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August 13th, 2014
 

Frank Verardi
13751 Cassinelli Ranch Road
P.O. Box 1328
Sutter Creek, CA 95685

Dear Frank:

     The letter sets forth the terms of your severance agreement with Daegis
Inc. (“Daegis”).

     Although Daegis or you may terminate your employment at-will, with or
without Cause, if Daegis terminates your employment without Cause or upon a
Change in Control, you shall receive (1) cash severance payments equivalent to
six (6) months of your base salary then in effect on the termination date,
payable as “salary continuation” in accordance with Daegis’ regular payroll
cycle, commencing on the first payroll period that is 31 days following the
termination date; and (2) continuation of your existing health insurance
benefits for a six (6) month period, if permitted by Daegis’ health insurance
plan (at the then-current contribution levels), or, if not permitted by Daegis’
health insurance plan, Daegis will reimburse you for the cost of six (6) months
of COBRA health insurance continuation benefits (assuming you are
COBRA-eligible), or Medicare supplement insurance premiums.

     Provision of these severance payments is contingent on your continued
compliance with all Daegis confidentiality, invention assignment, and
non-disclosure agreements, and your execution of a full general release,
releasing all claims, known and unknown, that you may have against Daegis,
arising out of or in any way related to your employment or termination of
employment, on terms satisfactory to Daegis. If such a general release has not
been executed and delivered and become irrevocable on or before the 30th day
following your termination date, no severance payments shall be or become
payable.

     The following definitions apply:

     “Cause” is defined as:

     (1) an intentional act of fraud, embezzlement, theft or any other material
violation of law that occurs during or in the course of your employment with
Daegis;

     (2) intentional damage to Daegis’ assets;

     (3) intentional disclosure of Daegis’ confidential information contrary to
its policies;

600 E. Las Colinas Blvd, Suite 1500 • Irving, TX
75039 • 214.584.6400 • daegisinc.com

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     (4) intentional engagement in any competitive activity which would
constitute a breach of your duty of loyalty;

     (5) intentional breach of any of Daegis policies;

     (6) the willful and continued failure to substantially perform your duties
for Daegis (other than as a result of incapacity due to disability); or

     (7) willful conduct by you that is demonstrably and materially injurious to
Daegis, monetarily or otherwise.

     An act, or a failure to act, shall not be deemed willful or intentional, as
those terms are used herein, unless it is done, or omitted to be done, by you in
bad faith or without a reasonable belief that your action or omission was in the
best interest of Daegis. Failure to meet performance goals or objectives, by
itself, does not constitute “Cause.” “Cause” also includes any of the above
grounds for dismissal regardless of whether Daegis learns of it before or after
terminating your employment.

     “Change in Control” is defined as any one of the following occurrences:

     (1) Any “person” (as such term is used in Sections 13(d) and 14(d) of the
Securities and Exchange Act of 1934 as amended (the “Exchange Act”), other than
a trustee or other fiduciary holding securities of Daegis under an employee
benefit plan of Daegis, becomes the “beneficial owner” (as defined in Rule 13d-3
promulgated under the Exchange Act), directly or indirectly, of the securities
of Daegis representing more than 50% of a) the outstanding shares of common
stock of Daegis or b) the combined voting power of Daegis’ then-outstanding
securities; or

     (2) The sale or disposition of all or substantially all of Daegis’ assets
(or any transaction having similar effect is consummated); or

     (3) Daegis is party to a merger or consolidation that results in the
holders of voting securities of Daegis outstanding immediately prior thereto
failing to continue to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more than 50% of the
combined voting power of the voting securities of Daegis or such surviving
entity outstanding immediately after such merger or consolidation; or

     (4) There occurs a sale to a “person” (as such term is defined in Section
13(d) of the Exchange Act) of securities of Daegis representing more than fifty
percent (50%) of the total number of votes that may be cast for the election of
directors of Daegis.

600 E. Las Colinas Blvd, Suite 1500 • Irving, TX
75039 • 214.584.6400 • daegisinc.com

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     Section 409A of the Internal Revenue Code of 1986 (the “Code”). This letter
is intended to meet the requirements of Section 409A of the Code, and will be
interpreted and construed consistent with that intent. For purposes of this
letter, the terms “terminate,” “terminated” and “termination” mean a termination
of your employment that constitutes a “separation from service” within the
meaning of the default rules of Section 409A of the Code. Notwithstanding any
other provision of this letter, to the extent that the right to any payment
(including the provision of benefits) hereunder provides for the “deferral of
compensation” within the meaning of Section 409A(d)(1) of the Code, the payment
will be paid (or provided) in accordance with the following:

     (i) If you are a “Specified Employee” within the meaning of Section
409A(a)(2)(B)(i) of the Code upon a separation from service, then no such
payment shall be made or commence during the period beginning on the termination
date and ending on the date that is six (6) months following the termination
date or, if earlier, on the date of your death. The amount of any payment that
would otherwise be paid to you during this period will instead be paid on the
fifteenth (15th) day of the first calendar month following the end of the
period.

     (ii) Payments with respect to reimbursements of expenses, including COBRA
or Medicare supplement insurance premiums, shall be made or provided in
accordance with the requirements of Code Section 409A, including, where
applicable, the requirement that the reimbursement be made on or before the last
day of the calendar year following the calendar year in which the relevant
expense is incurred. The amount of expenses eligible for reimbursement during a
calendar year may not affect the expenses eligible for reimbursement in any
other calendar year. In no event will any reimbursement be made following the
last day of the third calendar year following the year in which termination of
employment occurred.

     (iii) The right to a series of installment payments under this letter shall
be treated as a right to a series of separate payments for purposes of Code
Section 409A.

     Please sign and date this letter below and return to me.

Sincerely,   /s/ Timothy Bacci   Timothy Bacci, Interim CEO

Agreed and Accepted:         /s/ Frank Verardi     Frank Verardi   August 15,
2014 Date

600 E. Las Colinas Blvd, Suite 1500 • Irving, TX
75039 • 214.584.6400 • daegisinc.com

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