EXECUTIVE EMPLOYMENT
AGREEMENT

This Executive Employment
Agreement (“Agreement”) is made effective as of December 10, 2014 (“Effective
Date”), by and between Daegis, Inc. (the “Company”) and Timothy P. Bacci (the
“Executive”). 

The Parties hereby agree as
follows: 

1. Employment. This Agreement sets forth the terms of the Executive’s continuing
employment by the Company. Executive’s term of employment under this Agreement
(the “Employment Term”) shall run from the effective date of this Agreement
through the end of Executive’s employment with the Company, regardless of which
party terminates the employment relationship or why the relationship is
terminated. 

2. Duties.


a. Position. Executive is employed as Chief Executive Officer, reporting to the
Board of Directors, and shall have the duties and responsibilities assigned by
the Company and its Board of Directors both upon initial hire and as may be
assigned from time to time. Executive shall perform faithfully and diligently
all duties assigned to Executive. As Chief Executive Officer, the Executive
shall serve as the principal executive officer for the Company, as defined by
the applicable securities laws. The Position will be based in the Dallas, TX
area, and the Executive will also be expected to travel, as may be required, to
the Company’s various offices and to other locations as required by the
business. 

b. Best Efforts/Full-Time. Executive will expend Executive’s best efforts
on behalf of the Company, and will abide by all policies and decisions made by
the Company, as well as applicable federal, state and local laws, regulations or
ordinances, including in particular those laws applicable to the Company as a
publicly-traded company. Executive will act in the best interest of the Company
at all times. During the Employment Term, excluding periods of vacation and sick
leave to which the Executive is entitled, the Executive agrees to devote
reasonable attention and time during usual business hours to the business and
affairs of the Company to the extent necessary to discharge the responsibilities
assigned to the Executive hereunder. The Executive may (i) serve on corporate,
civil or charitable boards or committees, (ii) manage personal investments and
(iii) deliver lectures and teach at educational institutions, so long as such
activities do not constitute a conflict of interest, create issues of
independence, or interfere with the performance of the Executive’s
responsibilities hereunder, as determined by the Company. It is expressly
understood and agreed that to the extent any such activities have been conducted
by the Executive prior to the Effective Date and have been disclosed by the
Executive to the Board of Directors, the continued conduct of such activities
(or the conduct of activities similar in nature and scope thereto) subsequent to
the Effective Date shall not thereafter be deemed to interfere with the
performance of the Executive’s responsibilities to the Company.


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3. “At-Will” Employment Relationship. Executive’s employment with the Company is not
for any specified period and may be terminated at any time, with or without
cause or advance notice, except as notice may be otherwise required under
various provisions of this Agreement, by either the Executive or the Company. In
addition, the Company reserves the right to modify Executive’s position or
duties to meet business needs and to use discretion in deciding on appropriate
disciplinary actions; however, it is understood that at no time will the
modification of the Executive’s position or duties include a diminished
responsibility or authority customarily performed, undertaken and exercised by
persons situated in a similar executive capacity. No representative of the
Company, other than the Board of Directors, has the authority to alter the
At-Will relationship and nothing in this Agreement is intended to or should be
construed to contradict, modify or alter this At-Will relationship. 

4. Compensation. 


a. Base Salary. As compensation for Executive’s performance of Executives duties
hereunder, the Company shall pay to Executive an initial Base Salary of
$450,000.00 per year, as may be adjusted from time to time. Such Base Salary,
less applicable withholdings and authorized deductions shall be payable in
accordance with the Company’s customary practices applicable to its executives.


b. Incentive Compensation. In addition to Base Salary, Executive will be
eligible to earn, for each fiscal year ending during the Employment Term,
incentive compensation, in an amount up to 50% of Executive’s then-current base
salary per year, in accordance with the terms and conditions of the incentive
plan approved by the Compensation Committee. The actual plan terms, conditions,
and any payment thereunder to be determined by the Company and the Compensation
Committee, in its sole and absolute discretion. Executive may also earn
additional performance bonuses tied to achievement of specific goals as approved
by the Compensation Committee from time to time. All incentive compensation and
additional performance bonuses that may be earned during a fiscal year by
Executive are referred to herein as “Performance Bonuses.” 

c. Stock Options. Subject to the timing of the Board of Directors’
approval, Executive will be granted an initial incentive stock option to
purchase 4% (representing 655,378
shares) of the Company’s Common Stock under the Company’s 2010 Stock Option Plan
(the “Plan”) at an exercise price equal to the fair market value of that stock
on the Date of Grant (the “ Initial Option Grant”), 50% of which shall vest and
become exercisable on the first anniversary of the date of grant, unless such
vesting is accelerated pursuant to the terms and conditions of this Agreement.
The remaining 50% shall vest and become exercisable monthly thereafter over a
three year period in 36 equal periods, unless such vesting is accelerated
pursuant to the terms and conditions of this Agreement. Additionally, subject to
the timing of the Board of Directors’ approval, the Executive, on the first
anniversary date of Executive’s Initial Option Grant, will receive an additional
incentive stock option (“First Anniversary Stock Option”) to purchase 1.0% of
the Company’s then-outstanding Common Stock under the Plan, or any other equity
plans of the Company, at an exercise price equal to the fair market value of
that stock on the Date of Grant, assuming that there is an adequate number of
shares remaining (defined as a minimum of 1% of the then outstanding number of
shares or 164,000 shares, whichever is greater) under The Plan to be issued. The
Options granted under the First Anniversary Stock Option grant will likewise
vest at 50% on the first anniversary date of the grant, with the remaining 50%
vesting monthly thereafter over a three year period in 36 equal periods, unless
such vesting is accelerated pursuant to the terms and conditions of this
Agreement. Any Options granted to Executive will be subject to the terms and
conditions of the Plan and the standard stock option agreement provided pursuant
to the Plan which executive will be required to execute as a condition of
receiving the Option.


