for their expenses in so doing. Our officers, directors, and employees may, without additional compensation, personally or by other appropriate means request the return of proxies.

Attending the Annual Meeting

All holders of our common shares at the close of business on the Record Date, or their duly appointed proxies, are authorized to attend the Annual Meeting. Cameras, recording devices, and other electronic devices will not be permitted at the Annual Meeting. If you hold your common shares through a bank, broker, or other nominee, you will need to bring a copy of the brokerage statement reflecting your share ownership as of the Record Date, or a legal proxy from your bank or broker, to attend the meeting.

Voting Results

Preliminary voting results will be announced at the Annual Meeting. Within four business days following the Annual Meeting, final results, or preliminary results if final results are unknown, will be announced on a Form 8-K filed with the Securities and Exchange Commission ("SEC"(“SEC”). If preliminary results are announced, final results will be announced on a Form 8-K filed with the SEC within four business days after the final results are known.

Company Information

Our 20162019 Annual Report is being mailed with this Proxy Statement. These documents also are available electronically on our website at www.agilysys.com,under Investor Relations. Our 20162019 Annual Report is not incorporated into this Proxy Statement and is not to be considered proxy solicitation material. If you wish to have additional copies of our 20162019 Annual Report, we will mail copies to you without charge. Requests may be sent to our corporate services office at: Agilysys, Inc., Attn: Investor Relations, 1000 Windward Concourse, Suite 250, Alpharetta, Georgia 30005, or you may request copies through our website, under Investor Relations. These documents have been filed with the SEC and also may be accessed from the SEC'sSEC’s website at www.sec.gov. www.sec.gov. If you have any questions about the Annual Meeting or these proxy materials, please contact Investor Relations by telephone at 770-810-7948,770-810-7941, or by email at investorrelations@agilysys.com, or through our website under Investor Relations.


CORPORATE GOVERNANCE

Corporate Governance Guidelines

The Corporate Governance Guidelines (the "Guidelines"“Guidelines”) adopted by our board of directors are intended to provide


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a sound framework to assist the board of directors in fulfilling its responsibilities to shareholders. Under the Guidelines, the board of directors exercises its role in overseeing the Company by electing qualified and competent officers and by monitoring the performance of the Company. The Guidelines state that the board of directors and its committees exercise oversight of executive officer compensation and director compensation, succession planning, director nominations, corporate governance, financial accounting and reporting, internal controls, strategic and operational issues, and compliance with laws and regulations. The Guidelines also state the board of directors'directors’ policy regarding eligibility for the board of directors, including director independence and qualifications for director candidates, events that require resignation from the board of directors, service on other public company boards of directors, and stock ownership guidelines. The Nominating and Corporate Governance Committee annually reviews the Guidelines and makes recommendations for changes to the board of directors.
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The Guidelines are available on our website atwww.agilysys.com, under Investor Relations.

Code of Business Conduct

The Code of Business Conduct adopted by our board of directors applies to all directors, officers, and employees of the Company, as well as certain third parties, and incorporates additional ethics standards applicable to our Chief Executive Officer, Chief Financial Officer, and other senior financial officers of the Company, and any person performing a similar function. The Code of Business Conduct is reviewed annually by the Audit Committee, and recommendations for change are submitted to the board of directors for approval. The Code of Business Conduct is available on our website at www.agilysys.com, under Investor Relations. The Company has in place a reporting hotline and website available for use by all employees and third parties, as described in the Code of Business Conduct. Any employee or third-party can anonymously report potential violations of the Code of Business Conduct through the hotline or website, both of which isare managed by an independent third party. Reported violations are promptly reported to and investigated by the Company. Reported violations are addressed by the Company and, if related to accounting, internal accounting controls, or auditing matters, the Audit Committee. In addition, we intend to post on our website all disclosures that are required by law or NASDAQ listing standards concerning any amendments to, or waivers from, any provision of the Code of Business Conduct.

Director Independence

NASDAQ listing standards provide that at least a majority of the members of the board of directors must be independent, meaning free of any material relationship with the Company, other than his or her relationship as a director. The Guidelines state that the board of directors should consist of a substantial majority of independent directors. A director is not independent if he or she fails to satisfy the standards for director independence under NASDAQ listing standards, the rules of the SEC, and any other applicable laws, rules, and regulations. During the board of directors'directors’ annual review of director independence, the board of directors considers transactions, relationships, and arrangements, if any, between each director or a director'sdirector’s immediate family members and the Company or its management. In June 2016,May 2019, the board of directors performed its annual director independence review and, as a result, of such review determined that each of Donald Colvin, Dana Jones, Jerry Jones, Michael A. Kaufman, Melvin Keating, Keith M. Kolerus, and John Mutch qualify as independent directors. Mr. DennedyRamesh Srinivasan is not independent because of his service as President and CEO of the Company.

Director Attendance

The board of directors held six meetings during fiscal year 2016,2019, and no director attended less than 75% of the aggregate of the total number of board of director meetings and meetings held by committees of the board of directors on which hethe director served. Independent directors meet regularly in executive session at board of director and committee meetings, and executive sessions are chaired by the chairman of the board or by the appropriate committee chairman. It is the board of directors'directors’ policy that all of its members attend the Annual Meeting of Shareholders absent exceptional cause. Messrs. Colvin, Dennedy and KeatingAll the Directors attended the 2015 2018 Annual Meeting.Meeting, other than Dana Jones, who was not then a Director.

Shareholder Communication with Directors



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Shareholders and others who wish to communicate with the board of directors as a whole, or with any individual director, may do so by sending a written communication to such director(s) in care of our Secretary at our Alpharetta, Georgia office address, and our Secretary will forward the communication to the specified director(s).

Committees of the Board

During fiscal year 2016,2019, the board of directors had fourthree standing committees: the Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee, and Strategic Review Committee. Mr. Srinivasan is not a member of any committee. At the end of the fiscal year, and as of July 28, 2016, the members and chairman of each committee were as follows:
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Director
AuditCompensation


Audit


Compensation
Nominating and
Corporate
Governance
Strategic
Review
Donald Colvin*Chairman  
James H. Dennedy
Jerry JonesX XX
Michael A. Kaufman XChairmanChairman
Melvin Keating ChairmanXX
Keith M. KolerusX XX
John Mutch*XX X

*Qualifies as an Audit Committee Financial Expert.

As of June 25, 2019, the committee membership set forth above remained the same. Dana Jones, who joined the board of directors after the end of fiscal year 2019 and, therefore, was not a member of a board committee at the end of the fiscal year, was as of June 25, 2019 a member of the Audit and Nominating and Corporate Governance Committees.

Committee Charters.The board of directors has adopted a charter for each committee, other than the Strategic Review Committee, and each committee with a charter is responsible for the annual review of its respective charter. Charters for each committee are available on our website at www.agilysys.com, under Investor Relations.

Audit Committee.The Audit Committee held nineeight meetings during fiscal year 2016.2019. The Audit Committee reviews, with our independent registered public accounting firm, the proposed scope of our annual audits and audit results, as well as interim reviews of quarterly reports; reviews the adequacy of internal financial controls; reviews internal audit functions; is directly responsible for the appointment, determination of compensation, retention, and general oversight of our independent registered public accounting firm; reviews related person transactions; oversees the Company'sCompany’s implementation of its Code of Business Conduct; and reviews any concerns identified by either the internal or external auditors. The board of directors determined that all Audit Committee members are financially literate and independent under NASDAQ listing standards for audit committee members. The board of directors also determined that Messrs. Colvin and Mutch each qualify as an "audit“audit committee financial expert"expert” under SEC rules.

Compensation Committee.The Compensation Committee held fivefour meetings during fiscal year 2016.2019. The purpose of the Compensation Committee is to enhance shareholder value by ensuring that pay available to the board of directors, Chief Executive Officer, and other executive officers enables us to attract and retain high-quality leadership and is consistent with our executive pay philosophy. As part of its responsibility, the Compensation Committee oversees our pay plans and policies; annually reviews and determines all pay, including base salary, annual cash incentive, long-term equity incentive, and retirement and perquisite plans; administers our incentive programs, including establishing performance goals, determining the extent to which performance goals are achieved, and determining awards; administers our equity pay plans, including making grants to our executive officers; and regularly evaluates the effectiveness of the overall executive pay program and evaluates our incentive plans to determine if the plans'plans’ measures or goals encourage inappropriate risk-taking by our employees.executives. A more complete description of the Compensation Committee'sCommittee’s functions is found in the Compensation Committee Charter.


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The board of directors determined that all Compensation Committee members are independent under NASDAQ listing standards for compensation committee members.

Our Legal and Human Resources Departments support the Compensation Committee in its work and, in some cases, as a result of delegation of authority by the Compensation Committee, fulfill various functions in administering our pay programs. In addition, the Compensation Committee has the authority to engage the services of outside consultants and advisers to assist it. The Committee engages compensation consultants to perform current market assessments when it believes that such an assessment would inform its decision making with respect to executive compensation. The Compensation Committee did not engage a compensation consultant to advise it in connection with setting compensation for the Named Executive Officers in fiscal year 2016.2019.

Our Chief Executive Officer Chief Financial Officer, and our General Counsel attend Compensation Committee meetings when executive compensation, Company performance, and individual performance are discussed and evaluated by Compensation Committee members, and they provide their thoughts and recommendations on executive pay issues during these meetings and provide updates on financial performance, industry status, and other factors that may impact executive compensation. Decisions regarding the Chief Executive Officer'sOfficer’s compensation were based solely on the Compensation Committee'sCommittee’s deliberations, while compensation decisions regarding other executive officers took into consideration recommendations from the Chief Executive Officer. Only Compensation Committee members make decisions on executive officer compensation and approve all outcomes.
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Nominating and Corporate Governance Committee.The Nominating and Corporate Governance Committee ("(“Nominating Committee"Committee”) held four meetings during fiscal year 2016.2019. The board of directors determined that all Nominating Committee members are independent under NASDAQ listing standards. The Nominating Committee assists the board of directors in finding and nominating qualified people for election to the board; reviewing shareholder-recommended nominees; assessing and evaluating the board of directors'directors’ effectiveness; and establishing, implementing, and overseeing our governance programs and policies. The Nominating Committee is responsible for reviewing the qualifications of, and recommending to the board of directors, individuals to be nominated for membership on the board of directors. The board of directors has adopted Guidelines for Qualifications and Nomination of Director Candidates ("(“Nominating Guidelines"Guidelines”), and the Nominating Committee considers nominees using the criteria set forth in the Nominating Guidelines. At a minimum, a director nominee must:

Be of proven integrity with a record of substantial achievement;
·Be of proven integrity with a record of substantial achievement;
Have demonstrated ability and sound business judgment based on broad experience;
·Have demonstrated ability and sound business judgment based on broad experience;
Be able and willing to devote the required amount of time to the Company’s affairs, including attendance at board of director and committee meetings;
·Be able and willing to devote the required amount of time to the Company's affairs, including attendance at board of director and committee meetings;
Be analytical and constructive in the objective appraisal of management’s plans and programs;
·Be analytical and constructive in the objective appraisal of management's plans and programs;
Be committed to maximizing shareholder value and building a sound company, long-term;
·Be committed to maximizing shareholder value and building a sound company, long-term;
Be able to develop a professional working relationship with other directors and contribute to the board or directors’ working relationship with senior management of the Company;
·Be able to develop a professional working relationship with other directorsBe able to exercise independent and objective judgment and be free of any conflicts of interest with the Company; and contribute to the board or directors' working relationship with senior management of the Company;
·Be able to exercise independent and objective judgment and be free of any conflicts of interest with the Company; and
·Be able to maintain the highest level of confidentiality.

The Nominating Committee considers the foregoing factors, among others, in identifying nominees; however, there is no policy requiring the Nominating Committee to consider the impact of any one factor by itself. The Nominating Committee also will consider the board of directors'directors’ current and anticipated needs in terms of number, diversity, specific qualities, expertise, skills, experience, and background. In addition, the Corporate Governance Guidelines state that the board of directors should have a balanced membership, with diverse representation of relevant areas of experience, expertise, and backgrounds. The Nominating Committee seeks nominees that collectively will build a capable, responsive, and effective board of directors, prepared to address strategic, oversight, and governance challenges. The Nominating Committee believes that the backgrounds and qualifications of the directors as a group should provide a significant mix of experience, knowledge, and abilities that will enable the board of directors to


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fulfill its responsibilities.

The Nominating Committee will consider shareholder-recommended nominees for membership on the board of directors. For a shareholder to properly nominate a candidate for election as a director at a meeting of the shareholders, the shareholder must be a shareholder of record at the time the notice of the nomination is given and at the time of the meeting, be entitled to vote at the meeting in the election of directors, and have given timely written notice of the nomination to the Secretary. To be timely, notice must be received by the Secretary, in the case of an annual meeting, not less than 90 days nor more than 120 days prior to the anniversary of the previous year'syear’s annual meeting; provided, however, that if the date of the annual meeting is advanced more than 30 days prior to or delayed by more than 30 days after the anniversary of the preceding year'syear’s annual meeting, notice must be delivered not later
than the close of business on the later of the 90th day prior to such annual meeting or the 10th calendar day following
the day on which public disclosure of the date of such annual meeting is first made. In the case of a special meeting, timely notice must be received by the Secretary not later than the close of business on the 10th day after the date of such meeting is first publicly disclosed. A shareholder'sshareholder’s notice must set forth, as to each candidate:
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·Name, age, business address, and residence address of the candidate;
·Principal occupation or employment of the candidate;
·Class and number of shares that are owned of record or beneficially by the candidate;
·Information about the candidate required to be disclosed in a proxy statement complying with the rules and regulations of the SEC;
·Written consent of the candidate to serve as a director if elected and a representation that the candidate does not and will not have any undisclosed voting arrangements with respect to his actions as a director, will comply with the Company’s Amended Code of the candidate to serve as a director if elected and a representation that the candidate does not and will not have any undisclosed voting arrangements with respect to his actions as a director, will comply with the Company's Regulations and all other publicly disclosed corporate governance, conflict of interest, confidentiality, and share ownership and trading policies and Company guidelines;
·Name and address of the shareholder making such nomination and of the beneficial owner, if any, on whose behalf the nomination is made;
·Class and number of shares that are owned of record or beneficially by the shareholder and by any such beneficial owner as of the date of the notice;
·Representation that the shareholder or any such beneficial owner is a holder of record or beneficially of the shares entitled to vote at the meeting and intends to remain so through the date of the meeting;
·Description of any agreement, arrangement, or understanding between or among the shareholder and any such beneficial owner and any other persons (including their names) with respect to such nomination;
·Description of any agreement, arrangement, or understanding in effect as of the date of the shareholder'sDescription of any agreement, arrangement, or understanding in effect as of the date of the shareholder’s notice pursuant to which the shareholder, any such beneficial owner, or any other person directly or indirectly has other economic interests in the shares of the Company;
·Representation that the shareholder intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; and
·Representation whether the shareholder intends to deliver a proxy statement and/or form of proxy to holders of outstanding common shares and/or otherwise to solicit proxies in support of the nomination.

The Nominating Committee may request additional information from such nominee to assist in its evaluation. The Nominating Committee will evaluate any shareholder-recommended nominees in the same way it evaluates nominees recommended by other sources, as described above.

Strategic Review Committee.  The Strategic Review Committee held 10 meetings during fiscal year 2016.  The purpose of the Strategic Review Committee is to review and evaluate any and all strategic alternatives to the Company's current strategy and to recommend to the board of directors what action, if any, should be taken by the Company.

Board Leadership

The board of directors determined that having an independent director serve as chairman of the board is in the best interest of shareholders at this time. The structure ensures a greater role for our independent directors in the


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oversight of the Company and the active participation in setting agendas and establishing priorities and procedures for the board of directors. Pursuant to the board of directors'directors’ Corporate Governance Guidelines, it is our policy that the positions of chairman of the board and chief executive officer be held by different individuals, except as otherwise determined by the board of directors. Mr. Kaufman has served as Chairman of the Board since 2015.

In 2015, theThe board had previously established the role of vice-chairman of the board to assist the chairman of the board in the performance of his duties, as directed by the chairman from time to time. Mr. Kolerus has served as vice-chairman of the board sincefrom 2015 to 2019. Mr. Kolerus announced his retirement from the establishmentboard effective as of the role.end of June 2019, and the board decided not to continue the role of vice chairman following his retirement.

Risk Oversight

Management is responsible for the day-to-day management of risks facing the Company, while theCompany. The board of directors, as a whole and through its committees, particularly the Audit Committee, is actively involved in the oversight of such risks. The board of directors'directors’ role in risk oversight includes regular reports at board of director and Audit Committee meetings from members of senior management on areas of material risk to the Company, including strategic, financial, operational, and legal and regulatory compliance risks. Management regularly identifies and updates, among other items, the population of possible risks for the Company, assigns risk ratings, prioritizes the risks, assesses likelihood of risk occurrence, develops risk mitigation plans for prioritized risks, and assigns roles and responsibilities to implement mitigation plans. Risks are ranked by evaluating each risk'srisk’s likelihood of occurrence and magnitude. The board of directors'directors’ Compensation Committee, in consultation with management, evaluates our incentive plans to determine if
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the plans'plans’ measures or goals encourage inappropriate risk-taking by our employees. As part of its evaluation, the Compensation Committee determined that the performance measures and goals were tied to our business, financial, and strategic objectives. As such, the incentive plans are believed not to encourage risk-taking outside of the range of risks contemplated by the Company'sCompany’s business plan.

Compensation Committee Interlocks and Insider Participation

None of the members of the Compensation Committee during fiscal year 20162019 (Messrs. Jones, Kaufman, Keating, Kolerus, and Mutch) is or has been an officer or employee of the Company or has had any relationship with the Company required to be disclosed as a related person transactionstransaction, and none of our executive officers served on the compensation committee (or other committee serving an equivalent function) or board of any company that employed any member of our Compensation Committee or our board of directors during fiscal year 2016.

2019.

DIRECTOR COMPENSATION

During fiscal year 2016,2019, compensation for non-employee directors consisted of the following:
·$25,000$30,000 annual cash retainer for each non-employee director;
·$35,000 annual cash retainer for the chairman of the board;
·$5,000 annual cash retainer to the vice-chairman of the board;
$15,000 annual cash retainer for the chairman of the Audit Committee;
·$10,000 annual cash retainer for the chairman of the Audit$12,500 annual cash retainer for the chairman of the Compensation Committee;
·$7,500 annual cash retainer for the chairmen of each of the Compensation and Nominating & Corporate Governance Committees;
$7,500 annual cash retainer for the chairman of the Nominating & Corporate Governance Committee;
·$10,000 annual cash retainer for each member of the Audit, Nominating & Corporate Governance, and Compensation Committees, including each chairman;
·$10,000 annual cash retainer to each member of the Strategic Review Committee, including the chairman;
An award of restricted shares to each non-employee director valued at $75,000 on the grant date.
·$5,000 monthly cash retainer for each member of the Strategic Review Committee, including the chairman;
·An award of restricted shares to each non-employee director valued at $70,000 on the grant date.

We also reimburse our directors for reasonable out-of-pocket expenses in connection withincurred for attendance at board of directors and committee meetings.



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The fiscal year 20162019 equity award for each director other than Messrs. Colvin and Keating, consisted of 7,6755,274 restricted shares, based on a $9.12$14.22 grant date price, and was granted under the 20112016 Stock Incentive Plan. The restricted shares vested on March 31, 2016,2019, and provided for pro-rata vesting upon retirement prior to March 31, 2016.2019. The grant was made in June 2015on May 31, 2018, to the then current non-employee directors; however, Mr. Kaufman declined the award given the significant ownership in the Company by his firm, MAK Capital. Following their initial election to the board at the 2015 Annual Meeting, Messrs. Coleman and Keating received pro-rata grants of 3,278 restricted shares on November 12, 2015, based on a $11.12 grant date price, and otherwise on the same terms as the equity awards for the other directors.

Our directors are subject to share ownership guidelines that require ownership of either (i) three times the director'sdirector’s respective annual cash retainer within two years of service and six times the director'sdirector’s respective annual cash retainer within four years of service; or (ii) 15,000 shares within the first two years following the director'sdirector’s election to the board of directors and 45,000 shares within four years of election. We pay no additional fees for board of director or committee meeting attendance.
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Director Compensation for Fiscal Year 20162019

DirectorFees Earned or Paid in Cash   ($)(1)Stock Awards  ($)(2)
Total
  ($)
Donald Colvin18,806 36,451 55,257 
Jerry Jones51,139 69,996 121,135 
Michael A. Kaufman93,024 — 93,024 
Keith M. Kolerus73,560 69,996 143,556 
Melvin Keating50,715 36,451 87,166 
John Mutch70,042 69,996 140,038 
Director (1)Fees Earned or Paid in Cash ($)(2)Stock Awards ($)(3)
Total
  ($)
Donald Colvin55,000
 74,996
 129,996
 
Dana Jones (4)—
 —
 —
 
Jerry Jones50,000
 74,996
 124,996
 
Michael A. Kaufman92,500
 —
 92,500
 
Keith M. Kolerus50,000
 74,996
 124,996
 
Melvin Keating62,500
 74,996
 137,496
 
John Mutch50,000
 74,996
 124,996
 

(1)Our CEO, Ramesh Srinivasan, is also a member of the board of directors, but he receives
no direct compensation for such service.
(2) Fees are paid quarterly.
(2)
(3)Amounts in this column represent the grant date fair value of the restricted shares computed in accordance with Financial Accounting Standards Board ("FASB"(“FASB”) Accounting Standards Codification ("ASC")(ASC) Topic 718. As
(4)Dana Jones joined the board of March 31, 2016, Mr. Kolerus also held an aggregatedirectors after the end of 15,000 shares under unexercised stock options.fiscal year 2019 and, therefore,
received no compensation for fiscal year 2019.


PROPOSAL 1

AMENDMENT OF THE COMPANY'S AMENDED CODE OF REGULATIONS
TO DECLASSIFY THE BOARD

General
Our board of directors, in its continuing review of corporate governance matters, has concluded that it is advisable and in the best interests of the Company and its shareholders to amend the Amended Code of Regulations (the "Regulations") to declassify the board of directors. Accordingly, the board of directors recommends that the shareholders approve the amendment to the Regulations attached to this proxy statement as Appendix A. Under the present classified board of directors structure, the board of directors is classified into two classes as follows: Donald Colvin, Melvin Keating and Keith M. Kolerus constitute the Class A directors, with a term ending at the annual meeting of shareholders in 2017; and James H. Dennedy, Jerry Jones, Michael A. Kaufman and John Mutch constitute the Class B directors, with a term ending at this Annual Meeting.
Declassification Proposal
After careful consideration and upon the recommendation of the Nominating and Corporate Governance Committee, which is comprised entirely of independent directors, our board of directors has determined that it is advisable and in the best interests of our Company and its shareholders to declassify our board of directors to allow our shareholders to vote on the election of directors generally on an annual basis, rather than on a staggered basis.
The board of directors recognizes that a classified structure may offer several advantages, such as promoting board continuity and stability and encouraging directors to take a long-term perspective toward strategic planning.  Additionally, classified boards may motivate potential acquirers seeking control to initiate arms-length discussions with the board of directors, rather than engaging in unsolicited or coercive takeover tactics, since potential acquirers are unable to replace the entire board of directors in a single election, thereby better enabling the board of directors to maximize shareholder value and to ensure the equal and fair treatment of shareholders. On the other hand, the board of directors recognizes that a classified structure may reduce directors' accountability to shareholders because such a structure does not enable shareholders to express a view on each director's performance by means of an annual vote. Moreover, many institutional investors believe that board classification limits the ability of shareholders to influence corporate governance policies and to hold management accountable for implementing those policies.  In light of these views, a number of
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corporations have determined that principles of good corporate governance dictate that all directors of a corporation should be elected annually.
In considering whether a proposal to declassify the board of directors was advisable, the board of directors carefully considered the arguments in favor of and against the current classified board structure, and determined that annual elections of directors will give the shareholders of the Company a greater opportunity to evaluate the performance of the Company's directors by allowing them to vote on each director annually rather than once every two years. The board of directors approved the amendment to the Regulations and recommended that it be submitted to the shareholders for approval at the Annual Meeting.
If our shareholders approve this proposal 1, then effective immediately upon such approval, all of our Class A directors whose term does not expire at this Annual Meeting will resign and all of the resigning directors will be nominated to stand for election to a one-year term expiring at the annual meeting of shareholders in 2017, along with all of our Class B Directors, whose term already expires at this Annual Meeting, and who have also been nominated to stand for election to a one year term expiring at the annual meeting of shareholders in 2017.
As a result, assuming proposal 1 is approved, at this Annual Meeting and at subsequent annual meetings, absent future changes to our board election procedures, all of our directors would be subject to election to serve until the next annual meeting of shareholders and until their successors have been duly elected and qualified.
Vote Required
Approval of the amendment to the Regulations to declassify our board of directors requires the affirmative vote of two-thirds of the voting power of the Company's outstanding common stock.  Abstentions and broker non-votes will have the same effect as votes against the proposal, although they will be considered present for the purpose of determining a quorum. Validly executed proxies will be voted in favor of this proposal 1 unless a shareholder indicates otherwise when submitting its proxy.
Recommendation of the Board of Directors
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE AMENDMENT TO THE COMPANY'S REGULATIONS TO DECLASSIFY THE BOARD.  PROXY CARDS RECEIVED BY THE COMPANY WILL BE VOTED "FOR" PROPOSAL 1 UNLESS THE SHAREHOLDER SPECIFIES OTHERWISE ON THE PROXY CARD.


PROPOSAL 2

ELECTION OF DIRECTORS

General

Our board of directors currently consists of seven members classified into two classes as follows: Donald Colvin, Melvin Keating and Keith M. Kolerus constitute the Class A directors, with a term ending at the annual meeting of shareholders in 2017; and James H. Dennedy, Jerry Jones, Michael A. Kaufman and John Mutch constitute the Class B directors, whose term expires at this Annual Meeting. In each case, subject to their earlier death, resignation, removal or retirement, the directors remain in office until their respective successors are duly elected and qualified, notwithstanding the expiration of the otherwise applicable term.
Declassification Proposal
As described in proposal 1 above, our board of directors approved an amendment to our Regulations to eliminate the classified board of directors and recommended that the amendment be submitted to the shareholders for approval. If the shareholders approve proposal 1, the amendment to our Regulations will become immediately effective in
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advance of the election of directors at the Annual Meeting. Messrs. Colvin, Keating and Kolerus, whose term does not expire at the Annual Meeting, will resign, and they, together with Messrs. Dennedy, Jones, Kaufman and Mutch, whose term expires at this Annual Meeting, have been nominated for election to serve until the next annual meeting and until their respective successors are duly elected and qualified.
However, if proposal 1 is not approved, Messrs. Dennedy, Jones, Kaufman and Mutch, whose term is expiring, will stand for election to a two-year term expiring at the annual meeting of shareholders in 2018, and Messrs. Colvin, Keating and Kolerus will not resign and will continue to serve for the remainder of the term for which they were elected.
Nominees for Director
If proposal 1 is approved, our board of directors will be declassified, and each of the seven nominees, if elected at this Annual Meeting, will serve for a one-year term expiring at the Annual Meeting to be held in 2017 and until their respective successors have been duly elected and qualified, subject to their earlier death, resignation, retirement or removal.
Upon the recommendation of the Nominating and Corporate Governance Committee, comprised of independent directors, the board of directors has nominated each of Donald Colvin, James H. Dennedy,Dana Jones, Jerry Jones, Michael A. Kaufman, Melvin Keating, Keith M. KolerusJohn Mutch and John MutchRamesh Srinivasan for election to the board of directors for a term of


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one year, to serve until the annual meeting of shareholders in 20172020 and until their successors have been duly elected and qualified, subject to their earlier death, resignation, retirement or removal. Information concerning the nominees for election at this Annual Meeting is set forth below.
If proposal 1 is not approved, our board of directors will remain classified, and each Class A director will continue to serve for the remainder of his term. Upon the recommendation of the Nominating and Corporate Governance Committee, the board of directors has nominated James H. Dennedy, Jerry Jones, Michael A. Kaufman and John Mutch, whose term expires at this Annual Meeting, for election to the board of directors for a term of two years, to serve until the annual meeting of shareholders in 2018 and until his successor has been duly elected and qualified, subject to his earlier death, resignation, retirement or removal.
Unless authority to vote for any of these nominees is withheld, the shares represented by a validly executed proxy will be voted "“FOR"FOR” the election of each of Ms. Jones and Messrs. Colvin, Dennedy, Jones, Kaufman, Keating, KolerusMutch and MutchSrinivasan for a one-year term if proposal 1 is approved, or "FOR" the election of each of Messrs. Dennedy, Jones, Kaufman and Mutch for a two-year term if proposal 1 is not approved.term. Each nominee has indicated his or her willingness to serve as a director, if elected.

