**Exhibit 10.15**

 

**RETENTIONAGREEMENT**

 

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

 

**AGREEMENT**

 

WHEREAS, Employee is akey employee of the Company;

 

WHEREAS, the Companyconsiders that providing Employee with certain employment termination benefitswill operate as an incentive for Employee to remain employed by the Company inthe event of a Change of Control;

 

WHEREAS, the partiesagreed it is advisable and in the best interests of the parties to amend andrestate this Agreement to make certain changes related to recent legaldevelopments, most particularly related to California arbitration proceduresand Internal Revenue Code Section 409A, and also to make certain other changesas reflected herein; and

 

NOW THEREFORE, for theconsideration stated above, and for other good and valuable consideration, thereceipt and sufficiency of which is hereby acknowledged, the Company andEmployee agree as follows:

 

1.                                       Definitions.

 

1.1                                 “*Base Salary*”shall mean the Employee’s gross annual salary at the time of a Change ofControl 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 orperson, or any syndicate or group deemed to be a person under Section 14(d)(2) ofthe Exchange Act is or becomes the “Beneficial Owner” (as defined in Rule 13d-3of the General Rules and Regulations under the Exchange Act), directly orindirectly, of securities of the Company representing 50% or more of thecombined voting power of the Company’s then outstanding securities entitled tovote 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 thestockholders of the Company immediately prior to such Transaction do not,immediately after the Transaction, own more than fifty (50) percent of thecombined voting power of the Company or other corporation resulting from suchTransaction; or

 

1

----

 

(c)                                  all or substantially all of the assets ofthe Company are sold, liquidated or distributed.

 

1.3                                 “*Cause*” shallmean

 

(a)                                  Employee’s gross neglect of his duties tothe Company, where Employee has been given a reasonable opportunity to cure hisgross neglect (which reasonable opportunity must be granted during thethirty-day period preceding termination);

 

(b)                                 any violation by Employee of Employee’sobligations under this Agreement or any employment agreement which Employee mayhave with the Company;

 

(c)                                  Employee taking any role in any buy-outof the Company without the approval of the Company’s majority shareholder; or

 

(d)                                 Employee’s commission of any act offraud, theft or embezzlement against the Company.

 

1.4                                 “*Compensation*”shall mean Base Salary plus Target Bonus.

 

1.5                                 “*Resignation For GoodReason*” shall mean the voluntary resignation by Employee of hisemployment with the Company within two years following a Change of Control andwithin three (3) months of the following Good Reasons:

 

(a)                                  any reduction in Employee’s Base Salaryor Target Bonus; or

 

(b)                                 any reduction in Employee’s title; or

 

(c)                                  any significant reduction in Employee’s responsibilitiesand authority;

 

(d)                                 any failure by the Company to payEmployee’s Base Salary; or

 

(e)                                  a relocation by the Company of Employee’splace of Employment outside a fifty (50) mile radius of Employee’s currentplace of employment.

 

An event described in Section 1.5(a) through(e) will not constitute Good Reason unless Employee provides writtennotice to the Company of his intention to resign for Good Reason and unless theCompany 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 theTermination Date.

 

1.7                                 “*Target Bonus*”shall mean the variable annual compensation represented by the percentage ofBase Salary Employee is eligible to receive, if any, prior to a Change ofControl, in the event targeted goals are achieved for the year.  Employee acknowledges that there is no TargetBonus established for Employee at the date of this Agreement.

 

2

----

 

1.8                                 “*Termination Date*”shall mean the date of termination of Employee’s employment relationship withthe Company.

 

1.9                                 “*Termination Payments*”shall mean any payment or distribution of Compensation or benefits madepursuant to Section 4.1(a)-(c) of this Agreement.

 

2.                                       Title and Duties. Employee will hold the position of Vice President, an Executive Officerposition. Employee’s primary duties will include such duties as are assigned ordelegated to Employee by the Board of Directors of the Company (the “**Board**”).  Employeewill: (i) devote his entire business time, attention, skill, and energyexclusively to the business of the Company; (ii) use his best efforts topromote the success of the Company’s business; and (iii) cooperate fullywith the Board in the advancement of the best interests of the Company.

 

3.                                       At-Will Employment. Employee reaffirms that Employee’s employment relationship with theCompany is at-will, terminable at any time and for any reason by either theCompany or Employee.  While certainparagraphs of this Agreement describe events that could occur at a particulartime in the future, nothing in this Agreement may be construed as a guaranteeof employment of any length.

