<PAGE>   1
                                                                    EXHIBIT 10.1
April  23, 1998

Mr. Robert C. Vernon
35 Grand Miramar
Henderson, NV  89120

Dear Bob:

This letter sets forth the agreement between DataWorks Corporation (together
with each of its subsidiaries, the "Company") and you (the "Agreement") relating
to your mutually agreed to separation as an officer, employee and member of the
Board of Directors of the Company. You and the Company agree that this Agreement
shall supercede and replace the letter agreement entitled "Employment Terms"
dated November 29, 1997 (the "Employment Agreement") between you and the
Company. The terms of the new Agreement between you and the Company are as
follows:

1.      SEPARATION. You will resign as an officer, employee and member of the 
        Board of Directors of the Company effective as of April 24, 1998 (the
        "Separation Date").

2.      ACCRUED SALARY AND PAID TIME OFF. On the Separation Date, the Company
        will pay you all accrued salary, and all accrued and unused vacation
        earned through the Separation Date, subject to standard payroll
        deductions and withholdings. You are entitled to these payments upon the
        Separation Date regardless of whether or not you sign this Agreement.

3.      CONSULTING PERIOD. In exchange for the promises and covenants herein,
        the parties agree that you shall serve as an outside consultant to the
        Company for the period from the Separation Date through March 31, 2001
        (the "Consulting Period"). During the Consulting Period, you agree that
        from time to time, you will render consulting services upon reasonable
        request, at mutually agreed upon times and upon reasonable notice.
        You shall receive a fee for services, during the course of the
        Consulting Period, subject to certain obligations referenced herein (the
        "Consulting Payment"), and to be paid as follows: (i) $37,500 per
        quarter paid in seven (7) equal consecutive installments commencing on
        July 15, 1998 and continuing until January 15, 2000, each installment to
        be paid on the 15th day of the first month of the quarter in which
        services are being rendered; and (ii) $31,250 per quarter paid in four
        (4) equal consecutive installments commencing on April 15, 2000 and
        continuing until January 15, 2001, each installment to be paid on the
        15th day of the first month of the quarter in which services are being
        rendered. You agree that you shall be solely responsible for the payment
        of any taxes imposed on account of any payments made to you and you
        shall indemnify and hold the Company harmless for any and all
        liabilities, loss, damages and/or judgements incurred by the Company
        arising from or related to your failure to make appropriate tax
        payments.
<PAGE>   2

4.      OPTIONS. Each outstanding option to purchase Common Stock of the Company
        which is held by you as of the Separation Date will continue to be
        governed by the terms of the option agreement pursuant to which such
        option was granted (each referred to as an "Option Agreement").

5.      HEALTH INSURANCE. To the extent provided by the federal COBRA law or, if
        applicable, state insurance laws, and by the Company's current group
        health insurance policies, you will be eligible to continue your group
        health insurance benefits. Later, you may be able to convert to an
        individual policy through the provider of the Company's health
        insurance, if you wish. If you elect continued coverage under COBRA, the
        Company, as part of this Agreement, will pay your COBRA premiums (the
        "COBRA Benefit") through the earlier of (i) eighteen (18) months
        following the Separation Date ("the COBRA Period"), or (ii) the date in
        which you begin full-time employment with another company or business
        entity wherein comparable health benefits are offered. In addition, for
        eighteen (18) months following the COBRA Period, the Company will
        provide you with a monthly payment in an amount equal to the last
        monthly premium paid by the Company under your COBRA Benefit. The
        Company will adjust the COBRA Benefit amount from time to time as
        appropriate, to make it equal in amount to the per month premium charged
        by the Company's then-current group health insurance provider for the
        level of coverage you were receiving on the last day of the COBRA
        Period.

6.      OTHER COMPENSATION OR BENEFITS. You acknowledge that, except as
        expressly provided in this Agreement, you will not receive any
        compensation, severance, benefits, shares of stock or stock options,
        notwithstanding any prior agreement to the contrary, after the
        Separation Date.