A biography for each director nominee and our continuing directors follows and, if applicable, arrangements under which a director was appointed to the board of directors or information regarding any involvement in certain legal or administrative proceedings is provided. Additional information about the experiences, qualifications, attributes, or skills of each director and director nominee in support of his or her service on the board of directors is also provided.

DIRECTOR NOMINEES

Donald ColvinAge 6366Director since 2015

Mr. Colvin is a director of Viavi Solutions Inc., a global provider of network test, monitoring and assurance solutions, and was previously a director of Applied Micro Circuits Corp. Mr. Colvin was the Interim Chief Financial Officer of Isola Group Ltd. from June 2015 to July 2016.2015. Mr. Colvin previously served as Chief Financial Officer of Caesars Entertainment Corporation from November 2012 to January 2015 and before that was Executive Vice President and CFOChief Financial Officer of ON Semiconductor Corp. from April 2003 to October 2012. Prior to joining ON Semiconductor, Mr. Colvinhe held a number of financial leadership positions, including Vice President of Finance and CFOChief Financial Officer of Atmel Corporation, CFOChief Financial Officer of European Silicon Structures as well as several financial roles at Motorola Inc.

Mr. Colvin is a Director and Chairman of the Audit Committee of Isola Group, a director of UTAC (a private Singapore company) and a Member of the Advisory Board for Conexant.  Mr. Colvin holds aearned his B.A. in economicsEconomics, with honors, and an M.B.A. from the University of Strathclyde in Scotland. Mr. Colvin'sColvin’s qualifications and extensive experience include financial management, capital
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structure, financial strategy, significant public company leadership and board experience, and recent experience in the hospitality industry which the Company serves.

James H. Dennedy
Dana JonesAge 5044Director since 20092019

President andDana Jones is the Chief Executive Officer of Sparta Systems, the Company since October 2011. Interim President and Chief Executive Officer since May 2011. Principal and Chief Investment Officer with Arcadia Capital Advisors, LLC, an investmentmarket leader in digital enterprise quality management company making active investments in public companies, from April 2008software for the life sciences space. Prior to May 2011. President andjoining Sparta, Dana served as Chief Executive Officer of Engyro Corporation, anActive Network (Nasdaq: ACTV), the leader in activity and event management software. Under her leadership, the company grew rapidly, leading to the sale of the Sports and Communities divisions to Global Payments, Inc. (NYSE: GPN) for $1.2 billion. Before joining Active Network, Ms. Jones was Chief Marketing Officer and Senior Vice President of Products for Sabre Airline Solutions, a global provider of software to the airline industry. Prior to Sabre, Ms. Jones co-founded Noesis Energy, and served as Executive Vice President of Product, Sales, Marketing, and Operations. Ms. Jones has held Executive and General Management positions for early stage and global publicly traded enterprise software company offering solutions in systems management, from January 2005 to August 2007. Previously a director of Entrust, Inc., I-many, Inc.,companies over the last 20 years, including the Reynolds Company and NaviSite, Inc. As a former President of a division of a publicly-held software company andVignette (Nasdaq: VIGN). She started her career as a Chief Executive Officer of a private software company, Mr. Dennedy has experience in the technology industry. In addition, Mr. Dennedy has extensive experience in investment strategy, capital structure, financial strategy, mergers and acquisitions, and significant public company leadership and board experience.management consultant with A.T. Kearney.

Ms. Jones graduated Summa Cum Laude and holds a BSE in industrial and operations engineering from the University of Michigan. Ms. Jones is an accomplished software executive with decades of experience leading and growing cloud-based global enterprise software businesses.

Jerry JonesAge 6063Director since 2012



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Mr. Jones is the Executive Vice President, Chief Ethics and Legal Officer Executive Vice-President of Acxiom Corporation,LiveRamp Holdings, Inc. (NYSE: RAMP), a marketing technology and servicessoftware-as-a-service (SaaS) company since 1999.that provides the identity platform for powering exceptional experiences. His responsibilities include oversight of its legal, privacy and security teams and various strategic initiatives, including the strategy and execution of mergers and alliances. Prior to LiveRamp, Mr. Jones was the Chief Ethics and Legal Officer at Acxiom since 1999, where he oversaw all legal and data ethics matters. Prior to joining Acxiom, Mr. Jones was a partner with the Rose Law Firm in Little Rock, Arkansas, where he specialized in problem solving and business litigation for 19 years, representing a broad range of business interests. Previously he was a directorDirector of Entrust, Inc. He(Nasdaq: ENTU).

Mr. Jones is a 1980 graduate of the University of Arkansas School of Law and holds a bachelor'sbachelor’s degree in public administration from the University of Arkansas. As the Chief Ethics and Legal Officer of a technologySaaS company, Mr. Jones has extensive experience with legal, privacy, and security matters. He has also led the strategy and execution of mergers and alliances and international expansion efforts.

Michael A. KaufmanAge 4447Director since 2014

Mr. Kaufman is the PresidentChief Executive Officer of MAK Capital, a financial investment advisory firm based in New York, NY, which he founded in 2002. In addition, Mr. Kaufman has served as a director of Skyline Champion Corporation (NYSE: SKY) since 2018.

Mr. Kaufman holds a B.A. degree in Economics from the University of Chicago, where he also received his M.B.A. He also earned a law degree from Yale University. As PresidentChief Executive Officer of MAK Capital, a significant shareholder of the Company's largest shareholder,Company, Mr. Kaufman is uniquelyespecially qualified to represent the interests of the Company'sCompany’s shareholders as a director and chairman of the board. Additionally, Mr. Kaufman'sKaufman’s qualifications and experience include capital markets, investment strategy and financial management.

Melvin KeatingAge 6972Director since 2015

DirectorMr. Keating has been a consultant, providing investment advice and other services to public companies and private equity firms, since 2008. Mr. Keating also serves as a director of Vitamin Shoppe, Inc., a retailer of nutritional supplements (since April 2018), Harte Hanks, Inc., a global marketing services firm (since July 2017), and MagnaChip Semiconductor Corp, a designer and manufacturer of analog and mixed-signal semiconductor platform solutions (since August 2016). Previously he was a director of Red Lion Hotels Corporation sincefrom July 2010 anduntil June 2017, serving as Chairman of the Board from May 2013 to 2015. Since November 2008, Mr. Keating has been a consultant to several private equity firms, an industry where he previously worked.  Prior to that, he was President and CEO of Alliance Semiconductor from 2005 to 2008.During the past five years, Mr. Keating also serves asserved on the boards of directors of the following public companies: API Technologies Corp. (2011 - 2016); Crown Crafts Inc. (2010 -2013), ModSys International Ltd. (formerly BluePhoenix Solutions Ltd., 2010 - 2016), and SPS Commerce, Inc., a directorprovider of Modern Systems, Inc.  cloud-based supply chain management solutions (from March 2018 to May 2019).

Mr. Keating holds a B.A. from Rutgers University as well as both an M.S. in Accounting and an M.B.A. in Finance from The Wharton School of the University of Pennsylvania. Mr. Keating has substantial experience leading public companies in the technology and hospitality industries and is qualified in global operations, financial management and strategy and capital markets.

Keith M. Kolerus
Age 70Director since 1998

Chairman of the Board of Directors of the Company from 2008 to 2015. Mr. Kolerus also served as Chairman of the Board of Directors of Minco Technology Labs, a manufacturer of high reliability semiconductors, from 2010 to 2015, ACI Electronics, LLC, from 2004 to 2008, and National Semiconductor Japan Ltd., from 1995 to 1998. He holds a bachelor of engineering degree from Vanderbilt University and an M.B.A. from Loyola University, Chicago. Mr. Kolerus has extensive experience in engineering, global operations, private and public companies, software and hardware technology companies, government contracting, capital markets, financial management, and the technology industry. Mr. Kolerus' prior extensive experience leading boards of directors also qualify him to serve on our board of directors.
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John MutchAge 6063Director since 2009

Founder andMr. Mutch is managing partner of MV Advisors LLC.  Mr. Mutch founded MV Advisors in January of 2006 asLLC, a strategic block investment firm which provides focused investmentfounded by Mr. Mutch in January of 2006. He is chairman of the board of Aviat Networks, a global supplier of microwave networking solutions (since 2015), and operational guidance to both privatea director of Maxell Technologies, an energy storage and public companies. MV Advisors' current portfolio includes companies in the technology, active lifestyle and sports segments valued in excess of $100M.power delivery solutions company (since 2017). Mr. Mutch's career as an operating executive in the technology sector includes servingMutch served as Chairman and Chief Executive Officer of BeyondTrust Software, a privately held security software company focused on privilege identity management solutions, from 2008 to 2013,2013. He previously served as a Directordirector of YuMe, Inc., a data analysis platform for television advertising (from 2017 to


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2018), and Chief Executive Officer of Peregrine Systems (Nasdaq: PRGS) from 2003 to 2005, and as a Director and Chief Executive Officer on HNC Software (Nasdaq: HNCS) from 1999 to 2002. Previously he spent eight years in a variety of executive sales and marketing positions at Microsoft Corporation. Mr. Mutch current serves on the board of directors of Steel Excel, (Nasdaq: SXCL)an oilfield service company (from 2008 to 2016).

Mr. Mutch holds a B.S. Inin Economics from Cornell University and an M.B.A. from the University of Chicago. As a Chief Executive Officerformer chief executive officer and board member of an IT company,technology companies, Mr. Mutch has extensive experience in the technology industry, restructuring, financial management and strategy, capital markets, sales management, and marketing.

Ramesh SrinivasanAge 59Director since 2017

Mr. Srinivasan has been President and Chief Executive Officer of the Company since January 3, 2017. He also serves on the board of advisors for Symbotic, a supply chain robotics and solutions company. He previously served as CEO of Ooyala, a Silicon Valley based provider of a suite of technology offerings in the online video space, from January 2016 to November 2016. From March 2015 to November 2015, he was President and CEO of Innotrac Corp., an ecommerce fulfillment provider which merged with eBay Enterprise to form Radial Inc in 2015. Prior to that, Mr. Srinivasan served as President and CEO of Bally Technologies Inc. (NYSE: BYI) from December 2012 to May 2014, and President and COO from April 2011 to December 2012; he started as Executive Vice President of Bally Systems in March 2005. Mr. Srinivasan was with Manhattan Associates from 1998 to 2005, where his last position was Executive Vice-President of Warehouse Management Systems.

Mr. Srinivasan holds a Post-Graduate Diploma in Management (MBA) from the Indian Institute of Management, Bangalore, India, and a degree in Engineering from the Indian Institute of Technology (Banaras Hindu University), Varanasi, India. Mr. Srinivasan has nearly three decades of hands-on enterprise software development, execution and senior technology management leadership and strategy expertise and accomplishments, including experience and expertise in driving performance at high growth technology companies and helping them scale their business profitably.

Vote Required
If a quorum is present at the annual meeting, the
The nominees for election as directors will be elected if they receive the greatest number of votes cast at the Annual Meeting present in person or represented by proxy and entitled to vote. Abstentions and broker non-votes will have no effect on the election of directors.

Recommendation of the Board of Directors

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"“FOR” THE ELECTION OF EACH OF THE NOMINEES. PROXY CARDS RECEIVED BY THE COMPANY WILL BE VOTED "FOR"“FOR” THE ELECTION OF EACH OF THE NOMINEES UNLESS THE SHAREHOLDER SPECIFIES OTHERWISE ON THE PROXY CARD.


PROPOSAL 32
AMENDMENT TO THE COMPANY’S AMENDED CODE OF REGULATIONS AND
AMENDED ARTICLES OF INCORPORATION TO IMPLEMENT MAJORITY VOTING
IN UNCONTESTED DIRECTOR ELECTIONS

Our board of directors recommends that shareholders approve an amendment to our Amended Code of Regulations (the “Code”) and Amended Articles of Incorporation (the “Articles”), to require a majority vote, in uncontested elections, for director nominees to be elected (the “Amendments”). The board has concluded that the adoption of a majority voting standard in uncontested elections of directors will give shareholders a greater voice in director elections by giving effect to votes “against” nominees, and by requiring a nominee to receive an affirmative majority of votes cast to obtain or retain a seat on the board. The adoption of this standard in uncontested elections is


APPROVAL OF AGILYSYS, INC. 2016 STOCK INCENTIVE PLAN12


intended to reinforce the board’s accountability to the interests of shareholders and to reflect emerging corporate governance best practices.

Under the current plurality voting standard, nominees receiving the greatest number of votes “FOR” election are elected to the board, regardless of how many votes are cast. Under majority voting, each vote is required to be counted “FOR” or “AGAINST” a nominee’s election. To be elected to the board, the votes cast “FOR” a nominee’s election must exceed the votes cast “AGAINST.” Shareholders would also be able to “abstain” from voting, but abstentions and broker non-votes would not be counted in determining whether the affirmative majority vote has been obtained. If approved, the majority voting standard would only apply in uncontested elections of directors. In contested elections, plurality voting would remain the voting standard since it is the only standard that ensures all vacant board seats would be filled.

Ohio Revised Code Section 1701.55(b) requires that an Ohio company seeking to provide for majority voting do so in its articles of incorporation, rather than its code of regulations. The Board voted unanimouslyboard is therefore asking shareholders to approve amendments to the Articles to implement majority voting and recommendamendments to the Code to reference the majority voting standard in the Articles. Since these amendments to the Articles and Code are inextricably intertwined, by voting “FOR” this proposal, shareholders will be authorizing the approval of the 2016 Stock Incentive Plan (the "2016 Plan") (this proposal 3), the principal provisions of which are described below.board to implement both. The following is a summary of the material terms of the 2016 Plan and is qualified in its entirety by the full text of the 2016 Plan asproposed Amendments is set forth as Appendix Bin Annex A to this Proxy Statement.
The Board believes that stock-based awards are an important element of the Company's compensation programs. The 2016 Plan promotes the Company's compensation philosophy and objectives by (i) providing long-term incentives to those persons with significant responsibility for the success and growth of the Company; (ii) motivating participants to achieve the long-term success and growth of the Company; (iii) providing a vehicle to tie a significant portion of compensation to the long-term performance of the Company's shares; (iv) enabling the Company to attract and retain skilled and qualified officers, other employees, directors, and consultants who are expected to contribute to the Company's success in a competitive market for such individuals; (v) facilitating ownership of the Company's shares; and (vi) aligning the personal interests of officers, employees, and others in the Company's long-term growth and profitability with the interests of the Company's shareholders. The 2016 Plan will replace the Company's 2011 Stock Incentive Plan that was
If approved by shareholders, at the 2011 Annual Meeting (the "2011 Plan"). AsAmendments will become effective upon the filing of June 30, 2016, approximately 1,978,255 shares were available for grant underan amendment to the 2011 Plan, andAmended Articles of Incorporation with the Board approved the 2016 Plan to provide a sufficient pool, and broad variety,Ohio Secretary of stock and stock-based awards. Subject toState. The Company would make this filing promptly after shareholder approval at the 2019 Annual Meeting, the 2016 Plan willMeeting. The new majority voting standard would then be effective asfor an uncontested election of June 8, 2016.  Information ondirectors at the total numberCompany’s 2020 annual meeting of shares availableshareholders.

Currently, under Ohio Revised Code Section 1701.51, an incumbent director who is not re-elected remains in office until the Company's existing equity compensation plansdirector’s successor is elected and subjectqualified, or until his or her earlier resignation or removal. Therefore, if this proposal is approved by the shareholders, the board will also amend its Corporate Governance Guidelines to outstanding options and rightsprovide a director resignation policy if a nominee who is presented in the Equity Compensation Plan Information table on page 37.
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The 2016 Plan allows the Company the flexibility to grantcurrently a variety of stock and stock-based awards, including stock options and stock appreciation rights, granted separately or in tandem with each other, and restricted shares and restricted share units, both time vested or conditioned on the attainment of performance goals. The 2016 Plan is also designed to allow compliance with Section 162(m) of the Internal Revenue Code (the "Code"). It is intended that awards under the 2016 Plan with a performance component (which does not include time-vested share awards) generally will satisfy the requirements for performance-based compensation under Section 162(m) while granting the Compensation Committee the authority to grant nonperformance-based awards where it deems appropriate. Section 162(m) generally places a $1,000,000 limit on the tax deduction allowable for compensation paid (or accrued for tax purposes) with respect to the Chief Executive Officer and the three other highest-paid executives (excluding the chief financial officer) during a tax year; unless the compensation meets certain requirements. All stock incentive awards to the Company's most highly compensated executives that may be made over the next few years are expected to be granted under the 2016 Plan. By seeking shareholder approval of the 2016 Plan, the Board is also asking our shareholders to approve the material terms of the performance goals set forth in the 2016 Plan, which are described below.
Summary of the 2016 Plan
Shares Subject to the 2016 Plan
The aggregate number of common shares that may be issued under the 2016 Plan is 2,000,000, plus shares remaining available for grant under prior plans as discussed below. The 2016 Plan provides for appropriate adjustments in the number of shares subject to the 2016 Plan (and other share limitations contained therein and described below) and to grants previously made if there is a share split, dividend, reorganization, or other relevant change affecting the Company's corporate structure or its shares. If shares under an award are not issued prior to the expiration, termination, cancellation, or forfeiture of the award, then those shares would again be available for inclusion in future grants. Upon the effective date of the 2016 Plan, prior Company equity plans for which shares remain available for grant will be terminated. The shares available under such prior plans will be made available for grant under the 2016 Plan, as well as shares subject to outstanding awards under such prior plans which thereafter are forfeited, settled in cash or cancelled, or expire; provided that all outstanding awards under such prior plans remain outstanding and are administered and settled in accordance with the provisions of the prior plans, as applicable.
Other Share Limitations
The maximum number of shares subject to restricted shares or restricted share units that may be granted under the 2016 Plan is 1,250,000. The maximum number of shares subject to restricted shares or restricted share units that may be granted to an individual in a calendar year is 400,000 shares, and the maximum number of shares subject to stock options or stock appreciation rights that may be granted to an individual in a calendar year is 800,000 shares.
Eligible Participants
Officers and employeesdirector of the Company any consultantis not re-elected to the Company,board by an affirmative majority of the votes cast at an uncontested election. The resignation policy would require the director to tender his or her resignation to the chair of the Nominating and Corporate Governance Committee, with the Company's non-employee directors are eligibleboard determining within 90 days whether to receive awards underaccept the 2016 Plan. Awards are grantedresignation. Annex A to those persons with significant responsibility forthis proxy statement also includes the Company's success and growth. As of June 30, 2016, approximately 556 employees, including six executive officers, and six non-employee directors were eligible to receive equity awards.
Administration
The 2016 Plan is administered by a committee ("Committee") consisting of at least three directors appointeddirector resignation policy as it would be adopted into the Company’s Corporate Governance Guidelines by the Board, all of whom meet the definitionsboard.

Vote Required

Adoption of the terms "outside director" set forth in the regulations under Section 162(m) of the Code, "independent director" set forth in The Nasdaq Stock Market LLC ("Nasdaq") rules, and
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 "non-employee director" set forth in Rule 16b-3 under the Securities Exchange Act of 1934, as amended. Unless determined otherwise by the Board, the Compensation Committee will administer the 2016 Plan and has the authority under the 2016 Planamendments to (i) select the employees, consultants, and directors to whom awards are granted; (ii) determine the type and timing of awards and the appropriate award agreement evidencing each award; (iii) determine the number of shares covered by each award and all other terms and conditions of awards, not inconsistent with the terms of the 2016 Plan; (iv) determine whether an award is, or is intended to be, performance-based compensation within the meaning of 162(m) of the Code; (v) determine whether terms, conditions, and objectives have been met or, if permissible, should be modified or waived, not inconsistent with the terms of the 2016 Plan; (vi) cancel or suspend an award, or determine whether an amount or payment of an award should be reduced or eliminated; (vii) determine administrative rules, guidelines, and practices governing the 2016 Plan; and (viii) interpret the provisions of and otherwise supervise the administration of the 2016 Plan.
Stock Options
Stock options granted under the 2016 Plan must be in the form of either incentive stock options ("ISOs"), which meet the requirements of Section 422 of the Code, or nonqualified stock options ("NQSOs"), which do not meet those requirements. The term of a stock option is fixed by the Committee, but may not exceed seven years, and stock options are exercisable at such time or times as determined by the Committee. The exercise price of a stock option cannot be less than the fair market value of the shares on the date of grant, which generally means the last closing price of a share as reported on Nasdaq on the date of the grant. The grantee may pay the stock option exercise price either in cash or such other manner authorized in the 2016 Plan or the applicable award agreement, including the tender of shares. Shares tendered by participants as full or partial payment of the exercise price will not become available for issuance under the 2016 Plan. The 2016 Plan prohibits stock option repricing without shareholder approval.
Code Limitations on Incentive Stock Options
The Code currently places certain limitations on ISO awards. In addition to the other limitations described in the 2016 Plan, an ISO may only be granted to full or part-time employees (including officers and directors who are also employees) of the Company. The total fair market value of shares subject to ISOs which are exercisable for the first time by any participant in any given calendar year cannot exceed $100,000 (valued as of the date of grant). No ISO may be exercisable more than three months following termination of employment for any reason other than death or disability, nor more than one year with respect to death or disability terminations, or such stock option will no longer qualify as an ISO and shall be treated as an NQSO. ISOs will also be non-transferable in accordance with the provisions of the Code. Additional restrictions apply to the grant of ISOs to holders of in excess of 10% of the Company's outstanding shares.
Stock Appreciation Rights
The Committee may grant a stock appreciation right ("SAR") separately or in connection with a stock option granted under the 2016 Plan. If a grantee exercises a SAR, the grantee will receive an amount equal to the excess of the then-fair market value of the shares with respect to which the SAR is being exercised over the stock option exercise price of the shares, in the case of a SAR in connection with a stock option, or the exercise price of the SAR, in the case of an independent SAR. The SAR exercise price must be at least 100% of the fair market value of the underlying shares on the date of grant, and the term of such SAR may not exceed seven years. Payment may be made in cash, in shares, or in a combination of cash and shares, as the Committee determines. If a SAR granted in connection with a stock option is exercised in whole or in part, the right under the related stock option to purchase shares with respect to which the SAR has been exercised will terminate to the same extent. If a stock option is exercised, any SAR related to the shares purchased upon exercise of the stock option will terminate. To the extent that the number of shares reserved for issuance upon the grant of a SAR exceeds the number actually issued upon exercise of a SAR, such shares will not become available for issuance under the 2016 Plan. The 2016 Plan prohibits SAR repricing without shareholder approval.
15
Restricted Share and Restricted Share Unit Awards
The Committee may grant restricted share awards which consist of shares issued by the Company to a participant for no consideration, or for a purchase price which may be below their fair market value, and are subject to forfeiture in the event of termination of the participant's employment prior to vesting and subject to restrictions on sale or other transfer by the participant. Participants who hold restricted shares have voting rights with respect to the shares and have the right to receive dividend distributions, in cash or shares, payable to the extent the restrictions on the applicable restricted shares lapse. The Committee may also grant restricted share unit awards which are substantially similar to restricted share awards but which generally do not give the participant-holder the rights of a shareholder prior to lapse of the restrictions and, upon such lapse, may be settled in cash, shares, or a combination of both. The Committee may provide for the payment in cash or shares equal to the amount of dividends paid from time to time on the number of shares that would become payable upon vesting of the restricted share unit award. The Committee may provide that restrictions lapse after the passage of time (time-vested), upon certain events (such as death, disability, or retirement) or upon the attainment of specified performance objectives (performance-vested). The Committee may waive any restrictions or accelerate the date or dates on which restrictions lapse except no waiver may apply to a term that is not within the Committee's discretion to waive under the 2016 Plan.
Performance-Based Exception
The Committee may grant awards in a manner that is intended to qualify for the performance-based exception to the deductibility limitations of Section 162(m) of the Code and conditioned upon the achievement of performance goals as the Committee shall determine, in its sole discretion. The performance goals shall be based on one or more performance measures, and the Committee shall specify the time period or periods during which the performance goals must be met. The performance measure(s) may be described in terms of objectives that are related to the individual participant, the Company, or a subsidiary, division, department, region, function, or business unit of the Company, and shall consist of one or more or any combination of the following criteria: cash flow, profit, revenue, stock price, market share, sales, net income, operating income, return ratios, earnings per share, return on equity, working capital, total assets, net assets, return on assets, return on sales, return on invested capital, earnings, gross margin, costs, shareholders' equity, shareholder return and/or specific, objective and measurable non-financial objectives, productivity, or productivity improvement. Performance goals may be expressed in absolute terms or relative to the performance of other entities. The Committee may adjust or modify the performance objectives or periods, provided that any such modifications meet the requirements of Section 162(m) of the Code, to the extent applicable unless the Committee determines that such requirements should not be satisfied. Awards intended to qualify for the performance-based exception shall not vest or be paid until the Committee certifies that the performance goals have been achieved.
Transferability of Awards
No award is transferable other than by will or the laws of descent and distribution, except the Committee may, in its discretion, provide that an award (other than an ISO) is transferable without consideration to a participant's family member (as defined in the 2016 Plan), subject to such terms and conditions as the Committee may impose. All Awards shall be exercisable, during the participant's lifetime, only by the participant or a permitted transferee.
Termination of Employment
Generally, awards are forfeited upon a participant's termination of employment; however, the 2016 Plan provides that the Committee: (i) may allow a participant to exercise vested stock options or SARs for a period of time after termination, if not terminated for cause; and (ii) has discretion to provide the extent to which, if any, the vesting of any award is accelerated or forfeited due to a participant's, death, disability, or retirement, provided that, for awards intended to be performance-based compensation within the meaning of Section 162(m) of the Code, no vesting may occur or no distribution may be made prior to the attainment of the performance goals.
16
Change in Control
Except as otherwise provided in an award agreement, upon a "change in control" as defined in the 2016 Plan: (i) all outstanding stock options and SARs automatically become fully exercisable; and (ii) all restricted share and restricted share unit awards automatically become fully vested.
Recoupment Policy
Awards are subject to forfeiture or repayment pursuant to the terms of any applicable compensation recoupment or recovery policy adopted by the Company, Committee, or Board, including any policy adopted to comply with the rules of any stock exchange on which the shares are traded or the SEC.
Additional Restrictions
Awards may be subject to additional restrictions adopted by the Company, Committee, or Board, including share retention guidelines, minimum holding requirements or other similar restrictions.
Discontinuation of 2016 Plan, Amendments, and Award Substitutions
The Board of Directors may amend, alter, or discontinue the 2016 Plan at any time, provided that any such amendment, alteration, or discontinuance has been approved by the Company's shareholders, if shareholder approval is required under applicable laws, regulations, or exchange requirements (including for the purpose of qualification under Section 162(m) of the Code as "performance-based compensation"), and does not materially and adversely impair the rights of any grantee, without his or her consent, under any award previously granted. The 2016 Plan could be amended without shareholder approval in certain nonmaterial ways that could result in an increased cost to the Company. No Awards shall be made under the 2016 Plan after the tenth anniversary of the effective date.
New 2016 Plan Benefits
As of June 30, 2016, the Committee has approved the following awards under the 2016 Plan, subject to shareholder approval of the 2016 Plan at the annual meeting:
Name and PositionDollar Value (1)Number of Shares (2)
James H. Dennedy
President and Chief Executive Officer
$497,31747,499
Janine K. Seebeck
Senior Vice President, Chief Financial Officer and Treasurer
$143,11613,669
Kyle C. Badger
Senior Vice President, General Counsel and Secretary
$66,9996,399
Larry Steinberg
Senior Vice President, Chief Technology Officer
$112,89110,782
Jimmie D. Walker, Jr., Senior Vice President, Global Revenue$27,6282,638
Executive Officers as a Group$884,97384,523
Non-Executive Director Group$350,00030,355
Non-Executive Officer Employee Group$1,111,42396,934
____________
(1)Dollar values for restricted stock grants to non-employee directors and non-executive employees are based on the last reported sale price of our common stock on June 8, 2016 ($11.53).  Dollar values for restricted stock grants to executive officers are based on the last reported sale price of our common stock on June 30, 2016 ($10.47).
(2)
All restricted share grants to non-employee directors and non-executive employees were made on June 8, 2016.  All grants to executive officers were made on June 30, 2016.  Grants to non-employee directors vest on March 31, 2017.  Grants to employees, including executive officers, vest in three annual increments beginning on March 31, 2017, with the exception of the grants to Mr. Dennedy and Ms. Seebeck, which will vest when the performance criteria for such grants is obtained or one year from the date of shareholder approval of the 2016 Plan if the performance criteria are obtained sooner.
17
Any additional future awards under the 2016 Plan are granted in the discretion of the Committee, and therefore are not currently determinable, as awards are discretionary and participation is determined each fiscal year.
Certain Federal Tax Consequences with Respect to Awards
The following paragraphs are a summary of the general federal income tax consequences to U.S. taxpayers and the Company of awards granted under the 2016 Plan under current law. This is not intended to constitute tax advice, and tax consequences for an individual may be different.
There are no Federal income tax consequences to a participant or the Company upon the grant of stock options and SARs. When an NQSO or SAR is exercised, the participant realizes taxable compensation (ordinary income) at that time equal to, for an NQSO, the difference between the aggregate option exercise price and the fair market value of the shares on the date of exercise and, for an SAR, the aggregate amount of cash and fair market value of any shares received upon exercise. The Company is generally entitled to a tax deduction to the extent, and at the time, that the participant realizes compensation income. Upon the exercise of an NQSO or SAR, the 2016 PlanArticles requires the participant to pay to the Company any amount necessary to satisfy applicable Federal, state, or local tax withholding requirements. Upon the exerciseaffirmative vote of an ISO, a participant recognizes no immediate taxable income, except that the excesstwo-thirds of the fair market value of the shares acquired over the option exercise price will constitute a tax preference item for the purpose of computing the participant's alternative minimum tax liability. Income recognition is deferred until the shares acquired are disposed of and any gain will be treated as long-term capital gain if the minimum holding period is met (two years from the date of grant and one year from the date of exercise), but otherwise will be treated as ordinary income in an amount determined under the applicable tax rules. There is no tax deduction for the Company when an ISO is exercised. The participant's tax treatment upon a disposition of shares acquired through the exercise of a stock option is dependent upon the length of time the shares have been held. There is no tax consequence to the Company in connection with the disposition of the shares except that the Company would be entitled to a tax deduction, in an amount equal to the ordinary income recognized by the participant, in the case of a disposition of shares acquired upon exercise of an ISO before the ISO holding period has been satisfied.our outstanding common stock.
Generally, no taxes are due upon a grant of restricted shares or restricted share units. An award of restricted shares becomes taxable when it is no longer subject to a substantial risk of forfeiture (i.e., becomes vested or transferable). The taxation of restricted shares may be accelerated by an election under Section 83 of the Code, if permitted. Income tax is paid at ordinary income rates on the value of the restricted shares when the restrictions lapse, and then at capital gain rates with respect to any further gain (or loss) when the shares are sold. In the case of restricted share units, the participant has taxable ordinary income upon receipt of payment. In all cases, the Company has a tax deduction when the participant recognizes ordinary income subject to other applicable limitations and restrictions.
Grants may qualify as performance-based compensation under Section 162(m) of the Code. This status is intended to preserve Federal income tax deductions by the Company with respect to annual compensation required to be taken into account under Section 162(m) of the Code that is in excess of $1 million and paid to the Company's chief executive officer and three next most highly compensated executive officers, excluding the chief financial officer. To qualify, grants must be made by a committee consisting solely of two or more "outside directors" (as defined under Section 162 regulations) and satisfy the limit on the total number of shares that may be awarded to any one participant during any calendar year. In addition, for grants other than options to qualify, the granting, issuance, vesting, or retention of the grant must be contingent upon satisfying one or more performance criteria, as established and certified by a committee consisting solely of two or more "outside directors." The 2016 Plan permits 162(m) qualified grants but also permits the Committee to grant awards which do not qualify where it deems that appropriate.
Tax withholding requirements may be satisfied through the withholding of shares deliverable in connection with an award, as determined by the Committee. Shares withheld by, or otherwise remitted to, the Company to satisfy a participant's tax withholding obligations upon the lapse of restrictions of restricted shares or the exercise of options or SARs granted under the 2016 Plan or upon any other payment of issuance of shares under the 2016 Plan will not become available for issuance under the 2016 Plan.
18
Finally, the 2016 Plan is designed to meet requirements for exemptions from coverage under Section 409A of the Code governing nonqualified deferred compensation. The Committee is expressly authorized to take such actions as may be necessary to avoid adverse tax consequences thereunder.
The foregoing is only a summary of the effect of federal income taxation upon participants and the Company with respect to the grant and exercise of awards under the 2016 Plan. It does not purport to be complete and does not discuss the tax consequences of a participant's death or the provisions of the income tax laws of any municipality, state, or foreign country in which the participant may reside.
Required Vote and Recommendation of the Board of Directors
The affirmative vote of the holders of shares representing a majority of the common shares present in person or represented by proxy and entitled to vote will be required to approve proposal 3. The effect of an abstention is the same as a vote "AGAINST" proposal 3, and a broker non-vote will have no effect on proposal 3.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERSA VOTE "FOR" PROPOSAL 3. “FOR” APPROVAL OF AN AMENDMENT TO ARTICLE II, SECTION 1, OF THE COMPANY’S AMENDED CODE OF REGULATIONS, AND THE ADDITION OF ARTICLE EIGHTH TO THE AMENDED ARTICLES OF INCORPORATION, TO REQUIRE THE ELECTION OF DIRECTORS TO RECEIVE A MAJORITY VOTE IN UNCONTESTED ELECTIONS, OR A PLURALITY VOTE IN CONTESTED ELECTIONS. PROXY CARDS RECEIVED BY THE COMPANY WILL BE VOTED "FOR"“FOR” PROPOSAL 2 UNLESS THE SHAREHOLDER SPECIFIES OTHERWISE ON THE PROXY CARD.

