Exhibit 10.25
RETENTION
AGREEMENT
This Retention Agreement (this
“ Agreement ”) is entered into on July 13,
2009 between Overland Storage Inc., a California corporation having
its principal offices at 4820 Overland Avenue, San Diego,
California 92123 (the “ Company ”), and Jillian
Mansolf (“ 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;
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 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.
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1.3 “ Cause ”
shall mean
(a) Employee’s gross neglect
of her duties to the Company, where Employee has been given a
reasonable opportunity to cure her 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 Commission.
1.5 “ Resignation For Good
Reason ” shall mean the voluntary resignation by Employee
of her 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
her 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 Commission
” shall mean the variable annual compensation represented by
the sales commission Employee is eligible to receive, prior to a
Change of Control, in the event targeted quotas are achieved during
the year.
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.
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2. Title and Duties . Employee will hold
the position of Vice President, an Executive Officer position.
Employee’s primary duties will include such duties as are
assigned or delegated to Employee by the Chief Executive Officer of
the Company and/or the Board of Directors of the Company (the
“ Board ”). Employee will: (i) devote her
entire business time, attention, skill, and energy exclusively to
the business of the Company; (ii) use her 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 Commission, 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.
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.
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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 her 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’ compensation or unemployment
insurance benefits; or (b) the exclusions from arbitration
specified in the California Arbitration Act, California Code of
Civil Procedure section 1281.8. For the purpose of this
paragraph 8, references to “Employer” include
Company and all related or affiliated entities and their employees,
supervisors, officers, directors, owners, stockholders, agents,
pension or benefit plans, pension or benefit plan sponsors,
fiduciaries, administrators, and the successors and assigns of any
of them, and this paragraph 8 shall apply to them to the
extent that Employee’s claims arise out of or relate to their
actions on behalf of Company.
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8.2 Consideration . The
parties agree that their mutual promise to arbitrate any and all
disputes between them, except as provided in paragraph 8.1,
rather than litigate them before the courts or other bodies,
provides adequate consideration fo
