Exhibit 99.1
February 14, 2008
Robert Scroop
13414 Appalachian Way
San
Diego, California 92129
Re: Employment, Separation and
General Release Agreement
Dear Bob,
I
am writing in connection with your written resignation as Vice
President of New Product Delivery and as an officer of Overland
Storage, Inc. (the “Company”), which resignation
is dated and effective February 11, 2008 (“Effective
Date”). Although you will no longer serve as an officer of
the Company after the Effective Date, subject to your compliance with your
obligations as an employee of the Company and as set forth
below , you will
remain an exempt employee of the Company until August 14,
2008. Your employment with the Company will terminate
effective August 14, 2008 (“Separation
Date”). Although the Company does not have a formal
severance policy, this letter sets forth our proposed agreement
concerning your change in employment status with the Company, your
subsequent separation from the Company, benefits from the Company
and your release of the Company from any obligations or claims (the
“Agreement”). The time period between the
Effective Date and the Separation Date is referred to below as the
“Interim Employment Period.”
This letter constitutes a binding agreement
between you and the Company (the “Agreement”),
contingent solely upon (1) your execution of this Agreement
and (2) this Agreement becoming effective and enforceable on
the date immediately following the expiration of the
“Revocation Period” defined in paragraph 12 below (the
“Agreement Effective Date”).
Terms and
Conditions
1. As noted above, you
have resigned from your current position of Vice President of New
Product Delivery and as an officer of the Company as of the
Effective Date. After the Effective Date and during the
Interim Employment Period you will no longer serve as an officer of
the Company but you will remain an exempt employee of the
Company.
2. For sake of clarity,
since you will not longer serve as a “key employee” of
the Company after the Effective Date, the Amended and Restated
Retention Agreement between you and the Company dated
September 27, 2007 shall terminate and be null and void as of
that date. You agree to sign a separate confirmation of such
termination, if requested by the Company. In the event of a
“Change of Control” of the company, as that term is
defined in the Amended and Restated Retention Agreement, there
shall be no change in the terms of this Agreement, nor the
contemplated Supplemental Release Agreement.
3. As of the Effective
Date, the Indemnification Agreement between you and the Company
dated October 16, 2001 shall terminate and be null and void
since you will no longer serve in an
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indemnified capacity as of the Effective Date
(i.e. as an executive officer). However, in accordance with
Section 14 (“Binding Effect”) of the
Indemnification Agreement, the indemnification provided under the
Indemnification Agreement shall continue indefinitely for any
action taken or not taken while you served as an executive officer
of the Company.
4. During the Interim
Employment Period you will continue to be paid your base salary at
your most recent rate of pay, less all applicable federal, state
and local income tax, social security and other payroll taxes and
401K contributions you may specify, payable on the Company’s
normal payroll cycle. The Company will continue to furnish or
pay, as applicable, during the Interim Employment Period the
following “officer level” benefits which you enjoyed
while you were an executive officer, as if you had continued to
serve as an executive officer during that period:
(1) executive supplemental term life insurance ,
(2) payment of the premiums for standard medical and dental
insurance, and (3) reimbursement to you for any out of pocket
medical expenses for yourself and family, as well as other
expenses, in both cases as governed and limited by the
Company’s executive reimbursement policy. Also, for
sake of clarity, you will not accrue vacation pay during the
Interim Employment Period and your stock options will continue to
vest during the Interim Employment Period.
5. During the Interim
Employment Period, you will provide services to the Company as and
when requested with reasonable notice, including, if requested by
the Company, full time service. You agree to act in the best
interests of the Company, devote your best efforts to the
performance of your services and otherwise comply with all policies
applicable to Company employees. The foregoing restriction shall
not preclude you from engaging in civic, charitable or religious
activities, or from serving on board of directors of companies or
organizations so long as you notify the Company of such services in
writing, and such services do not pose a conflict or interfere with
your responsibilities to the Company.
6. On your Separation
Date (August 14, 2008), the Company shall provide you with a
final paycheck for the Interim Employment Period less all
applicable federal, state and local income, social security and
other payroll taxes.
7. In exchange for your
promises and releases in this Agreement and contingent upon your
execution and non-revocation of the Supplemental Release Agreement
(Exhibit A) after the Separation Date, the Company will pay
you, on the Company’s normal payroll cycle, six months base
salary at your most recent rate of pay, less all applicable
federal, state and local income tax, social security and other
payroll taxes. During this six-month period, your stock
options will continue to vest. At the end of the six-month
period, vesting of your options will cease, any unvested options
will expire and you will have three months from that date to
exercise any vested options. Thereafter, all vested but
unexercised options will expire.