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5. Benefits. 


a. Customary Fringe Benefits. Executive will be eligible for all customary and
usual fringe benefits generally available to other similarly situated executives
of the Company, subject to the terms and conditions of the Company’s benefit
plans. Company reserves the right to change or eliminate the fringe benefits on
a prospective basis, at any time. Current benefits include health and welfare
benefits (including vision and dental), STD/LTD, group life insurance and
retirement benefits (401(k)). 

b. Time Off. During the Employment Term, Executive will be eligible to accrue and
use a total of 20 days paid vacation (as may be increased from time to time) and
sick days in accordance with the Company’s policies as in effect from time to
time. Executive shall schedule vacation so that it does not interfere in any
material respect with the performance of Executive’s duties hereunder and so as
to minimize disruption to the Company’s business, consulting with the Board of
Directors in advance of scheduling any planned time off. 

c. Business Expenses. Executive will be reimbursed for all reasonable
out-of-pocket business expenses incurred in the performance of Executive’s
duties on behalf of the Company. Such expenses must be in accordance with the
Company’s then-current expense policies. Any requests for reimbursement must be
made promptly with appropriate documentation, using the approved expense
reimbursement process. 


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6. Termination of Executive’s
Employment. 


a. Definitions. For purposes of this Agreement, the following definitions
apply:



(i) Notice of Termination. For purposes of this Agreement, a “Notice of
Termination” shall mean a written notice which indicates the specific
termination provision in this Agreement, if any, relied upon, and shall set
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive’s employment under the provision so
indicated, if any, and the Termination Date. For purposes of this Agreement, no
purported termination of employment shall be effective without such Notice of
Termination 

(ii) Termination Date. For purposes of this Agreement, “Termination
Date” shall mean, in the case of the Executive’s death, the date of death, or in
all other cases, the effective date of the Executive’s termination of employment
from all positions with the Company, as specified in the Notice of Termination,
subject to the following: 



(1) If the Executive’s
employment is terminated by the Company for Cause, the date of the Notice of
Termination; 

(2) If the Executive’s
employment is terminated by the Company due to Disability, the date specified in
the Notice of Termination shall be at least thirty (30) days from the date the
Notice of Termination is given to the Executive, except as otherwise noted in
this section; and 

(3) If the Executive’s
employment is terminated by the Executive for Good Reason, the date specified in
the Notice of Termination shall not be more than thirty (30) days from the date
the Notice of Termination is given to the Company. 



(iii) Cause. For purposes of this Agreement, “Cause” is defined as:



(1) the Executive’s theft,
dishonesty, or falsification of any Company documents or records;

(2) the Executive’s improper
use or disclosure of the Company’s confidential or proprietary
information;

(3) any action, disruptive
conduct or employment-related misconduct by the Executive which has a
detrimental effect on the Company’s reputation or business, including, without
limitation, conduct by the Executive which is intended to adversely affect
overall employee morale;


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(4) the Executive’s failure or
inability to perform any reasonable assigned duties after written notice from
the Company of, and a reasonable opportunity to cure, such failure or
inability;

(5) any material breach by the
Executive of any employment agreement between the Executive and the Company,
which breach is not cured pursuant to the terms of such agreement; or

(6) the Executive’s conviction
(including any plea of guilty or nolo contendere) of any criminal act which
impairs the Executive’s ability to perform his or her duties with the
Company.



(iv) Disability. The Company may terminate the Executive’s employment upon Executive’s
Disability. For purposes of this Agreement, Disability means a physical or
mental infirmity which, despite any legally required accommodations, impairs the
Executive’s ability to substantially perform Executive’s duties under this
Agreement which continues for a period of at least ninety (90) consecutive days
and which is determined to be total and permanent by a physician selected by the
Company or its insurers and reasonably acceptable to the Executive or the
Executive’s legal representative. The Executive shall be entitled to the
compensation and benefits provided for under this Agreement for any period of
time during the Employment Term and prior to the Termination Date resulting from
the Executive being unable to work due to a physical or mental infirmity and as
otherwise provided in this Agreement in connection with the Disability;
provided, however, that the receipt of disability insurance payments or benefits
will not result in a duplication of any other compensation or benefits otherwise
provided for under this Agreement during any such period. Notwithstanding
anything contained in this Agreement to the contrary, until the Termination Date
specified in the Notice of Termination relating to the Executive’s Disability,
in the event the Executive is no longer under a Disability, the Executive will
be entitled to return to the Executive’s position on a regular basis with the
Company as set forth in this Agreement, in which event no termination by reason
of the Disability will be deemed to have occurred. 