7.      EXPENSE REIMBURSEMENTS. You agree that, within ten (10) business days of
        the Separation Date, you will submit your final documented expense
        reimbursement statement reflecting all business expenses you incurred
        through the Separation Date, if any, for which you seek reimbursement.
        The Company will reimburse you for these expenses pursuant to its
        regular business practice. You agree and understand that you will not be
        entitled to any expense reimbursements during the Consulting Period
        unless such expenses are approved in advance and in writing by an
        officer of the Company.

8.      RETURN OF COMPANY PROPERTY. You agree that, within ten (10) business
        days of the Separation Date, you will return to the Company all Company
        documents (and all copies thereof) and other Company property which you
        have had in your possession at any time, including, but not limited to,
        Company files, notes, drawings, records, business plans and forecasts,
        financial information, specifications, computer-recorded information,
        tangible property (including, but not limited to, computers), credit
        cards, entry cards, identification badges and keys; and, any materials
        of any kind which contain or embody any proprietary or confidential
        information of the Company (and all reproductions thereof).

9.      PROPRIETARY INFORMATION OBLIGATIONS. Both during and after your
        employment you will refrain from any use or disclosure of the Company's
        proprietary or confidential information or materials without prior
        written authorization from a duly authorized 


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        representative of the Company. The Proprietary Information and
        Inventions Agreement which you have executed, a copy of which is
        attached hereto as Exhibit B (the "Proprietary Information and
        Inventions Agreement") will continue to apply pursuant to its terms
        following the Separation Date.

10.     CONFIDENTIALITY. The provisions of this Agreement shall be held in
        strictest confidence by you and the Company and shall not be publicized
        or disclosed in any manner whatsoever; provided, however, that: (a) you
        may disclose this Agreement to your immediate family; (b) the parties
        may disclose this Agreement in confidence to their respective attorneys,
        accountants, auditors, tax preparers, and financial advisors; (c) the
        Company may disclose this Agreement as necessary to fulfill standard or
        legally required corporate reporting or disclosure requirements; and (d)
        the parties may disclose this Agreement insofar as such disclosure may
        be necessary to enforce its terms or as otherwise required by law. 

11.     NONDISPARAGEMENT. Both you and the Company agree not to disparage the
        other party, and/or the other party's officers, directors, employees,
        shareholders and agents, in any manner likely to be harmful to them or
        their business, business reputation or personal reputation; provided
        that both you and the Company shall respond accurately and fully to any
        question, inquiry or request for information when required by legal
        process. 

12.     RELEASE. In exchange for the payments and other consideration under this
        Agreement, you agree to execute the Employee Agreement and Release
        attached hereto as Exhibit A. In addition, both the Company and you
        hereby release the other party, and the other party's officers,
        directors, employees, shareholders and agents, from all past, present
        and future disputes, claims, damages, controversies, demands, rights,
        obligations, liabilities, actions and causes of action of every kind and
        nature, in equity or otherwise, whether known, unknown, suspected,
        unsuspected, disclosed or undisclosed, and that have arisen or arise
        directly or indirectly out of, or relate directly or indirectly to, any
        circumstance, agreement, activity, action, omission, event or matter
        occurring or existing on or prior to the date of this Agreement and
        which arise out of or relate to the Employment Agreement or any other
        prior association between you and the Company (excluding such party's
        continuing rights as expressly set forth herein and such party's rights
        under the Noncompetition Agreement dated September 29, 1997 between you
        and the Company (the "Noncompetition Agreement"), the Proprietary
        Information and Inventions Agreement and any Option Agreement).

