|
|
x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
Ohio
|
|
34-0907152
|
||
(State or other jurisdiction of
incorporation or organization)
|
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(I.R.S. Employer
Identification No.)
|
||
|
|
|
||
1000 Windward Concourse, Suite 250, Alpharetta, Georgia
|
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30005
|
||
(Address of principal executive offices)
|
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(ZIP Code)
|
||
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|
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(770) 810-7800
|
||||
(Registrant’s telephone number, including area code)
|
||||
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|
|
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N/A
|
||||
(Former name, former address and former fiscal year, if changed since last report)
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Large accelerated filer
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¨
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Accelerated filer
|
x
|
|
|
|
|
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Non-accelerated filer
|
¨
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(Do not check if a smaller reporting company)
|
Smaller reporting company
|
¨
|
|
|||
|
|
|
|
|
|||
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Item 1
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Financial Statements
|
|
|
|
|
|
|
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Condensed Consolidated Balance Sheets (Unaudited) - September 30, 2018 and March 31, 2018
|
|
|
|
|
|
|
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Condensed Consolidated Statements of Operations (Unaudited) - Three and Six Months Ended September 30, 2018 and September 30, 2017
|
|
|
|
|
|
|
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Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - Three and Six Months Ended September 30, 2018 and September 30, 2017
|
|
|
|
|
|
|
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Condensed Consolidated Statements of Cash Flows (Unaudited) - Six Months Ended September 30, 2018 and September 30, 2017
|
|
|
|
|
|
|
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Notes to Condensed Consolidated Financial Statements (Unaudited)
|
|
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Item 2
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
|
|
|
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Item 3
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Quantitative and Qualitative Disclosures About Market Risk
|
|
|
|
|
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Item 4
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Controls and Procedures
|
|
|
|
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Part II. Other Information
|
|
||
|
|
|
|
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Item 1
|
Legal Proceedings
|
|
|
|
|
|
|
Item 1A
|
Risk Factors
|
|
|
|
|
|
|
Item 2
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
|
|
|
|
|
|
Item 3
|
Defaults Upon Senior Securities
|
|
|
|
|
|
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Item 4
|
Mine Safety Disclosures
|
|
|
|
|
|
|
Item 5
|
Other Information
|
|
|
|
|
|
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Item 6
|
Exhibits
|
|
|
|
|
|
Signatures
|
|
|
|
|
September 30,
2018 |
|
March 31,
2018 |
||||
(In thousands, except share data)
|
|
|
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
32,904
|
|
|
$
|
39,943
|
|
Accounts receivable, net of allowance for doubtful accounts of $830 and $900, respectively
|
18,963
|
|
|
16,389
|
|
||
Contract assets
|
4,696
|
|
|
—
|
|
||
Inventories
|
1,678
|
|
|
1,999
|
|
||
Prepaid expenses and other current assets
|
5,089
|
|
|
5,593
|
|
||
Total current assets
|
63,330
|
|
|
63,924
|
|
||
Property and equipment, net
|
16,355
|
|
|
17,512
|
|
||
Goodwill
|
19,622
|
|
|
19,622
|
|
||
Intangible assets, net
|
8,461
|
|
|
8,484
|
|
||
Software development costs, net
|
41,159
|
|
|
45,181
|
|
||
Other non-current assets
|
4,699
|
|
|
2,484
|
|
||
Total assets
|
$
|
153,626
|
|
|
$
|
157,207
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
7,381
|
|
|
$
|
8,400
|
|
Contract liabilities
|
25,789
|
|
|
26,820
|
|
||
Accrued liabilities
|
9,459
|
|
|
9,241
|
|
||
Capital lease obligations, current
|
72
|
|
|
120
|
|
||
Total current liabilities
|
42,701
|
|
|
44,581
|
|
||
Deferred income taxes, non-current
|
274
|
|
|
227
|
|
||
Capital lease obligations, non-current
|
45
|
|
|
57
|
|
||
Other non-current liabilities
|
3,632
|
|
|
3,911
|
|
||
Commitments and contingencies (see Note 8)
|
|
|
|
||||
Shareholders' equity:
|
|
|
|
||||
Common shares, without par value, at $0.30 stated value; 80,000,000 shares authorized; 31,606,831 shares issued; and 23,530,629 and 23,324,679 shares outstanding at September 30, 2018 and March 31, 2018, respectively
|
9,482
|
|
|
9,482
|
|
||
Treasury shares, 8,076,202 and 8,282,152 at September 30, 2018 and March 31, 2018, respectively
