Exhibit 99.1
AMENDED AND RESTATED EMPLOYMENT
AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT
AGREEMENT (this
“ Agreement ”) is entered into between Overland
Storage, Inc., a California corporation (“ Employer
” or the “ Company ”) and Vernon A.
LoForti (“ Executive ”) on September 27,
2007. This Agreement is entered into in connection with the
appointment of Executive to the new position of President and Chief
Executive Officer of the Company on August 7, 2007 (the “
Effective Date ”), and shall be deemed effective as of
such date. This Agreement amends, restates and supersedes in
its entirety that certain Employment Agreement effective December
4, 2000 between Employer and Executive.
The parties agree as
follows:
1.
Positions And
Duties .
Executive will be employed by the Company in the position of
President and Chief Executive Officer (“ CEO ”),
reporting to the Company’s Board of Directors (the “
Board ”), and shall do and perform all services, acts
or things necessary or advisable to manage and conduct the business
of the Company and which are normally associated with the position
of President and CEO consistent with the bylaws of the Company and
as required by the Board.
1.1
Best
Efforts/Full-Time . During the Employment Term (as defined
in Section 1.2 herein), Executive will act in the best
interests of Employer and devote his full business time and best
efforts to the performance of his duties under this
Agreement. Executive agrees to be available to render such
services at all reasonable times and places and in accordance with
Employer’s directives. Executive shall be assigned to work in
the Company’s corporate offices in San Diego, California, but
may be required to travel in connection with his duties.
Executive will abide by all policies, procedures, and decisions
made by Employer, as well as all federal, state and local laws,
regulations or ordinances applicable to his employment. During his
employment, Executive must not engage in any work, paid or unpaid,
that creates an actual or potential conflict of interest with
Employer’s business interests and if, in the opinion of the
Board, an actual or potential conflict exists, the Board may in its
sole discretion require Executive to choose either to
(i) discontinue the other work or (ii) resign from his
employment with Employer. The foregoing restriction shall not
preclude Executive from engaging in civic, charitable or religious
activities, or from serving on boards of directors of companies or
organizations so long as he notifies the Board of such services in
writing, and such services do not pose a conflict or interfere with
his responsibilities to Employer. It is anticipated that
Executive shall generally devote no less than 40 hours per week to
his duties for Employer.
1.2
Term
Of Employment . This Agreement shall commence on the
Effective Date, and, unless terminated by either party in
accordance with Section 5 herein, shall continue until the
first anniversary of the Effective Date. Thereafter, unless
terminated by either party in accordance with Section 5,
Executive’s employment shall automatically renew for an
additional one year term on such date and on each anniversary
thereof (the period of employment hereunder shall be referred to
herein as the “ Employment Term ”). Except
as provided in Section 6, this
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Agreement shall
continue during the Employment Term to govern the terms and
conditions of Executive’s employment, unless modified by the
parties hereto in writing.
1.3
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.
2.
Compensation
.
2.1
Base
Salary .
As compensation for the proper and satisfactory performance of all
duties under this Agreement, Executive shall earn a gross annual
base salary of $400,000.00 ($16,666.67 gross per bi-weekly payroll
period), less applicable state and federal taxes and other payroll
deductions, payable in accordance with Employer’s normal
payroll practices but in no event less frequently than once per
month (the “ Base Salary ”).
2.2
Bonus . Executive will be eligible to
receive potential quarterly or annual cash bonus earnings solely as
determined (if any) from time to time by the Board or duly
authorized committee thereof (and in each case in the sole
discretion of the Board or duly authorized committee
thereof). Any such bonuses will be based on the
Company’s financial quarters or June 30 fiscal year, and
will be paid to Executive within 75 days following the end of such
fiscal quarter or year. Executive understands and agrees that he is
not eligible or otherwise entitled to any bonus under this section
unless Executive’s employment with the Company continues
through the date of payment of any such bonus. Executive
acknowledges that, as of the date of this Agreement, the Board has
not established any bonus target or program for
Executive.
