0001206774-14-002713.txt : 20140828 0001206774-14-002713.hdr.sgml : 20140828 20140828142455 ACCESSION NUMBER: 0001206774-14-002713 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 9 CONFORMED PERIOD OF REPORT: 20141001 FILED AS OF DATE: 20140828 DATE AS OF CHANGE: 20140828 EFFECTIVENESS DATE: 20140828 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DAEGIS INC. CENTRAL INDEX KEY: 0000880562 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 942710559 STATE OF INCORPORATION: DE FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 001-11807 FILM NUMBER: 141071310 BUSINESS ADDRESS: STREET 1: 1420 ROCKY RIDGE DRIVE STREET 2: SUITE 380 CITY: ROSEVILLE STATE: CA ZIP: 95661 BUSINESS PHONE: 9162184700 MAIL ADDRESS: STREET 1: 1420 ROCKY RIDGE DRIVE STREET 2: SUITE 380 CITY: ROSEVILLE STATE: CA ZIP: 95661 FORMER COMPANY: FORMER CONFORMED NAME: UNIFY CORP DATE OF NAME CHANGE: 19960419 DEF 14A 1 daegis_def14a.htm DEFINITIVE PROXY STATEMENT

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No.     )

Filed by the Registrant    x                       Filed by a Party other than the Registrant    o
 

Check the appropriate box:

o                  

Preliminary Proxy Statement 

o  

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

x  

Definitive Proxy Statement

o  

Definitive Additional Materials

o  

Soliciting Material under Rule 14a-12


Daegis Inc.
(Name of registrant as specified in its charter)

(Name of person(s) filing proxy statement, if other than the registrant)

Payment of Filing Fee (Check the appropriate box):
x                   No fee required.
o   Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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Daegis Inc.
600 E. Las Colinas Blvd, Suite 1500
Irving, Texas 75039

To our Stockholders,

     You are cordially invited to attend the Annual Meeting of Stockholders of Daegis Inc., which will take place Wednesday, October 1, 2014, at 2:00 p.m. Central Time at the Daegis Inc. corporate offices, 600 E. Las Colinas Blvd., Suite 1500, Irving, TX 75039. Details of the business to be conducted at the Annual Meeting are given in the Official Notice of the Meeting, Proxy Statement and form of proxy enclosed with this letter. Stockholders of record at the close of business on August 6, 2014, are entitled to notice of, and to vote at, the Annual Meeting.

     Your vote is important and we encourage you to vote promptly. Even if you intend to join us in person, we encourage you to vote in advance so that we will know that we have a quorum of stockholders for the meeting. Please see the General Information section of the enclosed Proxy Statement for instructions if you plan to personally attend the Annual Meeting.

     Whether or not you are able to personally attend the Annual Meeting, it is important that your shares be represented and voted. Your prompt vote over the Internet, by telephone via toll-free number, or by written proxy will save us the expense and extra work of additional proxy solicitation. Voting by any of these methods at your earliest convenience will ensure your representation at the Annual Meeting if you choose not to attend in person. If you decide to attend the Annual Meeting, you will be able to vote in person, even if you have personally submitted your proxy. Please review the instructions on the proxy card or the information forwarded by your bank, broker, or other holder of record concerning each of these voting options.

     We appreciate your continued interest in Daegis Inc. and look forward to seeing you at our Annual Meeting.

Sincerely,
 
Timothy P. Bacci
Interim Chief Executive Officer

Irving, Texas
August 28, 2014



Daegis Inc.
600 E. Las Colinas Blvd, Suite 1500
Irving, Texas 75039

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS



     You are cordially invited to attend the Annual Meeting of Stockholders of Daegis Inc., which will take place Wednesday, October 1, 2014, at 2:00 p.m. Central Time at the Daegis Inc. corporate offices, 600 E. Las Colinas Blvd., Suite 1500, Irving, TX 75039.

     At the meeting, we will ask stockholders to consider and vote on the following Proposals:

        1.         Elect five members of our Board of Directors to hold office for a one-year term;
 
        2.         Ratify the appointment of Whitley Penn LLP as our independent registered public accountants for the fiscal year ending April 30, 2015;
 
        3.         Vote, on an advisory basis, on the compensation of our Company’s executive officers; and
 
        4.         Any other business as may be properly brought before the Annual Meeting and any adjournments or postponements thereof.

     These items of business are more fully described in the Proxy Statement that accompanies this Notice.

     Stockholders of record at the close of business on August 6, 2014, are entitled to notice of, and to vote at, this meeting and any adjournments or postponements thereof. For ten days prior to the meeting, a complete list of the stockholders entitled to vote at the meeting will be available for examination by any stockholder for any purpose relating to the meeting during ordinary business hours at our principal offices located at 600 E. Las Colinas, Suite 1500, Irving, Texas 75039.

Sincerely,
 
Susan K. Conner
Corporate Secretary

Irving, Texas
August 28, 2014

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PLEASE MARK, DATE AND SIGN THE ENCLOSED PROXY CARD AND PROMPTLY RETURN IT IN THE ACCOMPANYING POSTAGE-PAID ENVELOPE TO ASSURE THAT YOUR SHARES ARE REPRESENTED AT THE MEETING. ALTERNATIVELY, YOU MAY VOTE YOUR SHARES VIA TELEPHONE OR THE INTERNET, AS DESCRIBED IN THE ACCOMPANYING MATERIALS. IF YOUR SHARES ARE HELD OF RECORD BY A BROKER, BANK OR OTHER NOMINEE AND YOU WISH TO VOTE, YOU MUST OBTAIN FROM THE RECORD HOLDER A PROXY ISSUED IN YOUR NAME. PROXIES ARE REVOCABLE, AND IF YOU ATTEND THE MEETING, YOU MAY CHOOSE TO VOTE IN PERSON EVEN IF YOU HAVE PREVIOUSLY VOTED YOUR SHARES

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON OCTOBER 1, 2014: Our Proxy Statement is attached. Financial and other information concerning Daegis Inc. is contained in our Annual Report to Stockholders for the fiscal year ended April 30, 2014. A complete set of proxy materials relating to our Annual Meeting is available on the Internet. These materials, consisting of the Notice of Annual Meeting, Proxy Statement, Proxy Card and Annual Report to Stockholders, may be viewed at www.proxyvote.com.

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DAEGIS INC.
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS

     The accompanying proxy is solicited by the Board of Directors (the “Board”) of Daegis Inc. (“Daegis,” “Company,” “we,” “us” or “our”), a Delaware corporation, for use at our Annual Meeting of Stockholders to be held on October 1, 2014 (the “Annual Meeting”), or any adjournment or postponement thereof, for the purposes set forth in the accompanying Notice of Annual Meeting. The date of this Proxy Statement is August 28, 2014, the approximate date on which this Proxy Statement and the accompanying form of proxy were first sent or given to stockholders.

GENERAL INFORMATION

     Annual Report. Our Annual Report on Form 10-K for the fiscal year ended April 30, 2014, is enclosed along with this Proxy Statement.

     Voting Securities. Only stockholders of record as of the close of business on August 6, 2014, are entitled to vote at the meeting and any adjournment thereof. As of that date, there were 40,000,000 shares authorized, of which there are 16,384,444 shares of Daegis common stock, par value $0.001 per share issued and outstanding. Stockholders may vote in person or by proxy. Each stockholder of record as of that date is entitled to one vote for each share of common stock held on each of the proposals presented in this Proxy Statement. Our Bylaws provide that a majority of all of the shares of the stock entitled to vote, whether present in person or represented by proxy, shall constitute a quorum for the transaction of business at the Annual Meeting. Votes for and against, abstentions and “broker non-votes” will each be counted as present for purposes of determining the presence of a quorum.

     Solicitation of Proxies. We will solicit stockholders by mail through our regular employees, and will request banks and brokers, and other custodians, nominees and fiduciaries, to solicit their customers who have Daegis stock registered in the names of such persons and will reimburse them for their reasonable out-of-pocket costs. We may also use the services of Directors, officers and others to solicit proxies, personally or by telephone, without additional compensation.

     Voting of Proxies. Except as described below, (i) All valid proxies received prior to the Annual Meeting will be voted; (ii) All shares represented by a proxy will be voted, and where a stockholder specifies by means of the proxy a choice with respect to any matter to be acted upon, the shares will be voted in accordance with the specification so made; and (iii) If no choice is indicated, shares represented by signed proxy cards will be voted FOR each director nominee and IN FAVOR of proposal no. 2. Broker non-votes on proposal no. 3 will be counted as a no-vote. A stockholder giving a proxy has the power to revoke his or her proxy at any time prior to the time it is voted at the Annual Meeting by delivering to the Corporate Secretary of the Company a written instrument revoking the previously delivered proxy or by delivering a duly executed proxy with a later date, or by attending the Annual Meeting and voting in person.

     Stockholders whose shares are registered in their own names may vote: (1) by returning a proxy card; (2) via the Internet; or (3) by telephone. Specific instructions to be followed by any registered stockholder interested in voting via the Internet or by telephone are set forth on the enclosed proxy card. The Internet and telephone voting procedures are designed to authenticate the stockholder’s identity and to allow the stockholders to vote his or her shares and confirm that his or her voting instructions have been properly recorded. If you do not wish to vote via the Internet or telephone, please complete, sign and return the proxy card in the self-addressed, postage paid envelope provided.

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Proposals

PROPOSAL 1 - ELECTION OF DIRECTORS

     Our stockholders will vote on the election of five members of our Board of Directors (the “Board”) at the Annual Meeting. Each director will serve until the next Annual Meeting of Stockholders and until their respective successor is duly elected and qualified, unless earlier removed in accordance with our Bylaws.

     Nominees for election to the Board are as follows:

Name            Principal Occupation            Age            Director Since
Steven D. Whiteman Independent Chairman of the Board, Daegis Inc. 63 1997
 
Timothy P. Bacci Interim Chief Executive Officer, Daegis Inc. 55 2009
 
Robert M. Bozeman Investor/Advisor to companies in Silicon Valley   65 2008
 
Richard M. Brooks EVP and CFO, Composite Technology International, Inc. 60   2005
 
Tery R. Larrew   Founder and Managing Partner, Caddis Capital LLC 60 2002

     For biographical and other information regarding the nominees for Director, please see “OTHER INFORMATION YOU NEED TO MAKE AN INFORMED DECISION – Directors.” For information on our Directors’ compensation, please see the information under “COMPENSATION OF DIRECTORS”.

