**Exhibit 10.22**

 

August 26,2008

 

RobertFarkaly

XXXXXXXXXXX

 Poway, CA  92064

 

Re:Severance Agreement and General Release

 

DearRobert:

 

Aswe discussed, your employment with Overland Storage, Inc. (the “Company”)will terminate August 27, 2008 (“Separation Date”).  Although theCompany does not have a formal severance policy, this letter sets forth ourproposed agreement concerning your separation from the Company, benefits fromthe Company and your release of the Company from any obligations or claims afterthe Separation Date.

 

1.               You have held the positionof VP, Worldwide Sales.  As of the Separation Date, your responsibilitiesas VP, Worldwide Sales will cease, and all payments and benefits from theCompany will cease, except as provided in this letter.

 

2.               On your Separation Date,regardless of whether you sign this Agreement, the Company shall provide youwith a final paycheck for salary through August 27, 2008 less allapplicable federal, state and local income, social security and other payrolltaxes

 

3.               The Company will completethe sales commissions true up calculation owed to you through your separationdate and will pay such commissions to you as soon as practicable.  Weexpect to pay it within 10 calendar days from the date of this letter.

 

4.               You acknowledge that, otherthan the sales commissions noted in 3 above, the Company has paid you allsalary and other compensation payments to which you are entitled in connection withyour service as an employee of the Company and that you are not entitled to anyadditional compensation from the Company.

 

5.               Contingent upon (1) yourexecution of this letter agreement and (2) this letter agreement becomingeffective and enforceable on the date immediately following the expiration ofthe “Revocation Period” defined in paragraph 7 below (such date, the “EffectiveDate”), the Company will pay you a sum equal to sixteen (16) weeks base salaryat your most recent rate of pay ($140,000.00 per annum) less all applicablefederal, state and local income tax, social security and other payroll taxes.

 

5.1                                 Included inthis communication are election forms for medical and dental insurance continuationas provided by the Consolidated Omnibus Budget Reconciliation Act (COBRA). If you elect medical COBRA coverage after signing this Agreement, the Companywill pay for up to six (6) months of medical COBRA premiums. Nothing in thisAgreement may be construed as extending your COBRA period beyond the eighteen-monthperiod allowed under that law, nor is the Company assuming any responsibilitythat you have for formally electing to continue coverage.

 

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6.               You are required toimmediately return on the Separation Date all Company property that you have inyour possession, including all equipment and accessories, office equipment,account lists, employee lists or client lists, credit cards, keys, anddocuments, including copies of documents.

 

7.               In consideration for thepayments and other agreements set forth above, you release and foreverdischarge 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 wayconnected with, the dealings between the parties to date, including theemployment relationship and termination thereof.  YOU ALSO SPECIFICALLYAGREE AND ACKNOWLEDGE YOU ARE WAIVING ANY RIGHT TO RECOVERY BASED ON STATE ORFEDERAL AGE, SEX, PREGNANCY, RACE, COLOR, NATIONAL ORIGIN, MARITAL STATUS,RELIGION, VETERAN STATUS, DISABILITY SEXUAL ORIENTATION, MEDICAL CONDITION, OROTHER ANTI-DISCRIMINATION LAWS, INCLUDING WITHOUT LIMITATION, TITLE VII OF THECIVIL RIGHTS ACT OF 1964, THE EQUAL PAY ACT, THE AMERICANS WITH DISABILITIESACT, THE CALIFORNIA LABOR CODE, THE CALIFORNIA FAIR EMPLOYMENT AND HOUSING ACT,THE FAMILY AND MEDICAL LEAVE ACT, THE CALIFORNIA FAMILY RIGHTS ACT, THEEMPLOYEE RETIREMENT INCOME SECURITY ACT, THE WORKER ADJUSTMENT AND RETRAININGACT, AND THE FAIR LABOR STANDARDS ACT, ALL AS AMENDED, WHETHER SUCH CLAIM BEBASED UPON AN ACTION FILED BY YOU OR BY A GOVERNMENTAL AGENCY.  YOU ALSORELEASE THE COMPANY FROM ANY CLAIM FOR ATTORNEYS’ FEES.