13.     MISCELLANEOUS. This Agreement, including Exhibit A and Exhibit B,
        constitutes the complete, final and exclusive embodiment of the entire
        agreement between you and the Company with regard to this subject
        matter. It is entered into without reliance on any promise or
        representation, written or oral, other than those expressly contained
        herein, and it supersedes any other such promises, warranties or
        representations. Notwithstanding the foregoing or anything else
        contained herein, the Noncompetition Agreement, the Proprietary
        Information and Inventions Agreement and each Option Agreement shall
        continue in full force and effect in accordance with their respective
        terms. This Agreement may not be modified or amended except in a writing
        signed by both you and a duly authorized officer of the Company. This
        Agreement shall bind the 

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        heirs, personal representatives, successors and assigns of both you and
        the Company, and inure to the benefit of both you and the Company, their
        heirs, successors and assigns. If any provision of this Agreement is
        determined to be invalid or unenforceable, in whole or in part, this
        determination will not affect any other provision of this Agreement and
        the provision in question shall be modified by the court so as to be
        rendered enforceable. This Agreement shall be deemed to have been
        entered into and shall be construed and enforced in accordance with the
        laws of the State of California as applied to contracts made and to be
        performed entirely within California.

If the forgoing accurately sets forth our agreement, please sign below and on
the attached Employee Agreement and Release, which is part of this Agreement,
and return the originals of both to me.

I wish you luck in your future endeavors.

                                   Sincerely,

                                            DATAWORKS CORPORATION



                                            By:    /s/ Norman R. Farquhar
                                                   ----------------------------
                                                   Norman R. Farquhar
                                                   Executive Vice President
                                                   and Chief Financial Officer

Exhibit A - Employee Agreement and Release
Exhibit B - Proprietary Information and Inventions Agreement



Agreed to and accepted this __ day of April, 1998:


/s/ Robert C. Vernon
---------------------
Robert C. Vernon

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                                    EXHIBIT A

                        EMPLOYMENT AGREEMENT AND RELEASE


        Except as otherwise set forth in this Agreement, I hereby release,
acquit and forever discharge the Company, its parents and subsidiaries, and
their officers, directors, agents, servants, employees, attorneys, shareholders,
successors, assigns and affiliates, of and from any and all claims, liabilities,
demands, causes of action, costs, expenses, attorneys fees, damages, indemnities
and obligations of every kind and nature, in law, equity, or otherwise, known
and unknown, suspected and unsuspected, disclosed and undisclosed, arising out
of or in any way related to agreements, events, acts or conduct at any time
prior to and including the execution date of this Agreement, including but not
limited to: all such claims and demands directly or indirectly arising out of or
in any way connected with my employment with the Company or the termination of
that employment; claims or demands related to salary, bonuses, commissions,
stock, stock options, or any other ownership interests in the Company, vacation
pay, fringe benefits, expense reimbursements, severance pay, or any other form
of compensation; claims pursuant to any federal, state or local law, statute, or
cause of action including, but not limited to, the federal Civil Rights Act of
1964, as amended; the federal Americans with Disabilities Act of 1990; the
federal Age Discrimination in Employment Act of 1967, as amended ("ADEA"); the
California Fair Employment and Housing Act, as amended; tort law; contract law;
wrongful discharge; discrimination; harassment; fraud; defamation; emotional
distress; and breach of the implied covenant of good faith and fair dealing.

        I acknowledge that I am knowingly and voluntarily waiving and releasing
any rights I may have under the ADEA, as amended. I also acknowledge that the
consideration given for the waiver and release in the preceding paragraph hereof
is in addition to anything of value to which I was already entitled. I further
acknowledge that I have been advised by this writing, as required by the ADEA,
that: (a) my waiver and release do not apply to any rights or claims that may
arise after the execution date of this Agreement; (b) I have been advised hereby
that I have the right to consult with an attorney prior to executing this
Agreement; (c) I have twenty-one (21) days to consider this Agreement (although
I may choose to voluntarily execute this Agreement earlier); (d) I have seven
(7) days following the execution of this Agreement by the parties to revoke the
Agreement; and (e) this Agreement shall not be effective until the date upon
which the revocation period has expired, which shall be the eighth day after
this Agreement is executed by me, provided that the Company has also executed
this Agreement by that date ("Effective Date").



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        In giving this release, which includes claims which may be unknown to me
at present. I acknowledge that I have read and understand Section 1542 of the
California Civil Code which reads as follows: "A GENERAL RELEASE DOES NOT EXTEND
TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT
THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR." I hereby expressly waive and
relinquish all rights and benefits under that section and any law of any
jurisdiction of similar effect with respect to my release of any claims I may
have against the Company.