|
(2,424
|
)
|
|
(2,486
|
)
|
||
Capital in excess of stated value
|
(451
|
)
|
|
(1,911
|
)
|
||
Retained earnings
|
100,687
|
|
|
103,601
|
|
||
Accumulated other comprehensive loss
|
(320
|
)
|
|
(255
|
)
|
||
Total shareholders' equity
|
106,974
|
|
|
108,431
|
|
||
Total liabilities and shareholders' equity
|
$
|
153,626
|
|
|
$
|
157,207
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
(In thousands, except share data)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net revenue:
|
|
|
|
|
|
|
|
||||||||
Products
|
$
|
8,769
|
|
|
$
|
7,318
|
|
|
$
|
17,849
|
|
|
$
|
17,601
|
|
Support, maintenance and subscription services
|
18,856
|
|
|
17,108
|
|
|
36,785
|
|
|
33,775
|
|
||||
Professional services
|
6,578
|
|
|
5,703
|
|
|
13,576
|
|
|
12,618
|
|
||||
Total net revenue
|
34,203
|
|
|
30,129
|
|
|
68,210
|
|
|
63,994
|
|
||||
Cost of goods sold:
|
|
|
|
|
|
|
|
||||||||
Products (inclusive of developed technology amortization)
|
7,703
|
|
|
5,419
|
|
|
14,833
|
|
|
13,042
|
|
||||
Support, maintenance and subscription services
|
3,977
|
|
|
4,446
|
|
|
8,051
|
|
|
8,478
|
|
||||
Professional services
|
4,774
|
|
|
4,894
|
|
|
9,688
|
|
|
10,430
|
|
||||
Total cost of goods sold
|
16,454
|
|
|
14,759
|
|
|
32,572
|
|
|
31,950
|
|
||||
Gross profit
|
17,749
|
|
|
15,370
|
|
|
35,638
|
|
|
32,044
|
|
||||
|
51.9
|
%
|
|
51.0
|
%
|
|
52.2
|
%
|
|
50.1
|
%
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Product development
|
10,151
|
|
|
6,812
|
|
|
17,240
|
|
|
13,438
|
|
||||
Sales and marketing
|
4,393
|
|
|
4,207
|
|
|
9,146
|
|
|
9,337
|
|
||||
General and administrative
|
5,176
|
|
|
5,561
|
|
|
11,181
|
|
|
12,361
|
|
||||
Depreciation of fixed assets
|
676
|
|
|
700
|
|
|
1,282
|
|
|
1,312
|
|
||||
Amortization of intangibles
|
674
|
|
|
465
|
|
|
1,217
|
|
|
950
|
|
||||
Restructuring, severance and other charges
|
448
|
|
|
826
|
|
|
889
|
|
|
863
|
|
||||
Legal settlements
|
35
|
|
|
—
|
|
|
126
|
|
|
—
|
|
||||
Total operating expense
|
21,553
|
|
|
18,571
|
|
|
41,081
|
|
|
38,261
|
|
||||
Operating loss
|
(3,804
|
)
|
|
(3,201
|
)
|
|
(5,443
|
)
|
|
(6,217
|
)
|
||||
Other expense (income):
|
|
|
|
|
|
|
|
||||||||
Interest (income)
|
(97
|
)
|
|
(23
|
)
|
|
(152
|
)
|
|
(51
|
)
|
||||
Interest expense
|
3
|
|
|
2
|
|
|
5
|
|
|
4
|
|
||||
Other expense (income), net
|
28
|
|
|
(37
|
)
|
|
228
|
|
|
(147
|
)
|
||||
Loss before taxes
|
(3,738
|
)
|
|
(3,143
|
)
|
|
(5,524
|
)
|
|
(6,023
|
)
|
||||
Income tax expense
|
53
|
|
|
105
|
|
|
4
|
|
|
183
|
|
||||
Net loss
|
$
|
(3,791
|
)
|
|
$
|
(3,248
|
)
|
|
$
|
(5,528
|
)
|
|
$
|
(6,206
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding
|
23,131
|
|
|
22,760
|
|
|
23,113
|
|
|
22,740
|
|
||||
Loss per share - basic and diluted:
|
|
|
|
|
|
|
|
||||||||
Loss per share
|
$
|
(0.16
|
)
|
|
$
|
(0.14
|
)
|
|
$
|
(0.24
|
)
|
|
$
|
(0.27
|
)
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
(In thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net loss
|
$
|
(3,791
|
)
|
|
$
|
(3,248
|
)
|
|
$
|
(5,528
|
)
|
|
$
|
(6,206
|
)
|
Other comprehensive (loss)/gain, net of tax:
|
|
|
|
|
|
|
|
||||||||
Unrealized foreign currency translation adjustments
|
(58
|
)
|
|
(22
|
)
|
|
(66
|
)
|
|
22
|
|
||||
Total comprehensive loss
|
$
|
(3,849
|
)
|
|
$
|
(3,270
|
)
|
|
$
|
(5,594
|
)
|
|
$
|
(6,184
|
)
|
|
Six months ended
|
||||||
|
September 30,
|
||||||
(In thousands)
|
2018
|
|
2017
|
||||
Operating activities
|
|
|
|
||||
Net loss
|
$
|
(5,528
|
)
|
|
$
|
(6,206
|
)
|
|
|
|
|
||||
Adjustments to reconcile net loss to net cash used in operating activities
|
|
|
|
||||
Net restructuring, severance and other charges
|
(126
|
)
|
|
19
|
|
||
Net legal settlements
|
126
|
|
|
—
|
|
||
Depreciation
|
1,282
|
|
|
1,312
|
|
||
Amortization
|
1,217
|
|
|
950
|
|
||
Amortization of developed technology
|
6,010
|
|
|
4,727
|
|
||
Deferred income taxes
|
54
|
|
|
87
|
|
||
Share-based compensation
|
1,674
|
|
|
2,318
|
|
||
Change in cash surrender value of company owned life insurance policies
|
(8
|
)
|
|
(6
|
)
|
||
Changes in operating assets and liabilities
|
(7,449
|
)
|
|
(4,849
|
)
|
||
Net cash used in operating activities
|
(2,748
|
)
|
|
(1,648
|
)
|
||
Investing activities
|
|
|
|
||||
Capital expenditures
|
(1,333
|
)
|
|
(3,106
|
)
|
||
Capitalized software development costs
|
(2,189
|
)
|
|
(5,477
|
)
|
||
Investments in corporate-owned life insurance policies
|
(2
|
)
|
|
(2
|
)
|
||
Net cash used in investing activities
|
(3,524
|
)
|
|
(8,585
|
)
|
||
Financing activities
|
|
|
|
||||
Repurchase of common shares to satisfy employee tax withholding
|
(557
|
)
|
|
(519
|
)
|
||
Principal payments under long-term obligations
|
(59
|
)
|
|
(61
|
)
|
||
Net cash used in financing activities
|
(616
|
)
|
|
(580
|
)
|
||
Effect of exchange rate changes on cash
|
(151
|
)
|
|
90
|
|
||
Net decrease in cash and cash equivalents
|
(7,039
|
)
|
|
(10,723
|
)
|
||
Cash and cash equivalents at beginning of period
|
$