PROPOSAL 3
AMENDMENT TO THE COMPANY’S AMENDED CODE OF REGULATIONS TO PROVIDE
FOR THE REMOVAL OF DIRECTORS BY A SIMPLE MAJORITY


13


Our board of directors recommends that shareholders approve an amendment to the Code to reduce the threshold for shareholder removal of a director from a two-thirds supermajority to a simple majority. The adoption of this standard is intended to reinforce the board’s accountability to the interests of shareholders and to reflect emerging corporate governance best practices. The text of the amendment to the Code is set forth in Annex B to this Proxy Statement.

Empowering shareholders to remove directors by a simple majority will ensure that all directors maintain sufficient support among, and accountability to, our shareholders. In fact, director removal by majority vote of shareholders is expressly provided for by Delaware law, which governs a majority of publicly traded corporations in the United States, and, as such, many public corporations have already adopted such a provision.

Vote Required

Adoption of the amendment to the Code requires the affirmative vote of two-thirds of our outstanding Common Stock.

Recommendation of the Board of Directors

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” APPROVAL OF AN AMENDMENT OF ARTICLE II, SECTION 6, OF THE COMPANY’S AMENDED CODE OF REGULATIONS TO REDUCE THE THRESHOLD NEEDED TO REMOVE A DIRECTOR FROM A TWO-THIRDS MAJORITY TO A SIMPLE MAJORITY. PROXY CARDS RECEIVED BY THE COMPANY WILL BE VOTED “FOR” PROPOSAL 3 UNLESS THE SHAREHOLDER SPECIFIES OTHERWISE ON THE PROXY CARD.


14


BENEFICIAL OWNERSHIP OF COMMON SHARES

The following table shows the number of common shares beneficially owned as of June 25, 2019, , by (i) each current director; (ii) our Named Executive Officers employed with the Company on June 25, 2019; (iii) all directors and executive officers as a group; and (iv) each person who is known by us to beneficially own more than 5% of our common shares.



Name


Common Shares
Shares Subject
to Exercisable Options

Restricted
Shares (1)
Total Shares
Beneficially Owned (1)

Percent of
Class (2)
Directors and Nominees     
Donald Colvin21,736
 —
 3,308
 25,044 *
Dana Jones—
 —
 3,308
 3,308 *
Jerry Jones46,676
 —
 3,308
 49,984 *
Michael A. Kaufman (3)2,408,757
 —
 —
 2,408,757 10.3
Keith M. Kolerus135,253
 —
 3,308
 138,561 *
Melvin Keating25,580
 —
 3,308
 28,888 *
John Mutch30,970
 —
 3,308
 34,278 *
Named Executive Officers     
Ramesh Srinivasan204,348
 525,000
 30,120
 759,468 3.2
Tony Pritchett28,508
 30,174
 12,827
 71,509 *
Kyle Badger90,624
 87,466
 8,529
 186,619 *
Prabuddha Biswas9,440
 10,615
 28,328
 48,383 *
Don DeMarinis5,403
 4,423
 10,288
 20,114 *
All directors and executive officers3,038,328
 695,843
 162,228
 3,896,399 16.1
Other Beneficial Owners     
BlackRock, Inc.
55 East 52nd Street
New York, New York 10055		2,569,881 (4)
    10.9
Bermuda One Fund LLC
c/o MQ Services Ltd. Victoria Place 31 Victoria Street, Hamilton, HM10, Bermuda		2,460,400 (5)
    10.5
MAK Capital One, LLC et al
590 Madison Avenue, 9th Floor
New York, New York 10022		2,408,757 (6)
    10.3
Dimensional Fund Advisors LP Building One
6300 Bee Cave Road
Austin, Texas, 78746		1,772,134 (7)
    7.5
The Vanguard Group, Inc. PO Box 2600 V26 Valley Forge, PA 19482-26001,197,964 (8)
    5.1
William Blair Investment Management, LLC
150 North Riverside Plaza
Chicago, IL 60606		1,179,416 (9)
    5.0



15


(1)Beneficial ownership of the shares comprises both sole voting and dispositive power or voting and dispositive power that is shared with a spouse, except for restricted shares for which individual has sole voting power but no dispositive power until such shares vest.
(2)* indicates beneficial ownership of less than 1% on June 25, 2019.
(3)Comprised entirely of shares beneficially owned by MAK Capital One LLC. Mr. Kaufman is the managing member of MAK Capital One LLC and shares voting and dispositive power with respect to all the shares.
(4)As reported on a Schedule 13G/A dated January 2, 2019. Blackrock, Inc. has sole voting power with respect to 2,544,831 shares and sole dispositive power with respect to all the shares.
(5)As reported on a Form 4 filed June 24, 2019. VP Bermuda LLC is the managing member of Bermuda One Fund LLC, and Scott D. Vogel is the Managing Member of VP Bermuda LLC. Bermuda Fund, VP Bermuda LLC and Mr. Vogel have shared power to vote or direct the vote the shares held by Bermuda One Fund LLC. The principal business address of VP Bermuda LLC and Mr. Vogel is c/o McCarter & English, LLP, 825 Eighth Avenue, 31st Flr., New York, NY 10019.
(6)As reported on a Schedule 13D/A dated February 14, 2019. MAK Capital One LLC has shared voting and dispositive power with respect to all the shares. MAK Capital One LLC serves as the investment manager of MAK Capital Fund LP (“MAK Fund”) and MAK-ro Capital Master Fund LP (“MAK-ro Fund”). MAK GP LLC is the general partner of MAK Fund and MAK-ro Fund. Michael A. Kaufman is managing member and controlling person of MAK GP LLC and MAK Capital One LLC MAK Fund, MAK-ro Fund, MAK Capital and MAK GP hold 1,605,365 shares (representing 6.8% of the outstanding shares), 513,840 shares (representing 2.2% of the outstanding shares), 118,523 shares (representing 0.5% of the outstanding shares) and 171,029 shares (representing 0.7% of the outstanding shares), respectively. Each of MAK Fund and MAK-ro Fund shares voting power and investment power with MAK Capital, MAK GP and Mr. Kaufman. Each of MAK Capital and MAK GP shares voting power and investment power with Mr. Kaufman. The principal business address of MAK Capital One LLC, MAK GP LLC and Mr. Kaufman is 590 Madison Avenue, 9th Floor, New York, New York 10022. The principal address of MAK Fund is c/o Dundee Leeds Management Services Ltd., 129 Front Street, Hamilton, HM 12, Bermuda. The principal business address of MAK-ro Fund is c/o Dundee Leeds Management Services Ltd., Waterfront Centre, 2nd Floor, 28 N. Church Street, P.O. Box 2506, Grand Cayman KY1-1104, Cayman Islands.
(7)As reported on a Schedule 13G/A dated February 8, 2019. Dimensional Fund Advisors LP has sole voting power with respect to 1,687,695 shares and sole dispositive power with respect to all the shares.
(8)As reported on a Schedule 13F filed May 15, 2019.
(9)As reported on a Schedule 13F filed May 10, 2019.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act requires the Company’s directors and certain of its executive officers and persons who beneficially own more than 10% of the Company’s common shares to file reports of and changes in ownership with the SEC. Based solely on the Company’s review of copies of SEC filings it has received or filed, the Company believes that each of its directors, executive officers, and beneficial owners of more than 10% of the shares satisfied the Section 16(a) filing requirements during fiscal year 2019, other than: due to miscommunication between Mr. Kolerus and the Company, Mr. Kolerus filed a Form 4 on September 17, 2018 for the sale of 14,317 shares that included transactions that were reported 1 and 2 days late, he filed a Form 4 on February 21, 2019 for the sale of 8,400 shares that included transactions that were reported between 3 and 23 days late, and he filed a Form 4 on [June 26], 2019 for the sale of 783 shares that should have been filed in August and December 2018.

EXECUTIVE OFFICERS

The following are biographies for each of our current, non-director executive officers. The biography for Mr. Dennedy,Srinivasan, our President and Chief Executive Officer, and a director, is provided above.



16


NameAgeCurrent PositionPrevious Positions
Janine K. SeebeckTony Pritchett40Senior Vice President, Chief Financial Officer and Treasurer since August 2013.37Vice President and Chief Financial Officer since June 2017.Interim Chief Financial Officer from November 2016 until June 2017. Senior Director of Operations from March 2015 until November 2016, Controller November 2011 tofrom August 2013 until March 2015, and Divisional Controller of the Retail Solutions Group from January 2012 until August 2013. Vice President of Finance, Asia Pacific, at PGi; from 2008 to April 2011. Vice President, Corporate Controller at Premiere Global Services, Inc. from 2002 to 2008.
Kyle C. Badger4851Senior Vice President, General Counsel and Secretary since October 2011.Executive Vice President, General Counsel and Secretary at Richardson Electronics, Ltd. from 2007 tountil October 2011. Senior Counsel at Ice Miller LLP from 2006 to 2007. Partner at McDermott, Will & Emery LLP from 2003 to 2006.
Rehan JaddiPrakash Bhat4454Vice President and Managing Director, India, since March 2017.Vice President, India Operations, at Radial Omnichannel Technologies India, from November 2015 until March 2017. Vice President, Bally Technologies India, from September 2005 to August 2014.
Prabuddha Biswas59Senior Vice President, Customer SupportChief Technology Officer since April 2018.Chief Technology Officer, Alert Logic, from August 2015 until April 2018. Vice President of Engineering, Airbiquity, from June 2013 until August 2015. Senior Vice President of Engineering, Medio Systems, from June 2011 until June 2013.
Don DeMarinis55Senior Vice President Sales, Americas, since January 2018.Chief Commercial Officer, Global, QikServe Limited, from April 2017 until January 2018. Executive Vice President/Chief Revenue Officer, Gusto, from June 2016 until April 2017. Vice President, Sports & Service Solutions, since December 2014.Entertainment Business Unit, Oracle, September 2014 until June 2016.
Heather Varian Foster47Vice President of Product Engineering,Marketing since March 2018.Vice President, Marketing, Worldpay, from June 2012 toJanuary 2017 until February 2018. Vice President, Marketing, StrataCloud, from May 2014 until December 2014.  Principal Group Program Manager at Microsoft2016. Vice President Marketing, ControlScan, from 2004 to 2012.December 2007 until May 2014.
Larry SteinbergRobert Jacks4861Senior Vice President and Chief TechnologyInformation Officer since July 2018.Vice President of Professional Services from June 2012.Principal Development Manager, Microsoft Corporation2015 until July 2018. President, Robert L. Jacks & Associates, LLC, from August 2009 to May 2012, and Principal Architect2013 until June 2015. Chief Information Officer, Chickasaw Nation, August 2005 until July 2013.
Jeba Kingsley46Vice President, Professional Services since December 2018.Vice President, Global Services, Scientific Games, from June 2007 to July 2009; Founder and Chief Technology Officer of Engyro CorporationNovember 2014 until November 2017. Vice President, Professional Services, Bally Technologies, from March 1995 to May 2007.2013 until November 2014. Senior Director, Professional Services, Bally Technologies, from March 2006 until February 2013.
Jimmie D. Walker, Jr.Sridhar Laveti5652Vice President of Established Products and Customer Support since September 2017.Vice President, Business Transformation from May 2017 until September 2017. Senior Vice President, Global Revenue since January 2016.Gaming Systems, at Bally Technologies from December 2014 until September 2017. Senior Vice President, Bally Technologies, from April 2006 until December 2014.
Chris Robertson48Vice President, SalesCorporate Controller and Marketing November 2014 toTreasurer, since June 2019.Corporate Controller and Treasurer from June 2017 until June 2019. Corporate Controller from February 2017 until June 2017. Managing Director at Grant Thornton LLP from 2010 until January 2016; Vice President of Sales, Codeforce 360 from May 2013 to October 2014; Business Development Principle, Edutainment Media from October 2005 to May 2013.2017.

19
BENEFICIAL OWNERSHIP OF COMMON SHARES

The following table shows the number of common shares beneficially owned as of July 28, 2016 by (i) each current director; (ii) our Named Executive Officers; (iii) all directors and executive officers as a group; and (iv) each person who is known by us to beneficially own more than 5% of our common shares.

17


 
 
Name
 
 
Common Shares
Shares Subject
to Exercisable Options
 
Restricted
Shares (1)
Total Shares
Beneficially Owned (1)
 
Percent of
Class (2)
Directors and Nominees     
Donald Colvin3,278 — — 3,278 *
Jerry Jones28,218 — — 28,218 *
Michael A. Kaufman (3)7,056,934 — — 7,056,934 30.8
Keith M. Kolerus141,495 15,000 — 156,495 *
Melvin Keating3,278 — — 3,278 *
John Mutch12,512 — — 12.512 *
Named Executive Officers     
Kyle C. Badger41,091 54,419 34,230 129,740 *
James H. Dennedy242,015 201,861 87,134 531,010 2.3
Janine Seebeck22,866 37,727 40,693 101,286 *
Larry Steinberg103,598 68,385 51,103 223,086 1.0
Jimmie D. Walker, Jr.1,213 3,555 25,850 30,618 *
All directors and executive officers7,687,421 394,538 259,548 8,341,507 35.8
Other Beneficial Owners     
MAK Capital One, LLC et al
590 Madison Avenue, 9th Floor
New York, New York 10022
7,056,934 (4)   30.8
RGM Capital, LLC
9010 Strada Stell Court, Suite 105
Naples, FL 34109
2,244,809 (5)   9.8
Discovery Group I, LLC
191 North Wacker Drive, Suite 1685
Chicago, Illinois 60606
2,231,855 (6)   9.7
Dimensional Fund Advisors LP 6300 Bee Cave Road
Building One
Austin, Texas, 78746
1,863,204 (7)   8.1
 
 
Name
 
 
Common Shares
Shares Subject
to Exercisable Options
 
Restricted
Shares (1)
Total Shares
Beneficially Owned (1)
 
Percent of
Class (2)
Other Beneficial Owners     
BlackRock, Inc.
55 East 52nd Street
New York, New York 10055
1,558,181 (8)   6.8

20
(1)Beneficial ownership of the shares comprises both sole voting and dispositive power, or voting and dispositive power that is shared with a spouse, except for restricted shares for which individual has sole voting power but no dispositive power until such shares vest.
(2)* indicates beneficial ownership of less than 1% on July 28, 2016.
(3)Comprised entirely of shares beneficially owned by MAK Capital One  L.L.C. Mr. Kaufman is the managing member of MAK Capital One L.L.C. and shares voting and dispositive power with respect to all of the shares.
(4)
As reported on a Schedule 13D/A dated May 12, 2015. MAK Capital One LLC has shared voting and dispositive power with respect to all of the shares. MAK Capital One LLC serves as the investment manager of MAK Capital Fund LP ("MAK Fund") and MAK-ro Capital Master Fund LP ("MAK-ro Fund"). MAK GP LLC is the general partner of MAK Fund and MAK-ro Fund. Michael A. Kaufman, managing member and controlling person of MAK GP LLC and MAK Capital One L.L.C., has shared voting and dispositive power with respect to all of the shares. MAK Fund  has shared voting and dispositive power with respect to 3,424,973 shares. MAK-ro Fund has shared voting and dispositive power with respect to 1,859,675 shares. Paloma International L.P. ("Paloma"), through its subsidiary Sunrise Partners Limited Partnership, and S. Donald Sussman, controlling person of Paloma, have shared voting and dispositive power with respect to 1,772,286 shares. The principal business address of MAK Capital One LLC, MAK GP LLC and Mr. Kaufman is 590 Madison Avenue, 9th Floor, New York, New York 10022. The principal address of MAK Fund is c/o Dundee Leeds Management Services Ltd., 129 Front Street, Hamilton, HM 12, Bermuda. The principal business address of MAK-ro Fund is c/o Dundee Leeds Management Services Ltd., Waterfront Centre, 2nd Floor, 28 N. Church Street, P.O. Box 2506, Grand Cayman KY1-1104, Cayman Islands. The principal address of Paloma and Sunrise Partners Limited Partnership is Two America Lane, Greenwich, Connecticut 06836-2571. The principal business address for Mr. Sussman is 217 Commercial Street, Portland, Maine 04101.
On May 31, 2011, MAK Fund, Paloma and Computershare Trust Company, N.A. (the "Trustee") entered into an Amended and Restated Voting Trust Agreement (the "Revised Voting Trust Agreement") to clarify the effect on the voting trust created by the Voting Trust Agreement dated as of December 31, 2009, were the reporting persons (named above) to beneficially own one-third or more of the Company's outstanding voting securities as a result of a decrease in the total number of voting securities outstanding.  In such event, regardless of the reporting persons' economic interest in the Company, its voting power will be effectively limited to no more than 23% or 27% of the voting securities in the event of a shareholder vote on (i) a merger, consolidation, conversion, sale or disposition of stock or assets or other business combination which requires approval of two-thirds of the Company's voting power (a "Strategic Transaction") or (ii) a transaction other than a Strategic Transaction which requires approval of two-thirds of the Company's voting power (an "Other Transaction"), respectively. In connection with a Strategic Transaction or Other Transaction, the reporting persons would continue to possess the total voting power only over a number of voting securities that would equal the total voting power it would possess were it to hold only one-third of the voting securities. The Revised Voting Trust Agreement will become effective if and when the number of shares owned by the reporting persons equals or exceeds one-third of the voting securities then outstanding as a result of a decrease in the total number of voting securities outstanding.  Until such time, the Voting Trust Agreement will remain in full force and effect.
The Voting Trust Agreement provides that, for transactions requiring at least two-thirds of the voting power to approve, Trustee will vote shares as follows: (i) for a Strategic Transaction, vote shares that exceed 20% of the outstanding shares in favor of, against, or abstaining from voting in the same proportion as all other shares voted by shareholders (including reporting persons' shares that do not exceed the 20% threshold); and (ii) for Other Transactions, vote shares that exceed 25% of the outstanding shares in favor of, against, or abstaining from voting in the same proportion as all other shares voted by shareholders (including reporting persons' shares that do not exceed the 25% threshold). The Voting Trust Agreement terminates (i) if the vote necessary to approve all forms of transactions is lowered to the affirmative vote of holders of shares entitling them to exercise at least a majority of the voting power on the proposal to approve such transactions (from two-thirds); (ii) if MAK Fund and Paloma are no longer members of a "group" for purposes of Section 13(d) of the Securities Exchange Act, then the Voting Trust Agreement terminates with respect to any of MAK Fund and Paloma that beneficially owns not more than 20% of the outstanding shares; (iii) on February 18, 2020, or February 18, 2025 if MAK Fund continues to hold 20% of the outstanding shares; or (v) if another person or entity holds greater than 20% of the outstanding shares that are not subject to a similar voting agreement.
(5)As reported on a Schedule 13G/A dated February 12, 2016. RGM Capital, LLC has shared voting and dispositive power with respect to all of the shares.  Robert G. Moses is the managing member of RGM Capital, LLC, and shares voting and dispositive power with respect to all of the shares.
(6)As reported on a Schedule 13D/A dated May 6, 2015.  Discovery Group has shared voting and dispositive power with respect to all the shares.  Discovery Equity Partners, L.P. and Daniel J. Donoghue and Michael R. Murphy, managing members of Discovery Group, share voting and dispositive power with respect to all the shares.  The business address of each of Discovery Equity Partners and Messrs. Donoghue and Murphy is 191 North Wacker Drive, Suite 1685, Chicago, Illinois 60606.
(7)As reported on a Schedule 13G/A dated February 9, 2016. Dimensional Fund Advisors LP has sole voting power with respect to 1,824,555 shares and sole dispositive power with respect to all of the shares.
(8)As reported on a Schedule 13G/A dated January 20, 2016. BlackRock, Inc. has sole voting power with respect to 1,539,036 shares and sole dispositive power with respect to all of the shares.
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act requires the Company's directors and certain of its executive officers and persons who beneficially own more than 10% of the Company's common shares to file reports of and changes in ownership with the SEC. Based solely on the Company's review of copies of SEC filings it has received or filed, the Company believes that each of its directors, executive officers, and beneficial owners of more than 10% of the shares satisfied the Section 16(a) filing requirements during fiscal year 2016, except as follows: (i) Messrs. Colvin and Keating filed late Form 3s reporting their election to the board of directors in September 2015, (ii) Mr. Walker filed late a Form 3 reporting his appointment as an executive officer in January 2016; (iii) Messrs. Dennedy, Badger, Jaddi, and Steinberg and Ms. Seebeck filed late Form 4s for equity grants made to them in June 2015 and tax withholdings in July 2015 and March 2016; (iv) Mr. Walker filed a late Form 4 reporting a tax withholding in March 2016; (v) Messrs. Jones, Kolerus and Mutch filed late Form 4s for equity grants made to them in June 2015, and (vi) Mr. Mutch filed a late Form 4 reporting a stock sale in March 2015.  The Company has recently outsourced the preparation and filing of Section 16(a) reports to improve compliance with the filing requirements of Section 16(a).

COMPENSATION DISCUSSION AND ANALYSIS

Introduction

This Compensation Discussion and Analysis (the "CD&A"“CD&A”) describes our executive compensation philosophy and programs for our Named Executive Officers during fiscal year 2016.2019, being the year beginning April 1, 2018, and continuing through March 31, 2019. Compensation arrangements with our Named Executive Officers are governed by the Compensation Committee of our board of directors.

Our Named Executive Officers in fiscal year 20162019 consisted of our Chief Executive Officer ("CEO")(CEO), our Chief Financial Officer ("CFO")(CFO), and our three other most highly compensated officers during fiscal year 2016,2019, as listed below:

·James Dennedy, President and Chief Executive Officer
Ramesh Srinivasan, President and CEO
·Janine Seebeck, Senior Vice President, Chief Financial Officer and Treasurer
Tony Pritchett, Vice President and CFO
·Kyle Badger, Senior Vice President, General Counsel and Secretary
·Larry Steinberg,Prabuddha Biswas, Senior Vice President, Chief Technology Officer
·Jimmie D. Walker, Jr., Senior Vice President, Global Revenue
Don DeMarinis, Senior Vice President Sales, Americas

Mr. Srinivasan joined us as CEO on January 3, 2017. In connection with Mr. Srinivasan’s appointment as CEO, our board of directors approved, and the Company entered into, an employment agreement with him on December 6, 2016. As discussed, below under the heading Fiscal Year 2019 Compensation, Mr. Srinivasan’s compensation for fiscal year 2019 was primarily as set forth in his employment agreement.

Mr. Biswas was hired into his role as Senior Vice President, Chief Technology Officer in April 2018, shortly after the beginning of fiscal year 2019. Messrs. Dennedy,Pritchett, Badger and Steinberg and for Ms. Seebeck consists of the same elements and adheres to the same philosophy and objectives.  Mr. Walker, as the head of our sales function, has a compensation structure designed to incent profitable sale revenue growth, andDeMarinis continued in their positions from fiscal year 2016 it was therefore substantially different from that of the other Named Executive Officers.

Compensation Highlights2018.

Compensation Focus for Fiscal Year 20162019. 