                                      By:
                                          -------------------------------------
                                                   Robert C. Vernon

                                      Date:
                                           ------------------------------------



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                                    EXHIBIT B

                PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT

                             DATAWORKS CORPORATION
                        CONFIDENTIALITY, NON-DISCLOSURE,
                     ASSIGNMENT OF INTELLECTUAL PROPERTY AND
                              ASSOCIATION AGREEMENT



I.      PREAMBLE:

A.      The parties to this agreement are:

        1.  DataWorks Corporation, Inc., its subsidiaries and affiliates 
            (hereinafter "DataWorks");

        2. Robert C. Vernon, a potential/current employee of, or current 
           independent contractor with DataWorks (hereinafter "ASSOCIATE").

B.         Consideration:

           ASSOCIATE is an employee, a prospective employee or independent
           contractor working for DataWorks. This agreement is intended to
           formalize in writing certain understandings and procedures which have
           been in effect since the time the ASSOCIATE was initially employed or
           engaged by DataWorks. In consideration of the ASSOCIATE's original
           and continuing employment with, or work for DataWorks in a capacity
           in which he or she may receive, or contribute to the production of,
           Confidential Information or Intellectual Property (as defined below),
           ASSOCIATE hereby confirms his or her understanding and agreement as
           follow:

II.     DEFINITIONS:
  
        C.      For purposes of this agreement, "Confidential Information" shall
                mean information or material proprietary to DataWorks or
                designated as Confidential Information by DataWorks and not
                generally known by non-DataWorks personnel, which the ASSOCIATE
                develops, or of which ASSOCIATE obtains knowledge, or to which
                the ASSOCIATE may obtain access, through or as a result of, the
                ASSOCIATE's relationship with DataWorks (including information
                conceived, originated, discovered or developed in whole or in
                part by the ASSOCIATE). Confidential Information includes, but
                is not limited to the following types of information and other
                information of a similar nature (whether or not reduced to
                writing): discoveries, ideas, concepts, software in various
                stages of development, designs, drawings, specifications,
                techniques, models, data, source code, object code, data
                structures, instruction sets, documentation, diagrams, flow
                charts, research, development, training methods, training
                manuals, processes, procedures, "know-how", marketing techniques
                and materials,

<PAGE>   8

                marketing and development plans, customer names
                and other information related to customers, price lists, pricing
                policies and financial information. Confidential information
                also includes any information described above which DataWorks
                obtains from other entities and which DataWorks treats as
                proprietary or designates as Confidential Information, whether
                or not owned or developed by DataWorks. INFORMATION PUBLICLY
                KNOWN THAT IS GENERALLY EMPLOYED BY THE TRADE AT OR AFTER THE
                TIME ASSOCIATE FIRST LEARNS OF SUCH INFORMATION, OR GENERIC
                INFORMATION OR KNOWLEDGE WHICH ASSOCIATE WOULD HAVE LEARNED IN
                THE COURSE OF SIMILAR EMPLOYMENT OR WORK ELSEWHERE IN THE TRADE,
                SHALL NOT BE DEEMED PART OF THE CONFIDENTIAL INFORMATION.

        D.      For purposes of this agreement, "DataWorks' Business" shall mean
                the design, manufacture, fabrication, development, testing,
                marketing, advertising, servicing, authorship, sales, and
                licensing of: computers, computer hardware, computer software,
                services, services related to the support of data processing
                services, computer firmware and computer manuals as well as the
                training and education of computer users.

        E.      For purposes of this agreement "Intellectual Property," shall
                mean those forms of authorship (as understood from Title 17 of
                the United States Code), invention (as understood by Title 35 of
                the United States Code) and identification (as understood from
                Title 15 of the United States Code Section 1051 et seq,
                trademarks and servicemarks) and such other forms of property
                rights in ideas, "know how", inventions, discoveries, or in
                their physical embodiments as shall be authorized by state,
                local, territorial, federal or international law.