2.3
Equity
Incentives. Executive will be eligible to receive stock
options or other equity incentives as determined from time to time
by the Board or duly authorized committee thereof, and in each case
in its sole discretion and in accordance with terms and conditions
determined by the Board or duly authorized committee
thereof.
2.4
Unilateral Modification Of
Compensation . Employer reserves the right to modify
Executive’s compensation, at any time, at its sole and
absolute discretion.
3.
Customary Fringe
Benefits . Executive shall be eligible for all
customary and usual benefits generally available to all executive
level employees of Employer, as determined in the sole and absolute
discretion of Employer and subject to the terms and conditions set
forth in the applicable benefit plan or policy. Employer
reserves the right to change or eliminate any of the fringe
benefits provided to executive level employees on a prospective
basis at any time, at Employer’s sole and absolute
discretion. Executive understands that all benefits provided
in this section may be reduced by, or subject to, all
applicable taxes.
4.
Business
Expenses . Executive will be reimbursed for all
reasonable, out-of-pocket business expenses incurred in the
performance of his duties on behalf of Employer subject to
Executive’s compliance with the Company’s established
expense reimbursement policy.
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5.
Termination
.
5.1
Termination For Cause By
Employer . Employer may terminate
Executive’s employment under this Agreement immediately at
any time for “Cause,” which shall include, but is not
limited to: (a) acts or omissions constituting gross
negligence, recklessness or willful misconduct on the part of
Executive with respect to his obligations or otherwise relating to
the business of Employer; (b) Executive’s material
breach of this Agreement; (c) Executive’s conviction or
entry of a plea of nolo contendere for fraud, misappropriation or
embezzlement, or any felony or crime of moral turpitude;
(d) Executive’s dishonesty or involvement in any conduct
that adversely affects Employer’s name or public image or is
otherwise detrimental to Employer’s business interests;
(e) Executive’s willful neglect of duties as determined
in the sole and exclusive discretion of Employer; or
(f) Executive’s death or permanent disability (defined
to mean Executive’s inability because of illness or
incapacity substantiated by appropriate medical authority, to
render services of the character contemplated by this Agreement
over a period of six consecutive months).
5.1.1
Entitlements Upon Termination
For Cause . In the event that Executive’s
employment is terminated for Cause in accordance with
Section 5.1, Executive shall be entitled to receive:
(a) the Base Salary then in effect, pro-rated to the date of
termination; (b) any bonus to which Executive is then entitled
pursuant to Section 2.2, if any; and (c) any expense
reimbursements to which Executive is entitled by virtue of his
prior employment with Employer (collectively, (a), (b) and (c)
above are referred to herein as the “ Standard
Entitlements ”). The Standard Entitlements shall be
paid to such Executive within 30 days following termination or
earlier if required by law. In the event of such termination
for Cause, Executive shall not be entitled to receive (i) the
Severance Payment (as defined in Section 5.2 below) or any portion
thereof, or (ii) any further vesting of stock options, and all
other obligations of Employer to Executive pursuant to this
Agreement shall automatically terminate and be completely
extinguished.