 

4.                                       Termination Payments.

 

4.1                                 If, within two (2) years immediatelyfollowing a Change of Control, Employee’s employment terminates as the resultof (i) termination by the Company of Employee’s employment for a reasonother than Cause; or (ii) Employee’s Resignation for Good Reason:

 

(a)                                  Employee will receive a pro-rata share ofBase Salary and accrued but unused vacation through the Termination Date, lessapplicable state and federal taxes or other payroll deductions;

 

(b)                                 Subject to Section 9, Employee willbe eligible for Severance under this Agreement in a lump-sum amount equal toBase Salary plus Target Bonus (if any be established in the future), lessapplicable state and federal taxes or other payroll deductions; and

 

(c)                                  Subject to Section 9, if Employee electsto continue insurance coverage as afforded to Employee according to theConsolidated Omnibus Budget Reconciliation Act of 1985 (“**COBRA**”),Company will reimburse Employee the amount of the premiums incurred by Employeeduring the Severance Period.  Nothing inthis Agreement will extend Employee’s COBRA period beyond the period allowedunder COBRA, nor is Company assuming any responsibility which Employee has forformally electing to continue coverage.

 

With the exception ofCOBRA reimbursements, all payments made pursuant to this Section 4.1 willbe 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 andnon-revocation of a release of all claims as of the Termination Date, insubstantially the form attached to this Agreement as Exhibit A.

 

3

----

 

4.3                                 If Employee’s employment terminates forany reason after the two year period immediately following a Change of Controlor terminates during that two year period for any reason other than (i) terminationby the Company of Employee’s employment for a reason other than Cause; or (ii) Employee’sResignation for Good Reason, the Company will pay Employee a pro-rata share ofBase Salary and accrued but unused vacation through the Termination Date, lessapplicable state and federal taxes or other payroll deductions.

 

5.                                       Retirement and Profit-Sharing Plans.  Notwithstandinganything in this Agreement to the contrary, Employee’s rights in anyretirement, pension or profit-sharing plans offered by the Company shall begoverned by the rules of such plans as well as by applicable law;provided, however, that on the Termination Date, Employee shall become fullyvested in all pension and 401(k) account balances.

 

6.                                       Tax Consequences. The Company makes no representations regarding the tax consequence ofany provision of this Agreement. Employee is advised to consult with his own tax advisor with respect tothe tax treatment of any payment contained in this Agreement.

 

7.                                       Tax Adjustment. Notwithstanding the foregoing or any other provision of this Agreementto the contrary, if tax counsel selected by the Company and acceptable toEmployee determines that any portion of any payment under this Agreement wouldconstitute an “excess parachute payment” within the meaning of Section 280Gof the Internal Revenue Code of 1986, as amended (the “**Code**”),the payments to be made to Employee under this Agreement shall be reduced (butnot below zero) such that the value of the aggregate payments that Employee isentitled to receive under this Agreement and any other agreement or plan orprogram of the Company shall be one dollar ($1) less than the maximum amount ofpayments which Employee may receive without becoming subject to the tax imposedby Section 4999 of the Code.

 

8.                                       Agreement to Arbitrate.  Employeeand Company agree to arbitrate any claim or dispute (“**Dispute**”)arising out of or in any way related to this Agreement, the employmentrelationship between Company and Employee or the termination of Employee’semployment, except as provided in paragraph 8.1 below, to the fullestextent permitted by law.  Except asprovided above, this method of resolving Disputes shall be the sole andexclusive 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 oflaw and, if applicable, by a jury, and instead agree that their disputes shallbe decided by an arbitrator.

 

8.1                                 *Scope of the Agreement*. A Dispute shall include all disputes or claims between Employee and Companyarising out of, concerning or relating to Employee’s employment by Company,including, without limitation:  claimsfor 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 federallaw, or common law, to the fullest extent permitted by law.  A Dispute shall not include any dispute orclaim, whether brought by either Employee or Company, for:  (a) workers’ compensation orunemployment insurance benefits; or (b) the exclusions from arbitrationspecified in the California Arbitration Act, California Code of Civil Proceduresection 1281.8.  For the purpose ofthis paragraph 8, references to “Employer” include Company and all relatedor affiliated entities and their employees, supervisors, officers, directors,owners, stockholders, 

 

4

----

 

agents, pension orbenefit plans, pension or benefit plan sponsors, fiduciaries, administrators,and the successors and assigns of any of them, and this paragraph 8 shallapply to them to the extent that Employee’s claims arise out of or relate totheir actions on behalf of Company.