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(v) Good Reason. The Executive may terminate Executive’s
employment for “Good Reason” within thirty (30) days following the occurrence of
one or more of the events or conditions as described in this section, to which
the Executive has not consented, by submitting a resignation in writing from all
positions Executive then holds with the Company. For purpose of this Agreement,
a resignation for “Good Reason” is defined as:



(1) A material diminution of
Executive’s duties or responsibilities, unless otherwise agreed to by the
Executive; Executive must provide the Company with written notice of Executive’s
objection to the change in duties or responsibilities, which is not cured, to
the extent susceptible to cure, within ten (10) days after notice, or the
Executive will be deemed to have agreed to the changes; 

(2) A material breach by the
Company of any provision of this Agreement; provided however, the Executive
shall first notify the Company in writing stating with reasonable specificity
the breach by the Company and the Executive shall only have Good Reason to
terminate Executive’s employment if the Company fails to commence action
reasonably necessary to cure such breach within ten (10) days following the date
of the Company’s receipt of the Executive’s written notice thereof; 

(3) The failure by the Company
to obtain an agreement, reasonably satisfactory to the Executive, from any
successor or assign of the Company to assume and agree to perform this
Agreement; 

(4) Any material reduction, of
10% or greater, in Executive’s base salary or incentive compensation
opportunity; or, 

(5) A relocation of
Executive’s place of employment by more than fifty (50) miles, if Executive
routinely reports to work at a Company office.



(vi) Change in Control. A “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 the Company under an employee benefit plan of the Company, becomes
the “beneficial owner” (as defined in Rule 13d-3 promulgated under the Exchange
Act), directly or indirectly, of the securities of the Company representing more
than 50% of a) the outstanding shares of common stock of the Company or b) the
combined voting power of the Company’s then-outstanding securities;
or,


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

(3) The Company is party to a
merger or consolidation that results in the holders of voting securities of the
Company 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 the Company 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 the Company representing more than fifty percent (50%) of the
total number of votes that may be cast for the election of directors of the
Company. 



b. Severance if Termination Without Cause by Company
or if Resignation for Good Reason by Executive. Although the Company or Executive may terminate
this Agreement At-Will, if the Company elects to terminate Executive’s
employment without “Cause” or Executive resigns for “Good Reason” (as defined
herein), Executive shall be eligible to receive the following Termination
Severance Benefits: i) all accrued and unpaid Base Salary earned during the
Employment Term, ii) a payment equal to the product of (A) the Performance
Bonuses, if any, that the Executive would have earned for that fiscal year in
which the Termination Date occurs based on actual achievement against the
applicable performance goals for such year and (B) a fraction, the numerator of
which is the number of days the Executive was employed by the Company during the
year of termination and the denominator of which is the number of days in such
year (the “Pro-Rata Bonus”), to be paid on the date that annual bonuses are paid
to similarly situated executives, but in no event later than two-and-one-half
(2-1/2) months following the end of the fiscal year in which the Termination
Date occurs; and iii) cash severance payments equivalent to twelve (12) months
of the Executive’s Base Salary then in effect on the Termination Date, payable
as “salary continuation” in accordance with the Company’s regular payroll cycle,
commencing on the first payroll period that is 31 days following the Termination
Date; and iv) the continuation of Executive’s existing health insurance benefits
for a twelve (12) month period, if permitted by the Company’s health insurance
plan (at the then-current contribution levels), or, if not permitted by the
Company’s health insurance plan, the Company will reimburse the Executive for
the cost of twelve (12) months of Executive’s COBRA health insurance
continuation benefits (assuming Executive is COBRA-eligible). All other Company
obligations to the Executive will be terminated and completely extinguished.
Provision of the Termination Severance Benefits is contingent on a) the
Executive’s continued compliance with all surviving provisions of this Agreement
and b) the Executive’s execution of a full general release, releasing all
claims, known and unknown, that Executive may have against the Company, arising
out of or in any way related to Executive’s employment or termination of
employment with the Company, on terms satisfactory to the Company, including a
reciprocal non-disparagement clause in favor of both the Company and the
Executive. If such a general release described in clause b) has not been
executed and delivered and become irrevocable on or before the 30th
day following the Termination Date, no amounts or benefits under this Agreement
shall be or become payable. 


