**EXHIBIT10.29**

 

**AMENDMENT NO. 2****TO****1996EMPLOYEE STOCK PURCHASE PLAN**

 

The First Amendment to the 1996 Employee StockPurchase Plan of Overland Data, Inc. (the “Plan”) is hereby amended as follows.The effective date of this amendment is August 20, 2003.

 

1.                                       Thename of the Plan shall be “The 1996 Employee Stock Purchase Plan of OverlandStorage, Inc.”

 

2.                                       Section2 of the Plan shall be amended to replace the definitions of “Corporation” and“Fair Market Value” in their entirety with:

 

**“Corporation”**shall mean Overland Storage,Inc., a California corporation.

 

**“Fair Market Value”** shall mean the value ofone (1) share of Common Stock on the relevant date, determined as follows:

 

(1)                                  Ifthe shares are traded on an exchange, the reported “closing price” on the lasttrading date immediately preceding the relevant date;

 

(2)                                  Ifthe shares are traded over-the-counter on the Nasdaq Stock Market, the NasdaqOfficial Closing Price reported for the last trading date immediately precedingthe relevant date;

 

(3)                                  Ifneither  (1) nor (2) applies, the fair market value as determined bythe Committee in good faith. Such determination shall be conclusive and bindingon all persons.

 

3.                                       Section2 of the Plan is amended to add the following defined terms:

 

** “Base Compensation”**means,with respect to each Participant for each pay period, such Participant’sCompensation, excluding (i) Bonus Compensation; (ii) any amounts

 

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contributed by the Corporation or a DesignatedSubsidiary to any pension plan, deferred compensation plan, or other similarplan; (iii) any automobile allowance (or reimbursement for such expenses); and(iv) any amounts paid as a starting bonus or finder’s fee.

 

**“Bonus Compensation”** means, with respect toeach Participant for each period with respect to which a cash bonus is payableto such Employee, the amount of the cash bonus payable to such Participant forsuch period. Except as determined by the Committee, Bonus Compensation does notinclude: (i) any amounts contributed by the Corporation or a Designated Subsidiaryto any pension plan, deferred compensation plan, or other similar plan; (ii)any automobile allowance (or reimbursement for such expenses); or (iii) anyamounts paid as a starting bonus or finder’s fee.

 

**“Maximum Percentage”** means the maximumpercentage of (i) Base Compensation, or (ii) Base Compensation and BonusCompensation, which a Participant may elect to have withheld from Compensationpursuant to Section 4. The Maximum Percentage will be fifteen percent (15%)unless a lower percentage amount is designated by the Committee with respect toan Option Period.

 

4.                                       Section4.1 of the Plan is amended in its entirety by replacing it with the following:

 

**“**4.1                          AnEmployee who is eligible to participate in the Plan in accordance with Section3 may become a Participant by filing, on a date prescribed by the Committeeprior to an applicable Entry Date, a completed payroll deduction authorizationand Plan enrollment form provided by the Corporation. An eligible Employee mayauthorize payroll deductions at the rate of any whole percentage (i.e., 1%, 2%,3%, etc.), up to the Maximum Percentage, of either (i) the Employee’s BaseCompensation, or (ii) the Employee’s Base Compensation and Bonus Compensation,as elected by the Employee in the payroll deduction authorization and Planenrollment form. If an Employee has elected to participate in the Plan but hasnot made an election whether payroll deductions should be calculated andwithheld from the Employee’s Base Compensation, or from the Employee’s BaseCompensation and Bonus Compensation, then payroll deductions shall becalculated and withheld from such Employee’s Base Compensation only. Allpayroll deductions may be held by the Corporation and commingled with its othercorporate funds. No interest shall be

 

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paid or credited to the Participant with respect tosuch payroll deductions except where required by local law as determined by theCommittee. A separate bookkeeping account for each Participant shall be maintainedby the Corporation under the Plan and the amount of each Participant’s payrolldeductions shall be credited to such account. A Participant may not make anyadditional payments into such account.”

 

5.                                       Section4.2 of the Plan is amended by replacing the first paragraph of Section 4.2 inits entirety with the following:

 

“4.2                           Underprocedures established by the Committee, a Participant may suspend ordiscontinue participation in the Plan at any time during an Exercise Period bycompleting and filing a new payroll deduction authorization and Plan enrollmentform with the Corporation. A Participant may increase or decrease his or herrate of payroll deductions, or change his or her election of the portion ofCompensation (i.e., Base Compensation, or Base Compensation and BonusCompensation) from which payroll deductions will be calculated and withheld, byfiling a new payroll deduction authorization and Plan enrollment form at anytime. Changes in rate shall be effective as soon as reasonably practicableafter the Corporation has received such form. Changes in the portion ofCompensation from which payroll deductions will be calculated and withheld willbe effective for the next commencing Exercise Period, subject to continuingeligibility of the Participant pursuant to Section 3. The Committee mayestablish rules limiting the frequency with which Participants may increase ordecrease the rate of payroll deduction, or change the election of the portionof Compensation from which payroll deductions will be calculated and withheld,and may impose a waiting period on Participants wishing to increase the rate ofpayroll deductions after a decrease. If a new payroll deduction authorizationand Plan enrollment form is not filed with the Corporation, the rate of payrolldeductions and the portion of Compensation from which payroll deductions willbe calculated and withheld shall continue as originally elected (i) throughoutthe Option Period and (ii) subject to continued eligibility as determined underSection 3, for succeeding Option Periods; unless in either case the Boarddetermines to change the Maximum Percentage.”

 

6.                                       Exceptas otherwise modified herein, all other terms and conditions of the Plan shallremain in full force and effect.

 

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