|
39,943
|
|
|
$
|
49,255
|
|
Cash and cash equivalents at end of period
|
$
|
32,904
|
|
|
$
|
38,532
|
|
|
|
|
|
||||
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING ACTIVITIES:
|
|
|
|
||||
Accrued capital expenditures
|
$
|
74
|
|
|
$
|
385
|
|
Accrued capitalized software development costs
|
—
|
|
|
357
|
|
(In thousands)
|
March 31, 2018
|
Adjustment from Topic 606
|
April 1, 2018
|
|||
Assets:
|
|
|
|
|||
Accounts receivable, net
|
16,389
|
|
3,124
|
|
19,513
|
|
Contract assets
|
—
|
|
4,583
|
|
4,583
|
|
Prepaid expenses and other current assets
|
5,593
|
|
(496
|
)
|
5,097
|
|
Other non-current assets
|
2,484
|
|
2,409
|
|
4,893
|
|
|
|
|
|
|||
Liabilities:
|
|
|
|
|||
Contract liabilities
|
26,820
|
|
7,006
|
|
33,826
|
|
|
|
|
|
|||
Shareholders' equity:
|
|
|
|
|||
Retained earnings
|
103,601
|
|
2,614
|
|
106,215
|
|
|
September 30, 2018
|
|||||
|
As reported
|
Balance without adoption of Topic 606
|
Effect of Change Higher (Lower)
|
|||
(In thousands)
|
||||||
Assets:
|
|
|
|
|||
Accounts receivable, net
|
18,963
|
|
18,312
|
|
651
|
|
Contract assets
|
4,696
|
|
—
|
|
4,696
|
|
Prepaid expenses and other current assets
|
5,089
|
|
5,532
|
|
(443
|
)
|
Other non-current assets
|
4,699
|
|
2,183
|
|
2,516
|
|
|
|
|
|
|||
Liabilities:
|
|
|
|
|||
Contract liabilities
|
25,789
|
|
21,120
|
|
4,669
|
|
|
|
|
|
|||
Shareholders' equity:
|
|
|
|
|||
Retained earnings
|
100,687
|
|
97,936
|
|
2,751
|
|
|
Three months ended September 30, 2018
|
|||||
|
As reported
|
Balance without adoption of Topic 606
|
Effect of Change Higher (Lower)
|
|||
(In thousands)
|
||||||
Net revenue:
|
|
|
|
|||
Products
|
8,769
|
|
8,391
|
|
378
|
|
Support, maintenance and subscription services
|
18,856
|
|
19,007
|
|
(151
|
)
|
Professional services
|
6,578
|
|
6,727
|
|
(149
|
)
|
Total net revenue:
|
34,203
|
|
34,125
|
|
78
|
|
|
|
|
|
|||
Operating expenses:
|
|
|
|
|||
Sales and marketing
|
4,393
|
|
4,536
|
|
(143
|
)
|
|
|
|
|
|||
Net Loss
|
(3,791
|
)
|
(4,012
|
)
|
221
|
|
|
Six months ended September 30, 2018
|
|||||
|
As reported
|
Balance without adoption of Topic 606
|
Effect of Change Higher (Lower)
|
|||
(In thousands)
|
||||||
Net revenue:
|
|
|
|
|||
Products
|
17,849
|
|
17,093
|
|
756
|
|
Support, maintenance and subscription services
|
36,785
|
|
37,194
|
|
(409
|
)
|
Professional services
|
13,576
|
|
13,894
|
|
(318
|
)
|
Total net revenue:
|
68,210
|
|
68,181
|
|
29
|
|
|
|
|
|
|||
Operating expenses:
|
|
|
|
|||
Sales and marketing
|
9,146
|
|
9,254
|
|
(108
|
)
|
|
|
|
|
|||
Net Loss
|
(5,528
|
)
|
(5,665
|
)
|
137
|
|
|
Balance at
|
Provisions/Adjustments
|
Payments
|
Balance at
|
||||||||
(In thousands)
|
March 31, 2018
|
September 30, 2018
|
||||||||||
Fiscal 2018 Restructuring Plan:
|
|
|
|
|
||||||||
Restructuring and other employment costs
|
$
|
198
|
|
$
|
—
|
|
$
|
(178
|
)
|
$
|
20
|
|
Total restructuring costs
|
$
|
198
|
|
$
|
—
|
|
$
|
(178
|
)
|
$
|
20
|
|
|
September 30, 2018
|
|
March 31, 2018
|
||||||||||||||||
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
||||||||||||
|
carrying
|
Accumulated
|
carrying
|
|
carrying
|
Accumulated
|
carrying
|
||||||||||||
(In thousands)
|
amount
|
amortization
|
amount
|
|
amount
|
amortization
|
amount
|
||||||||||||
Amortized intangible assets:
|
|
|
|
|
|
|
|
||||||||||||
Customer relationships
|
$
|
10,775
|
|
$
|
(10,775
|
)
|
$
|
—
|
|
|
$
|
10,775
|
|
$
|
(10,775
|
)
|
$
|
—
|
|
Non-competition agreements
|
2,700
|
|
(2,700
|
)
|
—
|
|
|
2,700
|
|
(2,700
|
)
|
—
|
|
||||||
Developed technology
|
10,398
|
|
(10,398
|
)
|
—
|
|
|
10,398
|
|
(10,398
|
)
|
—
|
|
||||||
Trade names
|
230
|
|
(169
|
)
|
61
|
|
|
230
|
|
(146
|
)
|
84
|
|
||||||
Patented technology
|
80
|
|
(80
|
)
|
—
|
|
|
80
|
|
(80
|
)
|
—
|
|
||||||
|
24,183
|
|
(24,122
|
)
|
61
|
|
|
24,183
|
|
(24,099
|
)
|
84
|
|
||||||
Unamortized intangible assets:
|
|
|
|
|
|
|
|
||||||||||||
Trade names
|
8,400
|
|
N/A
|
|
8,400
|
|
|
8,400
|
|
N/A
|
|
8,400
|
|
||||||
Total intangible assets
|
$
|
32,583
|
|
$
|
(24,122
|
)
|
$
|
8,461
|
|
|
$
|
32,583
|
|
$
|
(24,099
|
)
|
$
|
8,484
|
|
|
|
|
|
|
|
|
|
||||||||||||
Software development costs
|
$
|
67,541
|
|
$
|
(26,382
|
)
|
$
|
41,159
|
|
|
$
|
53,368
|
|
$
|
(20,372
|
)
|
$
|
32,996
|
|
Project expenditures not yet in use
|
—
|
|
—
|
|
—
|
|
|
12,185
|
|
—
|
|
12,185
|
|
||||||
Total software development costs
|
$
|
67,541
|
|
$
|
(26,382
|
)
|
$
|
41,159
|
|
|
$
|
65,553
|
|
$
|
(20,372
|
)
|
$
|
45,181
|
|
|
Estimated
|
||
|
Amortization
|
||
(In thousands)
|
Expense
|
||
Fiscal year ending March 31,
|
|
||
2019
|
$
|
6,615
|
|
2020
|
12,599
|
|
|
2021
|
12,515
|
|
|
2022
|
5,403
|
|
|
2023
|
3,399
|
|
|
2024
|
689
|
|
|
Total
|
$
|
41,220
|
|
(In thousands)
|
September 30,
2018 |
|
March 31,
2018 |
||||
Accrued liabilities:
|
|
|
|
||||
Salaries, wages, and related benefits
|
$
|
6,794
|
|
|
$
|
6,793
|
|
Other taxes payable
|
836
|
|
|
769
|
|
||
Restructuring liabilities
|
20
|
|
|
198
|
|
||
Accrued legal settlements
|
126
|
|