 

8.2                                 *Consideration*. The parties agree that their mutual promise to arbitrate any and alldisputes between them, except as provided in paragraph 8.1, rather thanlitigate them before the courts or other bodies, provides adequate considerationfor this paragraph 8.

 

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

 

8.4                                 *Arbitration Procedure*. The arbitration will be conducted by JAMS pursuant to its Rules forthe Resolution of Employment Disputes in San Diego, California by asingle, neutral arbitrator.  The partiesare entitled to representation by an attorney or other representative of theirchoosing.  The arbitrator shall have thepower to enter any award that could be entered by a judge of the Superior Courtof the State of California, as applicable to the cause of action, and only suchpower.  The arbitrator shall issue awritten 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 anyaward rendered by the arbitrator. Judgment on the award may be entered in any court having jurisdictionthereof.

 

8.5                                 *Costs of Arbitration*. If Employee initiates arbitration against the Company, Employee must paya filing fee equal to the current filing fee in the appropriate court had Employee’sclaim been brought there, and the Company shall bear the remaining costs of thearbitration forum, including arbitrator fees. If the Company initiates arbitration against Employee, the Company shallbear the entire cost of the arbitration forum, including arbitrator fees.  (Such costs do not include costs ofattorneys, discovery, expert witnesses, or other costs which Employee wouldhave been required to bear had the matter been filed in a court.)  The arbitrator may award attorneys’ fees andcosts to the prevailing party.  If thereis 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 servicewill be paid by the party requesting the postponement or cancellation, unlessthe arbitrator determines that such fee would cause undue hardship on theparty.  At the conclusion of thearbitration, each party agrees to promptly pay any arbitration award imposedagainst that party.

 

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

 

8.7                                 *Discovery*. The parties may obtain discovery in aid of the arbitration to thefullest extent permitted under law, including California Code of CivilProcedure Section 1283.05.  All discoverydisputes shall be resolved by the arbitrator.

 

5

----

 

9.                                       IRC Section 409A. Notwithstanding anything to the contrary, if, at the time of hisseparation of service from Company, Employee is a “specified employee” asdefined pursuant to Internal Revenue Code Section 409A, and if the amountsthat Employee is entitled to receive pursuant to this Agreement are nototherwise exempt from Code Section 409A, then to the extent necessary tocomply with Code Section 409A, no payments for such amounts may be madeunder this Agreement before the date which is six (6) months after Employee’sseparation of service from Company or, if earlier, Employee’s date ofdeath.  All such amounts, which wouldhave otherwise been required to be paid during such six (6) months afterEmployee’s separation of service shall instead be paid to Employee in one lumpsum payment on the first business day of the seventh month after Employee’sseparation of service from Company or, if earlier, Employee’s date ofdeath.  All such remaining payments shallbe made pursuant to their original terms and conditions.  This Agreement is intended to comply with theapplicable requirements of Code Section 409A and shall be construed andinterpreted in accordance therewith. Company may at any time amend this Agreement, or any payments to be madehereunder, as necessary to be in compliance with Code Section 409A andavoid the imposition on Employee of any potential excise taxes relating to CodeSection 409A.  Employee shall besolely liable for taxes (including without limitation resulting from anyunexpected or adverse tax consequences realized by Employee) arising from anypayments received by Employee hereunder.

 

10.                                 General Provisions.

 

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

 

10.2                           *Assignment*. Employee may not assign, pledge or encumber his interest in thisAgreement or any part thereof.  Apurchaser of substantially all the assets of the Company may assume all of theCompany’s liabilities under this Agreement, and the Company would thereby berelieved of all such liabilities, provided that Employee accepts employmentwith 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 beconstrued as a waiver of any such provision, nor prevent a party from enforcingthe 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 toassert all other legal and equitable remedies available under thecircumstances.

 

10.4                           *Severability*. The provisions of this Agreement are severable, and if any provisionwill be held to be invalid or otherwise unenforceable, in whole or in part, theremainder of the provisions, or enforceable parts of this Agreement, will notbe affected.

 

10.5                           *Entire Agreement*. This Agreement constitutes the entire agreement of the parties withrespect to the subject matter of this Agreement, and supersedes all prior andcontemporaneous negotiations, agreements and understandings between theparties, oral or written.