 

You also specifically agree and acknowledge that (1) you areknowingly and voluntarily waiving and releasing any rights you may have underthe Age Discrimination and Employment Act, as amended, and (2) that theconsideration given for this Agreement is in addition to anything of value towhich you are already entitled.  You are hereby advised that: (a) thisAgreement does not apply to any claims that may arise after the signing of thisAgreement; (b) you should consult with an attorney prior to executing thisrelease; (c) you have forty-five (45) days within which to consider thisrelease (although you may choose to voluntarily execute this release earlier);and (d) as set forth in the following paragraph, you have seven (7) calendardays following the execution of this release to revoke the Agreement.

 

Within three (3) calendar days of signing and dating thisAgreement, you agree to deliver the executed original of this Agreement tome.  However, you understand that you may revoke this Agreement for up toseven (7) calendar days following your execution of this Agreement (the “RevocationPeriod”) and it shall not become effective or enforceable until such RevocationPeriod has expired.  You and the Companyfurther acknowledge and agree that such revocation must be in writing addressedto and received by me not later than midnight on the 7th day following yourexecution of this Agreement.  Should you revoke this Agreement under thisparagraph, this Agreement shall not be effective or enforceable and you shallno longer have the right to receive the benefits or payments described in thisAgreement (other than those set forth in numbered paragraph 2 herein).

 

8.               By executing this Agreement,you acknowledge that you have read the document and have had the opportunity toreceive independent legal advice with respect to executing this Agreement andthat you expressly waive the rights and benefits you otherwise might have underCalifornia Civil Code Section 1542, which provides:

 

**A general release does not extend to claims which the employee does notknow or suspect to exist in his or her favor at the time of executing therelease, which if known**

 

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**by him or her must have materially affected his or her settlement withthe company.**

 

9.               The Company expressly denies liability ofany kind to you and nothing contained in thisletter will be construed as anadmission of any liability.

 

10.         You acknowledge and agree that you have acontinuing obligation under the terms of the Confidentiality Agreement yousigned (copy attached) to keep confidential and not to disclose informationknown or learned as a consequence of your employment with the Company,including facts relating to the business operations, procedures, materials,finances, customers, clients, suppliers, and marketing or sales strategies,methods, and tactics which is not generally known in the industry.

 

11.         This Agreement has been executed anddelivered within the State of California and our respective rights andobligations shall be construed and enforced in accordance with and governed by,California law.

 

12.         You acknowledge that his Agreement is theentire Agreement between the parties and supersedes all prior andcontemporaneous oral and written agreements and discussions.  This Agreement may be amended only by anAgreement in writing.

 

13.         Any dispute or claim arising out of thisAgreement will be subject to final and binding arbitration.  Thearbitration will be conducted by one arbitrator who is a member of the AmericanArbitration Association (AAA) and will be governed by the Model EmploymentArbitration rules of AAA.  The arbitration will be held in San Diego,California and the arbitrator will apply California substantive law in allrespects.  The arbitrator shall have all authority to determine thearbitrability of any claim and enter a final, binding judgment at theconclusion of any proceeding.  Any final judgment only may be appealed onthe grounds of improper bias or improper conduct of the arbitrator.

 

We wish you the best in your future endeavours.

 

Sincerely yours,

 

OVERLAND STORAGE, INC.

 
| By: | /s/ V.A. LoForti |   |
|-----|------------------|--------|

 

Vern Loforti

President

 

* * * * * * * * * *

 

I understand, acknowledgeand agree to the terms and conditions, including the releases and waivers, setforth in this letter.

 
|      /s/  Robert Farkaly |                                       |
|---------------------------------------------------|--------------------------------------------|
| Robert Farkaly                                    |                                       |
|                                              |                                       |
| Dated:                                            |      4  Sept 2008 |   |
|                                                   |                                            |  |

 

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