Exhibit 10.15


 


RETENTION
AGREEMENT


 


This Retention Agreement
(this “Agreement”) is entered into on April 21,
2008 between Overland Storage Inc., a California corporation having its
principal offices at 4820 Overland Avenue, San Diego, California 92123 (the “Company”), and Ravindra Pendekanti (“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
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


 


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(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, 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.


 


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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 Vice President, an Executive Officer
position. 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.


 


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.


 


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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’ 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, 


 


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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.


 


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
for this paragraph 8.


 


8.3                                 Initiation of Arbitration. 
Either party may initiate an arbitration proceeding by providing the
other party with written notice of any and all claims forming the basis of such
proceeding in sufficient detail to inform the other party of the substance of
such claims.  In no event shall the
request for arbitration be made after the date when institution of legal or
equitable proceedings based on such claims would be barred by the applicable
statute of limitations.


 


8.4                                 Arbitration Procedure. 
The arbitration will be conducted by JAMS pursuant to its Rules for
the Resolution of Employment Disputes in San Diego, California by a
single, neutral arbitrator.  The parties
are entitled to representation by an attorney or other representative of their
choosing.  The arbitrator shall have the
power to enter any award that could be entered by a judge of the Superior Court
of the State of California, as applicable to the cause of action, and only such
power.  The arbitrator shall issue a
written and signed statement of the basis of the arbitrator’s decision,
including findings of fact and conclusions of law.  The parties agree to abide by and perform any
award rendered by the arbitrator. 
Judgment on the award may be entered in any court having jurisdiction
thereof.


 


8.5                                 Costs of Arbitration. 
If Employee initiates arbitration against the Company, Employee must pay
a filing fee equal to the current filing fee in the appropriate court had Employee’s
claim been brought there, and the Company shall bear the remaining costs of the
arbitration forum, including arbitrator fees. 
If the Company initiates arbitration against Employee, the Company shall
bear the entire cost of the arbitration forum, including arbitrator fees.  (Such costs do not include costs of
attorneys, discovery, expert witnesses, or other costs which Employee would
have been required to bear had the matter been filed in a court.)  The arbitrator may award attorneys’ fees and
costs to the prevailing party.  If there
is any dispute as to whether the Company or Employee is the prevailing party,
the arbitrator will decide that issue. 
Any postponement or cancellation fee imposed by the arbitration service
will be paid by the party requesting the postponement or cancellation, unless
the arbitrator determines that such fee would cause undue hardship on the
party.  At the conclusion of the
arbitration, each party agrees to promptly pay any arbitration award imposed
against that party.


 


8.6                                 Governing Law. 
All Disputes between the parties shall be governed, determined and
resolved by the internal laws of the State of California, including the
California Arbitration Act, California Code of Civil Procedure 1280 et seq.


 


8.7                                 Discovery. 
The parties may obtain discovery in aid of the arbitration to the
fullest extent permitted under law, including California Code of Civil
Procedure Section 1283.05.  All discovery
disputes shall be resolved by the arbitrator.


 


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9.                                       IRC Section 409A. 
Notwithstanding anything to the contrary, if, at the time of his
separation of service from Company, Employee is a “specified employee” as
defined pursuant to Internal Revenue Code Section 409A, and if the amounts
that Employee is entitled to receive pursuant to this Agreement are not
otherwise exempt from Code Section 409A, then to the extent necessary to
comply with Code Section 409A, no payments for such amounts may be made
under this Agreement before the date which is six (6) months after Employee’s
separation of service from Company or, if earlier, Employee’s date of
death.  All such amounts, which would
have otherwise been required to be paid during such six (6) months after
Employee’s separation of service shall instead be paid to Employee in one lump
sum payment on the first business day of the seventh month after Employee’s
separation of service from Company or, if earlier, Employee’s date of
death.  All such remaining payments shall
be made pursuant to their original terms and conditions.  This Agreement is intended to comply with the
applicable requirements of Code Section 409A and shall be construed and
interpreted in accordance therewith. 
Company may at any time amend this Agreement, or any payments to be made
hereunder, as necessary to be in compliance with Code Section 409A and
avoid the imposition on Employee of any potential excise taxes relating to Code
Section 409A.  Employee shall be
solely liable for taxes (including without limitation resulting from any
unexpected or adverse tax consequences realized by Employee) arising from any
payments received by Employee hereunder.


 


10.                                 General Provisions.


 


10.1                           Governing Law. 
This Agreement will be governed by and construed in accordance with the
laws of California.