     Each of the persons nominated for election to the Board has agreed to stand for election. We know of no reason why any nominee should be unable or unwilling to serve if elected, and to the knowledge of the Board, each of the nominees intends to serve the entire term for which election is sought.

     If a quorum is present and voting, the nominees for director receiving the highest number of votes will be elected as Directors of the Company to serve until the next annual meeting of stockholders and until their successors have been duly elected and qualified. Abstentions and shares held by brokers that are present but not voted because the brokers were prohibited from exercising discretionary authority, i.e. “broker non-votes,” will be counted as present for purposes of determining if a quorum is present.

OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE
FOR PROPOSAL 1 AND FOR EACH DIRECTOR NOMINEE NAMED ABOVE.

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PROPOSAL 2 - RATIFICATION OF APPOINTMENT OF INDEPENDENT
REGISTERED PUBLIC
ACCOUNTING FIRM

     The Audit Committee of the Board has appointed Whitley Penn LLP as our independent registered public accounting firm for the fiscal year ending April 30, 2015. Services provided to the Company and its subsidiaries by Whitley LLP in 2014 are described under “INDEPENDENT PUBLIC ACCOUNTANTS”.

     We are asking our stockholders to ratify the appointment of Whitley Penn LLP as our independent registered public accounting firm for the 2015 fiscal year. Although ratification is not required by our Bylaws or otherwise, the Board is submitting the appointment of Whitley Penn LLP to our stockholders for ratification as a matter of good corporate practice.

     An affirmative vote of a majority of the outstanding shares of the Company present or represented by proxy and entitled to vote at the Annual Meeting, at which a quorum is present, will ratify the appointment of Whitley Penn LLP as our independent public accountants for the fiscal year 2015.

     If our stockholders do not approve Proposal 2, the appointment of Whitley Penn LLP will be reconsidered by our Audit Committee and our Board. Even if Proposal 2 is approved, the Audit Committee in its discretion may select a different independent registered public accounting firm if it determines that a change would be in the best interest of the Company and our stockholders and otherwise complies with all regulations of the SEC regarding a change in public accounting firms.

OUR BOARD OF DIRECTORS RECOMMENDS
THAT YOU VOTE
FOR PROPOSAL 2.

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PROPOSAL 3 – APPROVE, ON AN ADVISORY BASIS, THE
COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

       The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank Act”), enables the Company’s stockholders to vote to approve, on an advisory (nonbinding) basis, the compensation of the Company’s named executive officers (“Say-on-Pay”). The Company seeks your advisory vote and asks that you support the compensation of the named executive officers as disclosed in this proxy statement. At the Annual Meeting of Stockholders held on September 25, 2013, our stockholders were asked to vote on an advisory basis the frequency of the Say-on-Pay vote in future years. Our stockholders were provided with the option of one year, two years or three years. The option of one year received the highest number of votes cast by our stockholders. This vote was advisory and not binding on the Board. Based on its consideration of the stockholder vote and other matters, the Compensation Committee has decided to present the Say-on-Pay proposal to our stockholders on an annual basis. It is possible that the Compensation Committee may make some other determination regarding the frequency of a Say-on-Pay proposal in the future.

       As described in detail under “SUMMARY OF OUR FISCAL YEAR 2014 EXECUTIVE COMPENSATION,” our compensation programs are designed to emphasize pay for performance and to motivate our executives to create a successful company. We believe our compensation program, with its balance of short-term incentives and long-term incentives (including equity awards that vest over multiple years) rewards sustained performance that is aligned with long-term stockholder interests.

       This Say-on-Pay proposal gives the Company’s stockholders the opportunity to express their views on the compensation of its named executive officers. This vote is not intended to address any specific item of compensation, but rather the overall compensation of the Company’s named executive officers described in this Proxy Statement.

       Accordingly, the Board invites you to review carefully the Summary of Our Fiscal Year 2014 Executive Compensation beginning on page 15 and the tabular and other disclosures on compensation under “Our Executive Compensation Program Elements” beginning on page 16, and to cast a vote to approve, on an advisory basis, the Company’s executive compensation programs through the following resolution:

       “RESOLVED, that stockholders approve, on an advisory basis, the compensation paid to the Company’s named executive officers, as disclosed pursuant to the compensation disclosure rules of the SEC, including the compensation tables and any related material disclosed in the Proxy Statement.”

       This Say-on-Pay vote is advisory, and therefore not binding on the Company, the Compensation Committee or the Board of Directors. The Board of Directors and Compensation Committee value the opinions of the Company’s stockholders and to the extent there is any significant vote against the named executive officers’ compensation as disclosed in this Proxy Statement, the Board may consider the stockholders’ concerns and the Compensation Committee may evaluate whether any actions are necessary to address those concerns.

OUR BOARD OF DIRECTORS RECOMMENDS
THAT YOU VOTE
FOR PROPOSAL 3.

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OTHER INFORMATION YOU NEED TO MAKE AN INFORMED DECISION

Directors

Name Age Position
Steven D. Whiteman 63 Independent Director, Chairman of the Board
Timothy P. Bacci 55 Director, Interim Chief Executive Officer
Robert M. Bozeman 65 Independent Director
Richard M. Brooks 60 Independent Director
Tery R. Larrew 60 Independent Director

       Steven D. Whiteman has served as a Director of the Company since May 1997. In August 2004, he was appointed Chairman of the Board. Mr. Whiteman previously served as the President and Chief Executive Officer of Intesource, an Internet based e-procurement company. From June 2000 to May 2002, he worked as an independent consultant. From May 1993 until June 2000, Mr. Whiteman served as President of Viasoft, Inc. (“Viasoft”), a publicly-traded software products and services company. From February 1994 to June 2000, Mr. Whiteman also served as Chief Executive Officer and Director of Viasoft, and from April 1997 to June 2000, he served as Chairman of the Board of Directors. Mr. Whiteman is also a Director of Intesource, Actuate Corporation, and Trax Technology. Mr. Whiteman holds a B.A. degree in Business Administration from Taylor University and an M.B.A. from the University of Cincinnati.

       Mr. Whiteman’s qualifications to serve on our Board of Directors include, among other skills and qualifications, his prior experience as a chief executive officer of technology companies, his service on other corporate boards, as well as his extensive knowledge about the Company gained from his tenure as a board member dating back to 1997.

       In addition to serving as our Chairman of the Board, Mr. Whiteman currently serves on our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee.

       Timothy P. Bacci joined our Board of Directors in August 2009, following our acquisition of AXS-One Inc., where he was a member of their board. He was appointed Executive Chairman in 2012 and later appointed as our Interim Chief Executive Officer in January 2013. Mr. Bacci is the co-founder of BlueLine Partners, a strategic opportunities fund with more than $100 million in assets invested in small, publicly-traded, and undervalued healthcare and IT companies. From December 2004 to 2013 he was a Managing Partner at BlueLine Partners. Prior to BlueLine, he spent 15 years in executive positions for software companies, including serving as Chairman and interim CEO of Instant802 Networks and CEO of siteROCK Corp. He was a co-founder of Vicinity Corporation, which had a successful public offering in 2000 and was acquired by Microsoft in 2002. Additionally, he has served as a consultant to several early stage technology companies addressing areas relating to corporate strategy and executive recruiting. Mr. Bacci holds a B.S. in Engineering from the United States Naval Academy and served as an officer on active duty in the U.S. Navy as a fighter pilot.

       Mr. Bacci’s qualifications to serve on our Board of Directors include, among other skills and qualifications, his significant management and executive experience in the software industry, his experience in providing consulting services relating to corporate strategy and executive recruiting, his experience gained in evaluating and investing in healthcare and IT companies as a co-founder of BlueLine Partners and his service on other corporate boards.

       Robert M. Bozeman was appointed Director in January of 2008. Mr. Bozeman currently serves as an investor and/or advisor to companies in Silicon Valley. His experience includes business operations, venture capital investment, and Capital Markets and Mergers and Acquisitions. He previously served in the capacities of CEO and board member for a variety of software, information services and computer supplier companies. Mr. Bozeman's last operating role was as CEO for Bricsnet from July 2003 through November 2004; prior to that - from November 1997 through December 2003, Mr. Bozeman was General Partner of Angel Investors LP for both its Fund I and Fund II. Investments by the firm included Ask Jeeves, Brightmail, Google, Opsware, and PayPal. In addition, many of Angel Investors LP investments became successful acquisitions, including AOL’s acquisition of Spinner, Microsoft’s acquisitions of eQuil, MongoMusic and Vacation Spot and Sybase’s acquisition of AvantGo!. Mr. Bozeman is currently on the board and/or is an advisor to Become.com, Decooda, DocBox, Pow Wow, Nantero, and Ramidi. In this capacity, Mr. Bozeman generally operates through Eastlake Ventures, LLC (his family office).

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       His qualifications to serve on our Board of Directors include, among other skills and qualifications, his significant management and executive experience in a variety of technology companies, his service on other corporate boards and his extensive experience gained in evaluating and investing in companies as a General Partner of Angel Investors.

       Mr. Bozeman currently serves on our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee.

       Richard M. Brooks has served as a Director of the Company since August 2005. Since January 2011, Mr. Brooks has been the Executive Vice President and Chief Financial Officer of Composite Technology International, Inc., a manufacturer of building products. From September 2006 to December 2010, Mr. Brooks was a partner with Tatum, a national Executive Services consulting company, which is a wholly-owned subsidiary of SFN Group. With Tatum, Mr. Brooks acted as the project lead on a variety of consulting assignments, including acting as the interim CFO for Pixelworks, a publicly-traded semi-conductor company. Mr. Brooks previously served as Chief Executive Officer for VantageMed, a public software company, from April 2002 to December 2004. In addition, Mr. Brooks served as a director of VantageMed Corporation from March 2001 to January 2005 and was appointed Chairman of that board in May of 2002. Mr. Brooks received a B.S. in Business Administration from Oregon State University.

       His qualifications to serve on our Board of Directors include, among other skills and qualifications, his significant management and executive experience with public companies and his extensive experience in providing financial consulting services to a variety of companies, including publicly-traded companies.

       Mr. Brooks currently serves on our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee.