|
—
|
|
||
Severance liabilities
|
169
|
|
|
—
|
|
||
Professional fees
|
228
|
|
|
288
|
|
||
Deferred rent
|
420
|
|
|
407
|
|
||
Other
|
866
|
|
|
786
|
|
||
Total
|
$
|
9,459
|
|
|
$
|
9,241
|
|
Other non-current liabilities:
|
|
|
|
||||
Uncertain tax positions
|
$
|
1,442
|
|
|
$
|
1,519
|
|
Deferred rent
|
2,115
|
|
|
2,313
|
|
||
Other
|
75
|
|
|
79
|
|
||
Total
|
$
|
3,632
|
|
|
$
|
3,911
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
(Dollars in thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Income tax expense
|
$
|
53
|
|
|
$
|
105
|
|
|
$
|
4
|
|
|
$
|
183
|
|
Effective tax rate
|
(1.4
|
)%
|
|
(3.3
|
)%
|
|
(0.1
|
)%
|
|
(3.0
|
)%
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
(In thousands, except per share data)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net loss
|
$
|
(3,791
|
)
|
|
$
|
(3,248
|
)
|
|
$
|
(5,528
|
)
|
|
$
|
(6,206
|
)
|
|
|
|
|
|
|
|
|
||||||||
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding
|
23,131
|
|
|
22,760
|
|
|
23,113
|
|
|
22,740
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Loss per share - basic and diluted:
|
|
|
|
|
|
|
|
||||||||
Loss per share
|
$
|
(0.16
|
)
|
|
$
|
(0.14
|
)
|
|
$
|
(0.24
|
)
|
|
$
|
(0.27
|
)
|
|
|
|
|
|
|
|
|
||||||||
Anti-dilutive stock options, SSARs, restricted shares and performance shares
|
1,481
|
|
|
1,788
|
|
|
1,419
|
|
|
1,728
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
(In thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Product development
|
$
|
514
|
|
|
$
|
105
|
|
|
$
|
429
|
|
|
$
|
526
|
|
Sales and marketing
|
134
|
|
|
187
|
|
|
199
|
|
|
356
|
|
||||
General and administrative
|
617
|
|
|
808
|
|
|
1,046
|
|
|
1,436
|
|
||||
Total share-based compensation expense
|
1,265
|
|
|
1,100
|
|
|
1,674
|
|
|
2,318
|
|
|
Number of Rights
|
|
Weighted-Average Exercise Price
|
|
Remaining Contractual Term
|
|
Aggregate Intrinsic Value
|
|||||
(In thousands, except share and per share data)
|
|
|
(per right)
|
|
(in years)
|
|
|
|||||
Outstanding at April 1, 2018
|
1,103,160
|
|
|
$
|
10.60
|
|
|
|
|
|
||
Granted
|
158,244
|
|
|
14.22
|
|
|
|
|
|
|||
Exercised
|
(176,181
|
)
|
|
10.32
|
|
|
|
|
|
|||
Forfeited
|
(43,417
|
)
|
|
10.80
|
|
|
|
|
|
|||
Cancelled/expired
|
(3,492
|
)
|
|
9.60
|
|
|
|
|
|
|||
Outstanding at September 30, 2018
|
1,038,314
|
|
|
$
|
11.19
|
|
|
5.4
|
|
$
|
3,035
|
|
Exercisable at September 30, 2018
|
529,923
|
|
|
$
|
10.57
|
|
|
4.8
|
|
$
|
3,035
|
|
|
Number of Shares
|
|
Weighted-Average Grant-Date Fair Value
|
|||
(In thousands, except share and per share data)
|
|
|
(per share)
|
|||
Outstanding at April 1, 2018
|
243,354
|
|
|
$
|
10.78
|
|
Granted
|
238,703
|
|
|
14.25
|
||
Vested
|
—
|
|
|
—
|
|
|
Forfeited
|
(58,647
|
)
|
|
10.54
|
|
|
Outstanding at September 30, 2018
|
423,410
|
|
|
$
|
12.77
|
|
|
Number of Shares
|
|
(In thousands, except share and per share data)
|
|
|
Outstanding at April 1, 2018
|
91,463
|
|
Granted
|
63,291
|
|
Forfeited
|
(75,641
|
)
|
Vested
|
(15,822
|
)
|
Outstanding at September 30, 2018
|
63,291
|
|
|
Fair value measurement used
|
||||||||||||
|
Recorded value as of
|
|
Active markets for identical assets or liabilities
|
|
Quoted prices in similar instruments and observable inputs
|
|
Active markets for unobservable inputs
|
||||||
(In thousands)
|
September 30, 2018
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||
Assets:
|
|
|
|
|
|
|
|
||||||
Corporate-owned life insurance — non-current
|
$
|
863
|
|
|
—
|
|
|
—
|
|
|
$
|
863
|
|
|
Fair value measurement used
|
||||||||||||
|
Recorded value as of
|
|
Active markets for identical assets or liabilities
|
|
Quoted prices in similar instruments and observable inputs
|
|
Active markets for unobservable inputs
|
||||||
(In thousands)
|
March 31, 2018
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||
Assets:
|
|
|
|
|
|
|
|
||||||
Corporate-owned life insurance — non-current
|
$
|
853
|
|
|
—
|
|
|
—
|
|
|
$
|
853
|
|
|
Six months ended
|
||||||
|
September 30,
|
||||||
(In thousands)
|
2018
|
|
2017
|
||||
Corporate-owned life insurance:
|
|
|
|
||||
Balance on April 1
|
$
|
853
|
|
|
$
|
809
|
|
Unrealized gain relating to instruments held at reporting date
|
8
|
|
|
4
|
|
||
Purchases, sales, issuances and settlements, net
|
2
|
|
|
2
|
|
||
Balance on September 30
|
$
|
863
|
|
|
$
|
815
|
|
•
|
Putting the customer first
|
•
|
Accelerating our product development
|
•
|
Improving organizational efficiency and teamwork
|
•
|
Developing our employees and leaders
|
•
|
Growing revenue by improving the breadth and depth of our product set across both our well established products and our newer rGuest platform
|
•
|
Growing revenue through international expansion
|
•
|
Products revenue – Revenue earned from the sales of hardware equipment and proprietary and remarketed software.
|
•
|
Support, maintenance and subscription services revenue – Revenue earned from the sale of proprietary and remarketed ongoing support, maintenance and subscription or hosting services.