The compensation arrangements with our Named Executive Officers for fiscal year 20162019 were similar to theirthe compensation arrangements for Named Executive Officers in fiscal year 2015 and recent prior years. Our CEO’s compensation includes base salary and an annual incentive based on company financial performance that is settled in shares of common stock. The compensation for our other Named Executive Officers includes base salary, annual cash incentives based on company financial performance, and long-term equity incentives.

After considering the results of our recent votes on Named Executive Officer compensation, which confirmed the Company'sCompany’s general philosophy and objectives relative to our executive compensation program, the Compensation Committee continued efforts to maintain market median compensation and link executive pay to performance by maintaining base salaries and maintained annual incentive opportunities for all of the Named Executive Officers generally at the same level as fiscal year 2015,2018, while focusing annual incentives on improvements over fiscal year 20152018 results.
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Performance Linked Compensation.  Our Compensation Committee set fiscal year 2016 compensation, including financial targets for performance-based compensation, The annual incentive for our CEO, while based on the same company financial measures as the annual incentives for the other Named Executive Officers, was settled in shares of common stock to continuefurther align the CEO with shareholder interests and to emphasize pay for performance by setting annual cash incentives based on goals focused on improvements over fiscal year 2015 results for revenue and adjusted EBITDA.  In prior years, the Committee had included adjusted operating income as a financial performance metric in setting annual cash incentives.  However, as announced by the Companylong term value creation.

Mr. Biswas was hired at the beginning of fiscal year 2016, the Company is now using adjusted EBITDA internally to focus management on the results of the Company's core operations,2019, and the Compensation Committee alignedprovided him with larger long-term incentive grants than the metrics for annual cash incentives in fiscal year 2016 accordingly.  Adjusted EBITDA, a non-GAAP financial measure, is defined as income before income taxes, interest expense (net of interest income), depreciation and amortization (including amortization of developed technology), and excluding charges relating to (i) legal settlements, (ii) restructuring, severance, and other charges, (iii) asset write-offs and other fair value adjustments, (iv) share-based compensation, and (v) other non-operating (income) expense.

Mr. Dennedy's targeted pay was approximately 74% performance-based, and between 50% and 67% for each of our other Named Executive Officers' targeted pay was performance-based, tied directly to annual goals or long-term equity awards, the value of which is tied directly to an increase in share price.

Our operating results for fiscal year 2016 outperformed our plan.  Total net revenue increased by 16% from $103.5 million in fiscal year 2015 to $120.4 million in fiscal year 2016, and adjusted EBITDA increased 258% from $1.2 million in fiscal year 2015 to $4.3 million in fiscal year 2016. As a result, our Named Executive Officers earned approximately 138% of their target annual incentives related to fiscal year 2016.

To further link pay to performance and emphasize long-term shareholder value creation, the only increases in compensation provided to the Named Executive Officers in fiscal year 2016 byorder to attract him to the Compensation Committee were in the form of long-term equity incentive awards granted at the beginning of fiscal year 2016 to three of the Named Executive Officers that were 5 to 15% higher as a percentage of base salary over the prior year.

Chief Executive Officer Compensation.   Mr. Dennedy's compensation package for fiscal year 2016 did not change from 2015.

At the beginning of the fiscal year, the Compensation Committee believed Mr. Dennedy's compensation reflected the Compensation Committee's ongoing commitment to link pay to performanceCompany and to maintain market median compensation without change. At the end of the fiscal year, the Compensation Committee re-assessed Mr. Dennedy's total compensation for fiscal year 2016 and deemed that the total compensation that would have been earned underincrease his compensation package exceeded what the Committee believed to be market compensation for his position.alignment with shareholders. As a result, the Committee used its discretion to reduce Mr. Dennedy's annuallong-term incentive award to 100% of his target incentive amount from the 138% of target that would have been earned based on the Company's financial performance.

Highlightscompensation composed an outsized percentage of Mr. Dennedy's 2016 compensation included:
·No increase in base salary or annual incentive opportunity;
·Annual incentive payout reduced to target payout to keepBiswas’ total CEO compensation in line with the Committee's determination of market;
·50% of long-term incentive award, granted as stock-settled appreciation rights, is based entirely on share price improvement, and the balance, granted as restricted stock, is tied to share price; and
·74% of targeted compensation was variable pay, tied either to performance or share price improvement.

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Chief Financial Officer Compensation.   Ms. Seebeck's compensation package for fiscal year 2016 also continued to reflect the Compensation Committee's ongoing commitment to link pay to performance and to maintain market median compensation as evidence by the following for Ms. Seebeck:
·No increase in base salary or annual incentive opportunity;
·Increase in total compensation to better align to market median made entirely in long term incentive awards;
·50% of long-term incentive award, granted as stock-settled appreciation rights, is based entirely on share price improvement, and the balance, granted as restricted stock, is tied to share price;
·59% of targeted compensation was variable pay, tied either to performance or share price improvement, an increase of 9% over fiscal year 2015.

Senior Vice President, Sales Compensation.  Mr. Walker was not an executive officer at the beginning of the fiscal year, and accordingly his compensation was not reviewed or approved by the Compensation Committee.  At the beginning of the fiscal year his target cash compensation was $373,108, consisting of $171,428 in base salary and $201,680 in annual incentives based primarily on commissions.  In addition, in August 2015, Mr. Walker received a grant of stock-settled appreciation rights equal in value to $42,857, or 25% of his base salary, as part of annual equity grants made to senior non-executive employees of the Company.

In August 2015, in recognition of improved sales results under Mr. Walker's leadership, Mr. Dennedy increased Mr. Walker's target cash compensation to $450,000, consisting of $225,000 in base salary and $225,000 in annual incentives.  In January 2016, Mr. Dennedy, with the consent of the Compensation Committee, promoted Mr. Walker to the position of Senior Vice President, Global Revenue, and in connection with this promotion raised Mr. Walker's base salary to $240,000 and his annual incentive to $275,000.  The Compensation Committee also awarded Mr. Walker a grant of 25,000 restricted common shares as a retention incentive on the same basis as the retention grants made to other executive officers in fiscal year 2015.  As with the prior grants, Mr. Walker's grant vests 5% on the first anniversary of grant, 5% on the second anniversary of grant, and 90% on the third anniversary.2019 compensation.

Compensation Philosophy, Objectives, and Structure

Our Compensation Committee adopted its pay philosophy, objectives, and structure for Named Executive Officers to achieve financial and business goals and create long-term shareholder value.

Compensation Philosophy and Objectives. For fiscal year 2016,2019, as in recent prior fiscal years, our Compensation Committee'sCommittee’s pay philosophy was to pay total compensation at the market median of comparative peer group compensation, with emphasis placed onemphasize performance-based compensation, tied directly to annual goals or


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long-term equity awards, and to link compensation to our business strategy. The Compensation Committee'sCommittee’s objective was to establish an overall compensation package to:
·Reward the achievement of business objectives approved by our board of directors;

·Tie a significant portion of compensation to the long-term performance of our common shares;
Reward the achievement of business objectives approved by our board of directors;
·Provide a rational, consistent, and competitive executive compensation program that is well understood by those to whom it applies; and
Tie a significant portion of compensation to the long-term performance of our common shares;
·Provide a rational, consistent, and competitive executive compensation program that is well understood by those to whom it applies; and
Attract, retain, and motivate executives who can significantly contribute to our success.

Compensation Structure. Our compensation structure is comprised of:

Base Salary — Base salary provides fixed pay levels aimed to attract and retain executive talent. Variations in salary levels among Named Executive Officers are based on each executive'sexecutive’s roles and responsibilities, experience, functional expertise, relation to peer pay levels, competitive assessments, individual performance, and changes in salaries in the overall general market and for all employees of the Company. Salaries are reviewed annually by our Compensation Committee, and changes in salary are based on these factors and input from our CEO, other than for himself. None of the factors are weighted according to any specific formula. New salaries generally are based on the Compensation Committee'sCommittee’s discretion and judgment but may be based on any of the above-mentioned relevant factors.

Annual Incentives — Annual incentives provide cash variable pay for achievement of the Company'sCompany’s financial strategic, and operational goals and individual goals, with target incentives set as a percentage of salary, designed to reward achievement of goals with an annual cash payment. Variations in target incentive amounts among Named Executive Officers are determined by our Compensation Committee and based on market data, length of time in current role or similar role at another company, and recommendations from our CEO, other than for himself.  At the end of each fiscal year, the Compensation Committee considers the aggregate compensation of each Named
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Executive Officer and makes adjustments tomay adjust the annual incentive payment otherwise earned if the aggregate compensation is significantly outsidedeemed deficient or excessive in the opinion and discretion of the market median compensation determined based on the 2014 peer group and other information available to the Compensation Committee. Annual incentives for our CEO are settled in shares of common stock, instead of cash.

Long-Term Incentives — Long-term incentives are variable, equity incentives designed to drive improvements in performance that build wealth and create long-term shareholder value by tying the value of earned incentives to the long-term performance of our common shares. Target incentives are also set as a percentage of salary. Variations in awards among Named Executive Officers are determined by our Compensation Committee after a review of various factors, including recommendations based on market data, individual ability to influence results, length of time in current role or similar role at another company, and recommendations from our CEO, other than for himself.

Compensation Key Considerations

Annual Goal Setting. Annual goals for our Named Executive Officers aremay be tied to our financial, strategic, and operational goals and may include business specific financial targets relating to our goals. For fiscal year 2016,2019, the Compensation Committee linked all of the Named Executive Officer's annual incentive goals to financial targets emphasizing both growth and profitability. Accordingly, a portion of annual incentives were based on revenue growth and a portion were based on improvements in Adjusted Earnings from Operations, which we refer to as “AOE,” the same financial goalsmetrics which were used in fiscal year 2018.

AOE is a non-GAAP financial metric that we define as adjusted EBITDA, less capital expenditures and capitalized software development costs. See the table in Annex C to this Proxy Statement for revenue and adjusted EBITDA. At fiscal year-end,a reconciliation of AOE to Net Loss, the Compensation Committee evaluated the performance of each Named Executive Officer and determined an appropriate award based on established goals.most closely related GAAP measure.

Variable Pay at Risk. Our compensation philosophy drives the provision of greater at-risk pay to our Named Executive Officers, and variable pay at risk comprised approximately 74%between 43% and 76% of target annual compensation for our CEO and between 50% and 67% for otherthe Named Executive Officers. Our Named Executive Officers have significant opportunities for long-term, equity-based incentive compensation, higher than for annual cash incentive compensation for each Named Executive Officer, as our philosophy is to tie a significant portion of compensation to the long-term performance of our common shares. As a result,Thus, significant emphasis is placed on long-term shareholder value creation, thereby we believe minimizing excessive risk taking by our executives.

Competitive Market Assessments. As described in last year's CD&A, theThe Compensation Committee engaged Pearl Meyer & Partners as its compensation consultant during fiscal year 2014 and received from them a competitive market assessment that evaluated compensation levels for the Company's top four executive positions, including Messrs. Dennedy, Badger and Steinberg and Ms. Seebeck. The Committee hasdid not engagedengage a compensation consultant sinceand did not rely on any market assessment of compensation in setting compensation for fiscal year 2014. The 2014 assessment compared then current compensation levels for the executives to published compensation data for comparable executives at a peer group determined by the Compensation Committee in 2014 from a group recommended by Pearl Meyer & Partners.2019.

The 2014 peer group consisted of the following software and technology companies:

SPS Commerce Inc.
Rally Software Development Corp.Ellie Mae Inc.
E2open Inc.Synchronoss Technologies Inc.BSQUARE Corp.
Support.com Inc.
QAD Inc.American Software Inc.
Sourcefire Inc.
Bottomline Technologies Inc.Callidus Software Inc.
Gigamon Inc.Actuate Corp.Model N Inc.
Cyan Inc.
PROS Holdings Inc.
inContact Inc.
 Qualys Inc. Jive Software Inc.
 XRS Corp.
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These peer companies were selected based on industry relevance and comparability to the Company's revenue at the time of selection in 2014.  The Compensation Committee considered this 2014 assessment in setting Named Executive Officer Compensation at the beginning of fiscal year 2016.


Tally Sheets. Our Compensation Committee analyzed tally sheets at the beginning and end of the fiscal year to review overall compensation and pay mix for each Named Executive Officer. Tally sheets included a three-year look-back of total compensation, including annual cash compensation, long-term incentive awards granted and earned, and benefits and perquisites. Tally sheets also included a cumulative inventory of equity grants by fiscal year, including the value of outstanding equity at the Company's
25
Company’s then current stock price and the value received for prior vesting and exercises of equity. The tally sheets brought together, in one place, all elements of Named Executive Officers'Officers’ actual compensation and information about wealth accumulation so that our Compensation Committee could analyze the individual elements, the mix of compensation and the aggregate total amount of annual and accumulated compensation. Tally sheets were also used by the Compensation Committee to evaluate internal pay equity among the Named Executive Officers and to determine the impact of employment termination or change of control events. In support of the philosophy of rewarding performance, tally sheets are used by the Compensation Committee to review compensation as compared to expectations, and our Compensation Committee determined that annual compensation set for our Named Executive Officers for fiscal year 20162019 was consistent with expectations and with the established compensation philosophy and pay mix guidelines driven by that philosophy.

Fiscal Year 20162019 Compensation

The Company's fiscal year 2015 total target compensation ranked approximately at the median of the competitive market assessment provided by Pearl Meyers & Partners during fiscal year 2014, with Mr. Dennedy positioned between the 50th and 75th percentile and Ms. Seebeck and Messrs. Badger and Steinberg positioned just below the 50th percentile. Based on this, the Compensation Committee determined that increases in total compensation were appropriate for Ms. Seebeck and Messrs. Badger and Steinberg, but not for the other Named Executive Officers. In accordance with the Committee's desire to further link pay to performance and emphasize long-term shareholder value creation, the Committee allotted the increase only to those executives' long-term equity incentive awards granted at the beginning of fiscal year 2016.

Base Salary. For fiscal year 2016,2019, base salary comprised 26%between 24% and 57% of total target compensation for ourthe Named Executive Officers.

Under his employment agreement, Mr. Srinivasan’s base salary is $600,000 per year, subject to annual review and adjustment by the Compensation Committee. The Compensation Committee did not award an increase in base salary for Mr. Srinivasan in fiscal year 2019 because it believed his base salary to still be aligned with the Committee’s philosophy and goals and Mr. Srinivasan believed it would be inappropriate to increase his base salary while the Company continued to be unprofitable.

Mr. Biswas was first appointed to his positions in fiscal year 2019, and the Committee set his base salary at $270,000 per year, the level that the Committee believed to be competitive for his positions and necessary to attract him to his role. The Committee based its assessment on the recommendations of the CEO and between 33%the members’ own experience and 50% for our other Named Executive Officers. Base salariesjudgement.

Mr. Pritchett’s base salary increased by 13% and Mr. Badger’s increased by 8% from fiscal year 2018 to 2019, to $260,000 and $280,000 per year, respectively, effective June 1, 2019, based on recommendation of the CEO and partially based on their individual performances. With respect to Mr. Pritchett, the CEO believed, and the Compensation Committee agreed, that his base salary was low compared to their assessments of competitive CFO salaries. In addition, Mr. Badger’s base salary had not changed in 5 years.

Mr. DeMarinis’ base salary of $250,000 per year did not change from fiscal year 20152018 to 2016 because2019. Mr. DeMarinis’ base salary was set when he was first appointed to his role shortly before the beginning of fiscal year 2019, and the CEO and Compensation Committee believed thethat his original base salaries set in fiscal year 2015 to besalary was still aligned with the Committee'sCommittee’s philosophy and goals.

Annual Incentives

Annual IncentivesIncentive Targets. ForThe Compensation Committee set fiscal year 2016,2019 annual incentive goals were set at the beginning of the fiscal year. The discussion below provides details regarding fiscal year 2016As previously discussed, the Compensation Committee linked the annual incentive performance metrics, levels, and payouts forgoals of the Named Executive Officers.Officers to revenue and AOE. All the Named Executive Officers were subject to the same annual incentive structure:

Annual Incentive Levels.  For Dennedy, Seebeck, Badger and Steinberg, fiscal year 201667% of target annual incentives were set as a percentagebased on the Company’s achievement of salary. Targetfiscal year 2019 revenue targets;
33% of target annual incentives forwere based on the Company’s achievement of fiscal year 2016 were set2019 AOE targets;
Provided, however, that the AOE target would not be earned unless the Company’s balance of cash and


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cash equivalents at 88%the end of salary for Mr. Dennedy, 60% of salary for Mr. Steinberg and 50% of salary for the other Named Executive Officers, substantially the same as the prior two fiscal years. Annual incentives comprised 23% of total target compensation for Mr. Dennedy, and between 20% and 25% for our other Named Executive Officers.year 2019 was at least $37 million.

ComponentWeighting (%)ThresholdTargetMaximum
AmountPayout (% of target incentive)AmountPayout (% of target incentive)AmountPayout (% of target incentive)
Revenue67$130M50$140M100$150M150
AOE33($3M)50$0100$5M150

Performance Metrics for Dennedy, Seebeck, Badger and Steinberg.  For all Named Executive Officers other than Mr. Walker, fiscal year 2016 performance metrics consisted of a revenue target and an adjusted EBITDA target.  Each Named Executive Officer's annual incentive was weighted 60% onStraight-line achievement ofwould be calculated between the revenue target and 40% on achievement of the adjusted EBITDA target.  The Compensation Committee set financial performance metrics for fiscal year 2016 annual incentives to require targetthreshold level improvements over fiscal year 2015 results for revenue and adjusted EBITDA.  The target level for revenue was set at a $2.5 million, or 2.4%, improvement over fiscal 2015 results; and the target level for adjusted EBITDA was set at a $3.1 million, or 158%, improvement over fiscal 2015 results, reflecting the amount that the Compensation Committee believed could be reasonably achieved given the Company's operating plan and the costs associated with the Company's on-going investment in its next generation products and the Company's strategy of increasing revenue from its subscription services products.  Adjusted EBITDA, a non-GAAP financial measure, is calculated as income before income taxes, interest expense (net of interest income), depreciation and amortization (including amortization of developed technology), and excluding charges relating to (i) legal settlements, (ii) restructuring, severance, and other charges, (iii) asset write-offs and other fair value adjustments, (iv) share-based compensation, and (v) other non-operating (income) expense.. The Company believes adjusted EBITDA is a profitability measure and a key driver of value, focusing on sales, product mix, margins, and expense management. Adjusted EBITDA was selected as an annual goal component given the desire to balance sales and margins, as both are manageable by our Named Executive Officers.
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Performance percentages for payouts (with proportionate payouts between the target level and the maximum achievement levels) were based on varying levels of achievement of fiscal year 2016 budgeted results, as described below.  Payoutslevel. No payment was earned at less than target performance, and, other than for Mr. Srinivasan, payouts were capped at 150% of target incentives. Mr. Srinivasan, per the terms of his employment agreement, would earn and be capped at 200% of this annual incentive target at the maximum level.

 
 
 
 
Component
 
 
 
Weighting
(%)
 
Threshold
 
Target
 
Maximum
 
 
 
Amount
 
Payout
(% of target incentive)
 
 
 
Amount
 
Payout
(% of target incentive)
 
 
 
Amount
 
Payout
(% of target incentive)
 
Revenue
 
60
 
$103.9M
 
50
 
$106.0M
 
100
 
$110.2
 
150
 
Adjusted EBITDA
 
40
 
$3.4M
 
50
 
$3.9M
 
100
 
$4.4M
 
150
The Compensation Committee believed that revenue growth was more accretive to shareholder value than AOE improvement and, therefore, weighted revenue growth more than AOE improvement.

The Compensation Committee set the revenue target as a 10% improvement over fiscal year 2018 revenue of $127.4 million and set the AOE target as a $6 million improvement over fiscal year 2018 AOE of -$6 million. The Compensation Committee believed that the plan involved performance that was moderately difficult at the threshold level, difficult at the 100% target level, given continuing transformation of the business and competition and pricing pressure in the market,levels and significantly difficult at the maximum level, requiring meaningful improvement over fiscal year 20152018 results for revenue and adjusted EBITDA,AOE, in each case relative to future expectations at the time the levels were set. Threshold levels were consideredThe Committee imposed the cash balance condition on the AOE goal in order to encourage disciplined management of Company expenses. The target cash balance of $37 million at the end of fiscal year 2019 was set as a 69% reduction in cash loss over fiscal year 2017 to 2018 cash loss of -$9.3 million.

Annual Incentive Results. Our fiscal year 2019 results exceeded plan. Fiscal year 2019 revenue was $140.8 million, slightly exceeding the $140 million target level for annual incentive achievement. Fiscal year 2019 AOE was $4.8 million, significantly exceeding the $0 target level for annual incentive achievement. Fiscal year 2019 cash and cash equivalents balance was $40.8 million, well above the target cash balance of $37 million. As a result, each of our Named Executive Officers achieved annual incentive payments in excess of their target annual incentives.

 ComponentResultTargetAchievement (%)Weighting (%)Blended Achievement (%)
 
 Revenue$140.8M$140.0M1046769.68
 AOE$4.8M$01483348.84
 Cash Balance$40.8M$37MAchieved  
  118.52

CEO Annual Incentive. Mr. Srinivasan was eligible for an annual incentive for fiscal year 2019 based on the Company financial performance metrics described above, with any such earned incentive to be settled in shares of common stock. Pursuant to his employment agreement, Mr. Srinivasan’s target annual incentive for fiscal year 2019 was set at 75% of his base salary, or $450,000, with a maximum potential incentive of $900,000 (150% of his base salary and 200% of his target annual incentive), payable upon achievement necessary to successfully execute a minimum levelof 150% of the operating plan.annual incentive goals, and a threshold potential incentive of $225,000 (50% of his target annual incentive), payable upon achievement of 50% of the annual incentive goals.

Because his annual incentive would be settled in shares of common stock, the Compensation Committee approved a grant of 63,291 shares of restricted common stock to Mr. Srinivasan on May 31, 2018, the date that the Committee set his annual incentive goals, which shares were approximately equal in value to his maximum potential incentive


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on the date of grant. Pursuant to the grant, shares of restricted common stock would vest upon certification by the Compensation Committee of achievement of the annual incentive goals in the amount determined by the Committee, provided that vesting could not occur prior to May 31, 2019, the one-year anniversary of the date of grant, in accordance with the terms of our 2016 Stock Incentive Plan.

Based on the fiscal year 2019 results discussed above, Mr. Srinivasan was eligible to earn approximately 137% of this target annual incentive. Because his maximum annual incentive is 200% of his target annual incentive, compared to 150% for the other Named Executive Officers, Mr. Srinivasan’s percentage annual incentive scales at twice the rate of the others from the target to maximum incentive levels. However, Mr. Srinivasan viewed this result as unfair and requested that the Compensation Committee award him the same percentage of his annual incentive target as other employees. Therefore, the Compensation Committee determined that Mr. Srinivasan should earn an annual incentive of $533,340 in fiscal year 2019, or 118.52% of his annual incentive target, congruent with the Company’s blended achievement of 118.52% of the revenue and AOE goals. Accordingly, the Compensation Committee awarded Mr. Srinivasan 23,526 of the original 63,291 shares subject to the annual incentive grant, being the number of shares having a value of $533,340 based on the closing price of the Company’s common stock on May 28, 2019, the date that the Compensation Committee made its determination. These shares continued to be restricted and did not vest until May 31, 2019, the one-year anniversary of their date of grant, in accordance with the terms of the original grant and the Company’s 2016 Stock Incentive Plan. At vesting, the 23,526 shares awarded had a value of $512,867 based on the closing price of the Company’s common stock on May 31, 2019. The remaining 39,765 shares subject to the original annual incentive grant were forfeited and can never be earned by Mr. Srinivasan.

Annual Incentives for the Other Named Executive Officers. Fiscal year 2019 target annual incentives for the other Named Executive Officers, other than Mr. DeMarinis, were set as 50% of the executive’s base salary. Mr. DeMarinis’ fiscal year 2019 target annual incentive was set at $100,000 for the annual incentive plan described above, and he was also eligible for target annual incentives of $125,000 for commissions and other sales-related incentives due to his role as head of our Americas Sales teams.

Annual incentives comprised 12% to 38% of total fiscal year 2019 target compensation for these Named Executive Officers.

OfficerTarget Annual Incentive as % of Base SalaryTarget Annual IncentiveTarget Annual Incentive as % of FY19 Total Target Compensation
Tony Pritchett50%$130,00025%
Kyle Badger50%$140,00025%
Prabuddha Biswas50%$135,00012%
Don DeMarinis90%$225,00038%

Additional detail about thresholdtarget and maximum incentives are disclosed in the Grants of Plan-Based Awards for
Fiscal Year 2016 table.2019 table below.

Fiscal Year 2016 Payouts.  Our operating results forBased on the fiscal year 2016 outperformed our plan.  Total net revenue increased by 16% from $103.5 million in fiscal year 2015 to $120.4 million in fiscal year 2016, and EBITDA increased 258% from $1.2 million in fiscal year 2015 to $4.3 million in fiscal year 2016.

Component
Target
Actual
Payout (%)
Revenue
$106.0M
$120.4M
150%
Adjusted EBITDA (1)
$3.9M
$4.3M
120%

(1)Adjusted EBITDA is a non-GAAP measure.  A reconciliation of net loss, a GAAP measure, for fiscal year 2016 to adjusted EBITDA is as follows:

(In thousands)
2016
Net Loss
 $      (3,765)
Income tax expense (benefit)
                   6
Loss before taxes
         (3,759)
Depreciation of fixed assets
           2,199
Amortization of intangibles
           1,243
Amortization of developed technology
           1,022
Interest (income) expense
              (63)
EBITDA (b)
              642
Share-based compensation expense
           3,405
Restructuring, severance and other charges
              283
Asset write-offs and other fair value adjustments
              180
Other non-operating (income) expense
            (491)
Legal settlements
              268
Adjusted EBITDA
 $        4,287

(a)Adjusted EBITDA is defined as income before income taxes, interest expense (net of interest income), depreciation and amortization (including amortization of developed technology), and excluding charges relating to i) legal settlements, ii) restructuring, severance, and other charges, iii) asset write-offs and other fair value adjustments, iv) share-based compensation, and v) other non-operating (income) expense.
(b)EBITDA is defined as net income before income taxes, interest expense, depreciation and amortization.

As a result, our2019 results discussed above, each of the Named Executive Officers earned 138%118.52% of their target annual incentives relatedsubject to financial targets for fiscal year 2016.the annual incentive plan described above. Mr. DeMarinis earned an additional $96,779 of his target $125,000 sales incentives based on the net gross profit of sales made in the Americas.
27

22


The chart below set forth the fiscal year 2016 annual incentive opportunity for each Named Executive and the actual annual incentive awards earned and paid based on the Compensation Committee's review of the achievement of the performance measures.

 
 
Executive
 
Target Incentive
 
Incentive Earned
 
Incentive Paid
 
% of Base
 
Amount ($)
 
% of Target
 
Amount ($)
 
% of Target
 
Amount ($)
 
James Dennedy
 
88
 
360,500
 
138
 
468,650
 
100
 
360,500
 
Janine Seebeck
 
50
 
127,500
 
138
 
176,053
 
138
 
176,053
 
Kyle Badger
 
50
 
130,000
 
138
 
179,505
 
138
 
179,505
 
Larry Steinberg
 
60
 
157,500
 
138
 
217,477
 
138
 
217,477

As previously discussed, at the end of the fiscal year, the Compensation Committee re-assessed Mr. Dennedy's total compensation for fiscal year 2016 and deemed that the total compensation that would have been earned under his compensation package exceeded what the Committee believed to be market compensation for his position. As a result, the Committee used its discretion to reduce Mr. Dennedy's annual incentive award to 100% of his target incentive amount, from the 138% of target that would have been earned based on the Company's financial performance.
OfficerAnnual Incentive Plan Target ($)Company Blended Achievement (%)Annual Incentive Plan Payout ($)Sales Incentive Payout ($)Total Annual Incentives Payouts ($)
Tony Pritchett130,000118.52%154,076—
154,076
Kyle Badger140,000118.52%165,928—
165,928
Prabuddha Biswas135,000118.52%160,002—
160,002
Don DeMarinis100,000118.52%118,52096,779215,299

Performance Metrics for Walker.  Mr. Walker's fiscal year 2016 annual incentives were set by Mr. Dennedy at the beginning of the year and consisted of (i) commissions earned for achieving gross margin quotas for bookings (i.e., dollar value of gross margin for sales booked), for which his target incentive was $150,000, (ii) incentives earned for achieving specific customer and product transaction bookings (i.e., number of sales transactions booked), for which his target incentive was $75,000, and (iii) a bonus of $50,000 earned upon attaining 100% of his assigned bookings dollar amount quota for the year.  Mr. Dennedy set the target bookings levels at those he believed necessary for the Company to successfully execute the operating plan.  Other than the $50,000 bonus to be earned upon attaining 100% of assigned target, which was a flat amount, there was no floor or ceiling on the amount that Mr. Walker could earn with respect to his annual incentives.