III. ASSOCIATE AGREES:

        F.      ASSOCIATE agrees during his or her employment by DataWorks and
                for two years thereafter to hold in confidence and not to
                directly or indirectly reveal, report, publish, copy, disclose
                or transfer any Confidential Information to any person or entity
                or utilize any Confidential Information for any purpose except
                in the course of ASSOCIATE's work for DataWorks.

        G.      ASSOCIATE agrees to promptly disclose to DataWorks, all
                Intellectual Property conceived during the term of his or her
                employment.

        H.      ASSOCIATE agrees that all Intellectual Property meeting the
                conditions of California Labor Code, Section 2870, is the
                exclusive property of DataWorks.

        I.      ASSOCIATE agrees to assign to DataWorks all right, title and
                interest in any Intellectual Property belonging to DataWorks
                under Section 2870 of the California Labor Code.

        J.      ASSOCIATE agrees to promptly execute all papers and otherwise
                cooperate as is necessary to obtain and enforce U.S. and foreign
                patents, copyrights, trademark, 


<PAGE>   9

                servicemark and trade secret protection on Intellectual Property
                belonging to DataWorks.

        K.      ASSOCIATE agrees that all works of authorship prepared by
                ASSOCIATE in the course of his or her employment, including
                computer programs and other software, as well as manuals
                describing the operation of said programs and software, or
                manuals prepared for training, constitute works for hire under
                17 U.S.C. Section 101 and 201(b).

        L.      ASSOCIATE agrees that all notes, data, reference materials.
                schedules, drawings, memoranda, documentation and records in any
                way incorporating or reflecting any Confidential Information
                shall belong exclusively to DataWorks and ASSOCIATE agrees to
                turn over all copies of such materials, in the ASSOCIATE's
                control to DataWorks upon request or upon termination of the
                ASSOCIATE's relationship with DataWorks.

        M.      ASSOCIATE agrees that tangible embodiments of Confidential
                Information are not to be removed from DataWorks' premises
                without DataWorks' prior written consent.

        N.      ASSOCIATE agrees to cooperate with DataWorks in the protection
                of DataWorks' Confidential Information for five (5) years after
                ASSOCIATE's termination, provided DataWorks covers ASSOCIATE's
                expenses and tenders a per diem allowance equivalent to
                ASSOCIATE's then current salary.

        O.      ASSOCIATE agrees to participate in a termination interview
                immediately (within two (2) working days) upon leaving
                DataWorks. Said interview will include requiring:

                1.      ASSOCIATE to certify that all Confidential Information
                        of DataWorks has been returned; and

                2.      ASSOCIATE shall certify what non-DataWorks Confidential
                        Information or Intellectual Property ASSOCIATE has
                        created while employed at DataWorks.


        P.      ASSOCIATE acknowledges that future promotions or participation
                in ownership may be contingent on execution of a more stringent
                secrecy and non-use agreement.

IV.     DATAWORKS AGREES:

        Q.      To pay any costs of obtaining and maintaining U.S. and foreign
                protection an any Intellectual Property belonging to DataWorks.

        R.      DataWorks agrees to pay the salary, benefits and/or fees for
                ASSOCIATE as previously agreed.

<PAGE>   10
        S.      Nothing contained in this agreement obligates DataWorks to apply
                for any patent, copyright, trademark or servicemark protection.

V. LEGAL IMPLICATIONS:

        T.      Because of the unique nature of the Confidential Information,
                ASSOCIATE understands and agrees that DataWorks will suffer
                irreparable harm in the event that ASSOCIATE fails to comply
                with any of his or her obligations under this agreement and that
                monetary damages will be inadequate to compensate DataWorks for
                such breach. Accordingly, ASSOCIATE agrees that DataWorks will,
                in addition to any other remedies available to it, at law or in
                equity, be entitled to injunctive relief to enforce the terms of
                this agreement.

        U.      This agreement shall be governed by the California law
                applicable to contracts between residents of California which
                are wholly executed and performed in California.

        V.      In the event of legal action brought by either party, the
                prevailing party shall be entitled to reimbursement of full
                legal fees and costs as set by the court.