8. In exchange for your
promises and releases in this Agreement and contingent upon your
execution and non-revocation of the Supplemental Release Agreement
(Exhibit A) after the Separation Date, the Company will
provide you with election forms for family medical, dental and
vision insurance continuation as provided by the Consolidated
Omnibus Budget Reconciliation Act (COBRA). If you elect COBRA
coverage, the Company will pay the underlying insurance premiums
for up to eighteen months. This benefit, however, will
terminate on the earlier of eighteen months following your
Separation Date or the date you secure full-time employment and
become eligible for health care coverage. Nothing in this
Agreement may be
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construed as extending your COBRA period beyond
the eighteen-month period allowed under that law, nor is the
Company assuming any responsibility that you have for formally
electing to continue coverage.
9. Anything to the
contrary notwithstanding, all payments made by the Company to you
or your estate or beneficiaries will be subject to tax withholding
pursuant to any applicable laws or regulations. You will be
solely liable and responsible for the payment of your taxes arising
as a result of any payment hereunder including without limitation
any unexpected or adverse tax consequence.
10. On your Separation Date, you
are required to return immediately all Company property (with the
exception of your cell phone and laptop computer and related
accessories) that you have in your possession, including all
equipment and accessories, office equipment, account lists,
employee lists or client lists, credit cards, keys, and documents,
including copies of documents. With regard to your cell
phone, you may keep the equipment and the phone number, but
cellular service provided by the Company will be terminated on the
Separation Date and you should transfer the service to a provider
of your choice at your expense. As to your laptop computer,
you must deliver it to the Company’s I.T. department on the
Separation Date so that all data and programs can be removed.
It will be returned to you as soon as practicable in a clean
“OEM” state.
11. In consideration for the
promises, payments and other agreements set forth above, you
release and forever discharge the Company, its present and former
agents, employees, officers, directors, shareholders, principals,
predecessors, alter egos, partners, parents, subsidiaries,
affiliate, attorneys, insurers, successors and assigns, from any
and all claims, demands, grievances, causes of action or suit of
any kind arising out of, or in any way connected with, the dealings
between the parties to date, including the employment relationship
and termination thereof. YOU ALSO SPECIFICALLY AGREE AND
ACKNOWLEDGE YOU ARE WAIVING ANY RIGHT TO RECOVERY BASED ON STATE OR
FEDERAL AGE, SEX, PREGNANCY, RACE, COLOR, NATIONAL ORIGIN, MARITAL
STATUS, RELIGION, VETERAN STATUS, DISABILITY SEXUAL ORIENTATION,
MEDICAL CONDITION, OR OTHER ANTI-DISCRIMINATION LAWS, INCLUDING
WITHOUT LIMITATION, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, THE
EQUAL PAY ACT, THE AMERICANS WITH DISABILITIES ACT, THE CALIFORNIA
LABOR CODE, THE CALIFORNIA FAIR EMPLOYMENT AND HOUSING ACT, THE
FAMILY AND MEDICAL LEAVE ACT, THE CALIFORNIA FAMILY RIGHTS ACT, THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT, THE WORKER ADJUSTMENT AND
RETRAINING ACT, AND THE FAIR LABOR STANDARDS ACT, ALL AS AMENDED,
WHETHER SUCH CLAIM BE BASED UPON AN ACTION FILED BY YOU OR BY A
GOVERNMENTAL AGENCY. YOU ALSO RELEASE THE COMPANY FROM ANY
CLAIM FOR ATTORNEYS’ FEES. This release does not
release claims that cannot be released as a matter of
law.
12. You also specifically agree and
acknowledge that (1) you are knowingly and voluntarily waiving
and releasing any rights you may have under the Age Discrimination
and Employment Act, as amended, and (2) that the consideration
given for this Agreement is in addition to anything of value to
which you are already entitled. You are hereby advised that:
(a) this Agreement does not apply to any claims that may arise
after the signing of this Agreement; (b) you should consult
with an attorney prior to executing this release; (c) you have
twenty-one (21)
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days within which to consider this release
(although you may choose to voluntarily execute this release
earlier); and (d) as set forth in the following paragraph, you
have seven (7) calendar days following the execution of this
release to revoke the Agreement.
Within three (3) calendar days of signing
and dating this Agreement, you agree to deliver the executed
original of this Agreement to me, as Chief Executive Officer, at
the principal address of the Company. However, you understand
that you may revoke this Agreement for up to seven
(7) calendar days following your execution of this Agreement
(the “ Revocation Period ”) and it shall not
become effective or enforceable until such Revocation Period has
expired. You and the Company further acknowledge and agree
that such revocation must be in
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