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c. Severance if Termination Within Twelve (12) Months
Following a Change in Control.
Although the Company or Executive may terminate this Agreement At-Will, if the
Company elects to terminate Executive’s employment without “Cause” or Executive
resigns for “Good Reason” (as defined herein) on or within a period of twelve
(12) months following a Change in Control (as defined herein), Executive shall
be eligible to receive the following Change in Control Severance Benefits: i)
all accrued and unpaid Base Salary earned during the Employment Term, ii) cash
severance payments equivalent to (A) twelve (12) months of the Executive’s Base
Salary and (B) the Executive’s maximum Performance Bonuses payable for the
fiscal year in effect on the Termination Date, payable as “salary continuation”
in accordance with the Company’s regular payroll cycle, commencing on the first
payroll period that is 31 days following the Termination Date; iii) the
continuation of Executive’s existing health insurance benefits for a twelve (12)
month period, if permitted by the Company’s health insurance plan (at the
then-current contribution levels), or, if not permitted by the Company’s health
insurance plan, the Company will reimburse the Executive for the cost of twelve
(12) months of Executive’s COBRA health insurance continuation benefits
(assuming Executive is COBRA-eligible); and iv) any outstanding unvested equity
awards, including stock options under any Company stock option plans, shall
become fully vested and exercisable as of the Termination Date. All other
Company obligations to the Executive will be terminated and completely
extinguished. Provision of the Change in Control Severance Benefits is
contingent on a) the Executive’s continued compliance with all surviving
provisions of this Agreement and b) the Executive’s execution of a full general
release, releasing all claims, known and unknown, that Executive may have
against the Company, arising out of or in any way related to Executive’s
employment or termination of employment with the Company, on terms satisfactory
to the Company, including a reciprocal non-disparagement clause in favor of both
the Company and the Executive. If such a general release described in clause b)
has not been executed and delivered and become irrevocable on or before the
30th day following the Termination Date, no amounts or benefits under
this Agreement shall be or become payable.


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7. Restrictive
Covenants. Executive acknowledges
and agrees that in reliance upon Executive’s promises and representations in
this Agreement, Executive has been and shall be placed in a position of special
trust and confidence wherein: (i) Executive is provided with a portion of the
Confidential information (defined below) of the Company and its subsidiaries, (ii) is paid to
develop goodwill and valuable business relationships on behalf of the Company,
and/or (iii) is provided specialized training. The compensation to be paid to
the Executive under this Agreement (including severance payment rights), and the
Executive’s eligibility to receive awards of options to purchase shares of the
Company’s Common Stock under the Company’s 2010 Stock Option Plan (or any other
equity plans of the Company), are also expressly understood to be consideration
in exchange for Executive’s promises and representations in this Agreement.
Executive acknowledges that Executive’s services have been and will be of
special, unique and extraordinary value to the Company and its subsidiaries, and
that the restrictions provided for in this Agreement are reasonable and
necessary for the protection of the Company’s legitimate business interests.
Accordingly, Executive covenants and agrees:


a. Confidential Information
/ Nondisclosure.



(i) Confidential Information. “Confidential
Information” refers to an item of information or a compilation
of information, in any form (tangible or intangible), related to the Company’s
business that Company has not made public or authorized public disclosure of,
and that is not generally known to the public through proper means. Confidential
Information includes, but is not limited to: (a) Company’s internal analysis and
information regarding business opportunities, business plans, customer and
prospective customer lists, marketing plans and strategies, research and
development data, buying practices, financial data, operational data, methods,
techniques, technical data, know-how, innovations, computer programs,
un-patented inventions, and trade secrets; and (b) information about the
business affairs of third parties (including, but not limited to, customers and
acquisition targets) that such third parties provide to Company in confidence.
Executive acknowledges that items of Confidential Information are Company’s
valuable assets and have economic value, actual or potential, because they are
not known by the public or others who are not obligated to keep them
confidential and who could use them to their own economic benefit or to the
competitive disadvantage of the Company, and thus, should be treated as
Company’s trade secrets.

(ii) Nondisclosure. During
employment and for so long thereafter as the information qualifies for
protection as Confidential Information under this Agreement, Executive will
avoid engaging in any use or disclosure of Confidential Information that is not
expressly authorized in writing by the Company or required as part of
Executive’s performance of his or her job duties undertaken for the benefit of
the Company. Notwithstanding the foregoing, nothing herein shall be construed to
prohibit the reporting of a violation of law that is protected by law, or to
prohibit a disclosure of information that is compelled by law; provided,
however, that to the extent allowed by law, Executive will give Company as much
advance written notice as possible under the circumstances prior to such a
disclosure and will cooperate with Company in any legal action undertaken to
protect the confidentiality of the information.


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(iii) Property Rights. All Confidential Information shall be considered
the property of the Company in its collected, compiled and stored form in the
Company’s files, records, and computer systems. Company files and records (in
physical and electronic or digital form) are Company property and may not be
copied, removed, or destroyed without Company authorization. 

(iv) Limited Computer Authorization. Executive is authorized to access only those
Company computers that are designated for Executive’s use by the Company, and
may only do so while in the active employment of the Company. All such
authorization ends immediately upon the termination of employment. Executive is
not authorized to access and use the Company’s computers, email, or related
computer systems to compete or to prepare to compete, or to otherwise compromise
the Company’s legitimate business interests, and any such unauthorized access to
or use of the Company’s computers in violation of the foregoing understanding
may subject Executive to civil and/or criminal liability. 