        W.      ASSOCIATE agrees to jurisdiction and venue exclusively in the
                Courts of San Diego County, California.

        X.      ASSOCIATE acknowledges that DataWorks has made no
                representations as to any right of ASSOCIATE to continued
                employment and ASSOCIATE hereby acknowledges that his or her
                employment is "AT WLL".

                1.      ASSOCIATE acknowledges that no modification of this "AT
                        WILL" employment is effective unless made to ASSOCIATE
                        in writing by the President of DataWorks.

        Y.      This agreement contains the full and complete understanding of
                the parties with respect to the subject matter hereof and
                supersedes all prior representations and understandings whether
                oral or in writing.

        Z.      This agreement can only be modified in writing. Any modification
                of this agreement must be executed by the President of DataWorks
                to be enforceable against DataWorks.

VI.     EXCEPTIONS FROM AGREEMENT:

        AA.     The parties agree that any invention embodied in an issued
                patent or disclosed in a patent application filed prior to the
                commencement of ASSOCIATE's relationship with DataWorks shall
                not be subject to the terms of this agreement.

        BB.     The parties agree that any Intellectual Property set forth in
                Exhibit "A" attached to this agreement shall not be subject to
                the terms of this agreement.
<PAGE>   11

        CC.     The parties agree that any Intellectual Property not belonging
                to DataWorks under California Labor Code Section 2870 -
                Section 2872 (reprint attached hereto as Exhibit W) shall not be
                subject to the terms of this agreement.

                1.      Exhibit "A" attached:[ ]

                2.      No exclusions requiring an Exhibit "A" exist:[ ]

VII.    EXECUTION:

        I agree to the above terms and acknowledge receipt of a copy of this
agreement

DATED:     12/15/97


                              /s/ Robert C. Vernon
                              -------------------------------------------------
                              ASSOCIATE (Signature)


                              Robert C. Vernon
                              -------------------------------------------------
                              Name (Printed)
                             
                              -------------------------------------------------
                              Social Security Number


                              35 Grand Miramar, Henderson NV  89011
                              -------------------------------------------------
                              Mailing Address





DATED: _________________

                              -------------------------------------------------
                              DataWorks Corporation
                              President
<PAGE>   12
                                    EXHIBIT B
                                   ARTICLE 3.5
                         INVENTIONS MADE BY AN EMPLOYEE

                  Section 2870. Employment Agreements; Assignment or Rights

     Any provision in an employment agreement which provides that an employee
shall assign or offer to assign any of his or her rights in an invention to his
or her employer shall not apply to an invention for which no equipment,
supplies, facility, or trade secret information of the employer was used and
which was developed entirely on the employee's own time, and (a) which does not
relate (1) to the business of the employer or (2) to the employer's actual or
demonstrably anticipated research or development, or (b) which does not result
from any work performed by the employee for the employer. Any provision which
purports to apply to such an invention is to that extent against the public
policy of this state and is to that extent void and unenforceable.

                Section 2871. CONDITION OF EMPLOYMENT OR CONTINUED EMPLOYMENT; 
                               DISCLOSURE OF INVENTION

     No employer shall require a provision make void and unenforceable by
Section 2870 as a condition of employment or continued employment. Nothing in
this article shall be construed to forbid or restrict the right of an employer
to provide in contracts of employment for disclosure, provided that any such
disclosures be received in confidence, of all of the employee's inventions made
solely or jointly with others during the term of his or her employment, a review
process by the employer to determine such issues as may arise, and for full
title to certain patents and inventions to be in the United States, as required
by contracts between the employer and the United States or any of its agencies.

                Section 2872. Notice to Employee; Burden of Proof

     If an employment agreement entered into after January 1, 1980, contains a
provision requiring the employee to assign or offer to assign any of his or her
rights in any invention to his or her employer, the employer must also, at the
time the agreement is made, provide a written notification to the employee that
the agreement does not apply to an invention which qualifies fully under the
provisions of Section 2870. In any suit or action arising thereunder, the burden
of proof shall be on the employee claiming the benefits of its provisions.