|
•
|
Professional services revenue – Revenue earned from the delivery of implementation, integration and installation services for proprietary and remarketed products.
|
|
Three months ended
|
|
|
|
|
|||||||||
|
September 30,
|
|
Increase (decrease)
|
|||||||||||
(Dollars in thousands)
|
2018
|
|
2017
|
|
$
|
|
%
|
|||||||
Net revenue:
|
|
|
|
|
|
|
|
|||||||
Products
|
$
|
8,769
|
|
|
$
|
7,318
|
|
|
$
|
1,451
|
|
|
19.8
|
%
|
Support, maintenance and subscription services
|
18,856
|
|
|
17,108
|
|
|
1,748
|
|
|
10.2
|
|
|||
Professional services
|
6,578
|
|
|
5,703
|
|
|
875
|
|
|
15.3
|
|
|||
Total net revenue
|
34,203
|
|
|
30,129
|
|
|
4,074
|
|
|
13.5
|
|
|||
Cost of goods sold:
|
|
|
|
|
|
|
|
|||||||
Products (inclusive of developed technology amortization)
|
7,703
|
|
|
5,419
|
|
|
2,284
|
|
|
42.1
|
|
|||
Support, maintenance and subscription services
|
3,977
|
|
|
4,446
|
|
|
(469
|
)
|
|
(10.5
|
)
|
|||
Professional services
|
4,774
|
|
|
4,894
|
|
|
(120
|
)
|
|
(2.5
|
)
|
|||
Total cost of goods sold
|
16,454
|
|
|
14,759
|
|
|
1,695
|
|
|
11.5
|
|
|||
Gross profit
|
$
|
17,749
|
|
|
$
|
15,370
|
|
|
$
|
2,379
|
|
|
15.5
|
%
|
Gross profit margin
|
51.9
|
%
|
|
51.0
|
%
|
|
|
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|||||||
Product development
|
$
|
10,151
|
|
|
$
|
6,812
|
|
|
$
|
3,339
|
|
|
49.0
|
%
|
Sales and marketing
|
4,393
|
|
|
4,207
|
|
|
186
|
|
|
4.4
|
|
|||
General and administrative
|
5,176
|
|
|
5,561
|
|
|
(385
|
)
|
|
(6.9
|
)
|
|||
Depreciation of fixed assets
|
676
|
|
|
700
|
|
|
(24
|
)
|
|
(3.4
|
)
|
|||
Amortization of intangibles
|
674
|
|
|
465
|
|
|
209
|
|
|
44.9
|
|
|||
Restructuring, severance and other charges
|
448
|
|
|
826
|
|
|
(378
|
)
|
|
nm
|
|
|||
Legal settlements
|
35
|
|
|
—
|
|
|
35
|
|
|
nm
|
|
|||
Operating loss
|
$
|
(3,804
|
)
|
|
$
|
(3,201
|
)
|
|
$
|
(603
|
)
|
|
18.8
|
%
|
Operating loss percentage
|
(11.1
|
)%
|
|
(10.6
|
)%
|
|
|
|
|
|
Three months ended
|
|
|
|
|
|||||||||
|
September 30,
|
|
(Unfavorable) favorable
|
|||||||||||
(Dollars in thousands)
|
2018
|
|
2017
|
|
$
|
|
%
|
|||||||
Other expense (income):
|
|
|
|
|
|
|
|
|||||||
Interest (income)
|
$
|
(97
|
)
|
|
$
|
(23
|
)
|
|
$
|
74
|
|
|
nm
|
|
Interest expense
|
3
|
|
|
2
|
|
|
(1
|
)
|
|
(50.0
|
)%
|
|||
Other expense (income), net
|
28
|
|
|
(37
|
)
|
|
(65
|
)
|
|
nm
|
|
|||
Total other expense, net
|
$
|
(66
|
)
|
|
$
|
(58
|
)
|
|
$
|
8
|
|
|
nm
|
|
|
Three months ended
|
|
|
|
|
||||||||
|
September 30,
|
|
(Unfavorable) favorable
|
||||||||||
(Dollars in thousands)
|
2018
|
|
2017
|
|
$
|
|
%
|
||||||
Income tax expense
|
$
|
53
|
|
|
$
|
105
|
|
|
$
|
52
|
|
|
nm
|
Effective tax rate
|
(1.4
|
)%
|
|
(3.3
|
)%
|
|
|
|
|
|
Six months ended
|
|
|
|
|
|||||||||
|
September 30,
|
|
Increase (decrease)
|
|||||||||||
(Dollars in thousands)
|
2018
|
|
2017
|
|
$
|
|
%
|
|||||||
Net revenue:
|
|
|
|
|
|
|
|
|||||||
Products
|
$
|
17,849
|
|
|
$
|
17,601
|
|
|
$
|
248
|
|
|
1.4
|
%
|
Support, maintenance and subscription services
|
36,785
|
|
|
33,775
|
|
|
3,010
|
|
|
8.9
|
|
|||
Professional services
|
13,576
|
|
|
12,618
|
|
|
958
|
|
|
7.6
|
|
|||
Total net revenue
|
68,210
|
|
|
63,994
|
|
|
4,216
|
|
|
6.6
|
|
|||
Cost of goods sold:
|
|
|
|
|
|
|
|
|||||||
Products (inclusive of developed technology amortization)
|
14,833
|
|
|
13,042
|
|
|
1,791
|
|
|
13.7
|
|
|||
Support, maintenance and subscription services
|
8,051
|
|
|
8,478
|
|
|
(427
|
)
|
|
(5.0
|
)
|
|||
Professional services
|
9,688
|
|
|
10,430
|
|
|
(742
|
)
|
|
(7.1
|
)
|
|||
Total cost of goods sold
|
32,572
|
|
|
31,950
|
|
|
622
|
|
|
1.9
|
|
|||
Gross profit
|
$
|
35,638
|
|
|
$
|
32,044
|
|
|
$
|
3,594
|
|
|
11.2
|
%
|
Gross profit margin
|
52.2
|
%
|
|
50.1
|
%
|
|
|
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|||||||
Product development
|
$
|
17,240
|
|
|
$
|
13,438
|
|
|
$
|
3,802
|
|
|
28.3
|
%
|
Sales and marketing
|
9,146
|
|
|
9,337
|
|
|
(191
|
)
|
|
(2.0
|
)
|
|||
General and administrative
|
11,181
|
|
|
12,361
|
|
|
(1,180
|
)
|
|
(9.5
|
)
|
|||
Depreciation of fixed assets
|
1,282
|
|
|
1,312
|
|
|
(30
|
)
|
|
(2.3
|
)
|
|||
Amortization of intangibles
|
1,217
|
|
|
950
|
|
|
267
|
|
|
28.1
|
|
|||
Restructuring, severance and other charges
|
889
|
|
|
863
|
|
|
26
|
|
|
nm
|
|
|||
Legal settlements
|
126
|
|
|
—
|
|
|
126
|
|
|
nm
|
|
|||
Operating loss
|
$
|
(5,443
|
)
|
|
$
|
(6,217
|
)
|
|
$
|
774
|
|
|
(12.4
|
)%
|
Operating loss percentage
|
(8.0
|
)%
|
|
(9.7
|
)%
|
|
|
|
|
|
Six months ended
|
|
|
|
|
|||||||||
|
September 30,
|
|
(Unfavorable) favorable
|
|||||||||||
(Dollars in thousands)
|
2018
|
|
2017
|
|
$
|
|
%
|
|||||||
Other expense (income):
|
|
|
|
|
|
|
|
|||||||
Interest (income)
|
$
|
(152