(v) Return of Property. When Executive’s employment with Company ends,
or sooner if so requested, Executive will immediately return to Company any
Company property in Employee’s possession, including the following: all
Confidential Information; all records related to Company’s Intellectual
Property: and, all customer files, account files, price lists, product
information, and training manuals whether confidential or not; and, all keys and
security and credit cards; all equipment, products, samples, inventory, tools,
computers, software, cell phones and other electronic devices belonging to the
Company. At Company’s request, and without destroying or deleting any contents
thereof, Executive shall turn over to the Company for inspection, any personal
storage devices such as thumb drives, cell phones, or lap tops, Executive has
used to conduct Company business or to store any information related to the
Company’s business so that the Company can retrieve its property and insure that
all Company materials have been returned and not copied or retained in violation
of this Agreement. 

(vi) Necessary Additional Protections. Executive acknowledges that the foregoing
confidentiality and nondisclosure obligations are not sufficient standing alone
to adequately protect the Company’s Confidential Information because some
positions, services, and activities will, by their nature require or involve the
use of Confidential Information, intentionally or not, that cannot be detected
and addressed before irreparable harm is likely to occur; and, accordingly, the
additional restrictions provided for in the remainder of this Section 7 are
reasonable and necessary restrictions to avoid irreparable harm to the
Company.


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b. Non-Compete Covenant. During the Employment Term and for a period of
twelve (12) months thereafter (the “Restricted Period”), the Executive shall
not, directly or indirectly, compete with the Company by providing, managing, or
supervising services (as an employee, director, officer, owner, manager,
partner, consultant or otherwise) that: (i) are the same as, or similar in
nature, function or purpose to the services Executive performed for the Company
in the preceding two years, or (ii) would otherwise be likely to involve the use
or disclosure of the Company’s Confidential Information; for the benefit of any
business enterprise directly engaged in e-discovery software for processing,
search, review and production of data for litigation, compliance and regulatory
matters, information archiving and information governance and related software
solutions (the “Company Business”), in any state within the United States where
the Company or any of its subsidiaries that Executive has material contact with
or confidential information about conducts business during the Employment Term
(collectively, the “Territory”). Notwithstanding the foregoing, the Executive’s
passive, non-controlling ownership interest in a company solely as an investor
of five percent (5%) or less of the outstanding securities of any class of any
publicly-traded securities of any company shall not, by itself, be considered
prohibited competition under this Agreement.

c. Non-solicitation of Customers. During the Restricted Period, the Executive
shall not knowingly, directly or indirectly, solicit or attempt to solicit any
customer of the Company that Executive had business-related contact with or
Confidential Information about in the preceding two years for the purpose of
inducing or encouraging the customer to (i) cease or reduce doing business with
the Company or its subsidiaries, (ii) divert a business opportunity away from
the Company or its subsidiaries, or (iii) purchase goods or services that
compete with those of the Company or its subsidiaries that Executive had
material involvement with or Confidential Information about in the preceding two
years; nor will Executive knowingly help another person engage in such
solicitation. As used herein, “customer” shall be understood to include any
person or entity that has an ongoing business relationship with the Company and
those with whom the Company has a reasonable expectation of doing business based
on outstanding proposals or other negotiations in effect at the time Executive’s
employment ends. As used herein, “solicit” means to knowingly communicate with a
person or entity, whether directly or indirectly, in order to induce, cause or
encourage the person or entity to engage in a particular course of conduct (such
as buying a good or service), regardless of which party first initiates the
communication or whether the communication is in response to an inquiry or not.
This restriction is not intended to cover a general media advertisement or
similar communication that advertises the services or products of a business in
a general fashion without reference to any particular person and that is not
targeted at a particular customer, person or entity.


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d. Non-Solicitation of Employees. During the Restricted Period, the Executive
shall not knowingly, directly or indirectly, solicit or attempt to solicit an
employee or independent contractor providing personal services to the Company
for the purpose of inducing or encouraging that person to (i) cease providing
services to the Company or terminate the parties’ business relationship, or (ii)
to provide services to any person or entity that competes with the Company’s
Business.

e. Mutual Non-disparagement Covenant. During the Employment Term and thereafter, the
Executive shall not, directly or indirectly, take any action, or encourage
others to take any action, to disparage or criticize the Company, its
subsidiaries, or their employees, officers, directors, products, services,
customers or owners. During the Employment Term and thereafter, the Company
shall not, directly or indirectly, take any action, or encourage others to take
any action, to disparage the Executive’s reputation. Nothing contained in this
Section 7(e) shall preclude the Executive from enforcing his rights under this
Agreement or prevent the Executive, the Company, or its employees, officers and
directors, from truthfully testifying in response to legal process or a
governmental inquiry. 

f. Enforcement. The Executive acknowledges that a breach of the
covenants contained in this Section 7 would cause irreparable damage to the
Company, the exact amount of which would be difficult to ascertain, and that the
remedies at law for any such breach or threatened breach would be inadequate.
Accordingly, the Executive agrees that if he or she breaches or threatens to
breach any of the covenants contained in this Section 7, in addition to any
other remedy which may be available at law or in equity, the Company shall be
entitled to: (i) institute and prosecute proceedings in any court of competent
jurisdiction for specific performance and injunctive and other equitable relief
to prevent the breach or any threatened breach thereof without bond or other
security or a showing of irreparable harm or lack of an adequate remedy at law,
and (ii) an equitable accounting by any court of competent jurisdiction of all
profits or benefits arising out of such violation.

g. Scope of Covenants. The Company and the Executive further
acknowledge that the time, scope, geographic area and other provisions of this
Section 7 are reasonable and necessary for the protection of the interests of
the Company, but if any such restriction or covenant shall be held by any court
of competent jurisdiction to be void but would be valid if deleted in part or
reduced in application, such restriction or covenant shall apply in such
jurisdiction with such deletion or modification as may be necessary to make it
valid and enforceable. The restrictions and covenants contained in each
paragraph of this Section 7 shall be construed as separate and individual
restrictions and covenants and shall each be capable of being reduced in
application or severed without prejudice to the other restrictions and covenants
or to the remaining provisions of this Agreement.


