Exhibit 99.2
AMENDED AND RESTATED RETENTION
AGREEMENT
This Amended and
Restated Retention Agreement (this “ Agreement
”) is entered into on September 27, 2007 between Overland
Storage Inc., a California corporation having its principal offices
at 4820 Overland Avenue, San Diego, California 92123 (the “
Company ”), and
(“ Employee ”). This Agreement amends, restates
and supersedes in its entirety that certain Retention Agreement
effective
between the Company and Employee.
AGREEMENT
WHEREAS, Employee
is a key employee of the Company;
WHEREAS, the
Company considers that providing Employee with certain employment
termination benefits will operate as an incentive for Employee to
remain employed by the Company in the event of a Change of
Control;
WHEREAS, the
parties agreed it is advisable and in the best interests of the
parties to amend and restate this Agreement to make certain changes
related to recent legal developments, most particularly related to
California arbitration procedures and Internal Revenue Code
Section 409A, and also to make certain other changes as
reflected herein; and
NOW THEREFORE, for
the consideration stated above, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the Company and Employee agree as follows:
1.
Definitions
.
1.1
“ Base Salary
” shall mean the Employee’s gross annual salary at the
time of a Change of Control or the Termination Date, whichever is
higher.
1.2
“ Change of
Control ” is defined to have occurred if, and only if,
during Employee’s employment:
(a)
any individual,
partnership, firm, corporation, association, trust, unincorporated
organization or other entity or person, or any syndicate or group
deemed to be a person under Section 14(d)(2) of the Exchange Act is
or becomes the “Beneficial Owner” (as defined in Rule
13d-3 of the General Rules and Regulations under the Exchange Act),
directly or indirectly, of securities of the Company representing
50% or more of the combined voting power of the Company’s
then outstanding securities entitled to vote in the election of
directors of the Company;
(b)
there occurs a
reorganization, merger, consolidation or other corporate
transaction involving the Company (“ Transaction
”), in each case, with respect to which the
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stockholders of the
Company immediately prior to such Transaction do not, immediately
after the Transaction, own more than fifty (50) percent of the
combined voting power of the Company or other corporation resulting
from such Transaction; or
(c)
all or substantially all
of the assets of the Company are sold, liquidated or
distributed.
1.3
“ Cause ” shall mean
(a)
Employee’s gross
neglect of his duties to the Company, where Employee has been given
a reasonable opportunity to cure his gross neglect (which
reasonable opportunity must be granted during the thirty-day period
preceding termination);
(b)
any violation by Employee
of Employee’s obligations under this Agreement or any
employment agreement which Employee may have with the
Company;
(c)
Employee taking any role
in any buy-out of the Company without the approval of the
Company’s majority shareholder; or
(d)
Employee’s
commission of any act of fraud, theft or embezzlement against the
Company.
1.4
“
Compensation ” shall mean Base Salary plus Target
Bonus.
1.5
“ Resignation For
Good Reason ” shall mean the voluntary resignation by
Employee of his employment with the Company within two years
following a Change of Control and within three (3) months of the
following Good Reasons:
(a)
any reduction in
Employee’s Base Salary or Target Bonus; or
(b)
any reduction in
Employee’s title; or
(c)
any significant reduction
in Employee’s responsibilities and authority;
(d)
any failure by the Company
to pay Employee’s Base Salary; or
(e)
a relocation by the
Company of Employee’s place of Employment outside a fifty
(50) mile radius of Employee’s current place of
employment.
An event described
in Section 1.5(a) through (e) will not constitute Good Reason
unless Employee provides written notice to the Company of his
intention to resign for Good Reason and unless the Company does not
cure or remedy the alleged Good Reason condition within thirty (30)
days of the Company’s receipt of the written
notice.
1.6
“ Severance
Period ” shall begin on the Termination Date and extend
for twelve months following the Termination Date.
1.7
“ Target
Bonus ” shall mean the variable annual compensation
represented by the percentage of Base Salary Employee is eligible
to receive, if any, prior to a Change of Control,
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in the event targeted
goals are achieved for the year. Employee acknowledges that
there is no Target Bonus established for Employee at the date of
this Agreement.
1.8
“ Termination
Date ” shall mean the date of termination of
Employee’s employment relationship with the
Company.
1.9
“ Termination
Payments ” shall mean any payment or distribution of
Compensation or benefits made pursuant to Section 4.1(a)-(c) of
this Agreement.
2.
Title and
Duties .
Employee will hold the position of
.
Employee’s primary duties will include such duties as are
assigned or delegated to Employee by the Board of Directors of the
Company (the “ Board ”). Employee will:
(i) devote his entire business time, attention, skill, and energy
exclusively to the business of the Company; (ii) use his best
efforts to promote the success of the Company’s business; and
(iii) cooperate fully with the Board in the advancement of the best
interests of the Company.