Mr. Walker substantially outperformed his bookings targets for fiscal year 2016.  Mr. Walker earned (i) 154% of commissions for achieving gross margin quotas, (ii) 121% of his incentives for achieving specific customer and product transaction booking targets, and (iii) the $50,000 bonus for achieving 100% of his assigned bookings dollar amount quota.  On a blended basis, Mr. Walker earned 135% of his target annual incentives based on achievement against his performance plan.  At the end of the fiscal year, due to Mr. Walker's significant contribution to the Company's outperforming its operating plan, Mr, Dennedy approved payment to Mr. Walker of 138% of his target annual incentives so that his annual incentive payout would match that of the other Named Executive Officers.
OfficerComponentIncentive Payment at Target% AwardedPayment
Tony PritchettRevenue$51,7500%$0
 AOE51,750
50%25,875
 Discretionary11,500
275%31,625
  $115,00050%$57,500
     
Kyle BadgerRevenue$58,5000%$0
 AOE58,500
50%29,250
 Discretionary13,000
275%35,750
  $130,00050%$65,000
     
Sridhar LavetiRevenue$54,0000%$0
 AOE54,000
50%27,000
 Discretionary12,000
275%33,000
  $120,00050%$60,000
     
Larry SteinbergRevenue$70,8750%$0
 AOE70,875
50%35,438
 Discretionary15,750
100%15,750
  $157,50033%$51,188


Long-Term Incentives. As with the annual incentives, the Compensation Committee approved fiscal year 20162019 long-term incentive ("LTI"(“LTI”) awards at the beginning of year when the outcome for the fiscal year was substantially uncertain. LTI awards to Named Executive Officers consisted of stock-settled appreciation rights ("SSARs"(“SSARs”) and restricted shares, both with three-year vesting schedules, pursuant to the Company'sCompany’s shareholder-approved 20112016 Stock Incentive Plan. The Compensation Committee did not grant an LTI award to the CEO in fiscal year 2019 because he had received a substantial SSARs award upon joining us as CEO and because his annual incentives are settled in shares of common stock, which the Committee believed was sufficient to provide long term incentives for the CEO in fiscal year 2019.

With respect to the other Named Executive Officers, the Compensation Committee considered various LTI award alternatives. While annual incentives targeted specific performance goals, the focus on LTI awards was to link compensation directly to shareholder gains. SSARs provided the direct link between compensation and shareholder gains in a less dilutive manner than with stock options, and the three-year vesting schedule also enhances retention. RestrictedIn addition, restricted shares also tie compensation to shareholder gains and highly bolster retention over the vesting period. As in prior years, LTI awards were granted 50% as restricted stock and 50% as SSARs for each Named Executive Officer.

LTI awards comprised 52%between 21% and 64% of total fiscal year 2019 target compensation for the Named Executive Officers.


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Mr. Dennedy to directly link a significant portionBiswas was hired at the beginning of his pay, when combinedfiscal year 2019, and the Compensation Committee provided him with his annuallarger long-term incentive to performance and comprised between 25% and 48% for ourgrants than the other Named Executive Officers. Officers in order to attract him to the Company and increase his alignment with shareholders. The Compensation Committee granted him $540,000 in shares of restricted stock, based on the closing price of our common stock on the date of grant ($14.22), and $150,000 in SSARs, based on the Black-Scholes value of our common stock on the date of grant ($4.71). As a result, long-term incentive compensation composed an outsized percentage of Mr. Biswas’ total fiscal year 2019 compensation.

In setting LTI awards for the other Named Executive Officers, other than the CEO, the Compensation Committee received input and recommendations from our CEO, regarding each Named Executive Officer's relative ability to influence results. The competitive market assessment provided by Pearl Meyers & Partners indicated that fiscal year 2014 total compensation was below the market median for Messrs. Badger and Steinberg and Ms. Seebeck.  As a result, target levels of LTI were increased over the prior year for Messrs. Badger and Steinberg and Ms. Seebeck in order to better align their total compensation with the market median and to further link pay to performance and emphasize long-term shareholder value creation, as described above.
28

The Compensation Committeeat his recommendation set the annual 2016 LTI awards for eachthese Named Executive Officer as follows:Officers at 50% of their base salary, split evenly between shares of restricted common stock and SSARs. Awards of restricted common stock were based on the closing price of our common stock on the date of grant ($14.22), and awards of SSARs were based on the Black-Scholes value of our common stock on the date of grant ($4.71).

Name
Percent of
Salary (%)
Total LTI Value ($)SSARs Granted (#)
Restricted Shares
Granted (#)
James H. Dennedy200824,000105,84445,175
Janine K. Seebeck93237,15030,46213,001
Kyle C. Badger85221,00028,38712,116
Larry Steinberg145380,62548,89120,867

Officer
Total LTI Value
($)*		SSARs Granted
(#)
Restricted Shares
Granted (#)
Tony Pritchett130,00013,8004,571
Kyle Badger140,00014,8614,922
Prabuddha Biswas690,00031,84737,974
Don DeMarinis125,00013,2694,395
*Due to rounding down to avoid fractional shares, the actual value of LTI awards received was $2 to
$14 less than the amounts stated in this table. See the Summary Compensation Table on p. 28 of this
Proxy Statement for actual values received.

All SSARs and restricted shares vest in one-third increments on March 31, 2016, 20172019, 2020 and 2018.2021. The SSARs have a seven-year term, are settled in common shares upon exercise, and were granted at an exercise price of $9.12$14.22 (the closing price of the common shares on the grant date), have a seven-year term, and are settled in common shares upon exercise..

Additional Compensation – Executive Benefits. We provide executive benefits to our Named Executive Officers including additional life and long-term disability insurance plans. From time to time, Named Executive Officers also may participate in supplier sponsored events. Executive benefits are further described in the Summary Compensation Table. We believe these benefits enhance the competitiveness of our overall executive compensation package. We have, however, limited executive benefits offered to reduce compensation costs. Additionally, welfare benefits offered to our Named Executive Officers are the same level of benefits offered to all Company employees, except that we pay for the cost of physicals to promote the health and well-being of our executives.employees.

Employment Agreements and Change of Control

The material termination and change of control provisions of various agreements are summarized below for each Named Executive Officer and are covered in more detail in the Termination and Change of Control table and accompanying discussion.

Employment Agreements. In fiscal year 2015, all of the Named Executive Officers other than Mr. WalkerThe Company has entered into employment agreements with each of the Named Executive Officers.

In accordance with his employment agreement, Mr. Srinivasan will serve as CEO and President for a three-year initial term beginning on January 3, 2017. The term of employment will automatically extend for successive periods of one year unless either the Company with substantiallyor Mr. Srinivasan provides written notice of non-renewal at least 90 days before the same terms. Mr. Walker entered intoend of the then-current employment term. If a substantially similar employment agreementchange in connection with his promotion in January 2016.  Allcontrol of the Company occurs, the term of the employment agreement will expire no earlier than the second anniversary of the change in control. If Mr. Srinivasan’s employment is terminated by the Company for cause or by Mr. Srinivasan for good reason, then subject to his execution of a release of claims, Mr. Srinivasan will be entitled to receive severance equal to one year’s then-


24


current base salary and target annual bonus, which will be paid during regular pay intervals over the course of one year. In addition, he will also receive (1) a lump sum payment in cash, on the 60th day after the termination date, equal to the total after-tax premiums required to pay for twelve months of COBRA continuation coverage under the Company’s medical, dental and vision insurance plans; (2) a pro-rated bonus for the year of termination based on actual performance with no negative discretion by the Board; and (3) 12 months of accelerated vesting of all equity compensation awards outstanding on the termination date. If such termination occurs within the three months before or 24 months after a change in control, Mr. Srinivasan will receive two times the sum of his then-current base salary and target annual bonus, two times the COBRA payment and 100% vesting (on the 60th day after the termination date) of all outstanding equity awards. In addition, upon any termination of employment, Mr. Srinivasan will receive accrued but unpaid base salary and payment for any unused vacation and unreimbursed expenses.

The employment agreements including Mr. Walker's,for the other Named Executive Officers, have terms expiring July 21, 2017.on January 22, 2020. Under the employment agreements, upon termination without cause, we must pay severance equal to one year'ssix month’s salary and target annual incentive and a lump sum amount equal toreimbursement of the executive'sexecutive’s total premium for one yearsix months of COBRA continuation coverage under the Company'sCompany’s health benefit.benefit plans. If the executive's positionexecutive’s compensation is changed suchreduced by more than 10%, other than a general reduction that hisaffects all similarly situated executives, or her responsibilities are substantially lessened (a "changeif at any time prior to a change in position"),control the executive no longer reports to the CEO, the executive may terminate his or her employment if the Company fails to materially cure such condition within 30 days following notice of such condition by the executive, and the termination will be deemed to be a termination without cause and the executive is entitled to his or her severance benefits. In the event that any of these Named Executive Officers are terminated without cause or by the executive for good reason in the 24 months following a change of control of the Company, the executive is entitled to severance pay equal to one year’s salary and a pro rata portion of target annual incentive and reimbursement of the executive’s total premium for one year of COBRA continuation coverage under the Company’s health benefit.

None of the Named Executive Officers with employment agreements is entitled to excise tax gross-up payments. In consideration of the severance benefits, each employment agreement contains a 12-month post-termination non-solicitation provision, an indefinite confidentiality provision, and a 12-month post-termination non-compete provision. In the event that any of these Named Executive Officers are terminated without cause or for a change of position in the 24 months following a change of control of the Company, the Named Executive Officer is entitled to severance pay equal to two year's salary and target annual incentive and a lump sum amount equal to the executive's total premium for one year of COBRA continuation coverage under the Company's health benefit.

Our Compensation Committee believes that the terms of these employment agreements enhance our ability to retain our executives and contain severance costs by providing reasonable severance benefits competitive with market practice. Severance costs are contained by limiting pay to one year in the case of the CEO and six months in the case of the other Named Executive Officers in the absence of a change of control, limiting personal benefits, not providing accelerated vesting for awards under the agreements, and narrowly defining a voluntary termination that triggers severance benefits. Severance payments in the event of a change of control are subject to a double trigger such that severance benefits are provided only upon a combination of a change of control and a qualified termination. Additionally, the Company benefits greatly from the non-competition, non-disclosure, and non-solicitation clauses contained in the employment agreements.
29

Accelerated Vesting. NoneExcept as described above for our CEO, none of the employment agreements discussed above provide for accelerated vesting of equity. Under our 2011 and 2016 Stock Incentive Plan (and the 2016 Plan, if approved by shareholders at the Annual Meeting),Plans, vesting is accelerated upon the actual occurrence of a change of control for all SSARs and restricted shares (including performance shares). The Compensation Committee believed that during a change of control situation, a stable business environment is in the shareholders'shareholders’ best interests, and accelerated vesting provisions provide stability. The accelerated vesting provisions are applicable to all employees who receive equity awards, not just executive management.

The long-term incentive awards granted for fiscal year 20162019 are subject to a holding period of one year following a change of control. Under this provision, all SSARs and restricted shares granted for fiscal year 20162019 accelerate upon the actual occurrence of a change of control but remain subject to restrictions on exercise and transfer until the earlier of one year after the change of control or the executive's termination of employment without cause.executive’s qualified termination. The Compensation Committee believed that this further restriction during a change of control situation further promotes a stable business environment and is in the shareholders'shareholders’ best interests.

CEO Pay Ratio Disclosure



25


The following is a reasonable estimate, prepared under applicable SEC rules, of the ratio of the annual total compensation of our CEO to the median of the annual total compensation of our other employees. We determined our median employee based on base salary (annualized in the case of full- and part-time employees who joined the company during fiscal year 2019) of each of our employees (excluding the CEO), as of March 31, 2019. The annual total compensation of our median employee (other than the CEO) for 2019 was $64,329. As disclosed in the Summary Compensation Table appearing on page 28, our CEO’s annual total compensation for fiscal year 2019 was $1,066,039. Based on the foregoing, our estimate of the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all other employees was 17 to 1. Given the different methodologies that various public companies will use to determine an estimate of their pay ratio, the estimated ratio reported above should not be used as a basis for comparison between companies.

Additional Compensation Policies

Clawback – Recoupment of Bonuses, Incentives, and Gains. Under the Company's "clawback"Company’s “clawback” policy, if the board of directors determines that our financial statements are restated due directly or indirectly to fraud, ethical misconduct, intentional misconduct, or a breach of fiduciary duty by one or more executive officers or vice presidents, then the board of directors will have the sole discretion to cancel any stock-based awards granted and to take such action, as permitted by law, as it deems necessary to recover all or a portion of any bonus or incentive compensation paid and recoup any gains realized in respect of equity-based awards, provided recoveries cannot extend back more than three years. Additionally, under Section 304 of the Sarbanes-Oxley Act, if we are required to restate our financial statements due to material noncompliance with any financial reporting requirements as a result of misconduct, our CEO and CFO must reimburse us for any bonus or other incentive-based or equity-based compensation received during the 12 months following the first public issuance of the non-complying document, and any profits realized from the sale of our securities during those 12 months.

Stock Ownership Guidelines. To underscore the importance of strong alignment between the interests of management and shareholders, the board of directors approved stock ownership guidelines for directors and executives, with our CEO having the highest ownership requirement. Director and executive compensation isare designed to provide a significant opportunity to tie individual rewards to long-term Company performance. The objective of our stock ownership guidelines is to support this overall philosophy of alignment and to send a positive message to our shareholders, customers, suppliers, and employees of our commitment to shareholder value. Each director and executive officer is expected to maintain minimum share ownership of either: (i) the number of shares with a value based on a multiple of base salary or director annual retainer listed below, or (ii) the number of shares listed below:

Title
Multiple of Director
Annual  Retainer and
Executive Base Salary
Number of Shares
2 Years4 Years2 Years4 Years
Director3x6x15,000 45,000 
CEO2.5x5x125,000 250,000 
Senior Vice President0.5x2x15,000 75,000 
LTIP Participants—0.5x2,500 15,000 
 
Multiple of Director  
Annual Retainer and
Executive Base Salary
Number of Shares
2 Years4 Years2 Years4 Years
Directors3x6x15,000 45,000 
CEO2.5x5x125,000 250,000 
Senior Vice President0.5x2x15,000��75,000 
Other Executive Officers—0.5x2,500 15,000 

Stock ownership that is included toward attainment of the guidelines includes (i) shares held of record or beneficially owned, either directly or indirectly; (ii) shares acquired upon exercise of stock options or SSARs;
(iii) vested restricted or deferred shares; (iv) phantom or deferred share units held in a deferred compensation plan; and (v) shares
30
or deferred shares acquired by dividend reinvestment. Directors and executives are expected to attain the specified target ownership levels within both two and four years from the later of the effective date of this policy or becoming a director or an executive and remain at or above that level until retirement. Annually, the board of directors reviews progress toward achieving these ownership levels. Director and executives who have not attained the specified ownership guidelines will be required to hold 75% of shares acquired upon exercise of stock options and SSARs or vesting of performance or restricted shares until they meet their target ownership level. If ownership


26


guidelines are not met within two and four years, our Compensation Committee has the right to pay an executive'sexecutive’s annual incentives in shares until ownership guidelines are achieved.

Stock Retention Policy. Under the Company'sCompany’s stock retention policy, directors and executive officers are required to hold shares of Company stock for at least one year after such shares vest in the case of performance or restricted shares, or one year after exercise in the case of stock options or SSARs, or until the earlier date of their termination of service as a director or executive officer. The holding period policy does not apply in instances of a "change“change in control,"” as defined in the 2011 Stock Incentive Plan and 2016 Stock Incentive Plan.

Impact of Tax and Accounting Considerations.  In general, the Compensation Committee considers the various tax and accounting implications of the pay mechanisms used to provide pay to our Named Executive Officers, including the accounting cost associated with long-term incentive grants, when determining compensation. Section 162(m) of the Internal Revenue Code, generally prohibits any publicly held corporation from taking a federal incomethrough December 31, 2017, limited the tax deduction of public companies for paycompensation in excess of $1.0 million paid to the chief executive officertheir CEO and the three other highestmost highly compensated executive officers (other than the chief financial officer) in excessCFO) at the end of $1any fiscal year unless the compensation qualified as “performance-based compensation” Under applicable IRS regulations. For tax years after December 31, 2017, the Tax Cuts and Jobs Act of 2017 amended Section 162(m) to expand the $1.0 million in any taxable year. Exceptions are madededuction limitation described above to a larger group of employees and to eliminate the “performance-based” exception. The employees (referred to as “covered employees”) to whom the deduction limitation applies include the CEO and CFO (in each case, whether or not serving as executive officers as of the end of the fiscal year) and the three other most highly compensated executive officers. In addition, once considered a “covered employee” for certain qualified performance-based pay. It is the Compensation Committee's objective to maximize the effectiveness of our executive pay plans in this regard. The pay instruments used, including salaries, annual incentives, and equity, are tax deductible to the extent that they are performance-based or less than $1 million for such Named Executive Officer in a given year. However,year, the Compensation Committee retains discretion to pay compensation that is not tax deductible in situations where it believes such compensation is appropriate.individual will be treated as a “covered employee” for all subsequent years.


The Compensation Committee has considered the effect of Section 162(m) on the Company’s executive compensation program. The Compensation Committee exercises discretion in setting base salaries, structuring incentive and long-term compensation awards and in determining payments in relation to levels of achievement of performance goals. The Compensation Committee believes that the total compensation program for Named Executive Officers should be managed in accordance with the objectives outlined in the Committee’s compensation philosophy and in the best overall interests of the Company’s shareholders. Accordingly, compensation paid by the Company may not be deductible because such compensation exceeds the limitations for deductibility under Section 162(m).
COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with the Company'sCompany’s management. Based on that review and discussion, the Compensation Committee recommended to the board of directors that the Compensation Discussion and Analysis be includedincorporated by reference in the Company'sCompany’s Annual Report on Form 10-K for the fiscal year ended March 31, 20162019 and theincluded in this Proxy Statement for its 20162019 Annual Meeting of Shareholders.

The Compensation Committee of the Board of Directors
Melvin Keating, Chairman
Michael A. Kaufman,
Keith M. Kolerus
Jerry Jones, John Mutch

31


27


EXECUTIVE COMPENSATION

Summary Compensation Table

The following table and related notes provide information regarding fiscal year 20162019 compensation for our Named Executive Officers, including our CEO and CFO, and the other three most highly compensated executive officers whose total compensation exceeded $100,000 for fiscal year 2016.2019.

Summary Compensation Table for Fiscal Year 20162019

Name and Principal PositionYear
Salary
($)
Bonus
($)(1)
Stock Awards
($)(2)
Option Awards
($)(2)
Non-Equity
Incentive
Plan
Compen-sation
 ($)(3)
Non-
qualified
Deferred
Compen-
sation
Earnings
($)
All
Other
Compen-
sation
($)(4)
Total
($)
James H. Dennedy
President and Chief Executive Officer
FY16412,000 — 411,996 411,999 360,500 — 30,071 1,626,566 
FY15410,154 — 1,087,491 411,995 — — 33,919 1,943,559 
FY14400,000 — 399,998 400,129 447,278 — 32,760 1,680,038 
          
Janine K. Seebeck
Senior Vice President, Chief Financial Officer and Treasurer
FY16255,000 — 118,569 118,574 176,053 — 10,074 678,270 
FY15252,692 — 507,291 101,997 — — 11,533 873,513 
FY14218,490 25,000 59,995 60,015 153,352 — 11,505 528,347 
                  
Kyle C. Badger
Senior Vice President, General Counsel and Secretary
FY16260,000 — 110,498 110,497 179,505 — 11,425 671,925 
FY15260,000 — 441,747 103,997 — — 12,497 818,241 
FY14258,462 25,000 90,003 90,027 148,066 — 12,091 623,619 
          
Larry Steinberg
Senior Vice President, Chief Technology Officer
FY16262,500 — 190,307 190,309 217,477 — 10,686 871,279 
FY15260,577 — 643,470 170,623 — — 14,250 1,088,920 
FY14246,154 — 149,996 105,052 169,345 — 10,969 726,468 
          
Jimmie D. Walker, Jr.
Senior Vice President, Global
Revenue
FY16205,577 380,787 268,746 42,860 — — — 897,970 
          
 Name and Principal PositionYear
Salary
($)
Bonus
($)
Stock Awards
($)(1)
Option Awards
($)(1)
Non-Equity
Incentive
Plan
Compen-sation
($)(2)
Non-
qualified
Deferred
Compen-
sation
Earnings
($)
All
Other
Compen-
sation
($)(3)
Total
($)
 
Ramesh Srinivasan
President and Chief Executive Officer
FY19600,000
—
450,000
—
—
—
16,039
1,066,039
 FY18600,000
—
450,000
—
—
—
16,205
1,066,205
 FY17147,692
—
—
2,317,807
—
—
1,615
2,467,114
           
 
Tony Pritchett
Vice President and Chief Financial Officer
FY19254,923
—
65,000
64,998
154,076
—
16,581
555,578
 FY18224,683
50,000
205,097
93,669
57,500
—
12,536
643,485
 FY17186,152
—
113,517
—
22,922
—
8,139
330,730
           
 
Kyle C. Badger
Senior Vice President, General Counsel and Secretary
FY19276,615
—
69,991
69,995
165,928
—
18,465
600,994
 FY18260,000
—
64,994
52,813
65,000
—
13,555
456,362
 FY17260,000
—
267,557
66,998
57,893
—
14,156
666,604
           
 Prabuddha Biswas
Senior Vice President and Chief Technology Officer		FY19256,500
—
539,990
149,999
160,002
—
13,223
1,119,714
 
           
 Don DeMarinis Senior Vice President Sales, AmericasFY19250,000
96,779
62,497
62,497
118,520
—
16,941
607,234
 FY1852,885
13,713
124,998
—
—
—
1,067
192,663
           

(1)For Ms. Seebeck and Mr. Badger, FY14 amounts consist of discretionary bonuses related to the RSG transaction.  For Mr. Walker, FY16 amount consists of sales commissions and annual incentives associated with sales goals.
(1)Stock Awards include grants of restricted shares and performance shares. Option Awards include SSAR grants. Amounts disclosed do not represent the economic value received by the Named Executive Officers. The value, if any, recognized upon the exercise of a SSAR will depend upon the market price of the shares on the date the SSAR is exercised. The value, if any, recognized for restricted and performance shares will depend upon the market price of the shares upon vesting. In accordance with SEC rules, the values for restricted and performance shares and SSARs are equal to the aggregate grant date fair value for each award computed in accordance with FASB ASC Topic 718. The values for restricted and performance shares are based on the closing price on the grant date. For Mr. Srinivasan, the stock award consisted of shares of restricted common stock which were subject to performance conditions, and the amount recorded above is based on the probable outcome of the performance conditions on the date of grant. In fiscal year 2019, Mr. Srinivasan was granted $533,340 of the award, as described above in the CD&A, and in fiscal year 2018, he was granted $225,000 of the award. The values for SSARs are based on the Black-Scholes option pricing model. A discussion of the assumptions used in determining these valuations is set forth in Note 14 of the Notes to Consolidated Financial Statements of the Company’s 2019 Annual Report. For Stock Awards, the amounts shown represent grants of restricted shares to each Named Executive Officer as part of the executive’s annual long-term equity grant, and for 2017 includes grants of restricted shares to improve retention of key management, including Messrs. Badger and Pritchett.
(2)Stock Awards include grants of restricted shares and performance shares. Option Awards include SSAR grants. Amounts disclosed do not represent the economic value received by the Named Executive Officers. The value, if any, recognized upon the exercise of a SSAR will depend upon the market price of the shares on the date the SSAR is exercised. The value, if any, recognized for restricted and performance shares will depend upon the market price of the shares upon vesting. In accordance with SEC rules, the values for restricted and performance shares and SSARs are equal to the aggregate grant date fair value for each award computed in accordance with FASB ASC Topic 718. The values for restricted and performance shares are based on the closing price on the grant date. The values for SSARs are based on the Black-Scholes option pricing model. A discussion of the assumptions used in determining these valuations is set forth in Note 14 of the Notes to Consolidated Financial Statements of the Company's 2016 Annual Report. For Stock Awards, the amounts shown represent grants of restricted shares to each Named Executive Officer as part of the executive's annual long-term equity grant, and for 2015 includes grants of restricted shares to improve retention of key management, including the Named Executive Officers.
(2)Amounts represent annual incentive payments received for 2019, 2018 and 2017 based on pre-set incentive goals established at the beginning of each fiscal year and tied to the Company’s financial, strategic, and operational goals.
(3)Amounts represent annual incentive payments received for 2016, 2015 and 2014 based on pre-set incentive goals established at the beginning of each fiscal year and tied to the Company's financial, strategic, and operational goals.
(3)All other compensation includes the following compensation, calculated based on the aggregate incremental cost to the Company of the benefits noted:
(4)All other compensation includes the following compensation, calculated based on the aggregate incremental cost to the Company of the benefits noted:

32


28


All Other Compensation for Fiscal Year 20162019

Name
401(k)
Company
Match ($)
Executive
Life
Insurance ($)
Relocation
($)(a)
All Other
($)(b)
Total ($) 
J. Dennedy9,300 2,038 16,800 1,933 30,071 
J. Seebeck8,941 459 — 674 10,074 
K. Badger9,141 1,164 — 1,121 11,425 
L. Steinberg8,290 1,239 — 1,156 10,686 
Name
401(k)
Company
Match ($)
 
Executive
Life
Insurance ($)
 
Executive
Long Term
Disability ($)
 
All
Other
($)(a)
 Total ($) 
R. Srinivasan9,625 —
 2,796
 3,618
 16,039
 
T. Pritchett9,905 363
 1,268
 5,046
 16,582
 
K. Badger9,800 1,552
 1,943
 5,169
 18,464
 
P. Biswas7,269 —
 1,258
 4,696
 13,223
 
D. DeMarinis10,847 —
 —
 6,094
 16,941
 

(a)Consists of (i) matching funds for health savings accounts for each of Messrs. Pritchett, Biswas and
(a)Mr. Dennedy was reimbursedDeMarinis ($1,200, $2,400 and $1,405, respectively) and (ii) costs of employee and family travel to Company leadership events and employee gifts received at such events for temporary housing neareach of the Company's corporate offices.
(b)        Consists of executive long-term disability coverage.Named Executive Officers.

Grants of Plan-Based Awards

The following table and related notes summarize grants of equity and non-equity incentive compensation awards to our Named Executive Officers for fiscal year 2016.2019. All equity awards were made under the Company's 2011Company’s 2016 Stock Incentive Plan.