 


10.2                           Assignment. 
Employee may not assign, pledge or encumber his interest in this
Agreement or any part thereof.  A
purchaser of substantially all the assets of the Company may assume all of the
Company’s liabilities under this Agreement, and the Company would thereby be
relieved of all such liabilities, provided that Employee accepts employment
with such purchaser at the closing of the transaction.


 


10.3                           No Waiver of Breach. 
The failure to enforce any provision of this Agreement will not be
construed as a waiver of any such provision, nor prevent a party from enforcing
the provision or any other provision of this Agreement.  The rights granted the parties are cumulative,
and the election of one will not constitute a waiver of such party’s right to
assert all other legal and equitable remedies available under the
circumstances.


 


10.4                           Severability. 
The provisions of this Agreement are severable, and if any provision
will be held to be invalid or otherwise unenforceable, in whole or in part, the
remainder of the provisions, or enforceable parts of this Agreement, will not
be affected.


 


10.5                           Entire Agreement. 
This Agreement constitutes the entire agreement of the parties with
respect to the subject matter of this Agreement, and supersedes all prior and
contemporaneous negotiations, agreements and understandings between the
parties, oral or written.


 


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10.6                           Modification; Waivers. 
No modification, termination or attempted waiver of this Agreement will
be valid unless in writing, signed by the party against whom such modification,
termination or waiver is sought to be enforced.


 


10.7                           Fees and Expenses. 
If any proceeding is brought for the enforcement or interpretation of
this Agreement, or because of any alleged dispute, breach, default or
misrepresentation in connection with any provisions of this Agreement, the
successful or prevailing party will be entitled to recover from the other party
reasonable attorneys’ fees and other costs incurred in that proceeding
(including, in the case of an arbitration, arbitration fees and expenses), in
addition to any other relief to which such party may be entitled.


 


10.8                           Amendment. 
This Agreement may be amended or supplemented only by a writing signed
by both of the parties hereto.


 


10.9                           Duplicate Counterparts. 
This Agreement may be executed in any number of original, facsimile or
..PDF counterparts; each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.


 


10.10                     Interpretation. 
The headings contained in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this
Agreement.


 


10.11                     Drafting Ambiguities. 
Each party to this Agreement and its counsel have reviewed and revised
this Agreement.  The rule of
construction that any ambiguities are to be resolved against the drafting party
shall not be employed in the interpretation of this Agreement or any of the
amendments to this Agreement.


 


10.12                     Recovery of Attorney’s Fees and
Expenses.  If any litigation shall occur between
Executive and Employer which arises out of or as a result of this Agreement, or
which seeks an interpretation of this Agreement, the prevailing party shall be
entitled to recover reasonable attorneys’ fees and costs.


 


	
  Dated:  April 21, 2008

  	
  OVERLAND STORAGE, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kurt L. Kalbfleisch

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Kurt L. Kalbfleisch

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Vice President and CFO

  
	
   

  	
   

  	
   

  
	
  Dated:  April 21, 2008

  	
    /s/ Ravi
  Pendekanti 

  
	
   

  	
   

  
	
   

  	
  Printed Name:

  	
  Ravindra Pendekanti

  
						



 


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EXHIBIT A


 


GENERAL
RELEASE


 


This General Release (“Release”) is entered into effective as of                             
(the “Effective Date”) between Overland
Storage, Inc., a California corporation, having its principal offices at 4820
Overland Avenue, San Diego, California 92123 (the “Company”)
and Ravindra Pendekanti, an individual residing at                                         
(“Employee”) with reference to the
following facts:


 


RECITALS


 


A.                                   The parties entered into Retention
Agreement dated April 21, 2008 (“the Agreement”) pursuant
to which the parties agreed that, upon the occurrence of certain conditions,
Employee would become eligible for Termination Payments as defined in the
Agreement in exchange for Employee’s release of the Company from all claims
which Employee may have against the Company as of the Termination Date.


 


B.                                     The parties desire to dispose of, fully
and completely, all claims, which Employee may have against the Company in, the
manner set forth in this Release.