3.
At-Will
Employment . Employee reaffirms that
Employee’s employment relationship with the Company is
at-will, terminable at any time and for any reason by either the
Company or Employee. While certain paragraphs of this
Agreement describe events that could occur at a particular time in
the future, nothing in this Agreement may be construed as a
guarantee of employment of any length.
4.
Termination
Payments .
4.1
If, within two (2) years
immediately following a Change of Control, Employee’s
employment terminates as the result of (i) termination by the
Company of Employee’s employment for a reason other than
Cause; or (ii) Employee’s Resignation for Good
Reason:
(a)
Employee will receive a
pro-rata share of Base Salary and accrued but unused vacation
through the Termination Date, less applicable state and federal
taxes or other payroll deductions;
(b)
Subject to Section 9,
Employee will be eligible for Severance under this Agreement in a
lump-sum amount equal to Base Salary plus Target Bonus (if any be
established in the future), less applicable state and federal taxes
or other payroll deductions; and
(c)
Subject to Section 9, if
Employee elects to continue insurance coverage as afforded to
Employee according to the Consolidated Omnibus Budget
Reconciliation Act of 1985 (“ COBRA ”), Company
will reimburse Employee the amount of the premiums incurred by
Employee during the Severance Period. Nothing in this
Agreement will extend Employee’s COBRA period beyond the
period allowed under COBRA, nor is Company assuming any
responsibility which Employee has for formally electing to continue
coverage.
With the exception of
COBRA reimbursements, all payments made pursuant to this Section
4.1 will be made within 60 days following the termination of the
employment of Employee, subject to Section 9.
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4.2
The payments set forth in
Section 4.1(b) and (c) above are in exchange for, and contingent
upon Employee’s execution and non-revocation of a release of
all claims as of the Termination Date, in substantially the form
attached to this Agreement as Exhibit A .
4.3
If Employee’s
employment terminates for any reason after the two year period
immediately following a Change of Control or terminates during that
two year period for any reason other than (i) termination by the
Company of Employee’s employment for a reason other than
Cause; or (ii) Employee’s Resignation for Good Reason, the
Company will pay Employee a pro-rata share of Base Salary and
accrued but unused vacation through the Termination Date, less
applicable state and federal taxes or other payroll
deductions.
5.
Retirement and
Profit-Sharing Plans . Notwithstanding anything in this
Agreement to the contrary, Employee’s rights in any
retirement, pension or profit-sharing plans offered by the Company
shall be governed by the rules of such plans as well as by
applicable law; provided, however, that on the Termination Date,
Employee shall become fully vested in all pension and 401(k)
account balances.
6.
Tax
Consequences . The Company makes no representations
regarding the tax consequence of any provision of this
Agreement. Employee is advised to consult with his own tax
advisor with respect to the tax treatment of any payment contained
in this Agreement.
7.
Tax
Adjustment . Notwithstanding the foregoing or any
other provision of this Agreement to the contrary, if tax counsel
selected by the Company and acceptable to Employee determines that
any portion of any payment under this Agreement would constitute an
“excess parachute payment” within the meaning of
Section 280G of the Internal Revenue Code of 1986, as amended (the
“ Code ”), the payments to be made to Employee
under this Agreement shall be reduced (but not below zero) such
that the value of the aggregate payments that Employee is entitled
to receive under this Agreement and any other agreement or plan or
program of the Company shall be one dollar ($1) less than the
maximum amount of payments which Employee may receive without
becoming subject to the tax imposed by Section 4999 of the
Code.
8.
Agreement to
Arbitrate . Employee and Company agree to arbitrate
any claim or dispute (“ Dispute ”) arising out
of or in any way related to this Agreement, the employment
relationship between Company and Employee or the termination of
Employee’s employment, except as provided in
paragraph 8.1 below, to the fullest extent permitted by
law. Except as provided above, this method of resolving
Disputes shall be the sole and exclusive remedy of the
parties. Accordingly, the parties understand that, except as
provided herein, they are giving up their rights to have their
disputes decided in a court of law and, if applicable, by a jury,
and instead agree that their disputes shall be decided by an
arbitrator.
8.1
Scope
of the Agreement . A Dispute shall include all disputes or
claims between Employee and Company arising out of, concerning or
relating to Employee’s employment by Company, including,
without limitation: claims for breach of contract, tort,
discrimination, harassment, wrongful termination, demotion,
discipline, failure to accommodate, compensation or benefits
claims, constitutional claims and claims for violation of any
local, state or federal law, or common law, to the fullest extent
permitted by law. A Dispute shall not include any dispute or
claim, whether brought by either Employee or Company, for:
(a) workers’
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compensation or
unemployment insurance benefits; or (b) the
