S1 CORP /DE/

On October 31, 2011, ACI extended the Amended Offer until 5:00 p. m., Eastern time, on November 30, 2011, unless further extended. ACI Merger Sub’s obligation to accept for payment and pay for Shares tendered in the Amended Offer is subject to customary conditions, including, among other things, that (i) at least a majority of the outstanding Shares (determined on a fully-diluted basis) shall have been validly tendered in accordance with the terms of the Amended Offer and not properly withdrawn, and (ii) the applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 shall have expired or terminated.

Following the completion of the Amended Offer, and subject to satisfaction or waiver of certain conditions set forth in the Transaction Agreement, including, if required, a vote of the Company’s stockholders with respect to the adoption of the Transaction Agreement, ACI Merger Sub will be merged with and into the Company, with the Company surviving as a wholly owned subsidiary of ACI; alternatively, the parties may agree to effect the merger through the merger of the Company with and into ACI Merger Sub, with ACI Merger Sub serving as a wholly owned subsidiary of ACI (collectively, the “Merger”). At the effective time of the Merger, each remaining issued and outstanding Share (other than (i) Shares held by the Company, ACI or their respective subsidiaries, (ii) certain shares of restricted stock of the Company that convert into restricted shares of ACI common stock pursuant to the Transaction Agreement, or (iii) by stockholders who have properly exercised their dissenters’ rights under Section 262 of the Delaware General Corporation Law) will be automatically converted into the right to receive $6.62 in cash, without interest, and 0.1064 of a share of ACI common stock.

On October 25, 2011, we announced that the Company and other named defendants reached an agreement in principle with plaintiffs to settle the consolidated class action lawsuit captioned In re S1 Corporation Shareholders Litigation. This lawsuit relates to the now-terminated merger with Fundtech and the proposed acquisition of the Company by ACI. Pursuant to this agreement, the Company filed an amendment to its Solicitation/Recommendation Statement on Schedule 14D-9 (“Schedule 14D-9”) with the Securities and Exchange Commission. The amended Schedule 14D-9 contains certain additional disclosures the Company agreed to make in connection with the settlement of the lawsuit, although the Company has not admitted in any way that those disclosures are material or are otherwise required by law. In addition, the defendants have agreed to negotiate in good faith with plaintiffs’ counsel regarding the appropriate amount of fees, costs and expenses to be paid to plaintiffs’ counsel by the Company or its successor. The Company does not expect this cost to be material to our consolidated results of operations and financial position. The settlement will not affect the offer price to be paid in the Amended Offer by ACI Merger Sub or the merger consideration the Company’s stockholders would be entitled to receive pursuant to the terms of the Transaction Agreement.

Litigation Relating to Business Combinations. On July 29, 2011, a putative stockholder class action captioned Levitan v. S1 Corp., et al., C.A. No-6730, was filed in the Court of Chancery of the State of Delaware against the Company and the individual members of the Company’s board of directors. The complaint alleged, among other things, that the Company’s directors would breach their fiduciary duties by agreeing to a proposed acquisition of the Company by ACI. Among other things, the complaint sought to enjoin the Company and its directors from completing such a proposed acquisition by ACI or, alternatively, rescission of such a proposed acquisition by ACI in the event the Company and ACI were able to consummate such a transaction. On August 8, 2011, a putative stockholder filed an action in the Court of Chancery of the State of Delaware captioned Mang v. Dreyer, et al., C.A. No. 6760, asserting class and derivative claims against the Company and the individual members of the Company’s board of directors. The complaint alleged, among other things, that the Company’s directors breached their fiduciary duties and committed gross mismanagement and waste by reason of having rejected ACI’s proposal. On August 9, 2011, a putative stockholder class action was filed in the Court of Chancery of the State of Delaware captioned Yu v. S1 Corp., et al., C.A. No. 6771. The complaint alleged, among other things, that the Company’s directors had breached their fiduciary duties by failing to pursue the ACI proposal and/or failing to initiate a bidding or auction process for acquisition of the Company, and by issuing incomplete or misleading disclosures in the Company’s proxy solicitation materials. Both the Mang and Yu complaints sought, among other things, to enjoin both the stockholder vote in connection with, and any consummation of, the Company’s now-terminated merger with Fundtech.

On August 12, 2011, counsel for Plaintiffs Mang and Yu filed a proposed Order of Consolidation and Appointment of Lead Counsel, which would consolidate the Mang and Yu actions and designate the Yu complaint as the operative complaint in the consolidated action. On August 15, 2011, Plaintiff Levitan filed an Amended Verified Class Action Complaint, which no longer sought to enjoin the directors from pursuing the ACI proposal, but instead sought to enjoin the Company’s merger with Fundtech. On August 17, 2011, counsel for Plaintiffs in all three actions modified the previously-filed request for consolidation so as to request consolidation of all three actions, again designating the Yu complaint as the operative complaint, and advised the Court that the Defendants did not oppose such consolidation. On August 18, 2011, the Court granted the motion and ordered that the three cases be consolidated (the “Consolidated Lawsuit”).

On August 19, 2011, the Court scheduled a hearing on Plaintiffs’ motion for preliminary injunction for September 16, 2011. On August 31, 2011, Plaintiffs filed a Consolidated Amended Complaint that did not substantively alter the claims being advanced or the relief being sought. Subsequent to the Company’s announcement that the meeting for the stockholder vote on the proposals related to the now-terminated merger with Fundtech was to be delayed, the hearing on Plaintiffs’ motion was rescheduled for October 3, 2011.

The governmental and regulatory agencies from which the parties will seek these approvals have broad discretion in administering the applicable governing regulations. As a condition to their approval of the transactions contemplated by the Transaction Agreement, agencies may impose requirements, limitations or costs or require divestitures or place restrictions on the conduct of the combined company’s business. These requirements, limitations, costs, divestitures or restrictions could jeopardize or delay the consummation of the Transaction or may reduce the anticipated benefits of the combination contemplated by the Transaction. Further, no assurance can be given that the required consents and approvals will be obtained or that the required conditions to the Transaction will be satisfied, and, if all required consents and approvals are obtained and the conditions to the closing of the Transaction are satisfied, no assurance can be given as to the terms, conditions and timing of the consents and approvals. If ACI agrees to any material requirements, limitations, costs, divestitures or restrictions in order to obtain any consents or approvals required to close the Transaction, these requirements, limitations, additional costs or restrictions could adversely affect ACI’s ability to integrate the operations of ACI and the Company or reduce the anticipated benefits of the combination contemplated by the Transaction. This could have a material adverse effect on the business, financial condition and results of operations of the combined company and the market value of the combined company’s common stock after the acquisition. In addition, a third party could attempt to intervene in any governmental or regulatory filings to be made or otherwise object to the granting of any such governmental or regulatory authorizations, consents, orders or approvals, which may cause a delay in obtaining, or the imposition of material requirements, limitations, costs, divestitures or restrictions on, or the failure to obtain, any such authorizations, consents, orders or approvals.