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h. Enforceability. The restrictive covenants of this Section 7 are
in addition to the covenants that the Executive must comply with during and
following the Executive’s employment under the Company’s applicable
confidentiality, invention assignment, insider trading policy (“ITP”) and
non-disclosure agreements (collectively, the “Covenants”). This Agreement shall
be read to supplement and not replace or eliminate any of Executive’s
obligations under the Covenants. In the event of a breach of the Covenants, the
Company shall have all the remedies available thereunder in addition to the
remedies under this Section 7. If any court holds any of the restrictions or
covenants contained in this Section 7 to be unenforceable by reason of their
breadth or scope or otherwise, it is the intention of the parties hereto that
such determination not bar or in any way affect the right of the Company to the
relief provided in this Section 7 in the courts of any other jurisdiction within
the geographic scope of such restrictions and covenants. 

i. Disclosure of Restrictive
Covenants. The Executive agrees
to disclose in advance the existence and terms of the restrictions and covenants
contained in this Section 7 to any employer or other service recipient by whom
the Executive may be employed or retained during the Restricted Period.
Executive understands that both the Company and Executive have the right to
provide another party an opinion about interpretation and/or application of this
Agreement; Executive consents to such communications, and agrees not to assert a
claim of wrongdoing by Company as a result of such a communication.

j. Extension of Restricted Period. If the Executive breaches a time-limited
post-employment restriction created in this Section 7, then the time limitation
for the violated restriction will be extended by one day for each day Executive
is found to have been in violation of the restriction up to a length of time
that is equal in duration to the length of restriction originally provided for
so that Company gets the full benefit of compliance for the length of time
originally provided for.


8. Injunctive
Relief. Executive acknowledges
that Executive’s breach of the Covenants would cause irreparable injury to the
Company, and agrees that in the event of any such breach, the Company shall be
entitled to seek temporary, preliminary and permanent injunctive relief, without
the necessity of proving actual damages or posting any bond or
surety.

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9. AGREEMENT TO ARBITRATE. TO THE FULLEST EXTENT PERMITTED BY LAW,
EXECUTIVE AND COMPANY AGREE TO ARBITRATE ANY CONTROVERSY, CLAIM OR DISPUTE
BETWEEN THEM ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT, THE
EMPLOYMENT RELATIONSHIP BETWEEN THE COMPANY AND EXECUTIVE AND ANY DISPUTES UPON
TERMINATION OF EMPLOYMENT, INCLUDING BUT NOT LIMITED TO BREACH OF CONTRACT,
TORT, DISCRIMINATION, HARASSMENT, WRONGFUL TERMINATION, DEMOTION DISCIPLINE,
FAILURE TO ACCOMMODATE, FAMILY AND MEDICAL LEAVE, COMPENSATION OR BENEFITS
CLAIMS, CONSTITUTIONAL CLAIMS; AND ANY CLAIMS FOR VIOLATION OF ANY LOCAL, STATE
OR FEDERAL LAW, STATUTE, REGULATION, OR ORDINANCE OR COMMON LAW. CLAIMS FOR
WORKERS’ COMPENSATION, UNEMPLOYMENT INSURANCE BENEFITS, BREACH OF THE COMPANY’S
EXECUTIVE INNOVATIONS AND PROPRIETARY RIGHTS AGREEMENT AND OTHER CONFIDENTIALITY
AGREEMENTS, AND COMPANY’S RIGHT TO OBTAIN INJUNCTIVE RELIEF PURSUANT TO SECTION
8 ARE EXCLUDED. BY ACCEPTING EMPLOYMENT WITH THE COMPANY, THE EXECUTIVE WAIVES
THE RIGHT TO A JURY TRIAL WITH RESPECT TO ANY SUCH DISPUTES (EXCLUDING THOSE
AFOREMENTIONED). FOR THE PURPOSE OF THIS AGREEMENT TO ARBITRATE, REFERENCES TO
THE COMPANY INCLUDE ALL PARENT, SUBSIDIARY, OR RELATED ENTITIES AND THEIR
EMPLOYEES, SUPERVISORS, OFFICERS, DIRECTORS, AGENTS, PENSION OR BENEFIT PLAN
SPONSORS, FIDUCIARIES, ADMINISTRATORS, AFFILIATES, AND ALL SUCCESSORS AND
ASSIGNS OF ANY OF THEM, AND THIS AGREEMENT SHALL APPLY TO THEM TO THE EXTENT
EXECUTIVE’S CLAIMS ARISE OUT OF OR RELATE TO THEIR ACTIONS ON BEHALF OF THE
COMPANY. 