Grants of Plan-Based Awards for Fiscal Year 20162019

Name
Grant
Date
Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards ($)(1)
Estimated Future Payouts
Under Equity Incentive
Plan Awards ($)
All Other
Stock
Awards:
Number
of Shares
of Stock
(#)(2)
All Other
Option
Awards:
Number
of
Securities
Underlying
Options
(#)(3)
Exercise
or
Base
Price
of Option
Awards
($/share)
Grant Date
Fair Value
of Stock
and Option
Awards
($)(4)
Threshold
($)
Target
($)
Maximum
($)
Threshold
(#)
Target
(#)
Maximum
(#)
James H. Dennedy6/2/2015180,250 360,500540,750        
 6/2/2015        45,175  9.12
 6/2/2015         105,8449.123.89
            
Janine K. Seebeck6/2/201563,750127,500191,250        
 6/2/2015      13,001   9.12
 6/2/2015       30,462 9.123.89
             
Kyle C. Badger6/2/201565,000130,000195,000       
6/2/2015      12,116  9.12
6/2/2015         28,3879.123.89
            
Larry Steinberg6/2/201578,750 157,500236,250         
 6/2/2015          20,867  9.12
 6/2/2015           48,8919.123.89
            
Jimmie D. Walker, Jr.8/11/2015          10,6669.604.02
 1/5/2016          25,000  9.60
Name
Grant
Date
Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards ($)(1)		Estimated Future Payouts
Under Equity Incentive
Plan Awards (#)(2)		All Other
Stock
Awards:
Number
of Shares
of Stock
(#)(3)
All Other
Option
Awards:
Number
of
Securities
Underlying
Options
(#)(4)
Exercise
or
Base
Price
of Option
Awards
($/share)
Grant Date
Fair Value
of Stock
and Option
Awards
($)(5)
Threshold
($)
Target
($)
Maximum
($)
Threshold
(#)
Target
(#)
Maximum
(#)
Ramesh Srinivasan5/31/2018   15,82231,64563,291    
            
Tony Pritchett5/31/201865,000130,000195,000       
5/31/2018       13,80014.22$64,998
5/31/2018      4,571  $65,000
            
Kyle Badger5/31/201870,000140,000210,000       
5/31/2018       14,86114.22$69,995
5/31/2018      4,922  $69,991
            
Prabuddha Biswas5/31/201867,500135,000202,500       
5/31/2018       31,84714.22$149,999
5/31/2018      37,974  $539,990
            
Don DeMarinis5/31/201878,750157,500236,250       
5/31/2018       13,26914.22$62,497
5/31/2018      4,395  $62,497

(1)Amounts shown in the columns under Estimated Future Payouts Under Non-Equity Incentive Plan Awards represent fiscal year 2016 annual threshold, target, and maximum cash-based annual incentives granted under the annual incentive plan. Total threshold, target, and maximum payouts were conditioned on achievement of weighted goals based on revenue and adjusted operating income for each Named Executive Officer. Fiscal year 2016 payouts for each Named Executive Officer pursuant to these awards are shown in the Summary Compensation Table above in the column titled Non-Equity Incentive Plan Compensation. Further explanation of potential and actual payouts by component is set forth in the Compensation Discussion and Analysis – Annual Incentives.
(1)Amounts shown in the columns under Estimated Future Payouts Under Non-Equity Incentive Plan Awards represent fiscal year 2019 annual threshold, target, and maximum cash-based annual incentives granted under the annual incentive plan. Total threshold, target, and maximum payouts were conditioned on achievement of weighted goals based on revenue,
(2)The share amounts shown represent grants of restricted shares to each Named Executive Officer as part of the executive's annual long-term equity grant.
(3)The share amounts represent SSARs granted at the fair market value of the shares on the grant date as fiscal year 2016 long-term incentive awards. The SSARs are exercisable in thirds beginning on March 31, 2016. All SSARs have a seven-year term.
(4)The dollar amount shown for each equity grant represents the grant date fair value of the SSARs and restricted shares, calculated in accordance with FASB ASC Topic 718. The actual value, if any, recognized upon the exercise of a SSAR or vesting of restricted shares will depend upon the market price of the shares on the date the SSAR is exercised or restricted shares vest.
33

29


adjusted earnings from operations and individual performance for each Named Executive Officer other than Mr. Srinivasan. As discussed in the Compensation Discussion and Analysis above, for those Named Executive Officers, cash-based annual incentives could not be earned for less than threshold performance. Fiscal year 2019 payouts for each Named Executive Officer pursuant to these awards are shown in the Summary Compensation Table above in the column titled Non-Equity Incentive Plan Compensation. Further explanation of potential and actual payouts by component is set forth in the CD&A.
(2)Long-term equity incentives for Mr. Srinivasan consisted of shares of restricted common stock which would vest based on the achievement of revenue and adjusted earnings from operations targets. Achievement of the performance goal would have earned him common shares equal to $450,000, which would have equaled the target level of shares set forth in the table based on the grant date fair market value of $14.22 per share. Similarly, the threshold and maximum potential shares set forth in the table are based on the threshold and maximum incentive amounts of $225,000 and $900,000, respectively, at the grant date value of $14.22 per share. Mr. Srinivasan earned 23,526 shares for performance at 118.52% of target based on a determination date value of $22.67 per share. Further explanation of potential and actual payouts is set forth in the CD&A.
(3)The share amounts shown represent grants of restricted shares to each Named Executive Officer as part of the executive’s annual long-term equity grant. The restricted shares are exercisable in thirds beginning on March 31, 2019.
(4)The share amounts represent SSARs granted at the fair market value of the shares on the grant date as fiscal year 2019 long-term incentive awards. The SSARs are exercisable in thirds beginning on March 31, 2019. All SSARs have a seven-year term.
(5)The dollar amount shown for each equity grant represents the grant date fair value of the SSARs and restricted shares, calculated in accordance with FASB ASC Topic 718. The actual value, if any, recognized upon the exercise of a SSAR or vesting of restricted shares will depend upon the market price of the shares on the date the SSAR is exercised or restricted shares vest.

Outstanding Equity Awards

The following table and related notes summarize the outstanding equity awards held by the Named Executive Officers as of March 31, 2016.2019.


30


Outstanding Equity Awards at 20162019 Fiscal Year-End

Name
Grant
Date
Option AwardsStock Awards
Number of
Securities Underlying
Unexercised Options (#)
Option
Exercise
Price ($)
Option
Expiration
Date
Number of
Shares
of Stock
That Have
Not
Vested (#)(2)
Market
Value of
Shares of
Stock That
Have Not
Vested ($)(3)
ExercisableUnexercisable (1)
James H. Dennedy6/12/201278,305  7.46 6/12/2019   
 6/4/201350,188  12.38 6/4/2020   
 6/3/201438,042 19,021 (a)14.43 6/3/20219,517 (a)97,169 
 7/18/2014      47,500 (a)484,975 
 6/2/201535,281 70,563 (a)9.12 6/2/202230,117 (a)307,495 
        
Janine K. Seebeck11/7/20115,152  8.31 11/7/2018   
 6/12/20125,721  7.49 6/12/2019   
 6/4/20135,019  12.38 6/4/2020   
 8/7/20132,715  11.40 8/7/2020   
 6/3/20149,418 4,709 (b)14.43 6/3/20212,356 (b)24,055 
 7/18/2014      28,500 (b)290,985 
 6/2/201510,154 20,308 (b)9.12 6/2/20228,668 (b)88,500 
           
Kyle C. Badger10/31/201111,194  8.49 10/31/2018   
 6/12/201212,886  7.46 6/12/2019   
 6/4/201311,292  12.38 6/4/2020   
 6/3/20149,602 4,802 (c)14.43 6/3/20212,402 (c)24,524 
 7/18/2014      23,750 (c)242,488 
 6/2/20159,445 18,892 (c)9.12 6/2/20228,078 (c)82,476 
        
Larry Steinberg5/9/201217,513  8.64 5/9/2019   
 6/4/201318,821  12.38 6/4/2020   
 6/3/201415,754 7,878 (d)14.43 6/3/20213.941 (d)40,238 
 7/18/2014      33,250 (d)339,483 
 6/2/201516,297 32,594 (d)9.12 6/2/202213,912 (d)142,042 
           
Jimmie D. Walker, Jr.3/30/2015      1,785 (e)26,015 
 8/11/20153,555 7,105 (e)9.60 8/11/2022   
 1/5/2016      25,000 (e)255,250 
NameGrant
Date		Option AwardsStock Awards
Number of
Securities Underlying
Unexercised Options (#)
Option
Exercise
Price ($)
Option
Expiration
Date
Number of
Shares
of Stock
That Have
Not
Vested (#)(2)
Market
Value of
Shares of
Stock That
Have Not
Vested ($)(3)
ExercisableUnexercisable (1)
Ramesh Srinivasan1/3/2017455,000175,000 (a)10.807/3/2021  
5/31/2018    63,2911,339,870
        
Tony Pritchett6/12/20121,167 7.466/12/2019  
 8/11/20155,992 9.608/11/2022  
 6/14/201710,0005,000 (b)9.846/14/20245,000 (b)105,850
 7/6/20179,5824,793 (b)10.207/6/20241,879 (b)39,778
 5/31/20184,6009,200 (b)14.225/31/20253,048 (b)64,526
        
Kyle Badger6/12/201212,886 7.466/12/2019  
 6/4/201311,292 12.386/4/2020  
 6/3/201414,404 14.436/3/2021  
 6/2/201528,387 9.126/2/2022  
 6/30/201617,598 10.476/30/2023  
 7/6/201710,8335,418 (c)10.207/6/20242,124 (c)44,965
 5/31/20184,9539,908 (c)14.225/31/20253,282 (c)69,480
        
Prabuddha Biswas5/31/201810,61521,232 (d)14.225/31/202525,316 (d)535,940
        
Don DeMarinis2/1/2018    3,320 (e)70,284
 5/31/20184,4238,846 (e)14.225/31/20252,930 (e)62,028

(1)As of March 31, 2016, the vesting schedule for the time-vested SSARs was as follows:
(1)As of March 31, 2019, the vesting schedule for the time-vested SSARs was as follows:
(a)54,302 on March 31, 2017 and 35,281 on March 31, 2018
(a) 17,500 vest monthly from April 1, 2019 through January 1, 2020.
(b)14,863 on March 31, 2017 and 10,154 on March 31, 2018
(b) 14,393 on March 31, 2020 and 4,600 on March 31, 2021
(c)14,248 on March 31, 2017 and 9,446 on March 31, 2018
(c) 10,372 on March 31, 2020 and 4,95 on March 31, 2021
(d)24,175 on March 31, 2017 and 16,297 on March 31, 2018
(d) 10,616 on March 31, 2020 and 10,616 on March 31, 2021
(e)3,555 on March 31, 2017 and 3,556 on March 31, 2018
(e) 4,423 on March 31, 2020 and 4,423 on March 31, 2021
(2)As of March 31 2016, the vesting schedule for the time-vested stock awards was as follows:
(2)As of March 31, 2019, the vesting schedule for the time-vested stock awards was as follows:
(a)2,500 on July 31, 2016; 24,575 on March 31, 2017; 45,000 on July 31, 2017; 15,059 on March 31, 2018
(b) 8,403 on March 31, 2020 and 1,524 on March 31, 2021
(b)1,500 on July 31, 2016; 6,690 on March 31, 2017; 27,000 on July 31, 2017; 4,334 on March 31, 2018
(c) 3,765 on March 31, 2020; and 1,641 on March 31, 2021
(c)1,250 on July 31, 2016; 6,441 on March 31, 2017; 22,500 on July 31, 2017; 4,039 on March 31, 2018
(d) 12,658 on March 31, 2020 and 12,658 on March 31, 2021
(d)1,750 on July 31, 2016; 10,897 on March 31, 2017; 31,500 on July 31, 2017; 6,956 on March 31, 2018
(e) 4,785 on March 31, 2020 and 1,465 on March 31 2021
(e)1,250 on January 5, 2017; 1,785 on March 31, 2017; 1,250 on January 5, 2018; 22,500 on January 5, 2019.
(3)Calculated based on the closing price of the shares on March 31, 2016 of $10.21 per share.
34
(3)Calculated based on the closing price of the shares on March 29, 2019, of $21.17 per share.

Option Exercises and Stock Vested

The following table and related notes summarize the exercise of stock options and/or SSARs and the vesting of other stock awards by the Named Executive Officers while they were serving as Named Executive Officers during fiscal year 2016.2019.



31


Option Exercises and Stock Vested for Fiscal Year 2016

NameOption AwardsStock Awards
Number of
Shares
Acquired on
Exercise (#)
Value
Realized on
Exercise
($)
Number of
Shares
Acquired on
Vesting (#)
Value
Realized on
Vesting ($)(1)
James H. Dennedy— — 37,845 382,047 
Janine K. Seebeck— — 9,851 97,969 
Kyle C. Badger— — 10,114 101,089 
Larry Steinberg— — 17,572 174,822 
Jimmie D. Walker, Jr.— — 509 5,197 

(1)The value realized on vesting of stock awards is determined by multiplying the number of shares underlying the stock awards by the closing price of the shares on the vesting date of the awards.
2019

Termination and Change of Control

The following table and discussion summarize certain information related to the total potential payments which would have been made to the Named Executive Officers in the event of termination of their employment with the Company, including in the event of a change of control, effective March 31, 2016, the last business day of fiscal year 2016.
NameOption AwardsStock Awards
Number of
Shares
Acquired on
Exercise (#)
Value
Realized on
Exercise
($)
Number of
Shares
Acquired on
Vesting (#)
Value
Realized on
Vesting ($)(1)
Ramesh Srinivasan—
 —
 15,822 242,077 
Tony Pritchett591
 9,546
 9,099 192,626 
Kyle Badger5,302
 85,522
 15,897 287,339 
Prabuddha Biswas—
 —
 12,658 267,970 
Don DeMarinis—
 —
 4,785 101,298 

Employment Agreements.  (1)The Named Executive Officers are each a party to an employment agreement withvalue realized on vesting of stock awards is determined by multiplying the Company. Undernumber of shares underlying the employment agreements, if we terminate anystock awards by the closing price of the Named Executive Officers' employment without cause, he or she will receive severance equal to one year's salary and target annual incentive, and a lump sum amount equal toshares on the executive's total premium for one year of COBRA continuation coverage under the Company's health benefit. If the Company changes the Named Executive Officer's position such that his or her compensation or responsibilities are substantially lessened, and the Company fails to cure such situation within 30 days after notice, he or she may terminate his or her employment and will receive his or her severance benefits. In the event that anyvesting date of the Named Executive Officers are terminated without cause or for a change of position in the 24 months following a change of control of the Company, the Named Executive Officer is entitled to severance pay equal to two year's salary and target annual incentive and a lump sum amount equal to the executive's total premium for one year of COBRA continuation coverage under the Company's health benefit. Following a termination of employment for any reason the executive is prohibited for a one-year period following termination from being employed by, owning, operating, controlling, or being connected with any business that competes with the Company. Each executive's agreement also contains an indefinite non-disclosure provision for the protection of the Company's confidential information and one-year non-solicitation and non-compete provisions.
35awards.


Termination and Change of Control

Voluntary Termination or Termination for Cause ($)(1)
James
Dennedy
Janine
Seebeck
Kyle
Badger
Larry
Steinberg
Jimmie
Walker, Jr.
Base Salary and Incentive—————
Accelerated Vesting—————
Termination without Cause or by Employee for Change in Position ($)(1)     
Base Salary and Incentive773,000 382,500390,000 420,000 500,000 
Health Insurance (2)10,357 1,03110,357 11,557 10,357 
Accelerated Vesting— —— — — 
 ___________________________________
Total783,357 383,531400,357 431,557 510,357 
Change of Control ($)(3)
 
     
Base Salary and Incentive1,546,000 765,000780,000 840,000 1,000,000 
Health Insurance10,357 1,03110,357 11,557 10,357 
Accelerated Vesting/SSARs (3)76,914 22,13520,592 35,527 4,334 
Accelerated Vesting/Stock (3)889,638 415,476349,488 521,762 273,475 
 ___________________________________
Total2,522,909 1,191,7061,160,437 1,408,846 1,288,166 
Death or Disability ($)(4)     
Accelerated Vesting/SSARs (3)76,914 22,13520,592 35,527 4,334 
Accelerated Vesting/Stock (3)889,638 415,476349,488 521,762 521,762 
 ___________________________________
Total966,552 425,676370,081 557,289 277,809 
The following table and discussion summarize certain information related to the total potential payments which would have been made to the Named Executive Officers in the event of termination of their employment with the Company, including in the event of a change of control, effective March 29, 2019, the last business day of fiscal year 2019.

(1)For the Named Executive Officers, "cause" is defined as (i) breach of employment agreement or any other duty to the Company, (ii) dishonesty, fraud, or failure to abide by the published ethical standards, conflicts of interest, or material breach of Company policy, (iii) conviction of a felony crime or crime involving misappropriation of money or other Company property, (iv) misconduct, malfeasance, or insubordination, or (v) gross failure to perform (not including failure to achieve quantitative targets).  A "change in position" is the substantial lessening of compensation or responsibilities. After a change in position, the executive has 30 days to notify the Company of his or her termination of employment, and the Company has 30 days to cure. A "voluntary termination" includes death, disability, or legal incompetence.
Employment Agreements. The Named Executive Officers are each a party to an employment agreement with the Company.
(2)Health Insurance consists of health care and dental care benefits. The amount reflects 12 months of benefits for the Named Executive Officers that participate in the Company's plans. These benefits have been calculated based on actual cost to us for fiscal year 2016.

(3)If Mr. Srinivasan’s employment agreement is terminated by the Company for cause or by Mr. Srinivasan for good reason, then subject to his execution of a release of claims, Mr. Srinivasan will be entitled to receive severance equal to one year’s then-current base salary and target annual bonus, which will be paid during regular pay intervals over the course of one year. In addition, he will also receive (1) a lump sum payment in cash, on the 60th day after the termination date, equal to the total after-tax premiums required to pay for twelve months of COBRA continuation coverage under the Company’s medical, dental and vision insurance plans; (2) a pro-rated bonus for the year of termination based on actual performance with no negative discretion by the Board; and (3) 12 months of accelerated vesting of all equity compensation awards outstanding on the termination date. If such termination occurs within the three months before or 24 months after a change in control, Mr. Srinivasan will receive two times the sum of his then-current base salary and target annual bonus, two times the COBRA payment and 100% vesting (on the 60th day after the termination date) of all outstanding equity awards. In addition, upon any termination of employment, Mr. Srinivasan will receive accrued but unpaid base salary and payment for any unused vacation and unreimbursed expenses.

For Mr. Srinivasan, good reason means (i) a reduction in his base salary or target bonus opportunity, (ii) a material diminution in his authority, duties or responsibilities (including, without limitation, his no longer being the CEO of a publicly-traded company), (iii) his removal as a member of the board of directors (other than by your voluntary resignation), (iv) any other action that constitutes a willful and material breach by the Company of a material provision of his employment agreement, or (v) a material reduction in the benefits provided to him that is not part of a broader reduction of benefits applicable to substantially all other officers of the Company, and the Company fails to materially cure such condition within 30 days. For the other Named Executive Officers, good reason is limited to where the Company changes the Named Executive Officer’s position such that his compensation or responsibilities are substantially lessened, and the Company fails to cure such situation within 30 days after notice.

If the Company terminates the employment of any of the other Named Executive Officers without cause, we must pay severance equal to six month’s salary and reimbursement of the executive’s total premium for six months of


32


COBRA continuation coverage under the Company’s health benefit plans. If the executive’s compensation is reduced by more than 10%, other than a general reduction that affects all similarly situated executives, or if at any time prior to a change in control the executive no longer reports to the CEO, the executive may terminate his employment if the Company fails to materially cure such condition within 30 days following notice of such condition by the executive, and the termination will be deemed to be a termination without cause and the executive is entitled to his or her severance benefits. In the event that any of these Named Executive Officers are terminated without cause or by the executive for good reason in the 24 months following a change of control of the Company, the executive is entitled to severance pay equal to one year’s salary and a pro rata portion of target annual incentive and reimbursement of the executive’s total premium for one year of COBRA continuation coverage under the Company’s health benefit.

Following a termination of employment for any reason each Named Executive Officer is prohibited for a one-year period following termination from being employed by, owning, operating, controlling, or being connected with certain businesses that compete with the Company. Each executive’s agreement also contains an indefinite non-disclosure provision for the protection of the Company’s confidential information and a one-year non-solicitation of Company employees.

Termination and Change of Control

Voluntary Termination or Termination for Cause ($)(1)
Ramesh
Srinivasan
Tony
Pritchett
Kyle
Badger
Prabuddha BiswasDon DeMarinis
Base Salary and Incentive—————
Accelerated Vesting—————
Termination without Cause or by Employee for Good Reason ($)(2)     
Base Salary and Incentive1,050,000
 130,000
140,000
 134,000
 125,000
 
Health Insurance (3)20,612
 16,954
20,612
 18,142
 18,825
 
Accelerated Vesting1,633,275
 —
—
 —
 —
 
Total2,703,887
 146,954
160,612
 152,142
 143,825
 
Change of Control ($)(4)

     
Base Salary and Incentive2,100,000
 390,000
420,000
 405,000
 350,000
 
Health Insurance20,612
 16,954
20,612
 18,142
 18,825
 
Accelerated Vesting/SSARs1,633,275
 173,158
128,285
 147,562
 61,480
 
Accelerated Vesting/Stock900,000
 210,154
114,445
 535,940
 132,312
 
Total4,653,887
 790,266
683,342
 1,106,644
 562,617
 
Death or Disability ($)(5)     
Accelerated Vesting/SSARs1,633,275
 173,158
128,285
 147,562
 61,480
 
Accelerated Vesting/Stock—
 —
—
 —
 —
 
Total1,633,275
 173,158
128,285
 147,562
 61,480
 

(1) A “voluntary termination” includes death, disability, or legal incompetence.
(2) For Mr. Srinivasan, “cause” is defined as (i) conviction of a crime involving misappropriation of money or other property or conviction of a felony, or a guilty plea or plea of nolo contendere with respect to a felony, (ii) violations the confidentiality, non-competition and non-solicitation clauses of his employment agreement, (iii) breaches of his duty of loyalty to the Company or willful misconduct, any of which materially injures the Company, (iv) a willful and material breach of his material obligations under any agreement entered into between him and the Company that materially injures the Company, or (v) failure to substantially perform his reasonable duties with the Company (other than by reason of your disability). For the other Named Executive Officers, “cause” is defined as (i) breach of employment agreement or any other duty to the Company, (ii) dishonesty, fraud, or failure to abide by the published ethical standards, conflicts of interest, or material breach of Company policy, (iii) conviction of a felony crime or crime involving misappropriation of money or other Company property, or (iv)


33


misconduct, malfeasance, or insubordination. For Mr. Srinivasan, good reason means (i) a reduction in his base salary or target bonus opportunity, (ii) a material diminution in his authority, duties or responsibilities (including, without limitation, his no longer being the CEO of a publicly-traded company), (iii) his removal as a member of the board of directors (other than by your voluntary resignation), (iv) any other action that constitutes a willful and material breach by the Company of a material provision of his employment agreement, or (v) a material reduction in the benefits provided to him that is not part of a broader reduction of benefits applicable to substantially all other officers of the Company, and the Company fails to materially cure any such condition within 30 days. For the other Named Executive Officers, good reason means (i) a reduction in base salary or target bonus eligibility by more than 10% from its then current level, other than a general reduction in base salary or target bonus eligibility that affects all similarly situated executives in substantially the same proportions, or (ii) at any time prior to a change in control of the Company, the executive no longer reports to the CEO, and the Company fails to cure any such situation within 30 days after notice.
(3) Health Insurance consists of health care and dental care benefits. The amount reflects reimbursement of COBRA benefits for the applicable period.
(4) Severance payments in the event of a change of control are subject to a double trigger such that severance benefits are provided only upon a combination of a change of control and a qualified termination.  SSARs and restricted shares vest upon a change of control. For SSARs (except as qualified below) the value of accelerated vesting is calculated using the closing price of $10.21 per share on March 31, 2016 less the exercise price per share for the total number of SSARs accelerated. The value of restricted shares upon vesting reflects that same $10.21 closing price. Values represent potential vesting under a hypothetical change of control situation on March 31, 2016.
(4)All SSARs and restricted shares vest upon a change of control. For SSARs the value of accelerated vesting is calculated using the closing price of $21.17 per share on March 29, 2019, less the exercise price per share for the total number of SSARs accelerated. The value of restricted shares upon vesting reflects that same $21.17 closing price. Values represent potential vesting under a hypothetical change of control situation on March 31, 2019.
(5) All SSARs vest upon death or disability.


EQUITY COMPENSATION PLAN INFORMATION

The following table provides certain information with respect to all of the Company'sCompany’s equity compensation plans in effect as of March 31, 2016.
36
2019.

  
  
Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights Weighted-Average Exercise Price of Outstanding Options, Warrants and RightsNumber of Securities Remaining Available for Future Issuance Under Equity Compensation Plans
Equity compensation plans approved by shareholders (2000 Stock Option Plan for Outside Directors and 2000, 2006, and 2011 Stock Incentive Plans)
  
1,339,365
 12.29 1,016,888
     
Equity compensation plans not approved by shareholders
  
—
 —
 
 
—
 
Total 
 
 
 1,339,365
 
 12.29
 
  1,016,888
  Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights 
Number of  Securities Remaining Available for Future Issuance Under Equity Compensation 
Plans
Equity compensation plans approved by shareholders (2011 and 2016 Stock Incentive Plans) 1,016,643
 
$11.23
 1,756,156
    
Equity compensation plans not approved by shareholders —
 —
 —
       
Total 1,016,643
 
$11.23
 1,756,156


PROPOSAL 4
ADVISORY VOTE REGARDING EXECUTIVE COMPENSATION

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 ("Dodd-Frank Act") and SEC rules require us to allow our shareholders to vote, on a non-binding, advisory basis, on whether to approve the compensation of our Named Executive Officers as disclosed in this Proxy Statement, in accordance with the SEC'sSEC’s compensation disclosure rules. As described more fully in our CD&A section of this Proxy Statement, our compensation programs applicable to our Named Executive Officers are designed to retain executives who can significantly contribute to our success, reward the achievement of specific annual and long-term goals and strategic objectives, and tie a significant portion of compensation to the long-term performance of our shares to align executive pay and shareholders'shareholders’ interests. The Compensation Committee continually reviews the compensation programs for our Named Executive Officers to ensure the alignment of our executive compensation structure with our shareholders'shareholders’ interests and market practices. As a result of this review, the Compensation Committee:

·Maintained base salaries and target annual incentives for fiscal year 2016 at the same levels as fiscal year 2015;

·Focused annual incentives on improvements over fiscal year 2015 revenue results;
34

·Used its discretion to reduce the CEO's fiscal year 2016 annual incentive payout to maintain CEO total compensation in line with market compensation; and

·
Maintained base salaries and target annual incentives for fiscal year 2019 at substantially similar levels as fiscal year 2018;
Focused fiscal year 2019 annual incentives on improvements over fiscal year 2018 results;
Structured long-term incentives to reward increases in shareholder value.

We are asking shareholders to approve our Named Executive Officers'Officers’ compensation as described in this Proxy Statement. Currently, we ask shareholders to vote on such compensation annually. This vote is not intended to address any specific item of compensation, but rather the overall compensation, and the philosophy, objectives, and structure applicable to such compensation. This advisory vote is not binding on the Company, the Compensation Committee, or our board of directors; however, we value the opinions of our shareholders and to the extent there is any significant vote against this proposal, we will consider our shareholders'shareholders’ concerns and evaluate whether any actions are necessary to address those concerns. Accordingly, we are asking our shareholders to vote "FOR"“FOR” the following resolution at the Annual Meeting:

"“RESOLVED, that the Company'sCompany’s shareholders approve, on an advisory basis, the compensation of the Named Executive Officers, as disclosed in the Company'sCompany’s Proxy Statement for the 20162019 Annual Meeting of Shareholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis and the discussion under Executive Compensation, including the 20162019 compensation tables and the related disclosure and narratives to those tables."”

THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"“FOR” PROPOSAL 4. PROXY CARDS RECEIVED BY THE COMPANY WILL BE VOTED "FOR"“FOR” PROPOSAL 4 UNLESS THE SHAREHOLDER SPECIFIES OTHERWISE ON THE PROXY CARD.
37


AUDIT COMMITTEE REPORT

The Audit Committee oversees the Company'sCompany’s financial reporting process on behalf of the board of directors. The Audit Committee'sCommittee’s activities are governed by a written charter adopted by the board of directors, the Amended and Restated Audit Committee Charter, which is available at the Company'sCompany’s website www.agilysys.com. The Audit Committee currently consists of three directors, all of whom are independent in accordance with the rules of the NASDAQ Stock Market, Section 10A(m) of the Securities Exchange Act of 1934, and the rules and regulations of the SEC. The Board has determined that Directors Donald Colvin and John Mutch each qualify as an "audit“audit committee financial expert"expert” as defined by the SEC.

Management has the primary responsibility for the Company'sCompany’s financial statements and the reporting process, including the system of internal controls over financial reporting. Grant Thornton LLP, ("Grant"), the Company'sCompany’s independent registered public accounting firm, audits the annual financial statements prepared by management and expresses an opinion on whether those financial statements conform with United States generally accepted accounting principles, and also audits the internal controls over financial reporting and management'smanagement’s assessment of those controls. The Audit Committee hires the Company'sCompany’s independent registered public accounting firm and monitors these processes.

In carrying out its responsibilities, the Audit Committee has reviewed and has discussed with the Company'sCompany’s management the Company's 2016Company’s 2019 audited financial statements. Management represented to the Audit Committee that the Company'sCompany’s financial statements were prepared in accordance with United States generally accepted accounting principles. In addition, the Audit Committee discussed with the Company'sCompany’s financial management and independent registered public accounting firm the overall scope and plans for the audit. The Audit Committee also met with the independent registered public accounting firm, with and without management present, to discuss the results of the audit, their evaluation of the Company'sCompany’s internal controls over financial reporting, including both the design and usefulness of such internal controls, and the overall quality of the Company'sCompany’s financial reporting.



35


The Audit Committee has discussed with the independent registered public accounting firm the matters required to be discussed by Auditing Standard No. 16, CommunicationsCommunication with Audit Committees, as adopted by the Public Company Accounting Oversight Board.