|
)
|
|
$
|
(51
|
)
|
|
$
|
101
|
|
|
198.0
|
%
|
Interest expense
|
5
|
|
|
4
|
|
|
(1
|
)
|
|
(25.0
|
)%
|
|||
Other expense (income), net
|
228
|
|
|
(147
|
)
|
|
(375
|
)
|
|
nm
|
|
|||
Total other expense (income), net
|
$
|
81
|
|
|
$
|
(194
|
)
|
|
$
|
(275
|
)
|
|
nm
|
|
|
Six months ended
|
|
|
|
|
||||||||
|
September 30,
|
|
(Unfavorable) favorable
|
||||||||||
(Dollars in thousands)
|
2018
|
|
2017
|
|
$
|
|
%
|
||||||
Income tax expense
|
$
|
4.0
|
|
|
$
|
183
|
|
|
$
|
179
|
|
|
nm
|
Effective tax rate
|
(0.1
|
)%
|
|
(3.0
|
)%
|
|
|
|
|
|
Six months ended
|
||||||
|
September 30,
|
||||||
(In thousands)
|
2018
|
|
2017
|
||||
Net cash (used in):
|
|
|
|
||||
Operating activities
|
$
|
(2,748
|
)
|
|
$
|
(1,648
|
)
|
Investing activities
|
(3,524
|
)
|
|
(8,585
|
)
|
||
Financing activities
|
(616
|
)
|
|
(580
|
)
|
||
Effect of exchange rate changes on cash
|
(151
|
)
|
|
90
|
|
||
Net decrease in cash and cash equivalents
|
$
|
(7,039
|
)
|
|
$
|
(10,723
|
)
|
101
|
The following materials from our quarterly report on Form 10-Q for the quarter ended
September 30, 2018
, formatted in XBRL (Extensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets at
September 30, 2018
and
March 31, 2018
, (ii) Condensed Consolidated Statements of Operations for the three and six months ended
September 30, 2018
and
2017
, (iii) Condensed Consolidated Statements of Comprehensive Loss for the three and six months ended
September 30, 2018
and
2017
, (iv) Condensed Consolidated Statements of Cash Flows for the six months ended
September 30, 2018
and
2017
, and (v)
|
Date:
|
October 26, 2018
|
/s/ Anthony S. Pritchett
|
|
|
Anthony S. Pritchett
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial Officer and Duly Authorized Officer)
|
1.
|
Award
. As of the Grant Date, and subject to the terms and conditions of this Agreement, the Company hereby grants you an award (the “Award”) of the number of Common Shares set forth above (the “Restricted Shares”). This Award is granted to you pursuant to the Agilysys, Inc. 2016 Stock Incentive Plan, as amended from time to time (the “Plan”), and is subject to the terms and conditions set forth in this Agreement.
|
8.
|
Internal Revenue Code Section 409A
. This Agreement, Award and the compensation and benefits hereunder are intended to meet the requirements for exemption from coverage under Code Section 409A for restricted property set forth in Treas. Reg. Section 1.409A-1(b)(6), as well as any other applicable exemption, and shall be construed and administered accordingly. If the Company determines that any compensation or benefits awarded or payable under this Agreement may be subject to taxation under Code Section 409A, the Company shall, after consultation with you, have the authority to adopt, prospectively or retroactively, such amendments to this Agreement or to take any other actions it determines necessary or appropriate to exempt the compensation and benefits payable under this Agreement from Code Section 409A or meet the requirements of Code Section 409A. In no event, however, shall this Section or any other provisions of the Plan or this Agreement be construed to require the Company to provide any gross-up for the tax consequences of any provisions of, or awards or payments under, this Agreement, and the Company shall have no responsibility for tax consequences of any kind to you (or any other person or entity), whether or not such consequences are contemplated at the time of entry into this Agreement, or result from the terms or operation of this Agreement.
|
1.
|
Award
. As of the Grant Date, and subject to the terms and conditions of this Agreement, the Company hereby grants you an award (the “Award”) of the number of Common Shares set forth above (the “Restricted Shares”). This Award is granted to you pursuant to the Agilysys, Inc. 2016 Stock Incentive Plan, as amended from time to time (the “Plan”), and is subject to the terms and conditions set forth in this Agreement.
|
4.
|
Effect of Corporate Reorganization or Other Changes Affecting Number or Kind of Shares
. The provisions of this Agreement will be applicable to the Restricted Shares, Shares or other securities, if any, which may be acquired by you related to the Restricted Shares as a result of a liquidation, recapitalization, reorganization, redesignation or reclassification, split-up, reverse split, merger, consolidation, dividend, combination or exchange of Restricted Shares or Shares, exchange for other securities, a sale of all or substantially all assets or the like. The Committee may appropriately adjust the number and kind of Restricted Shares, Shares or other securities described in this Agreement to reflect such a change.
|
7.