a. Consideration for Arbitration
Agreement. The mutual promise by
Company and Executive to arbitrate any and all disputes between them (except for
those referenced above) rather than litigate them before the courts or other
bodies, provides the consideration for this agreement to arbitrate. 

b. Initiation of Arbitration. Either party may exercise the right to arbitrate
by providing the other party with written notice of any and all claims forming
the basis of such right in sufficient detail to inform the other party of the
substance of such claims. In no event shall the request for arbitration be made
after the date when institution of legal or equitable proceedings based on such
claims would be barred by the applicable statutes of limitation. 

c. Arbitration Procedure. The arbitration will be conducted in the state
and county in which the Company is headquartered by a single neutral arbitrator
and in accordance with the then-current rules for resolution of employment
disputes of the American Arbitration Association (“AAA”). The parties are
entitled to representation by an attorney or other representative of their
choosing. The arbitrator shall have the power to enter any award that could be
entered by a judge of the trial court of the state in which the Company is
headquartered and shall follow the applicable law. The parties agree to abide by
and perform any award rendered by the arbitrator. The arbitrator shall issue the
award in writing and therein state the essential findings and conclusions on
which the award is based. Judgment on the award may be entered in any court
having jurisdiction thereof. 

d. Costs of Arbitration. Company shall bear the costs of the arbitration
filing fees; the hearing fees and cost of the arbitrator will be initially borne
by the Company, but the non-prevailing party, as determined by the arbitrator,
shall be responsible for the hearing fees and costs of the
arbitrator.


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10. General
Provisions. 


a. Successors and Assigns. The rights and obligations of the Company under
this Agreement shall inure to the benefit of and shall be binding upon the
successors and assigns of the Company and the Company shall require any
successor or assign to expressly assume and agree to perform this Agreement in
the same manner the Company would be required to perform if no such succession
or assign had occurred. This Agreement shall automatically insure to the benefit
of, and be enforceable by, the Company’s owners, parent, subsidiaries,
affiliates, successors, and assigns to protect the property and interests of
same as if they were the Company without the need for any further action or
agreement by Executive. Executive acknowledges that the sharing of Confidential
Information and intellectual property interests between these entities gives
them a material property interest in the enforcement of this Agreement. This
agreement may be assigned by the Company as part of any sale, transfer, merger
or other disposition of the Company or its assets. Executive’s rights hereunder
are personal and may not be assigned or transferred to any other person, firm,
or corporation without the prior, express and written consent of the
Company.

b. Section 409A of the Internal Revenue Code of
1986 (the “Code”). This Letter
Agreement 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 Agreement, the terms “terminate,” “terminated” and “termination” mean a
termination of Executive’s 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 Agreement, 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 Executive is a
“Specified Employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code
on the Termination Date, 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
Executive’s death. The amount of any payment that would otherwise be paid to
Executive 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 legal fees 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.


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



c. Excise Tax Payments. In the event of a determination that a portion of
any payment or benefit to the Executive or for Executive’s benefit payable or
distributable pursuant to the terms of this Agreement on account of or in
connection with a Change in Control event is or will be deemed to be an “excess
parachute payment” within the meaning of Section 280G of the Internal Revenue
Code of 1986, as amended (the “Code”), the Company shall pay to the Executive an
amount (the “Tax Gross-Up”) sufficient to reimburse the Executive on an
after-tax basis for any excise tax imposed, pursuant to Code Section 4999 or any
successor provision or similar tax (“Excise Tax”), on the Executive with respect
to such payments or other benefits, so that the Executive does not incur any
out-of-pocket cost with respect to such Excise Tax. For this purpose, the
Executive shall be deemed to be in the highest marginal rate of federal and
state taxes. The Tax Gross-Up payment shall be made at the time the Excise Tax
triggering the right to such payment is remitted to the appropriate tax
authorities but no later than the close of the calendar year following the
calendar year in which such Excise Tax is remitted to the appropriate tax
authorities. As a condition of the Company’s payment of the Tax Gross-Up, the
Executive agrees to cooperate with the Company to furnish such information and
documents as the Company or its agents may reasonably request in order to make a
determination as to the amount of the Excise Tax. Any such calculations shall be
provided to the Executive for review, as well.

d. Clawback Provisions. Notwithstanding any other provisions in this
Agreement to the contrary, any incentive-based compensation, or any other
compensation, paid to the Executive pursuant to this Agreement or any other
agreement or arrangement with the Company which is subject to recovery under any
law, government regulation or stock exchange listing requirement, will be
subject to such deductions and clawback as may be required to be made pursuant
to such law, government regulation or stock exchange listing requirement (or any
policy adopted by the Company pursuant to any such law, government regulation or
stock exchange listing requirement). The Company will make any determination for
clawback or recovery in its sole discretion and in accordance with any
applicable law or regulations.