The Audit Committee has also received annual written disclosures from Grant Thornton regarding their independence from the Company and its management as required by the applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant'saccountant’s communications with the Audit Committee concerning independence, has discussed with the independent registered public accounting firm their independence, and has considered the compatibility of non-audit services with the registered public accounting firm'sfirm’s independence.

Based on the review and discussions referred to above, the Audit Committee recommended to the board of directors that the Company's 2016Company’s 2019 audited financial statements be included in the Company's 2016Company’s 2019 Annual Report on Form 10-K for the fiscal year ended March 31, 2016.2019.

Submitted by the Audit Committee of the Board of Directors as of June 8, 2016May 28, 2019

Donald Colvin, Chairman
Jerry JonesKeith Kolerus
John Mutch

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PROPOSAL 5
RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

By NASDAQ and SEC rules, appointment of the Company'sCompany’s independent registered public accounting firm ("(“Independent Accountant"Accountant”) is the direct responsibility of the Audit Committee, and the Audit Committee has appointed Grant Thornton LLP as our Independent Accountant for the fiscal year ending March 31, 2016.2020.

Shareholder ratification of the selection of Grant Thornton as our Independent Accountant is not required by our Amended Code of Regulations or otherwise; however, the board of directors has determined to seek shareholder ratification of that selection to provide shareholders an avenue to express their views on this important matter. If our shareholders fail to ratify the selection, the Audit Committee will seek to understand the reasons for the vote against ratification and will take those views into account in this and future appointments. Even if the selection is ratified, the Audit Committee in its discretion may direct the appointment of a different Independent Accountant at any time during the year if it is determined that such a change would be in the best interests of the Company and our shareholders.

THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"“FOR” THE RATIFICATION OF GRANT THORNTON AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM. PROXY CARDS RECEIVED BY THE COMPANY WILL BE VOTED "FOR"“FOR” PROPOSAL 5 UNLESS THE SHAREHOLDER SPECIFIES OTHERWISE ON THE PROXY CARD.

The Audit Committee reviewed the fees of Grant Thornton LLP, our Independent Accountant for fiscal year 2016, and of PricewaterhouseCoopers LLP ("PwC"), our Independent Accountant for fiscal year 2015.2019. Fees for services rendered by Grant Thornton and PwC for fiscal year 2016years 2019 and by PwC for fiscal year 20152018 were:

Fiscal
Year
Audit
Fees ($)
Audit-Related Fees ($)
Tax
Fees ($)
All Other
Fees ($)
2016 (Grant Thornton)680,281 — — — 
2016 (PwC)211,400 — — 2,700 
2015 (PwC)676,798 — — 2,700 

"

36


Fiscal
Year
Audit
Fees ($)
Audit-Related
Fees ($)
Tax
Fees ($)
All Other
Fees ($)
2019718,434

—
10,274

—
2018591,933

—

—

—

“Audit Fees"Fees” consist of fees billed for professional services provided for the annual audit of our financial statements, annual audit of internal control over financial reporting, review of the interim financial statements included in quarterly reports, and services that are normally provided in connection with statutory and regulatory filings. "Audit-Related Fees" generally include fees for employee benefits plan audits, business acquisitions, and accounting consultations. "Tax Fees"“Audit- Related Fees” relate to professional services that are reasonably related to the performance of the audit or review of our financial statements. “Tax Fees” include tax compliance and tax adviceconsulting services. "All“All Other Fees" generallyFees” relate to professional services providednot included in connection with non-audit acquisition activities.the foregoing categories, including services related to other regulatory reporting requirements.

Representatives of Grant Thornton are expected to be present at the Annual Meeting. They will have an opportunity to make a statement if they so desire and will be available to respond to appropriate questions.  Representatives of PwC are not expected to be present at the Annual Meeting.

The Audit Committee adopted an Audit and Non-Audit Services Pre-Approval Policy (the "Policy") to ensure compliance with SEC and other rules and regulations relating to auditor independence, with the goal of safeguarding the continued independence of our Independent Accountant. The Pre-Approval Policy sets forth the procedures and conditions pursuant to which audit, review, and attest services and non-audit services to be provided to the Company by our Independent Accountant may be pre-approved. The Audit Committee is required to pre-approve the audit and non-auditnon- audit services performed by our Independent Accountant to assure that the provision of such services does not impair independence. Unless a type of service to be provided has received pre-approval as set forth in the Pre-Approval Policy, it will require separate pre-approval by the Audit Committee
39
before commencement of the engagement. Any proposed service that has received pre-approval but which will exceed pre-approved cost limits will require separate pre-approval by the Audit Committee. All audit, non-audit, and tax services were pre-approved by the Audit Committee during fiscal years 20162019 and 2015.2018.
Change of Independent Registered Public Accounting Firm.
On August 12, 2015, we dismissed PwC. The decision to dismiss PwC was approved by the Audit Committee.
PwC's reports on our consolidated financial statements for the fiscal years ended March 31, 2015 and March 31, 2014 did not contain any adverse opinion or a disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principle.
During our fiscal years ended March 31, 2015 and March 31, 2014 and through August 12, 2015, there were no disagreements with PwC on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures, which disagreements, if not resolved to PwC's satisfaction, would have caused PwC to make reference to the subject matter of the disagreements in their reports on our consolidated financial statements for such years. In addition, during our fiscal years ended March 31, 2015 and March 31, 2014 and through August 12, 2015, there were no "reportable events" as that term is defined in Item 304(a)(1)(v) of Regulation S‑K.
We provided PwC with a copy of the above prior to its filing with the SEC and requested that PwC furnish us with a letter addressed to the SEC stating whether or not it agrees with the above statements.  PwC provided the requested letter, which was also filed with the SEC.
On August 20, 2015, we engaged Grant Thornton as our new independent registered public accounting firm for the fiscal year ending March 31, 2016. The engagement of Grant Thornton was approved by the Audit Committee. In connection with our engagement of Grant Thornton, including during the fiscal years ended March 31, 2015 and 2014 and through August 20, 2015, neither the Company, nor anyone on its behalf, consulted Grant Thornton regarding either (i) the application of accounting principles to a specific transaction, either completed or proposed, or the type of audit opinion that might be rendered on our financial statements or (ii) any matter that was the subject of a "disagreement" (as that term is defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) or a "reportable event" (as that term is defined in Item 304(a)(1)(v) of Regulation S-K).

RELATED PERSON TRANSACTIONS

All related person transactions with the Company require the prior approval or ratification by our Audit Committee. The board of directors adopted Related Person Transaction Procedures to formalize the procedures by which our Audit Committee reviews and approves or ratifies related person transactions. The procedures set forth the scope of transactions covered, the process for reporting such transactions, and the review process. Covered transactions include any transaction, arrangement, or relationship with the Company in which any director, executive officer, or other related person has a direct or indirect material interest, except for business travel and expense payments, share ownership, and executive compensation approved by the board of directors. Transactions are reportable to the Company'sCompany’s General Counsel, who will oversee the initial review of the reported transaction and notify the Audit Committee of transactions within the scope of the procedures, and the Audit Committee will determine whether to approve or ratify the transaction. Through our Nominating and Corporate Governance Committee, we make a formal yearly inquiry of all of our executive officers and directors for purposes of disclosure of related person transactions, and any such newly revealed related person transactions are conveyed to the Audit Committee. All officers and directors are charged with updating this information with our internal legal counsel.


HOUSEHOLDING

Some banks, brokers and other nominee record holders may be participating in the practice of "householding."“householding.” This means that only one copy of either the notice of Internet availability of the proxy statement or of this proxy statement and Annual Report on Form 10-K may have been sent to multiple shareholders sharing an address unless the shareholders provide contrary
40
instructions. We will promptly deliver a separate copy of these documents to you


37


if you call or write us at: Agilysys, Inc., 425 Walnut Street,1000 Windward Concourse, Suite 1800, Cincinnati, Ohio  45202,250, Alpharetta, Georgia 30005, Attention: Secretary; telephone (770) 810-7800.

If you want to receive separate copies of our proxy statements and annual reports to shareholders in the future, or if you are receiving multiple copies and would like to receive only one copy for your household, you should contact your bank, broker or other nominee record holder, or you may contact us at the above address or telephone number.


OTHER MATTERS

The Board is not aware of any matter to come before the Annual Meeting of Shareholders other than those mentioned in the accompanying Notice. If other matters properly come before the Annual Meeting, the persons named in the accompanying proxy card intend, to the extent permitted by law, to vote using their best judgment on such matters.


SHAREHOLDER PROPOSALS

Shareholders who, in accordance with SEC Rule 14a-8, wish to present proposals for inclusion in the proxy materials to be distributed in connection with the 20162020 Annual Meeting of Shareholders must submit their proposals so that they are received by our Secretary at our at our Alpharetta office, located at 1000 Windward Concourse, Suite 250, Alpharetta, Georgia 30005, no later than the close of business on April 17, 2017.10, 2020. Each proposal submitted should be accompanied by the name and address of the shareholder submitting the proposal and the number of common shares owned. If the proponent is not a shareholder of record, proof of beneficial ownership should also be submitted. All proposals must be a proper subject for action and comply with the proxy rules of the SEC.

In order for a shareholder to bring a matter properly before the 20162020 Annual Meeting present (other than a matter brought pursuant to SEC Rule 14a-8), the shareholder must comply with the requirements set forth in our Amended Code of Regulations, including: (i) be a shareholder of record at the time notice of the matter is given and at the time of the meeting, (ii) be entitled to vote at the meeting, and (iii) have given timely written notice of the matter to the Secretary. A shareholder'sshareholder’s notice of a matter the shareholder wishes to present at the 20162020 Annual Meeting (other than a matter brought pursuant to SEC Rule 14a-8), must be received by our Secretary at our Alpharetta office, located at 1000 Windward Concourse, Suite 250, Alpharetta, Georgia 30005, no earlier than May 18, 2017,11, 2020, and no later than June 17, 2017.11, 2020.


Any shareholder entitled to vote at the Annual Meeting on September 15, 2016August 9, 2019, may make a request in writing and we will mail, at no charge, a copy of our 20162019 Annual Report, including the financial statements and schedules required to be filed with the SEC pursuant to Rule 13a-1 under the Exchange Act, for the most recent fiscal year. Written requests should be directed to Agilysys, Inc., Attn: Investor Relations, 1000 Windward Concourse, Suite 250, Alpharetta, Georgia 30005.

Please sign and return your proxy card promptly, or vote via the Internetinternet or telephone. For your convenience, a return envelope is enclosed requiring no additional postage if mailed in the United States.
41


CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This Proxy Statementproxy statement and other publicly available documents, including the documents incorporated herein and therein by reference, contain, and our officers and representatives may from time to time make, "forward-looking statements"“forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: "anticipate," "intend," "plan," "goal," "seek," "believe," "project," "estimate," "expect," "strategy," "future," "likely," "may," "should," "will"“anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will” and similar references to future periods. TheseForward-looking statements are not guaranteesneither historical facts nor assurances of future performance


38


performance. Instead, they are based only on our current beliefs, expectations and involveassumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks uncertainties, and assumptionschanges in circumstances that are difficult to predict. These statementspredict and many of which are basedoutside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on management's current expectations, intentions, or beliefs and are subject to a numberany of these forward-looking statements. Important factors assumptions, and uncertainties that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, our ability to achieve operational efficiencies and meet customer demand for products and services and the risks described in the forward-looking statements. Factors that could cause or contribute to such differences or that might otherwise impactCompany’s filings with the business include the risk factors set forthSecurities and Exchange Commission, including those listed in Item 1A of our Annual Report on Form 10-K for the fiscal year ended March 31, 2016.2019. Any forward-looking statement made by us is based only on information currently available and speaks only as of the date on which it is made. We undertake no obligation to publicly update any such factorforward-looking statement made herein or to publicly announce the results of any revisions to any forward-looking statements contained hereinstatement that may be made from time to time, whether written or oral, whether as a result of new information, future events, or otherwise.
42

Appendix A
Amendments to Agilysys, Inc. Amended Code of Regulations

If Proposal 1 of the proxy statement is approved, Article II, Section 1 of the Company's Amended Code of Regulations would be amended as follows (with strikethroughs reflecting language to be deleted and bolded language reflecting additions):
Number, Classification, Term of Office
Section 1. (a) The Board of Directors shall be divided into two classes to be known as Class A and Class B. The number of Directors in each class may be fixed or changed by the Board of Directors of the Company; provided, however, that the total number of Directors shall not be less than three (3) or more than nine (9) members, and no class shall consist of less than three (3) directors. One class ofAll Directors shall be elected each year and the Directors in each class shall hold office for a term of two yearsone year and until their respective successors are elected and qualified. In case of any increase in the authorized number of Directors of any class, any additional Directors provided for and elected to such class shall hold office for a term which shall coincide with the full term or the remainder of the term, as the case may be, of such class.

If Proposal 1 of the proxy statement is approved, Article II, Section 6 of the Company's Amended Code of Regulations would be amended as follows (with strikethroughs reflecting language to be deleted):
Removal
Section 6. All the Directors or all the Directors of a particular class or any individual Director may be removed from office, with or without cause, by the vote of the holders of two-thirds of the voting power entitled to elect Directors in place of those to be removed; provided, that unless all the Directors or all the Directors of a particular class are to be removed, no Director shall be removed without cause if the number of shares voted against his removal would be sufficient to elect at least one Director if cumulatively voted at an election of all the Directors, or all the Directors of a particular class, as the case may be.
A-1
Appendix B
AGILYSYS, INC.
2016 STOCK INCENTIVE PLAN

1.Purposes.

The purposes of the Plan are to provide long-term incentives to those persons with significant responsibility for the success and growth of the Company, to align the interests of such persons with those of the Company's shareholders, to assist the Company in recruiting, retaining and motivating employees, directors and consultants on a competitive basis and to link compensation to performance.

2.Definitions.

For purposes of the Plan, the following capitalized terms shall have the meanings specified below:

(a) "Award" means a grant of Stock Options, Stock Appreciation Rights, Restricted Shares or Restricted Share Units, or any or all of them, to a Participant.

(b) "Award Agreement" means an agreement, either in written or electronic format, between the Company and a Participant setting forth the terms and conditions of an Award granted to the Participant.

(c) "Board" means the Board of Directors of the Company.


(d) "Cause" means with respect to any Participant, unless otherwise provided in the applicable Award Agreement, (i) the Participant's conviction or misappropriation of money or other property or conviction of a felony, or a guilty plea or plea of nolo contendere by Participant with respect to a felony, (ii) conduct by the Participant that is in competition with the Company, conduct by a Participant that breaches the Participant's duty of loyalty to the Company or a Participant's willful misconduct, any of which materially injures the Company, (iii) a willful and material breach by the Participant of his or her obligations under any agreement entered into between the Participant and the Company that materially injures the Company, or (iv) the Participant's failure to substantially perform his or her duties with the Company (other than by reason of the Participant's Disability). For Participants subject to Section 16 of the Exchange
Act, the determination of whether any conduct, action or failure to act constitutes "Cause" shall be made by the Committee in its sole discretion.

(e) "Change in Control" means the occurrence of any of the following events:

(i)all or substantially all of the assets of the Company are sold or transferred to another corporation or entity, or the Company is merged, consolidated or reorganized with or into another corporation or entity, with the result that upon conclusion of the transaction less than 51% of the outstanding securities entitled to vote generally in the election of directors ("Voting Stock") or other capital interests of the acquiring corporation or entity are owned, directly or indirectly, by the holders of Voting Stock of the Company generally prior to the transaction;

(ii)there is a report filed on Scheduled 13D or Scheduled 14D-1, each as promulgated pursuant to the Exchange Act, disclosing that any person (as the term "person" is used in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act), excluding the Company and any employee benefit plan of the Company, including the trustee of any such plan, has become the beneficial owner (as the term "beneficial owner" is defined under Rule 13d-3) of securities representing 33- 1/3% or more of the combined voting power of the then-outstanding Voting Stock of the Company; or

(iii)the individuals who, at the beginning of any period of two consecutive calendar years, constituted the directors of the Company cease for any reason to constitute at least a majority thereof unless either (A) the nomination for election by the Company's shareholders of each new director of the Company was approved by a vote of at
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least two-thirds of the directors of the Company still in office who were directors of the Company at the beginning of any such period; or (B) to the extent adverse tax consequences under Section 409A of the Code would not be triggered, this clause (iii) is waived by a vote of at least two-thirds of the directors of the Company still in office who were directors of the Company at the beginning of any such period.

Notwithstanding anything herein to the contrary, an event described above shall be considered a Change in Control hereunder only if it also constitutes a "change in control event" under Section 409A of the Code, to the extent necessary to avoid the adverse tax consequences thereunder with respect to any Award subject to Section 409A of the Code.

(f) "Code" means the Internal Revenue Code of 1986, as amended, and any rules, regulations or guidance promulgated thereunder. Any reference to the Code or a section thereof shall also refer to any successor Code or section.
(g) "Committee" means a committee appointed by the Board consisting of at least three members of the Board, all meeting the definitions of "outside director" set forth in Code Section 162(m), "independent director" set forth in The Nasdaq Stock Market rules, and "non-employee director" set forth in Rule 16b-3 of the Exchange Act, or any successor definitions adopted for a similar purpose by the Internal Revenue Service, any national securities exchange on which the Common Shares are listed or the Securities and Exchange Commission.

(h) "Common Share" or "Common Shares" means one or more of the common shares, without par value, of the Company.

(i) "Company" means Agilysys, Inc., a corporation organized under the laws of the State of Ohio, its subsidiaries, divisions and affiliated businesses.

(j) "Date of Grant" means the date on which the Committee authorizes the grant of an Award or such later date as may be specified by the Committee in such authorization.

(k) "Disability" means a Participant's physical or mental incapacity resulting from personal injury, disease, illness or other condition which (i) prevents him or her from performing his or her duties for the Company, as determined by the Committee or its designee, and (ii) results in his or her termination of employment or service with the Company. The Committee may substitute a different definition for the term "Disability" in its discretion as it deems appropriate.

(l) "Effective Date" has the meaning set forth in Section 13(a).

(m) "Exchange Act" means the Securities Exchange Act of 1934, as amended, and any rules, regulations, schedules or guidance promulgated thereunder.  Any reference to the Exchange Act or a section thereof shall also refer to any successor Exchange Act or section.

(n) "Exercise Price" means the purchase price of a Common Share covered by a Stock Option or SAR, as applicable.

(o) "Fair Market Value" on any date means the closing price of the Common Shares as reported on The Nasdaq Stock Market or, if applicable, any other national securities exchange on which the Common Shares are principally traded, or, if there were no sales of Common Shares on such date, then on the immediately preceding date on which there were any sales of Common Shares. If the Common Shares cease to be traded on a national securities exchange, the Fair Market Value shall be determined pursuant to a reasonable valuation method prescribed by the Committee. In the case of an ISO (or Tandem SAR), Fair Market Value shall be determined by the Committee in accordance with Code Section 422. For Awards intended to be exempt from Code Section 409A, Fair Market Value shall be determined by the Committee in accordance with Code Section 409A.
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(p) "Full-Value Award" means Restricted Shares or Restricted Share Units.

(q) "ISO" means an incentive Stock Option satisfying the requirements of Code Section 422 and designated as an ISO by the Committee.

(r) "Non-Employee Director" means a member of the Board who is not an employee of the Company.

(s) "NQSO" means a non-qualified Stock Option that does not satisfy the requirements of Code Section 422 or that is not designated as an ISO by the Committee.

(t) "Participant" means a person eligible to receive an Award under the Plan, as set forth in Section 4, and designated by the Committee to receive an Award subject to the conditions set forth in the Plan and any Award Agreement.

(u) "Performance-Based Exception" means the performance-based exception to the deductibility limitations of Code Section 162(m), as set forth in Code Section 162(m)(4)(C).

(v) "Performance Goals" means the goals established by the Committee, as described Section 6(d)(ii).

(w) "Performance Measures" means the criteria set out in Section 6(d)(iii) that may be used by the Committee as the basis for a Performance Goal.

(x) "Performance Period" means the period established by the Committee during which the achievement of Performance Goals is assessed in order to determine whether and to what extent an Award that is conditioned on attaining Performance Goals has been earned.

(y) "Plan" means the Agilysys, Inc. 2016 Stock Incentive Plan, as amended and restated.

(z) "Prior Plan" means the 2011 Stock Incentive Plan, as may be amended.

(aa) "Restricted Shares" means Common Shares that are subject to restrictions, as described in Section 6(c).

(bb) "Restricted Share Units" means a right, as described in Section 6(c), denominated in Common Shares to receive an amount, payable in either cash, Common Shares, Restricted Shares, or a combination thereof, equal to the value of a specified number of Common Shares.

(cc) "Restriction Period" means, with respect to any Full-Value Award, the period during which any risk of forfeiture or other restrictions set by the Committee, including performance restrictions, remain in effect until such time as they have lapsed under the terms and conditions of the Full-Value Award or as otherwise determined by the Committee, including the Performance Period for Full-Value Awards intended to qualify for the Performance-Based Exception.

(dd) "Retirement" means retirement with the Company at or after age 65 or at or after the later of age 55 and seven years of service.

(ee) "Securities Act" means the Securities Act of 1933, as amended, and any rules, regulations, schedules or guidance promulgated thereunder.  Any reference to the Securities Act or a section thereof shall also refer to any successor Securities Act or section.

(ff) "Stock Appreciation Right" or "SAR" means the right, as described in Section 6(b), to receive a payment equal to the excess of the Fair Market Value of a Common Share on the date the SARs are exercised over the Exercise Price established for those SARs at the time of grant, multiplied by the number of Common Shares with respect to which the SARs are exercised.

(gg) "Stock Option" means the right, as described in Section 6(a), to purchase Common Shares at a specified price for a specified period of time.  Stock Options include ISOs and NQSOs.
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(hh) "Tandem SAR" means a SAR granted in tandem with a Stock Option.

3.Administration of the Plan.

(a) Authority of Committee. The Plan shall be administered by the Committee. Unless otherwise determined by the Board, the Compensation Committee of the Board shall serve as the Committee. The Committee shall have all the powers vested in it by the terms of the Plan, such powers to include the sole and exclusive authority to (within the limitations described in the Plan):

(i)select Participants to be granted Awards under the Plan and grant Awards pursuant to the terms of the Plan;

(ii)determine the type, size and terms of the Awards to be granted to each Participant;

(iii)determine the time when Awards are to be granted and any conditions that must be satisfied before an Award is granted;

(iv)establish objectives and conditions for earning an Award;

(v)determine all other terms and conditions, not inconsistent with the terms of the Plan and any operative employment or other agreement, of any Award granted under the Plan, and determine the appropriate Award Agreement evidencing the Award;

(vi)determine whether conditions for earning an Award have been met, including any such determination required for compliance with Code Section 162(m);


(vii)modify or waive the terms and conditions of Awards granted under the Plan, not inconsistent with the terms of the Plan and any operative employment or other agreement, accelerate the vesting, exercise or payment of an Award or cancel or suspend an Award;

(viii)determine whether the amount or payment of an Award should be reduced or eliminated, and determine if, when and under what conditions payment of all or any part of any Award may be deferred;39

(ix)determine the guidelines and/or procedures for the payment or exercise of Awards;

(x)determine whether an Award should qualify, regardless of its amount, as deductible in its entirety for federal income tax purposes, including whether any Awards granted to an employee should qualify for the Performance-Based Exception;

(xi)adopt, alter and repeal such administrative rules, guidelines and practices governing the Plan;

(xii)construe, interpret, administer and implement the Plan, any Award Agreements or related documents and correct any defect, supply an omission or reconcile any inconsistency in or between the Plan, any Award Agreement or related documents; and

(xiii)make factual determinations with respect to the Plan and any Awards and otherwise supervise the administration of the Plan.

(b) Binding Authority. The Committee's interpretations of the Plan, and all actions taken and determinations made by the Committee pursuant to the powers vested in under the Plan, shall be conclusive and binding on all parties, including the Company, its shareholders and all Participants.

(c) Delegation of Authority. To the extent not prohibited by law or the rules of the national securities exchange on which the Company's Common Shares are listed, the Committee may allocate its authority hereunder to one or more of its members or delegate its authority hereunder to one or more Non-Employee Directors, except that no such allocation
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or delegation shall be permitted with respect to Awards intended to qualify for the Performance-Based Exception, and may grant authority to employees of the Company to execute documents on behalf of the Committee or to otherwise assist in the administration and operation of the Plan.

4.Eligibility.

Subject to the terms and conditions of the Plan, the Committee may select, from all eligible persons, Participants to whom Awards shall be granted under the Plan and shall determine the nature and amount of each Award.  Eligible persons include any of the following individuals: (i) any officer or employee of the Company, (ii) any consultant (as defined in the General Instructions to the Form S-8 registration statement under the Securities Act) to the Company, and (iii) any Non-Employee Director.  All Awards shall be evidenced by an Award Agreement, and Awards may be conditioned upon the Participant's execution of an Award Agreement.

5.Common Shares Subject to the Plan.

(a) Authorized Number of Common Shares. Unless otherwise authorized by the Company's shareholders and subject to this Section 5 and Section 8, the maximum aggregate number of Common Shares available for issuance under the Plan is 2,000,000, plus (i) the number of Common Shares that, on the Effective Date, are available to be granted under the Prior Plan but which are not then subject to outstanding awards under the Prior Plan, and (ii) the number of Common Shares subject to outstanding awards under the Prior Plan as of the Effective Date which thereafter are forfeited, settled in cash or cancelled or expire.  Upon the Effective Date, the Prior Plan will terminate; provided that all outstanding awards under the Prior Plan as of the Effective Date shall remain outstanding and shall be administered and settled in accordance with the provisions of the Prior Plan.

(i)     The maximum number of Common Shares available for grant with respect to Full- Value Awards is 1,250,000.

(ii)     Subject to Section 5(b), 2,000,000 of the Common Shares available for issuance under the Plan may be granted with respect to Incentive Stock Options.

(b) Share Counting. The following rules shall apply in determining the number of Common Shares available for grant under the Plan:

(i)     Common Shares subject to any Award shall be counted against the maximum share limitation as one Common Share for every Common Share subject thereto.

(ii)     To the extent that any Award is forfeited, cancelled, settled in cash, returned to the Company for failure to satisfy vesting requirements or other conditions of the Award or otherwise terminates without an issuance of Common Shares being made, the maximum share limitation shall be credited with one Common Share for each Common Share subject to such Award, and such number of credited Common Shares may again be made subject to Awards under the Plan.

(iii)     Any Common Shares tendered by a Participant or withheld as full or partial payment of withholding or other taxes or as payment for the exercise or conversion price of an Award or repurchased by the Company with Stock Option proceeds shall not be added back to the number of Common Shares available for issuance under the Plan. Upon exercise of a SAR, the number of Common Shares subject to the Award that are being exercised shall be counted against the maximum aggregate number of Common Shares that may be issued under the Plan on the basis of one Common Share for every Common Share subject thereto, regardless of the actual number of Common Shares used to settle the SAR upon exercise.

(iv)     Any Common Shares underlying Awards granted through the assumption of, or in substitution for, outstanding awards previously granted to individuals who become employees of the Company as a result of a merger, consolidation, acquisition or other corporate transaction shall not, unless required by law or regulation, count against the reserve of available Common Shares under the Plan.
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(c) Award Limitations. Subject to the adjustment provisions of Section 8, the following limits shall apply with respect to Awards intended to quality for the Performance-Based Exception:a2019proxycardfront.jpg

(i)     The maximum aggregate number of Common Shares that may be subject to Stock Options or SARs granted in any calendar year to any one Participant shall be 800,000 Common Shares.

(ii)     The maximum aggregate number of Common Shares that may be subject to Full- Value Awards granted in any calendar year to any one Participant shall be 400,000 Common Shares.40

(d) Shares to be Delivered. Common Shares to be delivered by the Company under the Plan may consist in whole or in part of authorized but unissued shares or treasury shares.

6.Awards to Participants.

(a) Stock Options.

(i)     Grants. Subject to the terms and conditions of the Plan, Stock Options may be granted to Participants, in such number and upon such terms and conditions as the Committee determines, and may consist of ISOs or NQSOs. Options may be granted alone or with Tandem SARs. With respect to Stock Options granted with Tandem SARs, the exercise of either such Stock Options or Tandem SARs will result in the simultaneous cancellation of the same number of Tandem SARs or Stock Options, as the case may be.