       Tery R. Larrew has served as a Director of the Company since May 2002. Mr. Larrew is the founding and managing partner of Caddis Capital LLC, a private equity firm that specializes in income oriented investments with strong equity appreciation including International Gaming and Entertainment; Energy – Oil & Gas Exploration and Production; Real Estate - Mobile Home Communities, Apartment Complexes, Self- Storage Units and Unimproved Land; Natural Resources – Water and Secured Debt/Hard Asset financing. Until 2005, Mr. Larrew served as the President and CEO of Vericept Corporation, a provider of network-based early warning and misuse prevention solutions, headquartered in Denver, Colorado. Prior to joining Vericept in 2002, Mr. Larrew co-founded IQ3G, a mobile services company, in 2000. From 1999 to 2000, Mr. Larrew was the Chairman and Chief Executive Officer of a start-up e-communication company, UPDATE Systems, Inc. From 1989 to 1998, Mr. Larrew served as President of the Database Marketing Services Division of Metromail/CIC. He is a graduate of Colorado State University with a B.S. degree in Business Administration and serves on the Global Leadership Council for the Colorado State University School of Business.

       His qualifications to serve on our Board of Directors include, among other skills and qualifications, his significant management and executive experience in the technology industry, his broad range of management experiences, as well as his extensive knowledge about the Company gained from his tenure as a board member dating back to 2002.

       Mr. Larrew currently serves on our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee.

       No nominee has any family relationship with any other nominee or with any of the Company’s executive officers.

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Corporate Governance

Board of Directors

       Our business is managed under the direction of our Board of Directors. Our Board currently consists of five members. The names of our Board members, their professional experience and attributes are described above under the caption “OTHER INFORMATION YOU NEED TO MAKE AN INFORMED DECISION – Directors.”

Board Leadership Structure

       The Board has determined that the positions of Chairman of the Board and Chief Executive Officer should be held by different individuals. In addition, the Board believes that the Chairman should not be an employee of the Company. Since August 2004, the Board has been led by Mr. Steven D. Whiteman, an independent non-executive chairman. The Chairman of the Board is responsible for coordinating the Board’s activities, including the scheduling of meetings of the full Board, scheduling executive sessions of the non-employee Directors (“Independent Directors”) and setting relevant items on the agenda (in consultation with the CEO as necessary or appropriate). The CEO is responsible for setting the strategic direction for the Company and the day to day leadership and performance of the Company. The Board believes this leadership structure has enhanced the Board’s oversight of, and independence from, Company management, the ability of the Board to carry out its roles and responsibilities on behalf of our stockholders, and our overall corporate governance.

Attendance at Board Meetings

       Each of the current Directors attended at least 75% of both the aggregate meetings of the Board and its committees held, during periods in which that director served on the Board and those committees. During our last fiscal year, a total of eight meetings of the Board of Directors were held. Directors are encouraged to attend our Annual Meeting of Stockholders.

Communication with our Board of Directors

       Stockholders who wish to communicate with our Board of Directors or an individual director may send a written communication to the Board or such director c/o Daegis Inc., 600 E. Las Colinas Blvd., Suite 1500, Irving, Texas 75039, Attn: Corporate Secretary. Each communication must set forth the name and address of the stockholder on whose behalf the communication is sent and the number of Daegis shares that are owned beneficially by such stockholder as of the date of the communication. Each communication will be reviewed by our Corporate Secretary to determine whether it is appropriate for presentation to the Board or such director. Examples of inappropriate communications include advertisements, solicitations or hostile communications. Communications determined by the Corporate Secretary to be appropriate for presentation to the Board or such director will be submitted to the Board or such director on a periodic basis.

Role of Board of Directors in Risk Oversight

       The Board of Directors oversees our processes to manage risk at the Board and senior management levels. The Board of Directors delegates much of this responsibility to the Audit Committee. Under its charter, the Audit Committee discusses with management the Company’s major financial risk exposures and steps management has taken to limit, monitor or control such exposure. While the Board of Directors and Audit Committee oversee our Company’s risk management, our senior management is responsible for the development, implementation, and maintenance of our risk management processes and provides periodic reports to the Board of Directors and its committees, as appropriate, on its assessment of strategic, operational, legal and compliance, and financial reporting risks to the Company. The Board of Directors and its committees, as appropriate, review and consider the management reports provided on the Company’s enterprise risk and risk management strategy.

Committees of the Board of Directors

       Our Board has three standing committees: Nominating and Corporate Governance Committee, Audit Committee, and Compensation Committee. The Board also has a special committee, the Capital Markets/Mergers & Acquisition Committee, which conducts business on an as-needed basis. Each of our Independent Directors is a member of all of our standing committees. These committees devote attention to specific subjects and assist our Board in discharging its business and risk oversight and governance responsibilities. Each standing committee’s charter is available on our website at www.daegis.com/about/investor-relations/corporate-governance.

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Nominating and Corporate Governance Committee

       Our Nominating and Corporate Governance Committee chair is Steven D. Whiteman. Our Board has determined that each member of the Nominating and Corporate Governance Committee qualifies as “independent” in accordance with the NASDAQ Listing Rules. Under its charter, the primary responsibilities include: (i) identifying individuals qualified to become Board members; (ii) selecting, or recommending to the Board, director nominees for each election of Directors; (iii) developing and recommending to the Board criteria for selecting qualified director candidates; (iv) considering committee member qualifications, appointment and removal; (v) recommending corporate governance principles, codes of conduct and compliance mechanisms applicable to the Company; and (vi) providing oversight in the evaluation of the Board and each committee. As described below, the Nominating and Corporate Governance Committee will consider nominees recommended by stockholders. Stockholders who wish to recommend nominees for director should submit such recommendations to the Corporate Secretary of Daegis at our corporate office located at 600 E. Las Colinas Blvd, Suite 1500, Irving, TX 75039. Nominee recommendations to the Board from stockholders are considered under the same criteria as a nominee recommended by the Board.

       In identifying candidates for membership on the Board of Directors, the Nominating and Governance Committee takes into account all factors it considers appropriate, which may include strength of character, conflict of interest, maturity of judgment, career specialization, relevant skills, diversity and the extent to which a particular candidate would fill a present need on the Board of Directors. The Nominating and Governance Committee does not have a formal policy with regard to the consideration of diversity in identifying director nominees. When identifying director nominees, the committee considers general principles of diversity, and does so in the broadest sense. At a minimum, director candidates must have unimpeachable character and integrity, sufficient time to carry out their duties, the ability to read and understand financial statements, experience at senior levels in areas relevant to the Company and consistent with the objective of having a diverse and experienced Board, the ability and willingness to exercise sound business judgment, the ability to work well with others and the willingness to assume the responsibilities required of a director of the Company.

       Each nominee for director named herein was recommended to the Company by the Nominating and Corporate Governance Committee.

       The Nominating and Corporate Governance Committee met on one occasion during fiscal 2014.

Audit Committee

       Our Audit Committee chair is Richard M. Brooks. Our Board of Directors has determined that each of the members of our Audit Committee is “independent,” as defined under and required by the federal securities laws and the rules of the NASDAQ Stock Market. Our Board of Directors has determined that Mr. Brooks qualifies as an “audit committee financial expert” under the federal securities laws and that each member of the Audit Committee has the “financial sophistication” required under the rules of the NASDAQ Stock Market.

       Our Audit Committee oversees the accounting and financial reporting processes of our Company, related controls, and oversees the external audit processes on behalf of our Board of Directors. The Audit Committee also assists the Board in fulfilling its oversight responsibilities by reviewing the financial information that is provided to stockholders and others, and the Company’s system of internal and external controls regarding finance, accounting, legal compliance and ethics. The Audit Committee oversees the independent auditors, including their independence and objectivity. However, the committee members are not acting as professional accountants or auditors, and their functions are not intended to duplicate or substitute for the activities of management and the independent auditors. The Audit Committee is empowered to retain independent legal counsel and other advisors as it deems necessary or appropriate to assist the Audit Committee in fulfilling its responsibilities, and to approve the fees and other retention terms of the advisors.

       The Audit Committee met on eight occasions during fiscal 2014.

Compensation Committee

       Our Compensation Committee chair is Tery R. Larrew. Our Board has determined that each member of the Compensation Committee qualifies as “independent”, as defined under and required by the federal securities laws and the rules of the NASDAQ. The Compensation Committee establishes and reviews the Company’s overall management compensation philosophy and policies.

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       The Compensation Committee operates under a written charter which establishes the primary responsibilities as follows:

  • Directly review and approve corporate goals and objectives relevant to the compensation of the Company’s CEO and other executive officers, including annual and long-term performance goals and objectives;
  • Evaluate the performance of the Company’s CEO and other executive officers in light of those goals and objectives; and determine and approve the compensation of the CEO and other executive officers based on that evaluation, including incentive-based cash compensation and equity-based compensation;
  • Review and authorize any employment, compensation, benefit or severance agreement with any executive officer (and any amendments or modifications thereto);
  • Administer and oversee any equity-based stock awards under our stock compensation plans or programs as to which the Board has delegated such responsibility to the Committee; and
  • Review and make recommendations to the Board with respect to the Company’s overall director compensation philosophy and policies.

       The Compensation Committee has in the past, and may in the future, delegate authority to review and approve the compensation of our employees to certain of our executive officers, including with respect to stock option grants issued under our Stock Option Plan. Even where the Compensation Committee has not delegated authority, our executive officers typically make recommendations to the Compensation Committee regarding compensation to be paid to our employees and the size of stock options and stock grants.

       In its sole discretion, the Compensation Committee has the authority to retain a compensation consultant. During fiscal 2013, Compensia, Inc., an executive compensation advisory services firm, was retained directly by the Compensation Committee to provide various advice to the Compensation Committee.

       The Compensation Committee met on three occasions during fiscal 2014.

Compensation Committee Interlocks and Insider Participation

       During fiscal 2014, the Compensation Committee was composed entirely of Independent Directors. None of the members of the Compensation Committee is or was, during fiscal 2014 or previously, an officer or employee of our Company and none had any relationship requiring disclosure under Item 404 of the SEC’s Regulation S-K. During fiscal 2014, none of our executive officers served as a member of a Board of Directors or compensation committee of any other entity that had one or more executive officers serving as a member of our Board or Compensation Committee.