5.2
Termination Without Cause By
Employer . Employer may terminate
Executive’s employment, without Cause, at any time. If
Employer terminates Executive’s employment without Cause,
Executive shall be entitled to receive the Standard Entitlements,
which shall be paid to Executive within 30 days following
termination or earlier if required by law. In addition to the
above, so long as Executive complies with all of the conditions in
Section 5.2.1 below, Executive will be entitled to an aggregate
severance payment equal to the sum of (i) Executive’s then
Base Salary, plus (ii) the total bonus amount paid to Executive
pursuant to Section 2.2, if any, during the 12 months immediately
preceding the date of termination (collectively, the “
Severance Payment ”). Subject to Section 11, the
Severance Payment shall be paid to Executive (less applicable state
and federal taxes or other payroll deductions) on a pro-rated basis
in accordance with Employer’s regular payroll practices for
the 12 months immediately following the date of termination,
provided that such payments shall not commence before: (i) Employer
receives an executed copy of the Release (defined in Section 5.2.1)
from Executive; and (ii) Executive’s right to revoke the
Release has lapsed under applicable law and the terms of the
Release. Upon Executive’s termination without Cause, subject
to the conditions specified above, any shares of Common Stock
underlying Executive’s then outstanding stock options that
otherwise would vest during the twelve (12) months following the
date of such termination shall vest in full and shall be
immediately exercisable as of the date of such termination, and
such
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stock options may be
exercised in whole or in part at any time within ninety (90) days
of the date of such termination without Cause. In the event
of such termination without Cause, all of Employer’s other
obligations pursuant to this Agreement shall terminate
automatically and extinguish completely following the date of such
termination without Cause.
5.2.1
Conditions to Receive
Severance Payment. The Severance Payment will be paid provided
that the following conditions are met: (i) Executive complies with
all surviving provisions of this Agreement as specified in
Section 12.8 below; and (ii) Executive executes (and does not
revoke) a full general release in the form attached hereto as
Exhibit A , releasing all claims, known or unknown, that
Executive may have against Employer arising out of or in any way
related to Executive’s employment or termination of
employment with Employer (the “ Release
”).
5.3
Voluntary Resignation by
Executive for Good Reason. If Executive notifies Employer in writing
within 60 days following the initial existence of one of the
circumstances constituting “Good Reason” (see Section
5.3.1), Employer will be given at least 30 days from the receipt of
such notice in which Employer may remedy or cure such
condition. For purposes of the foregoing, if Employee does
not timely provide notice to Employer, then Employee is deemed to
have waived this right. If Employer fails to remedy or cure
the condition set forth in Executive’s notice within 30 days
from the receipt of such notice, Executive may resign for Good
Reason, and so long as Executive complies with all of the
conditions set forth in Section 5.2.1 above, Executive will be
entitled to receive the Severance Payment. Subject to
Section 11, the Severance Payment shall be paid to Executive
(less applicable state and federal taxes or other payroll
deductions) on a pro-rated basis in accordance with
Employer’s regular payroll practices for the 12 months
immediately following the date of termination, provided that such
payments shall not commence before: (i) Employer receives an
executed copy of the Release from Executive; and (ii)
Executive’s right to revoke the Release has lapsed under
applicable law and the terms of the Release. In the event of such
resignation for Good Reason, all of Employer’s other
obligations pursuant to this Agreement shall terminate
automatically and extinguish completely following the date of such
resignation for Good Reason.
5.3.1
Executive will be deemed
to have resigned for “ Good Reason ” in the
following circumstances: (a) Employer reduces Executive’s
Base Salary by more than ten percent (10%), unless the reduction is
made as part of, and is generally consistent with, a general
reduction of other senior executive salaries; (b) Executive’s
position and/or duties are modified so that his duties are no
longer consistent with the position of President or Chief Executive
Officer; or (c) Employer relocates Executive’s principal
place of work to a location more than fifty (50) miles from
Employer’s current location without his prior written
approval.
5.4
Voluntary Resignation By
Executive without Good Reason . In the event Executive’s
resignation is without Good Reason, Executive shall be entitled to
receive the Standard Entitlements (to be paid within 30 days
following such resignation or earlier as required by law), but
shall not be entitled to receive (i) the Severance Payment or any
portion thereof, or (ii) any further vesting of stock options; and
all other obligations of Employer to Executive pursuant to this
Agreement shall automatically terminate and be completely
extinguished.
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6.
Termination Upon Change
Of Control . In the event of a “Change of
Control” (as defined in the Retention Agreement), all of
Employer’s obligations to Executive pursuant to
Section 5 above shall terminate automatically and extinguish
completely, and the consequences of any termination or resignation
of Executive on or after a Change of Control will be gov