(ii)     Exercise Price. The Exercise Price shall be equal to or, at the Committee's discretion, greater than the Fair Market Value on the date the Stock Option is granted, unless the Stock Option was granted through the assumption of, or in substitution for, outstanding awards previously granted to individuals who became employees of the Company as a result of a merger, consolidation, acquisition or other corporate transaction, in which case the assumption or substitution shall be accomplished in a manner that permits the Stock Option to be exempt from Code Section 409A.

(iii)     Term. The term of Stock Options shall be determined by the Committee in its sole discretion, but in no event shall the term exceed seven years from the Date of Grant.


(iv)     ISO Limits. ISOs may be granted only to Participants who are employees of the Company (or of any parent or subsidiary corporation within the meaning of Code Section 424) on the Date of Grant, and may only be granted to an employee who, at the time the Stock Option is granted, does not own more than ten percent of the total combined voting power of all classes of stock of the Company (or of any parent or subsidiary corporation within the meaning of Code Section 424), unless (A) the Exercise Price is at least 110% percent of the Fair Market Value on the Date of Grant, and (B) the ISO is not exercisable after five years from the Date of Grant. The aggregate Fair Market Value of all Common Shares, determined at the time the ISOs are granted, with respect to which ISOs are exercisable by a Participant for the first time during any calendar year (under all plans of the Company) shall not exceed $100,000 or such other amount as may subsequently be specified by the Code. If such Fair Market Value exceeds the $100,000 limit, the ISOs exceeding the limit shall be treated as NQSOs, taking the Stock Options in the order each was granted. The terms of all ISOs shall be consistent with and contain or be deemed to contain all provisions required to qualify as an "incentive stock option" under Code Section 422.

(v)     No Repricing. Subject to the adjustment provisions of Section 8, without the approval of the Company's shareholders, (A) the Exercise Price for any outstanding Stock Option may not be decreased after the Date of Grant, (B) no outstanding Stock Option may be surrendered to the Company as consideration for the grant of a new Stock Option with a lower Exercise Price, and (C) no other modifications to any outstanding Stock Option may be made that would be treated as a "repricing" under the then applicable rules, regulations or listing requirements adopted by the national securities exchange on which the Common Shares are listed.

(vi)     Form of Payment. Vested Stock Options may be exercised in whole or in part, and the Exercise Price shall be paid to the Company at the time of exercise, subject to any applicable rules or regulations adopted by the Committee:
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(A)  to the extent permitted by applicable law, pursuant to cashless exercise procedures that are approved by the Committee;

(B)  through the tender of unrestricted Common Shares owned by the Participant (or by delivering a certification or attestation of ownership of such Common Shares) valued at their Fair Market Value on the date of exercise;

(C)  in cash or its equivalent; or

(D)  by any combination of (A), (B), and (C) above.

(vii)     No Dividends or Shareholder Rights. No dividends or dividend equivalents may be paid on Stock Options. Except as otherwise provided herein, a Participant shall have no rights as a holder of Common Shares covered by a Stock Option unless and until such Common Shares have been registered to the Participant as the owner.

(b)  Stock Appreciation Rights.

(i)     Grants. Subject to the terms and provisions of the Plan, SARs may be granted to Participants, in such number and upon such terms and conditions as the Committee determines, and may be granted alone or as Tandem SARs. With respect to Tandem SARs, the exercise of either such Stock Options or SARs will result in the simultaneous cancellation of the same number of Tandem SARs or Stock Options, as the case may be.

(ii)     Exercise Price. The Exercise Price shall be equal to or, at the Committee's discretion, greater than Fair Market Value on the date the SAR is granted, unless the SAR was granted through the assumption of, or in substitution for, outstanding awards previously granted to individuals who became employees of the Company as a result of a merger, consolidation, acquisition or other corporate transaction involving the Company, in which case the assumption or substitution shall be accomplished in a manner that permits the SAR to be exempt from Code Section 409A.

(iii)     Term. The term of a SAR shall be determined by the Committee in its sole discretion, but in no event shall the term exceed seven years from the Date of Grant; provided that, each SAR granted in tandem with a Stock Option shall terminate upon the termination or exercise of the related Stock Option.

(iv)     No Repricing. Subject to the adjustment provisions of Section 8, without the approval of the Company's shareholders, (A) the Exercise Price for any outstanding SAR may not be decreased after the Date of Grant, (B) no outstanding SAR may be surrendered to the Company as consideration for the grant of a new SAR with a lower Exercise Price and, (C) no other modifications to any outstanding SAR may be made that would be treated as a "repricing" under the then applicable rules, regulations or listing requirements adopted by the national securities exchange on which the Common Shares are listed.

(v)     Form of Payment. Vested SARs may be exercised in whole or in part, and the Committee may authorize payment of a SAR in the form of cash, Common Shares valued at its Fair Market Value on the date of the exercise or a combination thereof, or by any other method as the Committee may determine.

(vi)     Tandem SARs. Tandem SARs may be exercised for all or part of the Common Shares subject to the related Stock Option upon the surrender of the right to exercise the equivalent portion of the related Stock Option. A Tandem SAR may be exercised only with respect to the Common Shares for which its related Stock Option is then exercisable. Notwithstanding any other provision of the Plan to the contrary, with respect to a Tandem SAR granted in connection with an ISO: (A) the Tandem SAR will expire no later than the expiration of the underlying ISO, (B) the value of the payout with respect to the Tandem SAR may be for no more than 100% of the excess of the Fair Market Value of the Common Shares subject to the underlying ISO at the time the Tandem SAR is exercised over the Exercise Price of the underlying ISO, and (C) the Tandem SAR may be exercised only when the Fair Market Value of the Common Shares subject to the ISO exceeds the Exercise Price of the ISO.
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(vii)     No Dividends or Shareholder Rights. No dividends or dividend equivalents may be paid on SARs. Except as otherwise provided herein, a Participant shall have no rights as a holder of Common Shares covered by a SAR unless and until such Common Shares have been registered to the Participant as the owner.

(c) Restricted Shares and Restricted Share Units.

(i)     Grants. Subject to the terms and provisions of the Plan, Restricted Shares and Restricted Share Units may be granted to Participants in such number and upon such terms and conditions as the Committee determines.  Restricted Shares will be registered in the name of the Participant and deposited with the Company or its agent in certificated or book-entry form.

(ii)     Restrictions. Restricted Shares or Restricted Share Units may be granted at no cost or at a purchase price determined by the Committee, which may be less than the Fair Market Value, but subject to such terms and conditions as the Committee determines, including, without limitation: forfeiture conditions, transfer restrictions, restrictions based upon the achievement of specific performance goals (Company-wide, divisional and/or individual), which may be based on one or more Performance Measure, time-based restrictions on vesting and/or restrictions under applicable federal or state securities laws. Subject to Sections 9 and 10, for Awards to employees, no Restricted Shares or Restricted Share Units conditioned upon the achievement of performance shall be based on a Restriction Period of less than one year, and any Restriction Period based solely on continued employment or service (time-based) shall be for a minimum of three years, subject to (A) pro rata or graded vesting prior to the expiration of such time-based Restriction Period, and (B) acceleration due to the Participant's death, Disability or Retirement, in each case as specified in the applicable Award Agreement; provided that the Restriction Period applicable to the first vesting date  of an Award subject to pro rata or graded vesting (as referenced in (A) above) may be for less than one year, provided the first vesting date is no earlier than the fiscal year-end date of the fiscal year during which the Award was granted. To the extent the Restricted Shares or Restricted Share Units are intended to qualify for the Performance-Based Exception, the applicable restrictions shall be based on the achievement of Performance Goals over a Performance Period, as described in Section 6(d).

(iii)     Transfer Restrictions. During the Restriction Period, Restricted Shares and Restricted Share Units may not be sold, assigned transferred or otherwise disposed of, or mortgaged, pledged or otherwise encumbered. In order to enforce the limitations imposed upon the Restricted Shares, the Committee may (A) cause a legend or legends to be placed on any certificates evidencing such Restricted Shares, and/or (B) cause "stop transfer" instructions to be issued, as it deems necessary or appropriate.

(iv)     Dividends and Voting Rights. Unless otherwise determined by the Committee, during the Restriction Period, Participants who hold Restricted Shares shall have the right to receive dividends in cash or other property or other distribution or rights in respect of the Restricted Shares and shall have the right to vote the Restricted Shares as the record owners; provided that, unless otherwise determined by the Committee, any dividends or other property payable to a Participant during the Restriction Period shall be distributed to the Participant only if and when the restrictions imposed on the applicable Restricted Shares lapse. Unless otherwise determined by the Committee, during the Restriction Period, Participants who hold Restricted Shares Units shall be credited with dividend equivalents in respect of such Restricted Share Units; provided that, unless otherwise determined by the Committee, such dividend equivalents shall be distributed (without interest) to the Participant only if and when the restrictions imposed on the applicable Restricted Share Units lapse.  Participants shall have no other rights as a shareholder with respect to Restricted Share Units.  Notwithstanding the forgoing, no Restricted Shares or Restricted Share Units conditioned upon the achievement of performance shall provide the Participant with dividend or shareholder rights; provided that an Award Agreement may provide for payment (in money or shares) equal to the dividends paid on the number of Common Shares payable upon vesting of such Restricted Shares or Restricted Share Units.

(v)     Payment of Restricted Share Units. Restricted Share Units that become payable in accordance with their terms and conditions shall be settled in cash, Common Shares, Restricted Shares, or a combination thereof, as determined by the Committee.
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(vi)     Ownership. Restricted Shares shall be registered in the name of the Participant on the books and records of the Company or its designee (or by one or more physical certificates if physical certificates are issued) subject to the applicable restrictions imposed by the Plan. At the end of the Restriction Period that applies to Restricted Shares, the number of shares to which the Participant is entitled shall be delivered to the Participant free and clear of the restrictions, either in certificated or book-entry form. No Common Shares shall be registered in the name of the Participant with respect to Restricted Share Units, and Participants shall have no ownership interest in the Common Shares to which the Restricted Share Units relate, unless and until payment is made in Common Shares.

(vii)     Forfeiture. If a Participant who holds Restricted Shares or Restricted Share Units fails to satisfy the restrictions, terms or conditions applicable to the Award, except as otherwise determined by the Committee, the Participant shall forfeit the Restricted Shares or Restricted Share Units.  The Committee may at any time waive such restrictions or accelerate the date or dates on which the restrictions will lapse; however, to the extent the Restricted Shares or Restricted Share Units are intended to qualify for the Performance-Based Exception, the provisions of Section 6(d)(iv) will apply.

(d) Performance-Based Exception.

(i)     Grants. Subject to the provisions of the Plan, Full-Value Awards granted in a manner that is intended to qualify for the Performance-Based Exception shall be conditioned upon the achievement of Performance Goals as the Committee shall determine, in its sole discretion.
(ii)     Performance Goals. Performance Goals shall be based on one or more Performance Measures, over a Performance Period, as to be determined by the Committee.

(iii)     Performance Measures. The Performance Measure(s) may be described in terms of objectives that are related to the individual Participant or objectives that are Company-wide or related to a subsidiary, division, department, region, function or business unit of the Company, and shall consist of one or more or any combination of the following criteria: cash flow, profit, revenue, stock price, market share, sales, net income, operating income, return ratios, earnings per share, return on equity, working capital, total assets, net assets, return on assets, return on sales, return on invested capital, earnings, gross margin, costs, shareholders' equity, shareholder return and/or specific, objective and measurable non-financial objectives, productivity or productivity improvement. The Performance Goals based on these Performance Measures may be expressed in absolute terms or relative to the performance of other entities.

(iv)     Treatment of Awards. With respect to any Full-Value Award that is intended to qualify for the Performance-Based Exception: (A) the Committee shall interpret the Plan and this Section 6(d) in light of Code Section 162(m), (B) the Committee shall not amend the Full-Value Award in any way that would adversely affect the treatment of the Full-Value Award under Code Section 162(m), and (C) such Full-Value Award shall not vest or be paid until the Committee shall first have certified that the Performance Goals have been achieved.

7.Deferred Payments.

Subject to the terms of the Plan, the Committee may determine that all or a portion of any Award to a Participant, whether it is to be paid in cash, Common Shares or a combination thereof, shall be deferred or may, in its sole discretion, approve deferral elections made by Participants. Deferrals shall be for such periods and upon such terms as the Committee may determine in its sole discretion, which terms shall comply with Code Section 409A.

8.Dilution and Other Adjustments.

In the event of any merger, reorganization, consolidation, liquidation, recapitalization, reclassification, redesignation, stock dividend, other distribution (whether in the form of cash, shares or otherwise), stock split, reverse stock split, spin off, combination, repurchase or exchange of shares or issuance of warrants or rights to purchase shares or other securities, or other change in corporate structure affecting the Common Shares, the Committee shall make such adjustments in the aggregate number and type of Common Shares which may be delivered and the individual award maximums as set forth in Section 5, the
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number and type of Common Shares subject to outstanding Awards and the Exercise Price or other price of Common Shares subject to outstanding Awards (provided the number of Common Shares subject to any Award shall always be a whole number), as may be and to the extent determined to be appropriate and equitable by the Committee to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan. Such adjustment shall be conclusive and binding for all purposes of the Plan. Any such adjustment of an ISO or SAR shall be made in compliance with Code Sections 422 and 424, and no such adjustment shall be made that would cause any Award which is or becomes subject to Code Section 409A to fail to comply with the requirements of Code Section 409A or is exempt from Code Section 409A to become subject to Code Section 409A.

9.Change in Control.

Notwithstanding any other provision of the Plan to the contrary, immediately upon the occurrence of a Change in Control, the following provisions of this Section 9 shall apply except to the extent an Award Agreement provides for a different treatment (in which case the Award Agreement shall govern):

(a) all outstanding Stock Options and SARs vest and become fully exercisable; and

(b) all Full-Value Awards become fully vested.

10.Termination.

(a) Termination by Death, Disability, or Retirement. The terms and conditions of the Participant's Award Agreement shall govern the extent, if at all, to which the vesting of any Award is accelerated or forfeited due to a Participant's death, Disability, or Retirement; provided that, for Full-Value Awards intended to qualify for the Performance-Based Exception, no vesting may occur or no distribution may be made prior to the attainment of the Performance Goals.

(b) Termination for Cause. If a Participant's employment or service terminates for Cause, (i) all Stock Options and SARs (or portions thereof) which have not been exercised, whether vested or not, and (ii) all Full-Value Awards, shall immediately be forfeited upon termination, including such Awards that are subject to performance conditions (or unearned portions thereof).

(c) Other Terminations. If a Participant's employment or service terminates, voluntarily or involuntarily, for any reason other than death, Disability, Retirement or Cause, (i) any vested portion of Stock Options or SARs held by the Participant at the time of termination may be exercised for a period of three months (or such other period as the Committee may specify at or after the time of grant) from the termination date, or until the expiration of the original term of the Stock Option or SAR, whichever period is shorter, (ii) no unvested portion of any Stock Option or SAR shall become vested, including such Awards that are subject to performance conditions (or unearned portions thereof), and (iii) all Full-Value Awards, including such Awards that are subject to performance conditions (or unearned portions thereof), shall immediately be forfeited upon termination.

(d) Limitation for ISOs. No ISO may be exercised more than three months following termination of employment for any reason (including Retirement) other than death or Disability, nor more than one year following termination of employment for the reason of death or Disability (as defined in Code Section 422), or such Award will no longer qualify as an ISO and shall thereafter be, and receive the tax treatment applicable to, an NQSO. For this purpose, a termination of employment is cessation of employment, under the rules applicable to ISOs, such that no employment relationship exists between the Participant and the Company.

(e) Transfers and Leaves of Absence. The transfer of a Participant within the Company shall not be deemed a termination of employment except as required by Code Sections 422 and 409A, and other applicable laws. The following leaves of absences are not deemed to be a termination of employment:

(i)     if approved in writing by the Company, for military service, sickness or any other purpose approved by the Company, and the period of absence does not exceed 90 days;
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(ii)     if in excess of 90 days, if approved in writing by the Company, but only if the Participant's right to reemployment is guaranteed by statute or contract and provided that the Participant returns to work within 30 days after the end of such absence; and

(iii)     subject to the restrictions of Code Section 409A and to the extent that such discretion is permitted by law, if the Committee determines in its discretion that the absence is not a termination of employment.

11.Recoupment or Recovery Policy.

Any Award shall be subject to forfeiture or repayment pursuant to the terms of any applicable compensation recoupment or recovery policy adopted by the Company, Committee or Board, as thereafter amended, including any policy adopted to comply with the rules of any stock exchange on which the Common Shares are traded or the Securities and Exchange Commission.

12.Miscellaneous Provisions.

(a) Rights as a Shareholder. Except as otherwise provided herein, a Participant shall have no rights as a shareholder with respect to Awards hereunder, unless and until the Common Shares have been registered to the Participant as the owner.

(b) No Loans. No loans from the Company to Participants shall be permitted in connection with the Plan.

(c) Assignment or Transfer. Except as otherwise provided under the Plan, no Award or any rights or interests therein shall be transferable other than by will or the laws of descent and distribution. The Committee may, in its discretion, provide that an Award (other than an ISO) is transferable without the payment of any consideration to a Participant's family member, subject to such terms and conditions as the Committee may impose. For this purpose, "family member" has the meaning given to such term in the General Instructions to the Form S-8 registration statement under the Securities Act. All Awards shall be exercisable, during the Participant's lifetime, only by the Participant or a person who is a permitted transferee pursuant to this Section 12(c). Once awarded, the Common Shares (other than Restricted Shares) received by Participants may be freely transferred, assigned, pledged or otherwise subjected to lien, subject to the restrictions imposed by the Securities Act, Section 16 of the Exchange Act and the Company's Insider Trading Policy, each as amended.

(d) Withholding Taxes. The Company shall have the right to deduct from all Awards paid in cash to a Participant any taxes required by law to be withheld with respect to such Awards. All statutory minimum applicable withholding taxes arising with respect to Awards paid in Common Shares to a Participant shall be satisfied by the Company retaining Common Shares having a Fair Market Value on the date the tax is to be determined that is equal to the amount of such statutory minimum applicable withholding tax (rounded, if necessary, to the next lowest whole number of Common Shares); provided, however, that, subject to any restrictions or limitations that the Company deems appropriate, a Participant may elect to satisfy such statutory minimum applicable withholding tax through cash or cash proceeds.

(e) No Rights to Awards. Neither the Plan nor any action taken hereunder shall be construed as giving any person any right to be retained in the employ or service of the Company, and the Plan shall not interfere with or limit in any way the right of the Company to terminate any person's employment or service at any time. Except as set forth herein, no employee or other person shall have any claim or right to be granted an Award under the Plan. By accepting an Award, the Participant acknowledges and agrees that (i) the Award will be exclusively governed by the Plan, including the right of the Company to amend or cancel the Plan at any time without the Company incurring liability to the Participant (except, to the extent the terms of the Award so provide, for Awards already granted under the Plan), (ii) Participant is not entitled to future award grants under the Plan or any other plan, and (iii) the value of any Awards received shall be excluded from the calculation of termination or other severance payments or benefits.

(f)  Beneficiary Designation. To the extent allowed by the Committee, each Participant under the Plan may name any beneficiary or beneficiaries to whom any benefit under the Plan is to be paid in case of his or her death before he or she receives all of such benefit. Unless the Committee determines otherwise, each such designation shall revoke all prior designations by the same Participant, shall be in a form prescribed by the Committee and shall be effective only when received
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in writing by the Company during the Participant's lifetime. In the absence of any such designation, benefits remaining unpaid at the Participant's death shall be paid to the Participant's estate.

(g) Fractional Shares. Fractional Common Shares shall not be issued or transferred under an Award, but the Committee may direct that cash be paid in lieu of fractional shares or may round off fractional shares, in its discretion.

(h) Unfunded Plan. The Plan shall be unfunded and any benefits under the Plan shall represent an unsecured promise to pay by the Company. With respect to any payments not yet made to a Participant pursuant to an Award, nothing contained in the Plan or any Award Agreement shall give the Participant any rights that are greater than those of a general unsecured creditor of the Company.

(i) Severability. If any provision of the Plan is deemed illegal or invalid, the illegality or invalidity shall not affect the remaining provisions of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.

(j) Limitation of Liability. Members of the Board and the Committee and officers and employees of the Company who are their designees acting under the Plan shall be fully protected in relying in good faith upon the advice of counsel and shall incur no liability except for gross or willful misconduct in the performance of their duties hereunder.

(k) Successors. All obligations of the Company with respect to Awards granted under the Plan shall be binding on any successor to the Company, whether as a result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.

(l)  Code Section 409A Compliance. The Plan is intended to satisfy the requirements of Code Section 409A and any regulations or guidance that may be adopted thereunder, including any transition relief available under applicable guidance.  The Plan may be amended or interpreted by the Committee as it determines appropriate in accordance with Code Section 409A and to avoid a plan failure under Code Section 409A(a)(1). If a Participant is a "specified employee" as defined in Code Section 409A at the time of the Participant's separation from service with the Company, then solely to the extent necessary to avoid the imposition of any additional tax under Code Section 409A, the commencement of any payments or benefits under an Award shall be deferred until the date that is six months following the Participant's separation from service (or such other period as required to comply with Code Section 409A).

(m) Additional Restrictions on Awards and Shares.  Either at the time an Award is granted or by subsequent action, the Committee may, but need not, impose such restrictions, conditions or limitations as it determines appropriate on the Award, any Common Shares issued under an Award, or both, including, without limitation, (a) restrictions under an insider trading policy, (b) share retention guidelines, minimum holding requirements and other restrictions designed to delay or coordinate the timing and manner of sales, and (c) other policies that may be implemented by the Board from time to time.


13.Effective Date, Amendments, Governing Law and Plan Termination.

(a) Effective Date. The Effective Date of the Plan is the date on which the Company's shareholders approve the Plan at a duly held shareholder meeting.

(b) Amendments.

(i)  Amendment of the Plan. The Committee or the Board may at any time terminate or amend the Plan in whole or in part, but no such action shall materially and adversely affect any rights or obligations with respect to any Awards granted prior to the date of such termination or amendment without the consent of the affected Participant, except to the extent that the Committee reasonably determines that such termination or amendment is necessary or appropriate to comply with applicable law or the rules and regulations of any stock exchange on which the Common Shares are traded or to preserve any intended favorable, or avoid any unintended unfavorable, tax effects for the Company, Plan or Participants. 
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 Notwithstanding the foregoing, unless the Company's shareholders shall have first approved the amendment, no amendment of the Plan shall be effective if the amendment would: (A) increase the maximum number of Common Shares that may be delivered under the Plan or to any one individual (except to the extent made pursuant to Section 8 hereof), (B) extend the maximum period during which Awards may be granted under the Plan, (C) add to the types of awards that can be made under the Plan, (D) modify the requirements as to eligibility for participation in the Plan, (E) permit a repricing or decrease the Exercise Price to less than the Fair Market Value on the Date of Grant of any Stock Option or SAR, except for adjustments made pursuant to Section 8, (F) materially increase benefits to Participants, or (G) otherwise require shareholder approval pursuant to the Plan or applicable law or the rules of the principal securities exchange on which Common Shares are traded.

(ii)  Amendment of Awards. The Committee may amend, prospectively or retroactively, the terms of an Award, provided that no such amendment is inconsistent with the terms of the Plan or would materially and adversely affect the rights of any Participant without his or her written consent.

(c) Governing Law. To the extent not preempted by Federal law, the Plan and all Award Agreements are construed in accordance with and governed by the laws of the State of Ohio. The Plan is not intended to be governed by the Employment Retirement Income Security Act of 1934, and shall be so construed and administered.

(d) Plan Termination. No Awards shall be made under the Plan after the tenth anniversary of the Effective Date.
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IMPORTANT ANNUAL MEETING INFORMATION
Using a black ink pen, mark your votes with an X as
shown in this example. Please do not write outside the designated areas.
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Electronic Voting Instructions
Available 24 hours a day, 7 days a week!
Instead of mailing your proxy, you may choose one of the voting methods outlined below to vote your proxy.
VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR.
Proxies submitted by the Internet or telephone must be received by 1:00 am Eastern Time on September 15, 2016.
     Vote by Internet
•   Go to www.investorvote.com/AGYS
•   Or scan the QR code with your smartphone
•    Follow the steps outlined on the secure website
     Vote by telephone
•   Call toll free 1-800-652-VOTE (8683) within the USA, US territories & Canada on a touch tone telephone
•    Follow the instructions provided by the recorded message 
Annual Meeting Proxy Card

▼PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. ▼
A Proposals — The Board of Directors recommends a vote FOR Proposal 1, FOR all nominees listed in Proposal 2 and FOR Proposals 3, 4 and 5.
If cumulative voting is in effect, the Proxy holders intend to cumulate votes for the election of all or any one or more of the Board of Directors' nominees listed below. THIS PROXY CARD GIVES THE PROXY HOLDERS FULL DISCRETIONARY AUTHORITY TO VOTE CUMULATIVELY AND TO ALLOCATE VOTES AMONG THE NOMINEES LISTED BELOW, UNLESS AUTHORITY TO VOTE FOR ANY OF THEM IS WITHHELD, IN WHICH CASE NO VOTES REPRESENTED BY THIS PROXY CARD WILL BE CAST FOR ANY DIRECTOR FOR WHOM AUTHORITY TO VOTE IS SO WITHHELD.
1. Approval of an amendment to the Company's Amended Code of Regulations to declassify the Board of Directors
For
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Against
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Abstain
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2. If Proposal 1 is approved, the election of seven members of the Board of Directors to hold office for a one-year term expiring at the 2017 Annual Meeting.

01 – Donald A. Colvin 02 – James H. Dennedy 03 – Jerry Jones 04 – Michael A. Kaufman 05 – Melvin L. Keating 06 – Keith M. Kolerus 07 – John Mutch

☐Mark here to WITHHOLD vote from all nominees.
☐Mark here to vote FOR all nominees.
☐For All Nominees EXCEPT – To withhold a vote for one or more nominees, mark the box to the left and the numbered box(es) to the right corresponding to the director(s) listed above.
01
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02
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03
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04
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05
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06
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07
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If Proposal 1 is not approved, the election of four Class B members of the Board of Directors to hold office for a two-year term expiring at the 2018 Annual Meeting.

01 –James H. Dennedy 02 – Jerry Jones 03 – Michael A. Kaufman 04 – John Mutch

☐Mark here to WITHHOLD vote from all nominees.
☐Mark here to vote FOR all nominees.
☐For All Nominees EXCEPT – To withhold a vote for one or more nominees, mark the box to the left and the numbered box(es) to the right corresponding to the director(s) listed above.
01
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02
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03
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04
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3. Approval of the Agilysys, Inc. 2016 Stock Incentive Plan.
For
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Against
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Abstain
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4. Approval, on a non-binding advisory basis, the compensation of our named executive officers set forth in the attached Proxy Statement.
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5. Ratification of the appointment of Grant Thornton LLP as our independent registered public accounting firm for the fiscal year ending March 31, 2017.
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6. In their discretion, the proxies are authorized to vote upon such other business as may properly come before the Annual Meeting or any adjournments thereof.

B Non-Voting Items
Change of Address – Please print new address below.
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C Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below
Please sign exactly as your name appears above. If signing as attorney, executor, administrator, trustee or guardian, please give full title as such; and if signing for a corporation, please give your title. When shares are in the names of more than one person, each must sign.

Date (mm/dd/yyyy) — Please print date below.               Signature 1 — Please keep signature within the box. Signature 2 — Please keep signature within the box.
            /          /

▼ PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. ▼
Proxy Card — Agilysys, Inc. — Annual Meeting of Shareholders — September 15, 2016
This proxy is solicited on behalf of the Board of Directors
The undersigned hereby appoints James H. Dennedy, Keith M. Kolerus and Kyle C. Badger, and each of them, as proxy holders and attorneys, with full power of substitution, to appear and vote all of the Common Shares of Agilysys, Inc. which the undersigned shall be entitled to vote at the Annual Meeting of Shareholders of Agilysys, to be held on Wednesday, September 15, 2016 at Agilysys' offices at 3380 146th Place SE, Suite 400, Bellevue, Washington 98007 at 8:00 a.m., local time, and at any adjournments thereof, hereby revoking any and all proxies heretofore given.
When properly executed, this proxy will be voted in the manner directed by the signed shareholder(s); if no direction is made, this proxy will be voted FOR proposal 1, FOR all nominees in proposal 2 and FOR proposals 3, 4 and 5.
PLEASE COMPLETE, DATE AND SIGN THIS PROXY CARD AND RETURN IT IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
Important Notice Regarding Internet Availability of Proxy Materials for the Annual Meeting to be held on September 15, 2016: The Notice of Annual Meeting of Shareholders and Proxy Statement are available on our website at www.agilysys.com.
(Continued and to be signed on reverse side)