Code of Ethics

       Our Board of Directors has adopted a Code of Ethics for Senior Officers (the “Code”) that establishes the standards of ethical conduct applicable to all Directors, officers and employees of our Company, including our Chief Executive Officer and senior financial officials. It is available on our website at www.daegis.com/about/investor-relations/corporate-governance. The Code affirms that we expect all Directors and employees to uphold our standards of ethical behavior and compliance with the law and to avoid conflicts of interest between the Company and their personal and professional affairs. It establishes procedures for the confidential reporting of suspected violations of the Code. It also sets forth procedures to receive, retain, and treat complaints received regarding accounting, internal accounting controls, auditing or compliance matters and to allow for the confidential and anonymous submission by employees of concerns regarding questionable accounting, auditing or compliance matters. Our Code of Ethics for Senior Officers also addresses conflicts between the interests of our Directors or officers and our Company or its stockholders. The Audit Committee is responsible for applying and interpreting the Code in situations where questions are presented to it. Any waiver of our Code of Ethics for Senior Officers must be approved by the Audit Committee, or the Board of Directors, as applicable, and in compliance with applicable law.

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Compensation of Directors

       Each Independent Director receives an annual cash retainer and may receive an annual stock option grant. The compensation for each Independent Director is assessed by the other members of the Board and is generally based upon the degree and quality of his/her participation in Board activities. For the year ended April 30, 2014, no options to purchase shares of our common stock were awarded to our Directors. The Company reimburses expenses for the Directors' attendance at board and committee meetings. A summary of the compensation for each Independent Director is included on the following table.

Based Upon Annual Amount How Paid
Annual Cash Retainer (1) Board participation $25,000 in cash $6,250 per quarter
 
Committee participation $11,000 in cash $2,750 per quarter
 
Stock Option Grant (2) Board determination of award Up to 12,500 An option to purchase the
to be made pursuant to the Shares of common stock Company’s common stock
2010 Stock Option Plans at FMV at the date of Grant
with one-year vesting
period

(1)       Directors also receive compensation for their participation or chairing of committees. These payments are paid in four quarterly payments. In addition to the fees paid for board and committee participation, the Chairman of the Board is paid $7,000 annually; the Chairmen of the Audit and Compensation Committees are paid $4,000 annually; and the Chairman of the Nominating and Corporate Governance Committee is paid $2,000 annually.
 
(2) Directors can receive an annual stock option grant of up to 12,500 shares of Daegis common stock. Eligibility is determined by the Board and is based on several factors, including the financial performance of the Company, the Director’s personal contribution to the Company and any other relevant factors or events. The stock option grant, if any, has historically been made in May of each year and the exercise price is equivalent to the fair market value of the stock at the time of the option grant. Any such option grant will vest monthly over a period of 12 months.

       The Board reviews the composition of the committees on a regular basis and may from time-to-time, make a determination that changes in the members serving on each committee, or modifications for the compensation for work effort involved, may be made as warranted.

Director Compensation Table

       The following table sets forth certain information with respect to our Independent Director compensation during the fiscal year ended April 30, 2014.

Fees Earned or Stock Option
Name Paid in Cash Awards Awards
Steven D. Whiteman $45,000 - -
Robert M. Bozeman $36,000 - -
Richard M. Brooks $40,000 - -
Tery R. Larrew $40,000 - -

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Director Outstanding Equity Awards at April 30, 2014

       The following table summarizes the outstanding equity award holdings by non-employee Directors which vest monthly over 12 months from the grant date.

Number of Number of
Securities Securities
Underlying Underlying
Unexercised Unexercised Option Option Option
Options Options Exercise Grant Expiration
Executive       (Exercisable)       (Unexercisable)       Price       Date       Date      
(#) (#) ($)
Steven D. Whiteman 7,000 - 2.10 3/10/2006 3/10/2016
2,000 - 2.55 5/1/2007 5/1/2017
5,000 - 6.40 5/2/2008 5/2/2018  
6,500   - 2.60 5/5/2009 5/5/2019
10,000 - 3.56 5/4/2010 5/4/2020
  5,000 - 2.90 5/2/2011 5/2/2021
7,500 - 1.92 7/1/2011 7/1/2021
12,500 - 1.40 5/1/2012 5/1/2022
 
Robert M. Bozeman 4,000 - 6.25 1/14/2008 1/14/2018
5,000 - 6.40 5/2/2008 5/2/2018
6,500 - 2.60 5/5/2009 5/5/2019
10,000 - 3.56 5/4/2010   5/4/2020
5,000 -   2.90   5/2/2011 5/2/2021
7,500 - 1.92 7/1/2011 7/1/2021
12,500 - 1.40 5/1/2012 5/1/2022
 
Richard M. Brooks 5,000 - 1.80 8/1/2005 8/1/2015
2,000 - 2.55 5/1/2007 5/1/2017
5,000 - 6.40 5/2/2008 5/2/2018
6,500 - 2.60 5/5/2009 5/5/2019
10,000 - 3.56 5/4/2010 5/4/2020
5,000 - 2.90 5/2/2011 5/2/2021
7,500 - 1.92 7/1/2011 7/1/2021
12,500 - 1.40 5/1/2012 5/1/2022
 
Tery R. Larrew 2,000 - 2.55 5/1/2007 5/1/2017
5,000 - 6.40 5/2/2008 5/2/2018
6,500 - 2.60 5/5/2009 5/5/2019
10,000 - 3.56 5/4/2010 5/4/2020
5,000 - 2.90 5/2/2011 5/2/2021
7,500 - 1.92 7/1/2011 7/1/2021
12,500 - 1.40 5/1/2012 5/1/2022

Indemnification of Officers and Directors

       Our Articles of Incorporation (the “Certificate”) limits the liability of our Directors to the maximum extent permitted by Delaware law. Delaware law provides that a corporation’s certificate of incorporation may contain a provision eliminating or limiting the personal liability of a director for monetary damages for breach of their fiduciary duties as Directors, except for liability for: (i) any breach of their duty of loyalty to the corporation or its stockholders; (ii) acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (iii) unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the Delaware General Corporation Law; or (iv) any transactions from which the director derived an improper personal benefit. Our Bylaws call for us to indemnify our Directors, executive officers, and trustees to the fullest extent permitted by law. We believe that such indemnification covers negligence and gross negligence. Our Bylaws also permit us to secure insurance on behalf of any executive officer, director, employee or other agent for any liability arising out of his or her actions in such capacity (subject to certain exclusions), regardless of whether the Bylaws permit indemnification.

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Executive Officers

     The following table sets forth certain information concerning our executive officers as of April 30, 2014.

Executive
  Officer
Executive       Current Position with Company       Age       Since
Timothy P. Bacci Interim Chief Executive Officer   55 2013
Susan K. Conner Chief Financial Officer 50 2013
Deborah Jillson President, Archive & eDiscovery Division 48 2012
Vice President and General Manager, Gupta Technologies and
Frank Verardi Composer Technologies 65 2001

     Timothy P. Bacci has served as our Interim Chief Executive Officer since January 2013. He brings more than 20 years of executive experience in private and publicly traded companies. He joined the Daegis Inc. Board of Directors in 2009 and was appointed Executive Chairman in 2012 and Interim CEO in January 2013. Mr. Bacci is the co-founder of BlueLine Partners, a strategic opportunities fund with more than $100 million in assets invested in small, publicly-traded, and undervalued healthcare and IT companies. From December 2004-2013 he was a Managing Partner of BlueLine. Prior to BlueLine, he served in executive positions for software companies, including serving as Chairman and Interim CEO of Instant802 Networks and CEO of siteROCK Corp. He was a co-founder of Vicinity Corporation, which had a successful public offering in 2000 and was subsequently acquired by Microsoft in 2002. Additionally, he has served as a consultant to several early stage technology companies addressing areas relating to corporate strategy and executive recruiting. Mr. Bacci holds a bachelor’s degree of science in engineering from the United States Naval Academy and served as an officer on active duty in the U.S. Navy as a fighter pilot.

     Susan K. Conner was appointed as our Chief Financial Officer in May 2013. She has more than 25 years of experience as a public company CFO, audit partner at a Big 4 accounting firm and business strategist and advisor. Through May 2001, Susan was a Business Assurance Partner with PricewaterhouseCoopers (“PwC”), advising clients on a number of M&A transactions. Following her time at PwC, she served from May 2001 to November 2006 as the CFO at Pegasus Solutions, Inc., a provider of technology services to the hospitality industry, which went private in 2006, and from October 2008 to August 2010 as the CFO of Zix Corporation, a Software as a Service (“Saas”) company that delivers technology in the security sector. Prior to joining the Company, she had most recently worked as an independent advisor to privately-held companies on a variety of transactional and financial leadership engagements. Ms. Conner is a licensed Certified Public Accountant and holds a bachelor’s degree in business administration and accounting from the University of Texas at Austin.

     Deborah Jillson was appointed as the President of the Daegis Archive and eDiscovery Division in December 2013. From May 2012 to November 2013, she served as the President of the Daegis eDiscovery Division. She is a seasoned business executive with more than 16 years of proven experience managing and growing multiple business units and divisions in large, successful companies. At Daegis, she is responsible for the long-term success of the business, growing its product portfolio and positioning Daegis as a sustainable and reputable leader in the eDiscovery market. Previously, Deborah served as the Vice President of Litigation Tools, Services and Hosting at LexisNexis from December 2010 to January 2012 where she was responsible for the cross-functional management of the Concordance and Law eDiscovery software businesses, both of which achieved revenue growth during her tenure. Prior to that role, Deborah was the General Manager at Access Data Summation from August 2005 to December 2010 where she transformed CT Summation CaseVault from an entrepreneurial software provider into an industry recognized leader of eDiscovery cloud-based services. Deborah has extensive experience as a user of eDiscovery software products, having managed paralegal and litigation support staff at top law firms where she navigated the challenges of using both software and SaaS/Cloud solutions. She has a bachelor’s degree in business management from Trinity College.

     Frank Verardi has served as an executive officer since 2000. Mr. Verardi is currently Vice President and General Manager, Gupta Technologies and Composer Technologies and is responsible for driving worldwide sales and the day to day operations for the application development, database and migration business. From May 2007 through April 2011, Mr. Verardi was the Vice President of Sales for the Americas and Asia Pacific regions. From May 2005 to April 2007, he served as Vice President and General Manager where he oversaw the sales and marketing for the Company’s technology products. From June 2003 to April 2005, he served as Vice President of Technical Services, and from May 2001 to May 2003, he served as Vice President of Worldwide Sales and Marketing. Prior to these positions, Mr. Verardi served in various management positions, including Vice President of Worldwide Professional Services, Vice President of Worldwide Product Delivery and Customer Support, and Director of Client Services. Mr. Verardi joined the Company in August 1988. Prior to that, Mr. Verardi held various positions with Computer Sciences Corporation, including Director of Commercial Professional Services. Mr. Verardi received a bachelor’s degree in computer science from California State University, Chico.