 


AGREEMENT


 


1.                                       Release.  Employee, for
himself and his heirs, successors and assigns, fully releases and discharges
the Company, its officers, directors, employees, shareholders, attorneys,
accountants, other professionals, insurers and agents (collectively, “Agents”), and all entities related to each party, including,
but not limited to, heirs, executors, administrators, personal representatives,
assigns, parent, subsidiary and sister corporations, affiliates, partners and
co-venturers (collectively, “Related Entities”),
from all rights, claims, demands, actions, causes of action, liabilities and
obligations of every kind, nature and description whatsoever, Employee now has,
owns or holds or has at anytime had, owned or held or may have against the
Company, Agents or Related Entities from any source whatsoever, whether or not
arising from or related to the facts recited in this Release.  Employee specifically releases and waives any
and all claims arising under any express or implied contract, rule, regulation
or ordinance, including, without limitation, Title VII of the Civil Rights Act
of 1964, the Civil Rights Act of 1991, the Americans with Disabilities Act, the
California Fair Employment and Housing Act, the California Labor Code and the
Age Discrimination in Employment Act, as amended (“ADEA”).
Employee acknowledges that the Company has paid Employee all wages, bonuses,
accrued unused vacation pay, options, benefits and monies owed by the Company
to Employee.  This release does not waive
any claims which as a matter of law cannot be waived.


 


2.               Section 1542 Waiver. 
This Release is intended as a full and complete release and discharge of
any and all claims that Employee may have against the Company, Agents or
Related Entities.  In making this
release, Employee intends to release each of the Company, Agents and Related
Entities from liability of any nature whatsoever for any claim of damages or
injury or for equitable or declaratory relief of any kind, whether the claim,
or any facts on which such claim might be based, is known or unknown to
him.  Employee expressly waives all
rights under Section 1542 of the California Civil Code, which Employee
understands provides as follows:


 


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A GENERAL RELEASE
DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST
IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM
OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.


 


Employee acknowledges that he may discover facts
different from or in addition to those that he now believes to be true with
respect to this Release.  Employee agrees
that this Release shall remain effective notwithstanding the discovery of any
different or additional facts.


 


3.               Waiver of Certain Claims. 
Employee acknowledges that he has been advised in writing of his right
to consult with an attorney prior to executing the waivers set out in this
Release, and that he has been given a 21-day period in which to consider
entering into the release of ADEA claims, if any.  If Employee does not consider this Release
for the full 21-day period, but instead signs and returns it earlier, Employee
has done so voluntarily with the full understanding that Employee waived
Employee’s right to the full 21-day period. 
In addition, Employee is hereby informed that Employee has seven (7) days
following the date of signing of this Agreement in which to revoke this
Release. Employee can revoke the Release by sending notice of my revocation to
the attention of the Chairman of the Board of the Company. If Employee does not
send such written notice of revocation via U.S. Mail postmarked within 7 days,
this Release shall become effective and irrevocable at 12:01 a.m. on the
eighth (8th) day after Employee signs it (the “Effective Date”).


 


4.               No Undue Influence.  This Release
is executed voluntarily and without any duress or undue influence.  Employee acknowledges that he has read this
Release and executed it with his full and free consent.  No provision of this Release shall be
construed against any party by virtue of the fact that such party or its
counsel drafted such provision or the entirety of this Release.


 


5.               Governing Law.  This Release
is made and entered into in the State of California and accordingly the rights
and obligations of the parties hereunder shall in all respects be construed,
interpreted, enforced and governed in accordance with the laws of the State of
California as applied to contracts entered into by and between residents of
California to be wholly performed within California.


 


6.               Severability.  If any
provision of this Release is held to be invalid, void or unenforceable, the
balance of the provisions of this Release shall, nevertheless, remain in full
force and effect and shall in no way be affected, impaired or invalidated.


 


7.               Counterparts.  This Release
may be executed simultaneously in one or more original, facsimile, or .PDF
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.  This Release may be executed by facsimile,
with originals to follow by overnight courier.


 


8.               Dispute Resolution Procedures. 
Any dispute or claim arising out of this Release shall be subject to
final and binding arbitration in accordance with the procedures, terms and
conditions set forth Section 8 of the Agreement, which terms are
incorporated herein by reference.


 


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9.               Entire Agreement.  This Release
constitutes the entire agreement of the parties with respect to the subject
matter of this Release, and supersedes all prior and contemporaneous negotiations,
agreements and understandings between the parties, oral or written,
including,  without limitation, the Agreement,
between the Company and Employee.


 


10.         Modification; Waivers.  No
modification, termination or attempted waiver of this Release will be valid
unless in writing, signed by the party against whom such modification,
termination or waiver is sought to be enforced.


 


11.         Amendment.  This Release
may be amended or supplemented only by a writing signed by Employee and the
Company.


 


 


	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Printed Name:

  	
  Ravindra Pendekanti

  



 


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