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e. Waiver. Either party’s failure to enforce any provision of this Agreement shall
not in any way be construed as a waiver of any such provision, or prevent that
party thereafter from enforcing each and every other provision of this
Agreement; provided, however, that if Executive claims the Company has failed to
comply with any ongoing payment or benefit obligation, the failure to make a
timely demand for payment or other compliance within thirty (30) days of the
first due date for such an obligation shall waive the right to assert continued
entitlement or to assert subsequent breaches of the same alleged obligation at a
later time. 

f. Attorneys’ Fees. If any arbitration or other proceeding is
instituted to enforce or interpret this Agreement, the prevailing party shall be
entitled to recover from the losing party in addition to statutory costs, the
reasonable attorneys’ fees the prevailing party incurred in connection with such
arbitration or proceeding. For purposes of enforcement of Section 7 of this
Agreement, Company shall be deemed a prevailing party if Executive is found to
be in violation of any restriction in this Agreement and Company secures any
part of the injunctive relief or other equitable remedies it seeks to enforce
this Agreement.

g. Severability. In the event any provision of this Agreement is
found to be unenforceable by an arbitrator or court of competent jurisdiction,
such provision shall be deemed modified to the extent necessary to allow
enforceability of the provision as so limited, it being intended that the
parties shall receive the benefit contemplated herein to the fullest extent
permitted by law. If a deemed modification is not satisfactory in the judgment
of an arbitrator or court, the unenforceable provision shall be deemed deleted,
and the validity and enforceability of the remaining provisions shall not be
affected thereby. 

h. Interpretation; Construction. The headings set forth in this Agreement are for
convenience only and shall not be used in interpreting this Agreement. This
Agreement has been drafted by legal counsel representing the Company, but
Executive has participated in the negotiation of its terms. Furthermore,
Executive acknowledges that Executive has had an opportunity to review and
revise the Agreement and to have it reviewed by legal counsel, if desired, and,
therefore, the normal rule of construction to the effect that any ambiguities
are to be resolved against the drafting party shall not be employed in the
interpretation of this Agreement. 

i. Governing Law and Forum Selection. This Agreement shall be governed by and
construed in accordance with the laws of the United States and the State of
Texas without regard to conflicts of law principles. All legal disputes between
the parties arising from or related to this Agreement shall be litigated in a
court of competent jurisdiction (state or federal) located in Dallas County,
Texas. The parties consent to, and hereby irrevocably submit to the jurisdiction
of such courts and waive the defense of inconvenient forum to the maintenance of
any such action or proceeding in such venue. 


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j. Notices. Any notice required or permitted by this Agreement shall be in writing
and shall be delivered as follows with notice deemed given as indicated: i) by
personal delivery when delivered personally; ii) by overnight courier upon
written verification of receipt; or iii) by certified or registered mail, return
receipt requested, upon verification of receipt. Notice shall be sent to the
addresses set forth below, or such other address as either party may specify in
writing. 


	If to
      Executive:	If to
      Company:
		 
		 
	Timothy P. Bacci	Daegis,
      Inc.
	3704 Imperial
    Drive	Attn:
      Human Resources
	Flower Mound, TX
      75028	600 E.
      Las Colinas Blvd., Suite 1500
		Irving,
      TX 75039




k. Survival. Sections 7 (“Restrictive Covenants”), 8 (“Injunctive Relief”), 9,
(“Agreement to Arbitrate”), 10 (“General Provisions”) and 11 (“Entire
Agreement”) of this Agreement shall survive Executive’s termination of
employment by the Company. This Agreement will be deemed to renew and continue
during any periods of renewal of Executive’s employment, including, but not
limited to, periods of employment following promotions or transfers, or during
any subsequent re-employment by Company. Executive understands and agrees that
all the terms and obligations contained in this Agreement are independent of the
existence of any claim or cause of action by Executive against the Company, and
any such claims shall not constitute a defense to Executive’s obligations
hereunder, or to the enforcement by the Company of this Agreement, but shall be
determined separately and independently. All common law and statutory
obligations of Executive to the Company as an employee shall remain in effect;
this Agreement supplements, and shall not be deemed to reduce or dilute, or make
inapplicable, any common law or statutory duty that Executive would otherwise
have to the Company absent this Agreement


11. Entire Agreement. This Agreement, any Company option documents,
and the Company’s applicable confidentiality, invention assignment, insider
trading policy (“ITP”) and non-disclosure agreements constitute the entire
agreement between the parties relating to this subject matter and supersede all
prior or simultaneous representations, discussions, negotiations or agreements,
whether written or oral. This Agreement may be amended or modified only with the
written consent of the Executive and the Board of Directors of the Company. No
oral waiver, amendment or modification will be effective under any circumstances
whatsoever. 

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THE PARTIES TO THIS AGREEMENT
HAVE READ THE FOREGOING AGREEMENT AND FULLY UNDERSTAND EACH AND EVERY PROVISION
CONTAINED HEREIN, INCLUDING THE AGREEMENT TO ARBITRATE DISPUTES.

	By the Company, Daegis, Inc.	By the Executive
		 
		 
	By:	 	 	By:	 	 
	 	 	 	 	 	 
	 	Steven D. Whiteman
Chairman of the
      Board	 	 	Timothy P. Bacci	 
		 
		 


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