There are no family relationships among any of the Company’s executive officers and Directors.

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SUMMARY OF OUR FISCAL YEAR 2014 EXECUTIVE COMPENSATION

General

     The Board of Director’s Compensation Committee, oversees the cash and non-cash compensation programs, and benefit programs applicable to our executive officers and Directors of the Company. Our Compensation Committee is composed entirely of Independent Directors.

     The Compensation Committee is responsible for establishing and approving our policies governing the compensation for our executive officers, after discussion with our Interim Chief Executive Officer as to his direct reports. Consistent with NASDAQ requirements, our Chief Executive Officer’s compensation is determined solely by the Independent Directors, and the Chief Executive Officer does not participate in those discussions or decisions.

     We provide what we believe is a competitive total compensation package to our executive management team through a combination of base salary, an annual cash incentive plan, a long-term equity incentive compensation plan and broad-based benefits programs. We place emphasis on pay for performance-based incentive compensation programs, which make payments when certain Company earnings or revenue goals are achieved. This Summary of Our Fiscal Year 2014 Executive Compensation explains our compensation philosophy, policies and practices with respect to our CEO, and our three most highly compensated officers as of our fiscal year end other than our CEO (collectively, “named executive officers,” or “NEOS”).

The Objectives of Our Executive Compensation Program

     The primary goals of the Compensation Committee with respect to executive compensation are to attract and retain the most talented and dedicated executives possible, to tie annual and long-term cash and equity incentives to achievement of specified performance objectives, and to align executives’ incentives with stockholder value creation. To achieve these goals, the Compensation Committee intends to implement and maintain compensation plans that tie a substantial portion of the executives’ overall compensation to our financial and operational performance, as measured by metrics such as total revenue, revenue growth and profitability. The Compensation Committee evaluates individual executive performance with a goal of setting compensation at levels the Compensation Committee believes are comparable with executives in other companies of similar size and stage of development operating in the software industry while taking into account our relative performance and strategic goals.

We use the following principles to guide our decisions regarding executive compensation:

Allocation between long-term and currently paid out compensation.

     The compensation we currently pay consists of base salary and annual cash incentive compensation. The long-term compensation consists entirely of stock awards or stock options pursuant to our 2010 Stock Option Plan. The allocation between long-term and currently paid out compensation is based on an analysis of how the enterprise software industry and companies of similar size in the general technology market use long-term incentives and currently paid cash compensation to pay their executive officers.

Allocation between cash and non-cash compensation.

     It is our intent to allocate all currently paid compensation and annual incentive compensation pay in the form of cash and all long-term compensation in the form of stock awards and/or stock options to purchase our common stock. We consider competitive market analyses when determining the allocation between cash and non-cash compensation.

15



Provide compensation opportunities targeted at market median levels.

     To attract and retain executives with the ability and the experience necessary to lead us and deliver strong performance to our stockholders, we strive to provide a total compensation package that is competitive with total compensation provided by our industry peer group. We benchmark our salary and target incentive levels and practices as well as our performance results in relation to a peer group of comparable general technology and enterprise software companies of similar size in terms of revenue and market capitalization. We target base salaries and target total cash compensation to approximate the market median (50th percentile) compensation level. See “Market Assessment of Executive Compensation” below.

Require performance goals to be substantially achieved in order for 80% of annual incentive compensation to be earned.

     Our executive compensation program emphasizes pay for performance. Performance is measured based on the achievement of Company financial and operational performance goals established by our Board of Directors relative to our Board of Director approved annual business plan. Our financial and operational goals are established so the attainment of these goals is not assured and will require significant effort on the part of our executives.

Offer a comprehensive benefits package to all full-time employees.

     We provide a competitive benefits package to all full-time employees which includes health and welfare benefits, such as medical, dental, vision care, disability insurance, life insurance benefits, and a 401(k) Savings Plan. We have no structured executive perquisite benefits (e.g., club memberships or company vehicles) for executive officers, including the NEOs, and we currently do not provide any deferred compensation programs or supplemental pensions to any executive officer, including the NEOs.

Provide fair and equitable compensation.

     We provide a total compensation program that we believe will be perceived by both our executive officers and our stockholders as fair and equitable. In addition to conducting analyses of market pay levels and considering individual circumstances related to each executive officer, we also consider the pay of each executive officer relative to each of the other executive officers and relative to other members of the management team. We have designed our total compensation programs to be fair among our executive management team.

Our Executive Compensation Program Elements

     Overall, our executive compensation programs are designed to be consistent with the objectives and principles set forth above. For each fiscal year, the Compensation Committee will select, in its discretion, the executive officers of the Company or its subsidiaries who are to participate in the Company’s incentive plans. The Compensation Committee will establish the terms and conditions applicable to any award granted under the plan and a participant will be eligible to receive an award under the plan in accordance with such terms and conditions. Awards will be paid in whole or in part in cash, common stock or other property and will generally be paid in the first quarter following completion of a given fiscal year. The basic elements of our executive compensation programs are summarized below:

     Base Salary. Base salaries for our executives are established based on the scope of their responsibilities, taking into account competitive market compensation paid by other companies for similar positions. Consistent with our compensation philosophy, we generally believe executive base salaries should be targeted near the median of the range of salaries for executives in similar positions with similar responsibilities at comparable companies. Base salaries are reviewed annually, and adjusted from time to time to realign salaries with market levels after taking into account individual responsibilities, performance and experience. For fiscal 2014, this review occurred during the first quarter.

     Incentive Compensation Plan. The Company, as approved by the Compensation Committee, maintains an annual Incentive Compensation Plan (“Incentive Plan”) such that executives of the Company can receive an incentive compensation payment based on the achievement of pre-defined objectives. Each participant in the Plan has a target Incentive Plan opportunity for the fiscal year based on a percentage of base salary. The primary objective of the Incentive Plan is to compensate executives for achieving Company and division financial goals. In addition, during fiscal year 2014, the annual Incentive Plan included a discretionary bonus component which accounted for 20% of the NEO’s Incentive Plan opportunity. The actual amount of any discretionary bonus payment will be determined following a review of each executive’s individual performance and contribution to our strategic goals. For fiscal 2014, the Incentive Plan financial performance targets for the heads of our Archive and eDiscovery division, and the Gupta Technologies and Composer Technologies division, respectively, were based on revenue and Adjusted EBITDA for the division, as well as the overall company Adjusted EBITDA. The financial goal performance target for the corporate executive officers was based on overall Company revenue and Adjusted EBITDA. The term Adjusted EBITDA was defined as “earnings before interest, taxes, depreciation, amortization and stock compensation expense”. For fiscal 2014, 80% of each NEO’s Incentive Compensation Plan opportunity was based upon achievement of these financial goals. 

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     In November 2013, the Compensation Committee reviewed the fiscal year 2014 performance goals based on the Company’s performance to date during the fiscal year. The Committee established the fiscal year performance goals so that they would be difficult, but not impossible to achieve, requiring substantial effort, in order to retain and incent its executives. Based on this review, the Committee modified downward the fiscal year 2014 Adjusted EBITDA goals (but not the Company revenue goals) during November 2013 to reflect the Company’s actual Adjusted EBITDA performance during the first two fiscal quarters, and to establish challenging, but achievable, Adjusted EBITDA goals for the remainder of the fiscal year.

     The Compensation Committee retains negative discretion to cancel, reduce, modify or eliminate performance payments under the Incentive Plan as it deems necessary. For fiscal 2014, the Committee exercised its discretion to reduce the NEOs’ Incentive Plan awards calculated based on actual financial performance by approximately 15%. For fiscal 2014, each participating NEO received a discretionary bonus equal to 85% of his or her total discretionary bonus opportunity. The Board established the payout of the discretionary bonuses considering the NEOs’ contributions toward to Company’s reorganization.

     Long-Term Equity Incentive Program. We believe long-term performance is achieved through an ownership culture that encourages such performance by our executive officers through the use of stock and stock-based awards. Our stock compensation guidelines have been established to provide certain of our employees, including our executive officers, with incentives to help align those employees’ interests with the interests of stockholders. The Compensation Committee believes that the use of stock and stock-based awards is a significant component in enabling the Company to achieve its compensation goals. All stock awards are made at the direction of the Compensation Committee.

     Options and Stock Awards. Our 2010 Stock Plan authorizes the Compensation Committee to grant options to purchase shares of common stock to our employees, Directors and consultants. Our Compensation Committee provides oversight to management in their role as the administrator of the stock option plan. Stock option grants are made at the commencement of employment and, occasionally, following a significant change in job responsibilities or to meet other special retention or performance objectives. Stock option grants may also make up part of the annual compensation package for our named executive officers. The Compensation Committee reviews and approves stock option awards to executive officers based upon a review of competitive compensation data, its assessment of individual performance, a review of each executive’s existing long-term incentives, and retention considerations. Periodic stock option grants are made at the discretion of the Compensation Committee to eligible employees and, in appropriate circumstances, the Compensation Committee considers the recommendations of members of management. In fiscal 2014, one named executive officer was awarded a stock option grant upon commencement of her employment in the amount indicated in the “Summary Compensation Table”. No other options or stock awards were made in fiscal 2014.

     Other Compensation. In accordance with our compensation philosophy, the Compensation Committee may, in its discretion, revise, amend or authorize any changes to the executive officer’s compensation or benefits as deemed necessary.

     Retirement Savings Opportunity. The Company maintains a 401(k) employee retirement savings plan. Eligible employees may contribute up to 100% of their pre-tax salary, but not more than statutory limits. We match a portion of employee contributions, currently 50% of the first 6% of compensation deferred, which vests immediately. We do not provide an option for our employees to invest in our common stock in the 401(k) plan.

     Health and Welfare Benefits. All full-time employees, including our named executive officers, may participate in our health and welfare benefit programs, including medical, dental and vision care coverage, disability insurance and life insurance.

