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







     (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







     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