|
Internal Revenue Code Section 409A
. This Agreement, Award and the compensation and benefits hereunder are intended to meet the requirements for exemption from coverage under Code Section 409A for restricted property set forth in Treas. Reg. Section 1.409A-1(b)(6), as well as any other applicable exemption, and shall be construed and administered accordingly. If the Company determines that any compensation or benefits awarded or payable under this Agreement may be subject to taxation under Code Section 409A, the Company shall, after consultation with you, have the authority to adopt, prospectively or retroactively, such amendments to this Agreement or to take any other actions it determines necessary or appropriate to exempt the compensation and benefits payable under this Agreement from Code Section 409A or meet the requirements of Code Section 409A. In no event, however, shall this Section or any other provisions of the Plan or this Agreement be construed to require the Company to provide any gross-up for the tax consequences of any provisions of, or awards or payments under, this Agreement, and the Company shall have no responsibility for tax consequences of any kind to you (or any other person or entity), whether or not such consequences are contemplated at the time of entry into this Agreement, or result from the terms or operation of this Agreement.
|
8.
|
Tax Withholding
. The Committee shall cause the Company to sell the fewest number of Shares for the proceeds of such sale to equal (or exceed by not more than the actual sale price of a single Share) your or any other recipient’s minimum withholding tax liability resulting from any
|
9.
|
No Right to Continued Employment
. Neither the Plan nor this Agreement shall be construed to grant you any right to remain an employee with the Company or its affiliates, or to be employed in any particular position therewith. The Plan and this Agreement do not constitute a contract of employment, and the Company and each affiliate expressly reserves the right, at any time, to terminate your employment free from liability, or any claim, under the Plan and this Agreement, except as may be specifically provided therein.
|
10.
|
Notices
. All notices or other communications relating to the Plan and this Agreement as it relates to you shall be in writing, shall be deemed to have been made if personally delivered in return for a receipt or, if mailed, by regular U.S. mail, postage prepaid, by the Company to you at your address then on file with the Company. You are responsible for notifying the Company of a change in your address.
|
11.
|
Governing Law
. Except as may otherwise be provided in the Plan, this Agreement will be governed by, construed and enforced in accordance with the internal laws of the State of Ohio without giving effect to its conflict of laws principles.
|
12.
|
Amendment
. The Committee may waive any conditions or rights under, amend any terms of, or alter, suspend, discontinue, cancel or terminate this Agreement. However, no such action may be inconsistent with the terms of the Plan or materially and adversely affect your rights without your written consent. Notwithstanding the foregoing, the Company may, after consulting with you, unilaterally amend this Agreement to comply with law, preserve favorable tax effects or avoid unfavorable tax effects for either of the parties.
|
13.
|
Effect of Waiver
. Any waiver of any term, condition or breach thereof will not be a waiver of any other term or condition or of the same term or condition for the future, or of any subsequent breach.
|
14.
|
Separability
. In the event of the invalidity of any part or provision of this Agreement, such invalidity will not affect the enforceability of any other part or provision of this Agreement.
|
15.
|
Successors and Legal Representatives
. This Agreement will bind and inure to the benefit of the Company and you and its and your respective beneficiaries, heirs, legatees, executors, administrators, estates, successors, assigns, legal representatives, guardians and caretakers.
|
16.
|
Transferability
. The Award shall not be transferable by you other than by will or the laws of descent and distribution, and the Award may be exercised during your lifetime only by you (or such other person as may be permitted to exercise the Award on your behalf).
|
17.
|
No Further Liability
. The liability of the Company, its affiliates and the Committee under or in connection with this Agreement is limited to the obligations set forth herein and no terms or provisions of this Agreement shall be construed to impose any liability on the Company, its affiliates, the Committee or their directors and employees in favor of any person or entity with respect to any loss, cost, tax or expense which the person or entity may incur in connection with or arising from any transaction related to this Agreement. No third-party beneficiaries are intended.
|
18.
|
Recoupment Right
. You acknowledge that if the Board of Directors of the Company (including a Committee of the Board) determines that the Company’s financials are restated due directly or
|
19.
|
The Plan
. The Plan is hereby incorporated by reference and made a part of this Agreement for all purposes, and when taken together with this Agreement, shall govern the rights of you and the Company with respect to the Award. You irrevocably agree to, and accept, the terms, conditions and restrictions of the Plan and this Agreement on your own behalf and on behalf of any beneficiaries, heirs, legatees, guardians, representatives, successors and assigns.
All capitalized terms used in this Agreement, unless otherwise defined, shall have the meaning ascribed to them under the Plan. In the event and to the extent of an express conflict or inconsistency among any of this Agreement, any written employment agreement with you then in effect, the provisions of the Plan, and any rules, regulations, and interpretations of the Plan adopted by the Committee, then the following order of priority shall control; (a) any written employment agreement then in effect, (b) the Plan, (c) any rules, regulations, and interpretations of the Plan adopted by the Committee, and (d) this Agreement; and to the extent that any other document controls this Agreement shall be deemed to be modified accordingly.
|
1.
|
Award
. Effective as of the Grant Date set forth above, the Company grants to you stock-settled stock appreciation rights (the “SSARs”) to purchase the number of common shares of the Company set forth above, at the Exercise Price per share set forth above. These SSARs are granted to you pursuant to the Agilysys, Inc. 2016 Stock Incentive Plan, as amended from time to time (the “Plan”), and is subject to the terms and conditions set forth in this Agreement.
|
2.
|
Term
. The term of the SSAR shall be for a period of
7 years
from the date of grant, and these SSARs shall expire at the close of regular business hours at the Company’s principal office on the last day of the term of the SSAR, or, if earlier, on the applicable expiration date provided for in sections 3 and 4 hereof.
|
3.
|
Vesting
. The SSARs will vest as follows, subject to the other terms and conditions of this Agreement, including that you remain employed as of the specified dates:
|
4.
|
Exercisability
.
|
5.
|
Death of Recipient
. If you die while an Employee, such person or persons as shall have acquired, by will or by the laws of descent and distribution, the right to exercise the SSARs (the “Personal Representative”) shall be entitled to exercise the SSARs as to all of the Shares then subject to the SSARs. Such exercise rights shall terminate upon the earlier of the date one year from the date of your death or the last day of the term of the SSARs. If, after Retirement, you die prior to the last day of the term of the SSARs, the Personal Representative shall be entitled to exercise all unexercised SSARs, and such SSARs shall remain exercisable, for the greater of the remainder of the exercise period (as applicable) or one year from the date of your death, but in no event shall the SSARs be exercisable after the last day of the term of the SSARs. If you die during the one-year period commencing on the date of your termination due to your Disability, the Personal Representative shall be entitled to exercise the SSARs, and such SSARs shall remain exercisable until one year from the date of such death, but in no event shall the SSARs be exercisable after the last day of the term of the SSARs.