Market Assessment of Executive Compensation

     Our Compensation Committee determines the compensation for our CEO, including his base salary, cash bonus incentives and equity incentives. For all other named executive officers, the Compensation Committee meets with our Interim CEO, Mr. Bacci, who reviews each executive officer’s performance with the Compensation Committee and makes recommendations to the Compensation Committee with respect to any proposed changes to the executive’s base salary, cash bonus incentives and equity incentives. When assessing the annual compensation elements for our executive officers, the Compensation Committee considers the Company’s corporate strategy, the annual performance of the executive officer, the importance of the executive position to the Company, the existing salary and awards of the executive officer, the expected contributions to be made by the executive officer in the upcoming fiscal year and any other factors the Committee deems appropriate. The Compensation Committee also reviews the analyses and recommendations of the executive compensation consultant retained by the Compensation Committee. After considering the relevant information, the Compensation Committee establishes the annual compensation package for our executive officers. 

17



     In February 2013, the Compensation Committee hired Compensia, Inc. (“Compensia”), an executive compensation advisory services firm, to provide guidance on current industry best practices and compensation market data from comparable companies. The data provided by Compensia included executive compensation information for similar positions as our executive management team from a list of nineteen comparable, publicly-traded general technology and enterprise software companies of similar size in terms of revenue and market capitalization and a proprietary compensation database compiled by Compensia that included a combination of small public companies and late stage pre-IPO companies. Compensia reviewed our executive officers’ total compensation package (including base salary, bonus methodology and target amount, and other short and long-term equity incentives) as compared to the total compensation package of executive officers in similar positions at the comparable companies. Based on this comparison, Compensia prepared an assessment of each of our executive management team’s total compensation package for the Compensation Committee including advice on interpreting the market data and any recommended changes to executive compensation. The compensation market data was summarized at the 25% market percentile, 50% market percentile and 75% market percentiles. The Compensation Committee decided to use the 50% market percentile of the compensation market data since it believed that it was the most appropriate guideline to ensure that our executive compensation is competitive with similar positions of other companies. The Compensation Committee will obtain an updated executive compensation analysis on a bi-annual basis.

Compensation Analysis Peer Group
American Software       FalconStor Software       Onvia
Astea International FTI Consulting Pervasive Software
Callidus Software GlobalSCAPE Smith Micro Software
Crexendo Guidance Software SoundBite Communications
Datawatch   Navigant Consulting   TigerLogic
Epiq Systems NetSol Technologies Versant
Zix Corporation

     Data from the compensation analysis peer group was evaluated with respect to base salary, actual total cash compensation, long-term incentive values, and total direct compensation. The Compensation Committee uses the results of the consultant’s analysis to evaluate the appropriateness of compensation levels for each member of our executive management team. Subsequent to the end of the fiscal year, the Compensation Committee designs the annual executive compensation package based on the Committee’s above stated philosophy, the compensation market data along with other factors including the executive’s and Company’s performance in the prior year, and the difficulty of attaining the financial and operational goals created by the Committee. The annual executive compensation elements include base salary, plus performance incentive compensation based on the attainment of financial and operational goals and, when the Compensation Committee determines it is appropriate, stock option grants.

Risk Considerations

     The Board and Compensation Committee reviewed with management the design and operation of our compensation programs for all employees, including executive officers, for the purpose of determining whether such programs might encourage inappropriate risk-taking that could have a material adverse effect on the Company. After conducting its evaluation, the Compensation Committee does not believe that any of the Company’s compensation policies or practices creates risks that are reasonably likely to have a material adverse effect on the Company.

Tax Deductibility of Executive Compensation

     Limitations on deductibility of compensation may occur under Section 162(m) of the Internal Revenue Code which generally limits the tax deductibility of compensation paid by a public company to its chief executive officer and certain other highly compensated executive officers to $1 million in the year the compensation becomes taxable to the executive officer. There is an exception to the limit on deductibility for performance-based compensation that meets certain requirements. It is the policy of the Compensation Committee to periodically evaluate the qualification of compensation for exclusion from the $1 million deduction limit under Section 162(m) of the Internal Revenue Code, as well as other sections of the Code, while maintaining flexibility to take actions with respect to compensation that it deems to be in the interest of the Company and its stockholders which may not qualify for tax deductibility.

18



SUMMARY COMPENSATION TABLE FOR FISCAL YEAR 2014

     The following table sets forth information for the last two years’ compensation paid to or earned during the fiscal years ended April 30, 2014 and 2013, for our Chief Executive Officer, and our three other most highly compensated executive officers:

Non-Equity
Incentive All
Stock Option Compensation Other
Name and Principal Position       Year       Salary       Bonus       Awards       Awards       Plan       Compensation       Total
(1) (2) (3) (4)    
Timothy P. Bacci*      
       Interim Chief Executive 2014 - - - - - $ 406,000 (6) $ 406,000
       Officer 2013 - - - $ 9,113 (5) - $ 268,000 (7) $ 277,113
 
Susan K. Conner**
       Chief Financial Officer 2014 $ 251,654 $ 23,200 (8) - $ 72,945 (9) $ 16,100 (10) $ 5,063 (11) $ 368,962
2013 - - - - - - -
 
Deborah Jillson
       President, Archive & 2014 $ 300,000 $ 75,400 (12) - - $ 14,200 (13) $ 3,750 (11) $ 393,350
       eDiscovery Division 2013 $ 271,875 - - $ 109,350 (14) - $ 7,375 (11) $ 388,600
 
Frank Verardi
       Vice President and General 2014 $ 182,083 $ 15,900 (15) - - $ 40,500 (16) $ 4,294 (11) $ 242,777
       Manager, Gupta 2013 $ 150,000 - - $ 25,515 (17) $ 129,500 $ 5,465 (11) $ 310,522
       Technologies and
       Composer Technologies

* Mr. Bacci was appointed the Interim Chief Executive Officer in January 2013.
     
** Ms. Conner was appointed Chief Financial Officer in May 2013.
 
(1)

Includes amounts, if any, deferred at the named executive officer’s option under our 401(k) Savings Plan.

 
(2)

No stock awards have been granted in the last two fiscal years.

 
(3)

The amounts in this column equal the grant date fair value of each award as computed in accordance with FASB Accounting Standards Codification Topic 718 – Stock Compensation. A discussion of the assumptions used in calculating the grant date fair value of these stock options can be found in Note 9 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, 2014 under the heading “Stock-Based Compensation”. Amounts shown reflect accounting expenses and do not reflect whether the recipient has actually realized a financial benefit from the awards.

 
(4)

Represents incentive compensation earned and paid pursuant to the Company’s Incentive Compensation Plan. In November 2013, the Compensation Committee determined that, based on the significant realignment changes taking place in the Company and performance to date, the adjusted EBITDA performance goals should be reduced, but that the revenue goals would be remain unchanged.

 
(5)

Represents stock options for 12,500 shares granted on May 1, 2012, as compensation for serving as a member of the Board of Directors.

 
(6)

Represents the amounts paid for Interim CEO consulting fees to Mr. Bacci.

 
(7)

Represents $28,000 paid in 2013 for Director compensation, $180,000 paid in 2013 for consulting fees prior to service as the Interim CEO, and $60,000 paid in 2013 for Interim CEO services under a consulting arrangement.

 
(8)

Ms. Conner earned a $23,200 discretionary payment pursuant to the Company’s 2014 Incentive Compensation Plan.

 
(9)

Represents stock options for 150,000 shares granted on May 29, 2013.

 
(10)      

Ms. Conner earned an Annual Incentive Award equal to $16,100. This reflected achievement of 89% of the corporate revenue target and 81% of the corporate adjusted EBITDA target, and the Board’s exercise of discretion to reduce the actual bonus paid by 15%.

19



(11) Represents the Company’s matching contributions under its 401(k) Savings Plan.
 
(12) Ms. Jillson earned a $50,000 discretionary payment paid to reflect leadership in the Company’s realignment, and a $25,400 discretionary bonus pursuant to the Company’s 2014 Incentive Compensation Plan.
 
(13)       Ms. Jillson earned a $14,200 Annual Incentive Award payout. This reflected achievement at 81% of the corporate adjusted EBITDA target, 74% of her division’s revenue target, and 59% of her division’s adjusted EBITDA target, and the Board’s exercise of discretion to reduce the actual bonus paid by approximately 15%.
 
(14) Represents stock options for 150,000 shares granted on May 21, 2012.
 
(15) Mr. Verardi earned a $15,900 discretionary payment pursuant to the Company’s 2014 Incentive Compensation Plan.
 
(16) Mr. Verardi earned a $40,500 Annual Incentive Award payout. This reflected achievement of 81% of the corporate adjusted EBITDA target, 93% of his division’s revenue target, and 97% of his division’s adjusted EBITDA target, and the Board’s exercise of discretion to reduce the actual bonus paid by 15%.
 
(17) Represents stock options for 35,000 shares granted on May 1, 2012.

Employment and Severance Agreements

     Our Board of Directors entered into a consulting arrangement on behalf of the Company with our Interim Chief Executive Officer, Timothy P. Bacci. Mr. Bacci’s consulting fees totaled $264,664, paid at varying monthly amounts, for the first eight months of fiscal 2014 and, beginning in January 2014, the Board approved an increase in the monthly consulting fee to $35,333 per month.

     We have entered into an executive employment agreement with our Chief Financial Officer, Susan K. Conner. The employment agreement provides for base salary equal to $270,000, subject to increase from time to time, an annual incentive bonus opportunity equal to 50% of her current base salary, the grant of a stock option upon her initial employment for 150,000 shares, and the grant of a stock option of 81,922 shares upon the one-year anniversary of her employment which covers 0.5% of the Company’s then-outstanding Common Stock. The options vest over a period of four years. Ms. Conner is entitled to severance pay equal to nine months of her base salary and the reimbursement of medical premiums for nine months if her employment is terminated by the Company other than for “cause”, if she resigns employment for “good reason”, or within twelve months following a “change in control”. In the event of a termination following a “change in control”, she will also be provided an additional payment equal to her maximum incentive compensation for the fiscal year of the termination, and any stock options would become fully vested and exercisable as of the date of termination.

     We have an employment letter with our Archive and eDiscovery President, Deborah Jillson. It provides for base salary equal to $300,000 and a bonus opportunity of $150,000 per year, subject to adjustment by the Company, and severance pay equal to nine months of her base salary if her employment is terminated by the Company other than for “cause” or as a result of a “change in control”.