 

6

----

 

10.6                           *Modification; Waivers*. No modification, termination or attempted waiver of this Agreement willbe 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 ofthis Agreement, or because of any alleged dispute, breach, default ormisrepresentation in connection with any provisions of this Agreement, thesuccessful or prevailing party will be entitled to recover from the other partyreasonable attorneys’ fees and other costs incurred in that proceeding(including, in the case of an arbitration, arbitration fees and expenses), inaddition 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 signedby 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 whichtogether shall constitute one and the same instrument.

 

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

 

10.11                     *Drafting Ambiguities*. Each party to this Agreement and its counsel have reviewed and revisedthis Agreement.  The rule ofconstruction that any ambiguities are to be resolved against the drafting partyshall not be employed in the interpretation of this Agreement or any of theamendments to this Agreement.

 

10.12                     *Recovery of Attorney’s Fees andExpenses. *If any litigation shall occur betweenExecutive and Employer which arises out of or as a result of this Agreement, orwhich seeks an interpretation of this Agreement, the prevailing party shall beentitled 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 |
|                                  |                                  |  |  |  |  |

 

7

----

 

**EXHIBIT A**

 

**GENERALRELEASE**

 

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

 

**RECITALS**

 

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

 

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

 

**AGREEMENT**

 

1.                                       Release.  Employee, forhimself and his heirs, successors and assigns, fully releases and dischargesthe 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 andco-venturers (collectively, “**Related Entities**”),from all rights, claims, demands, actions, causes of action, liabilities andobligations 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 theCompany, Agents or Related Entities from any source whatsoever, whether or notarising from or related to the facts recited in this Release.  Employee specifically releases and waives anyand all claims arising under any express or implied contract, rule, regulationor ordinance, including, without limitation, Title VII of the Civil Rights Actof 1964, the Civil Rights Act of 1991, the Americans with Disabilities Act, theCalifornia Fair Employment and Housing Act, the California Labor Code and theAge 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 Companyto Employee.  This release does not waiveany 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 ofany and all claims that Employee may have against the Company, Agents orRelated Entities.  In making thisrelease, Employee intends to release each of the Company, Agents and RelatedEntities from liability of any nature whatsoever for any claim of damages orinjury 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 tohim.  Employee expressly waives allrights under Section 1542 of the California Civil Code, which Employeeunderstands provides as follows:

 

A-1

----

 

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

 

Employee acknowledges that he may discover factsdifferent from or in addition to those that he now believes to be true withrespect to this Release.  Employee agreesthat this Release shall remain effective notwithstanding the discovery of anydifferent or additional facts.

 

3.               Waiver of Certain Claims. Employee acknowledges that he has been advised in writing of his rightto consult with an attorney prior to executing the waivers set out in thisRelease, and that he has been given a 21-day period in which to considerentering into the release of ADEA claims, if any.  If Employee does not consider this Releasefor the full 21-day period, but instead signs and returns it earlier, Employeehas done so voluntarily with the full understanding that Employee waivedEmployee’s right to the full 21-day period. In addition, Employee is hereby informed that Employee has seven (7) daysfollowing the date of signing of this Agreement in which to revoke thisRelease. Employee can revoke the Release by sending notice of my revocation tothe attention of the Chairman of the Board of the Company. If Employee does notsend 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 theeighth (8th) day after Employee signs it (the “**Effective Date**”).

 

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

 

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

 

6.               Severability.  If anyprovision of this Release is held to be invalid, void or unenforceable, thebalance of the provisions of this Release shall, nevertheless, remain in fullforce and effect and shall in no way be affected, impaired or invalidated.

 

7.               Counterparts.  This Releasemay be executed simultaneously in one or more original, facsimile, or .PDFcounterparts, each of which shall be deemed an original, but all of whichtogether 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 tofinal and binding arbitration in accordance with the procedures, terms andconditions set forth Section 8 of the Agreement, which terms areincorporated herein by reference.

 

A-2

----

 

9.               Entire Agreement.  This Releaseconstitutes the entire agreement of the parties with respect to the subjectmatter 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.  Nomodification, termination or attempted waiver of this Release will be validunless in writing, signed by the party against whom such modification,termination or waiver is sought to be enforced.

 

11.         Amendment.  This Releasemay be amended or supplemented only by a writing signed by Employee and theCompany.

 

 
| Dated: |   |   |          |
|--------|--------|--------|---------------|
|   |   |   |          |
|   |   |   | Printed Name: | Ravindra Pendekanti |

 

A-3

----