|
6.
|
Change of Control
.
|
7.
|
Waiver of Terms and Conditions
. The Committee has the power and authority to waive or accelerate the vesting provisions of the SSARs, or to waive or modify the other terms and conditions of and restrictions and limitations on the SSARs, provided such waiver or modification is not (a) materially detrimental to you, nor (b) inconsistent with the terms of the Plan and any employment agreement with you then in effect.
|
8.
|
Method of Exercise
. The SSARs may be exercised by delivery to the Legal Department of the Company a completed notice of exercise in the form prescribed by the Legal Department
|
9.
|
Issuance of Shares
. Upon receipt by the Company prior to expiration of the SSARs of a duly completed notice of exercise and, with respect to any SSARs exercised by any person other than you, by proof satisfactory to the Committee of the right of such person to exercise the SSARs, and subject to section 5 hereof, the Company shall cause its transfer agent to enter in its books and records on your behalf the net number of Shares derived after accounting for the Exercise Price and any required tax withholding. You or such other person exercising the SSARs shall not have any of the rights of a shareholder with respect to the Shares covered by the SSARs until such Shares are book-entered on behalf of you or such other person exercising the SSAR, subject to any applicable restrictions under Section 5.
|
10.
|
Regulatory Compliance
. You agree that the Company shall not be obligated to issue any Shares upon exercise of the SSARs if such issuance would cause the Company to violate any federal or state law or any rule, regulation, order or consent decree of any regulatory authority (including without limitation the Securities and Exchange Commission and The Nasdaq Stock Market) having jurisdiction over the affairs of the Company. You agree that you will provide the Company with such information as is reasonably requested by the Company or its counsel to determine whether the issuance of Shares complies with the provisions of this section.
|
11.
|
Investment Representation
.
|
12.
|
Notices
. All notices or other communications relating to the Plan and this Agreement as it relates to you shall be in writing, shall be deemed to have been made if personally delivered in return for a receipt or, if mailed, by regular U.S. mail, postage prepaid, by the Company to you at your address then on file with the Company. You are responsible for notifying the Company of a change in your address.
|
13.
|
Governing Law
. Except as may otherwise be provided in the Plan, this Agreement will be governed by, construed and enforced in accordance with the internal laws of the State of Ohio without giving effect to its conflict of laws principles.
|
14.
|
Amendment
. The Committee may waive any conditions or rights under, amend any terms of, or alter, suspend, discontinue, cancel or terminate this Agreement. However, no such action may be inconsistent with the terms of the Plan or materially and adversely affect your rights without your written consent. Notwithstanding the foregoing, the Company may, after consulting
|
15.
|
Effect of Waiver
. Any waiver of any term, condition or breach thereof will not be a waiver of any other term or condition or of the same term or condition for the future, or of any subsequent breach.
|
16.
|
Separability
. In the event of the invalidity of any part or provision of this Agreement, such invalidity will not affect the enforceability of any other part or provision of this Agreement.
|
17.
|
Successors and Legal Representatives
. This Agreement will bind and inure to the benefit of the Company and you and its and your respective beneficiaries, heirs, legatees, executors, administrators, estates, successors, assigns, legal representatives, guardians and caretakers.
|
18.
|
Transferability
. The SSARs shall not be transferable by you other than by will or the laws of descent and distribution, and the SSARs may be exercised during your lifetime only by you (or such other person as may be permitted to exercise SSARs on your behalf).
|
19.
|
No Further Liability
. The liability of the Company, its affiliates and the Committee under or in connection with this Agreement is limited to the obligations set forth herein and no terms or provisions of this Agreement shall be construed to impose any liability on the Company, its affiliates, the Committee or their directors and employees in favor of any person or entity with respect to any loss, cost, tax or expense which the person or entity may incur in connection with or arising from any transaction related to this Agreement. No third-party beneficiaries are intended.
|
20.
|
Recoupment Right
. You acknowledge that if the Board of Directors of the Company (including a Committee of the Board) determines that the Company’s financials are restated due directly or indirectly to the fraud, ethical misconduct, intentional misconduct or a breach of fiduciary duty by you, the Board (or Committee) shall have sole discretion to take such actions, as permitted by law, as it deems necessary to cancel the SSAR and to recover all or a portion of any gains realized in respect of the SSAR, provided such recovery cannot extend back more than three years.
|
21.
|
The Plan
. The Plan is hereby incorporated by reference and made a part of this Agreement for all purposes, and when taken together with this Agreement, shall govern the rights of you and the Company with respect to the Award. You irrevocably agree to, and accept, the terms, conditions and restrictions of the Plan and this Agreement on your own behalf and on behalf of any beneficiaries, heirs, legatees, guardians, representatives, successors and assigns. All capitalized terms used in this Agreement, unless otherwise defined, shall have the meaning ascribed to them under the Plan. In the event and to the extent of an express conflict or inconsistency among any of this Agreement, any written employment agreement with you then in effect, the provisions of the Plan, and any rules, regulations, and interpretations of the Plan adopted by the Committee, then the following order of priority shall control; (a) any written employment agreement then in effect, (b) the Plan, (c) any rules, regulations, and interpretations of the Plan adopted by the Committee, and (d) this Agreement; and to the extent that any other document controls this Agreement shall be deemed to be modified accordingly.
|
By:
|
/s/
Ramesh Srinivasan
|
|
Ramesh Srinivasan
|
|
President and Chief Executive Officer
|
|
(Principal Executive Officer)
|
By:
|
/s/ Anthony S. Pritchett
|
|
Anthony S. Pritchett
|
|
Chief Financial Officer
|
|
(Principal Financial Officer)
|
By:
|
/s/ Chris J. Robertson
|
|
Chris J. Robertson
|
|
Corporate Controller and Treasurer
|
|
(Principal Accounting Officer)
|
1.
|
The Quarterly Report on Form 10-Q of the Company for the period ended September 30, 2018 (the “
Report
”) fully complies (1) with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
By:
|
/s/ Ramesh Srinivasan
|
|
Ramesh Srinivasan
|
|
President and Chief Executive Officer
|
|
(Principal Executive Officer)
|
|
|
|
/s/ Anthony S. Pritchett
|
|
Anthony S. Pritchett
|
|
Chief Financial Officer
|
|
(Principal Financial Officer)
|
|
|
|
/s/ Chris J. Robertson
|
|
Chris J. Robertson
|
|
Corporate Controller and Treasurer
|
|
(Principal Accounting Officer)
|