Exhibit 10.2

 

OVERLAND STORAGE, INC.

 

Stock Option Cancellation Agreement

 

This Stock Option Cancellation Agreement (the “Agreement”) is entered into
between Overland Storage, Inc. (the “Company”) and                        (the
“Optionholder”) (together the “Parties”) on this 27th day of September, 2007, to
cancel certain stock options previously granted to the Optionholder under the
Overland Storage, Inc. 2003 Equity Incentive Plan (the “Plan”), or the Company’s
1995 Stock Option Plan, 1997 Executive Stock Option Plan, or 2000 Stock Option
Plan.

 

WHEREAS, the Company and the Optionholder previously entered into stock option
agreement(s) described on Exhibit A (the “Option Agreement(s)”);

 

WHEREAS, pursuant to the Option Agreement(s), the Optionholder holds the right
to purchase shares of Company common stock in the amounts and at the exercise
price(s), as listed on Exhibit A (the “Option(s)”);

 

WHEREAS, the Board of Directors of the Company (the “Board”) deems it to be in
the best interests of the Company to cancel the Option(s), subject to approval
of the Company’s shareholders (the “Shareholders”), for reasons which include
the Board’s determination to seek approval of the Shareholders for an increase
in available shares of Company common stock under the Plan consistent with the
approval models of major institutional shareholders and their advisors;

 

WHEREAS, the Plan constitutes an important incentive for participants by linking
employees, outside directors and consultants directly to the Shareholders’
interests through increased stock ownership, and further, the Plan is essential
to the Company’s continued success by serving as a tool to attract and retain
qualified individuals to serve on behalf of the Company; and

 

WHEREAS, the Optionholder expects to benefit from the cancellation of the
Option(s) as a holder of other equity securities of the Company.

 

NOW, THEREFORE, in consideration and the mutual covenants heretofore recited,
the sufficiency of which are hereby acknowledged, the Parties agree as follows:

 

1.             Cancellation of Option(s). The Parties hereby agree that the
Option(s) shall be cancelled on the date approval of the Shareholders is
obtained to effectuate the cancellation of the Option(s) (the “Effective Date”),
with the understanding that the underlying shares of Company common stock will
no longer be available for issuance under the Plan. Upon such cancellation, the
Optionholder will forever waive and relinquish all rights to the Option(s) and
under the Option Agreement(s).

 

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2.             Agreement Not to Exercise. The Optionholder agrees not to
exercise the Option(s) on or before the Effective Date.

 

3.             Termination of Agreement. This Agreement shall terminate and have
no further force or effect if the Shareholders do not approve the cancellation
of the Option(s) at the Company’s 2007 Annual Meeting of Shareholders, including
any adjournment thereof. In such event, the Option(s) will remain outstanding
and exercisable in accordance with the terms of the Option Agreement(s).

 

4.             Entire Agreement. This Agreement constitutes the entire agreement
between the Parties with respect to the subject matter hereof and supersedes in
its entirety any and all prior undertakings and agreements between the Parties
with respect to the subject matter hereof.

 

5.             Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same Agreement. Facsimile copies of
originally executed signature pages shall serve for all purposes as originally
executed signature pages.

 

IN WITNESS WHEREOF, each of the Parties have executed this Agreement as of the
date first set forth above.

 

 

OPTIONHOLDER

OVERLAND STORAGE, INC.

 

 

 

 

By:

 

 

Signature

 

 

 

 

 

Its:

 

 

Printed Name

 

 

 

Date:

 

 

Date:

 

 

 

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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EXHIBIT A

 

OPTION(S)

 

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Table of Options Scheduled to be Cancelled Under the Agreements

 

The following table sets forth the stock options scheduled for cancellation
under the Stock Option Cancellation Agreements entered into with each of the
persons named below. The stock options were cancelled effective November 13,
2007 upon shareholder approval of  Proposal 2 of our definitive proxy statement
filed with the SEC on October 10, 2007.

 

 

 

Option

 

Number

 

Per Share

 

 

 

Optionee Name

 

Grant Date

 

of Shares

 

Exercise Price

 

Plan Name

 

Robert Degan

 

1/20/2003

 

22,000

 

$

14.75

 

2000 Stock Option Plan

 

 

 

3/3/2005

 

12,000

 

$

14.67

 

2003 Equity Incentive Plan

 

 

 

 

 

 

 

 

 

 

 

Robert Farkaly

 

6/25/2003

 

5,000

 

$

20.25

 

2000 Stock Option Plan

 

 

 

11/18/2004

 

5,000

 

$

13.98

 

2003 Equity Incentive Plan

 

 

 

 

 

 

 

 

 

 

 

Mike Gawarecki

 

4/21/2000

 

20,000

 

$

10.00

 

1997 Stock Option Plan

 

 

 

7/10/2002

 

52,500

 

$

13.50

 

2000 Stock Option Plan

 

 

 

11/17/2003

 

10,000

 

$

19.33

 

2003 Equity Incentive Plan

 

 

 

11/15/2004

 

31,400

 

$

14.29

 

2003 Equity Incentive Plan

 

 

 

 

 

 

 

 

 

 

 

Kurt Kalbfleisch

 

4/21/2000

 

8,000

 

$

10.00

 

1995 Stock Option Plan

 

 

 

7/2/2003

 

10,000

 

$

20.13

 

1995 Stock Option Plan

 

 

 

11/18/2004

 

3,500

 

$

13.98

 

2003 Equity Incentive Plan

 

 

 

 

 

 

 

 

 

 

 

Vernon LoForti

 

4/21/2000

 

20,000

 

$

10.00

 

1997 Stock Option Plan

 

 

 

7/10/2002

 

60,000

 

$

13.50

 

2000 Stock Option Plan

 

 

 

11/17/2003

 

10,000

 

$

19.33

 

2003 Equity Incentive Plan

 

 

 

11/15/2004

 

29,700

 

$

14.29

 

2003 Equity Incentive Plan

 

 

 

 

 

 

 

 

 

 

 

Scott McClendon

 

1/20/2003

 

11,000

 

$

14.75

 

2000 Stock Option Plan

 

 

 

11/17/2003

 

18,000

 

$

19.33

 

2003 Equity Incentive Plan

 

 

 

11/15/2004

 

18,000

 

$

14.29

 

2003 Equity Incentive Plan

 

 

 

 

 

 

 

 

 

 

 

Michael Norkus

 

8/11/2004

 

4,500

 

$

11.05

 

2003 Equity Incentive Plan

 

 

 

11/15/2004

 

18,000

 

$

14.29

 

2003 Equity Incentive Plan

 

 

 

 

 

 

 

 

 

 

 

Robert Scroop

 

7/10/2002

 

60,000

 

$

13.50

 

2000 Stock Option Plan

 

 

 

11/17/2003

 

10,000

 

$

19.33

 

2003 Equity Incentive Plan

 

 

 

11/15/2004

 

29,700

 

$

14.29

 

2003 Equity Incentive Plan

 

 

 

 

 

 

 

 

 

 

 

Total Shares Cancelled

 

 

 

468,300

 

 

 

 

 

 

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