     We also have entered into a severance agreement with our Vice President and General Manager, Gupta Technologies and Composer Technologies, Frank Verardi. The severance agreement provides for payment to Mr. Verardi of six months of his base salary and the reimbursement for medical premiums for six months if his employment is terminated by the Company other than for “cause” or as a result of a “change in control”.

Change of Control

     Under our 2001 and 2010 Stock Option Plans, should we merge with or otherwise be acquired by another company in a transaction where our stockholders do not retain a majority of the voting stock, such event would constitute a “Change of Control.” If there is a Change of Control and the successor company fails to either assume the outstanding options or substitute substantially equivalent options for its own stock, all our outstanding options shall become fully vested and immediately exercisable. Any outstanding options will terminate if they are not exercised upon consummation of the merger or assumed or replaced by the successor corporation.

20



Outstanding Equity Awards at April 30, 2014

     The following table summarizes the outstanding equity award holdings by our named executive officers.

 
Number of Number of
Securities Securities
Underlying Underlying
Unexercised Unexercised Option Option Option
Options Options Exercise Grant Expiration
Executive (Exercisable) (Unexercisable) Price Date Date
      (#)       (#)       ($)                  
Timothy P. Bacci 8,000 - 3.46 8/20/2009  (1) 8/20/2019
  10,000 - 3.56 5/4/2010  (1) 5/4/2020
5,000 - 2.90 5/2/2011  (1) 5/2/2021
7,500 - 1.92 7/1/2011  (1) 7/1/2021
12,500 - 1.40 5/1/2012  (1) 5/1/2022
 
Susan K. Conner - 150,000 1.10 5/29/2013  (2) 5/29/2023
 
Deborah Jillson 71,875 78,125 1.26 5/21/2012  (2) 5/21/2022
 
Frank Verardi 4,000 - 2.30 2/2/2005  (2) 2/2/2015
22,500 - 2.60 5/5/2009  (2) 5/5/2019
22,031 469 3.56 5/4/2010  (2) 5/4/2020
6,563 2,438 2.90 5/2/2011  (2) 5/2/2021
6,960 3,165 1.92 7/1/2011  (2) 7/1/2021
33,541 1,459 1.40 5/1/2012  (3) 5/1/2022

(1)         Represents stock options which vest monthly over 12 months from the grant date.
     
(2) Represents stock options which vest 25% after 12 months from the date of grant, and the remaining 75% vest monthly thereafter through the fourth anniversary of the grant date.
     
(3) Represents stock options which vest monthly over 24 months from the grant date.

21



SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS

     Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our executive officers, Directors and persons who beneficially own more than ten percent (10%) of Daegis’ equity securities to file initial reports of ownership and reports of changes in ownership with the Securities and Exchange Commission (“SEC”). Such persons are required by SEC regulations to furnish us with copies of all Section 16(a) reports filed by them.

     Based solely upon our review of such reports furnished to us and written representations from certain reporting persons, we believe that all filing requirements applicable to our executive officers, Directors and more than ten percent (10%) stockholders for the fiscal year ended April 30, 2014, were met.

STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth certain information as of June 30, 2014 (unless otherwise indicated), with respect to the beneficial ownership of our common stock by: (i) each member of our Board of Directors; (ii) each of our named executive officers; (iii) all of our Directors and executive officers as a group; and (iv) each stockholder who is known to us to own beneficially more than 5% of our outstanding common stock.

          Common Shares Owned
  Number of Shares of Percentage of
Name and Address of Beneficial Owner (1)       Common Stock       Total Common Stock
Directors        
       Steven D. Whiteman (2) 85,448 *
       Robert M. Bozeman (3)   60,500   *
       Richard M. Brooks (4) 59,200 *
       Tery R. Larrew (5)   83,998   *
 
Executive Officers        
         Timothy P. Bacci (6)(7) 3,230,077 19.71%
       Susan K. Conner (8)   96,875   *
       Deborah Jillson (9) 89,375 *
       Frank Verardi (10)   148,506   *
All Directors and Executive Officers as a group (8 persons) 3,749,590 22.89%
 
5% Stockholders        
       BlueLine Partners, LLC (6)(7) 3,230,077 19.71%
 
       Norman H. Pessin & Sandra F. Pessin (11)   2,057,991   12.56%
 
       The Jensen Revocable Trust (12)   1,236,794   7.55%
 
* Less than 1%

(1)        The percentage of shares beneficially owned is based on 16,384,444 shares of common stock outstanding as of June 30, 2014. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of common stock subject to options or warrants held by that person that are currently exercisable, or will become exercisable within 60 days of June 30, 2014, are deemed outstanding. Such shares, however, are not deemed outstanding for purposes of computing the percentage ownership of any other person. Except as indicated in the footnotes to this table, the persons named in the table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them, subject to community property laws where applicable. Unless otherwise indicated, the beneficial owner in the table may be contacted in care of Daegis Inc., 600 E. Las Colinas Boulevard, Suite 1500, Irving, TX 75039.
 
(2) Includes 55,500 shares that Mr. Whiteman has the right to acquire under outstanding stock options that are currently exercisable or that become exercisable within 60 days of June 30, 2014.

22



(3) Includes 50,500 shares that Mr. Bozeman has the right to acquire under outstanding stock options that are currently exercisable or that become exercisable within 60 days of June 30, 2014.
             
(4) Includes 53,500 shares that Mr. Brooks has the right to acquire under outstanding stock options that are currently exercisable or that become exercisable within 60 days of June 30, 2014.
 
(5) Includes 48,500 shares that Mr. Larrew has the right to acquire under outstanding stock options that are currently exercisable or that become exercisable within 60 days of June 30, 2014.
 
(6) BlueLine Capital, LLC is the investment manager for a variety of private investment funds and is based in California. Mr. Timothy Bacci and Mr. Scott Shuda are the Managing Directors of BlueLine Partners, LLC and they manage BlueLine Capital Partners, L.P., BlueLine Capital Partners II, L.P., BlueLine Capital Partners III, L.P., BlueLine Capital Partners L.L.C., and BlueLine Capital Partners II, L.L.C. Mr. Bacci also directly owns 3,887 shares. See note (7) below. As reported in Schedule 13D/A filed on March 24, 2011, BlueLine Partners, LLC 3480 Buskirk Avenue, Suite 214, Pleasant Hill, California 94523 has shared voting and dispositive power to such shares.
 
(7) Includes 43,000 shares subject to options held by Mr. Bacci exercisable within 60 days of June 30, 2014. Mr. Bacci also indirectly owns 1,556,080 shares as a managing director of BlueLine Capital, LLC. See note (6) above.
 
(8) Includes 46,875 shares that Ms. Conner has the right to acquire under outstanding stock options that are currently exercisable or that become exercisable within 60 days of June 30, 2014.
 
(9) Includes 84,375 shares that Ms. Jillson has the right to acquire under outstanding stock options that are currently exercisable or that become exercisable within 60 days of June 30, 2014.
 
(10) Includes 99,117 shares that Mr. Verardi has the right to acquire under outstanding stock options that are currently exercisable or that become exercisable within 60 days of June 30, 2014.
 
(11) As reported in Schedule 13D filed on December 19, 2013, Mr. Norman H. Pessin and Ms. Sandra F. Pessin, 366 Madison Avenue, 14th Floor, New York, NY 10017, are private investors and have sole voting and dispositive power over 2,006,056 and 51,935 shares, respectively.
 
(12) Mr. Kurt A. Jensen beneficially owns The Jensen Revocable Trust along with his wife, Ms. Carolyn L. Jensen, who collectively are co-settlors, co-trustees, and co-beneficiaries of The Jensen Revocable Trust, 1344 Adams St., Saint Helena, CA 94574. As reported in Schedule 13D filed on February 5, 2013, Mr. Kurt A. Jensen and Ms. Carolyn L. Jensen share voting and investment power over all the foregoing shares. These shares were issued as part of the Company’s acquisition of Daegis in June 2010. Mr. Jensen had been the president and chief executive officer of Strategic Office Solutions, Inc. (dba Daegis).

23



CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Amounts Due from Officers, Directors and Principal Stockholders.

     We have made no loans to executive officers, Directors, stockholders or other affiliates. Any such loan must be approved by a majority of those Board members who are independent of and have no interest in the transaction.

     On June 30, 2011, the Company completed a $4.0 million private placement which included the issuance of 1,666,667 shares of preferred stock to BlueLine Capital, LLC. The preferred stock included an annual dividend of 10% payable in cash or stock, at the Company’s option. The preferred stock automatically converted on a 1-for-1 basis into shares of common stock of the Company on June 30, 2013. The preferred stock had no other preferences. One of our Board members and our Interim CEO, Timothy P. Bacci, was a managing director of BlueLine Partners.

     During fiscal 2013, the Company’s Board of Directors requested Mr. Timothy P. Bacci to review various operational, sales and marketing functions within the Company and to provide related recommendations to the Company based on the results of this review. For these services, until being appointed the Interim CEO, Mr. Bacci earned $180,000 in fiscal 2013. His current fee arrangement as Interim CEO is discussed under “Employment and Severance Agreements”.

     Director Independence.

     Four of our five Directors are independent under the rules of the NASDAQ Marketplace. Only Mr. Bacci, Interim CEO, is not considered independent under such rules.

INDEPENDENT PUBLIC ACCOUNTANTS

General

     Whitley Penn LLP (“Whitley Penn”) has been selected by the Audit Committee as our independent registered accounting firm for fiscal years ended April 30, 2015 and 2014. During fiscal 2014, our Audit Committee requested management to solicit proposals from several independent registered accounting firms for professional services related to the audit of our financial statements. On January 13, 2014, Audit Committee engaged Whitley Penn as our independent registered public accounting firm to audit our financial statements commencing with the fiscal year ended April 30, 2014. On January 13, 2014, we also notified Grant Thornton LLP (“Grant Thornton”), our independent auditors for the fiscal years ended April 30, 2013 and 2012, of our election to dismiss Grant Thornton as our independent registered public accounting firm.

     A representative of Whitley Penn is expected to be present at the 2014 Annual Meeting, and they are expected to be available to respond to appropriate questions.

     Grant Thornton’s report on our consolidated financial statements for the fiscal year ended April 30, 2013 and 2012 did not contain an adverse opinion or a disclaimer of opinion, nor did Grant Thornton qualify or modify its opinion as to uncertainty, audit scope or accounting principles. During the years ended April 30, 2013 and 2012, and through January 13, 2014, we had no disagreement with Grant Thornton on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures, which disagreements, if not resolved to Grant Thornton’s satisfaction, would have caused Grant Thornton to make reference to the subject matter of disagreement in their reports on our consolidated financial statements; or reportable events, as described under Item 304(a)(1)(v) of Regulation S-K. The material weakness in our internal control over financial reporting described in the foregoing filings with the SEC related to our contract modification process. Grant Thornton agreed with the foregoing disclosures as evidenced by their letter addressed to the SEC, which was filed with our Current Report on Form 8-K, dated January 17, 2014.

     During the years ended April 30, 2013 and 2012, and through January 13, 2014, Whitley Penn was not engaged as an independent accountant to audit either our financial statements or those of any of our subsidiaries, nor have we or anyone acting on our behalf consulted with Whitley Penn regarding either: (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on our financial statements; or (ii) any matter that was the subject of a disagreement or reportable event as set forth in Item 304(a)(2)(ii) of Regulation S-K.

24



Fees Paid to Independent Public Accountants

     The following is a summary of professional fees billed to us by Whitley Penn and Grant Thornton for the year ended April 30, 2014 and April 30, 2013:

Whitley Penn Grant Thornton
      2014       2014       2013
Audit Fees (1) $         112,099 $         143,598 $         327,000
Audit-Related Fees (2) - - -
Tax Fees - - -
All Other Fees - - -
       Total Fees $ 112,099 $ 143,598 $ 327,000

(1)       

The audit fees for fiscal year 2014 represent the amount billed to the Company for services rendered during the fiscal year, even if the auditor did not bill the Company for those services until after the end of the fiscal year, and fiscal 2013 amounts that were settled and approved by the Audit Committee subsequent to the date of the prior year Proxy Statement. In accordance with the SEC’s definitions and rules, audit fees represent fees for professional services for the audit of the Company’s consolidated financial statements included in our Annual Report on Form 10-K, for the review of the Company’s unaudited consolidated financial statements included in our quarterly reports on Form 10-Q, and for the review of registration statements and issuance of consents for services that are normally provided by the accountant in connection with statutory and regulatory filings.

 
(2)

Audit-related fees are billings for assurance and related services that were reasonably related to the performance of the audit or review of our consolidated financial statements, including attestation services that are not required by statute or regulation.

Pre-Approval Policies and Procedures

     In order to assure that the provision of services does not impair the auditor’s independence, the Audit Committee has adopted a policy that requires advance approval of all audit, audit-related, tax services, and other services performed by Whitley Penn. The policy provides for pre-approval by the Audit Committee of specifically defined audit and non-audit services. Unless the specific service has been pre-approved with respect to that year, the Audit Committee must approve the permitted service before the independent auditor is engaged to perform it. Such services are reviewed on at least an annual basis and may be from time-to-time revised. All of the services provided by the independent auditor in fiscal 2014 and 2013 were pre-approved.

OTHER STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS AT NEXT YEAR’S ANNUAL MEETING

     Any proposal to conduct business (other than nominations) at a meeting of stockholders that a stockholder desires to have included in our proxy materials for the 2015 Annual Meeting of Stockholders must comply with the applicable rules and regulations of the SEC, including that any such proposal must be received by our Corporate Secretary at our principal office no later than April 30, 2015 and must otherwise comply with Rule 14a-8 under the Exchange Act and the applicable procedures set forth in our Bylaws.

     Our Bylaws require a stockholder to give advance notice of any proposal to conduct business, or to present a nomination of one or more candidates for election to the Board of Directors, that the stockholder wishes to bring before a meeting of our stockholders. In general, for business proposals or nominations to be brought before an annual meeting by a stockholder, written notice of the stockholder proposal or nomination must be received by our Corporate Secretary during the period beginning 120 days and ending 90 days before the anniversary of the last annual meeting. However, if the date of the upcoming annual meeting is more than 30 days before or more than 60 days after the anniversary of the last annual meeting, notice must be received by the Corporate Secretary during the period beginning 120 days before the upcoming annual meeting and ending on the later of 90 days before the upcoming annual meeting or 10 days after the first public announcement of such meeting date.

     If a stockholder desires to have a proposal to conduct business (other than nominations) included in our proxy materials for the 2015 annual meeting of our stockholders and desires to have such proposal brought before the same annual meeting, the stockholder must comply with the applicable rules and regulations of the SEC and the applicable procedures set forth in our Bylaws. Any stockholder proposals should be sent to: Nominating and Governance Committee, c/o Corporate Secretary, 600 E. Las Colinas Blvd., Suite 1500, Irving, Texas 75039. 

25



Director Nominations

     Under our Bylaws, stockholder recommendations of nominees to the Board of Directors must also comply with the advance notice requirements in our Bylaws, including the requirement that a stockholder notice must be delivered to or mailed and received by the Company not later than thirty (30) days prior to the annual meeting. To submit such recommendations not later than thirty (30) days prior to such meeting; however, in the event that less than forty (40) days’ notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be received not later than the close of business on the 10th day following the date on which such notice of the date of such meeting was mailed or such public disclosure was made.

     Any such recommendation must include the following information:

  • the name and address of the stockholder who intends to make the nomination and of the person or persons to be nominated;
  • a representation that the stockholder is a holder of record of stock of the corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice;
  • a description of all arrangements or understandings between the stockholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the stockholder;
  • such other information regarding each nominee proposed by such stockholder as would be required to be included in a proxy statement filed pursuant to the proxy rules of the Securities and Exchange Commission had the nominee been nominated, or intended to be nominated, by the Board of Directors; and
  • the consent of each nominee to serve as a director of the corporation if so elected.

     Recommendations for director candidates should be sent to: Nominating and Governance Committee, c/o Corporate Secretary, 600 E. Las Colinas Blvd., Suite 1500, Irving, Texas 75039.

26



OTHER MATTERS

     We know of no other matters that will be presented at the Annual Meeting as set forth above. If any other matter or matters are properly brought before the meeting, or any adjournment thereof, it is the intention of the persons named in the accompanying form of proxy to vote the proxy in their discretion. Discretionary authority with respect to other matters is granted by signing and returning the enclosed proxy card or by otherwise providing voting instructions.

WHERE YOU CAN FIND MORE INFORMATION

     You may read and copy any reports, statements or other information that we file with the SEC directly from the SEC. You may either:

  • Read and copy any materials we have filed with the SEC at the SEC’s Public Reference Room maintained at 100 F Street, N.W., Washington, D.C. 20549; or
  • Visit the SEC’s website at www.sec.gov, which contains reports, proxy and information statements, and other information regarding us and other issuers that file electronically with the SEC.

     You may obtain more information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.

     You should not rely only on the information contained (or incorporated by reference) in this Proxy Statement. We have not authorized anyone to provide you with information that is different from what is contained in this Proxy Statement. This Proxy Statement is dated August 28, 2014. You should not assume that the information contained in this Proxy Statement is accurate as of any date other than that date (or as of an earlier date if so indicated in this Proxy Statement).

     Our Annual Report on Form 10-K for the year ended April 30, 2014 (excluding exhibits), is being mailed together with this Proxy Statement and is available on our website at www.daegisinc.com in accordance with the SEC’s “notice and access” regulations.

     Please date, sign and return the proxy card at your earliest convenience in the enclosed envelope. No postage is required for mailing in the United States. We would appreciate the prompt return of your proxy card, as it will save e expense of further mailings.

By Order of the Board of Directors,
 

Susan K. Conner
Chief Financial Officer, Treasurer, & Corporate Secretary


 

Irving, Texas
August 28, 2014

27






DAEGIS INC
Attn: Susan K. Conner
600 E. LAS COLINAS BOULEVARD
Suite 1500
IRVING, TEXAS 75039

VOTE BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.

ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.

VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions.

VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.








TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:       KEEP THIS PORTION FOR YOUR RECORDS
                                  THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For Withhold For All
      All       All       Except
The Board of Directors recommends you vote
FOR the following: o o o
 
1.      Election of Directors
         Nominees

To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below.


  
 

                                                      
01 Steven D. Whiteman 02 Timothy P. Bacci 03 Robert M. Bozeman 04 Richard M. Brooks 05 Tery R. Larrew

The Board of Directors recommends you vote FOR proposals 2 and 3.       For       Against       Abstain
               
2

To ratify the appointment of Whitley Penn LLP as the Company's independent auditors for the fiscal year ending April 30, 2015.

o o o
                      
3

Vote, on an advisory basis, on the compensation of our named executive officers.

o o o
               

NOTE: With discretionary authority, upon such other matters as may properly come before the Annual Meeting. At this time, the Board knows of no other matters to be presented at the meeting.







For address change/comments, mark here.           o
(see reverse for instructions)   Yes   No    
             
Please indicate if you plan to attend this meeting       o       o      

Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer.



   
Signature [PLEASE SIGN WITHIN BOX] Date       
   
Signature (Joint Owners) Date       





 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice & Proxy Statement, Annual Report is/are available at www.proxyvote.com.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
         
DAEGIS INC.

PROXY FOR ANNUAL MEETING OF STOCKHOLDERS

SOLICITED BY THE BOARD OF DIRECTORS

This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors' recommendations.

The undersigned hereby appoints Susan K. Conner with full power of substitution to represent the undersigned and to vote all the shares of the common stock of Daegis Inc. (the “Company”) which the undersigned is entitled to vote at the 2014 Annual Meeting of Stockholders of the Company to be held at Daegis Inc., 600 E. Las Colinas Blvd., Suite 1500, Irving, TX 75039, on October 1, 2014, at 2:00 p.m. Central time, and at any adjournment thereof: (1) as hereinafter specified upon the proposals listed below and as more particularly described in the Company’s Proxy Statement, and (2) in their discretion, upon such other matters as may properly come before the meeting.
 
The undersigned hereby acknowledges receipt of: (1) Notice of Annual Meeting of Stockholders of the Company, (2) accompanying Proxy Statement, and (3) Annual Report of the Company for the fiscal year ended April 30, 2014.
 
         Address change/comments:
 
 
 
(If you noted any Address Changes and/or Comments above, please mark corresponding box on the reverse side.)
 
Continued and to be signed on reverse side


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