Exhibit
10.2


 


OVERLAND
STORAGE, INC.

SUMMARY SHEET

OF

DIRECTOR AND EXECUTIVE OFFICER COMPENSATION


 


Non-Employee
Director Compensation 


 


Our compensation plan for
non-employee directors consists of both a cash component and an equity
component. We pay each non-employee director $5,000 per quarter, plus $2,500
for each Board meeting attended ($1,250 if held telephonically), plus
reimbursement for expenses. The Chairman of the Board receives an additional
$2,500 per quarter in addition to the non-employee director fee of $5,000 per
quarter.  Members of the Audit Committee
and the Compensation Committee receive a retainer of $500 per quarter in lieu
of a fee for committee meetings attended during a quarter and members of the
Nominating and Governance Committee receive $500 for each committee meeting
attended ($250 if held telephonically and no fee if held the same day as a
Board meeting).  Members of the Special
Committee on Shareholder Value will receive $500 for each committee meeting
attended (whether telephonically or in person). 
Such fee will not be paid for committee meetings in joint session with
the full board. The Board has not yet determined the compensation for directors
serving on the newly-created Strategy Committee.


 


In addition to the cash
component of compensation, each non-employee director receives stock
options.  Under our 2003 Equity Incentive
Plan, which we refer to as the 2003 Incentive Plan, each non-employee director
receives a ten-year nonqualified stock option to purchase 18,000 shares on the
same date as the company’s annual meeting of shareholders.  These options are exercisable at fair market
value on the date of grant and vest in equal monthly installments over a
12-month period, as measured from the grant date.  When a new non-employee director joins the
board, such director will be awarded a new option for a number of shares
determined by multiplying 1,500 by the number of months remaining until the
next scheduled annual meeting date, giving credit for any partial month.  Such option will vest at the rate of 1,500
shares per month and will be fully vested at the next annual meeting date, at
which time the director will receive the normal annual grant. On November 15,
2005, the date of our last annual meeting of shareholders, Scott McClendon,
Robert Degan and Michael Norkus each received an option for 18,000 shares.  In connection with their elections to the
Board, Mark Barrenechea received an option for 16,500 shares on December 21,
2005 and William Miller received an option for 7,500 shares on June 12, 2006.


 


Compensation
of Executive Officers


 


Our executive officers
serve at the discretion of the Board of Directors. From time to time, the
Compensation Committee of the Board of Directors reviews and determines the
salaries that are paid to our executive officers. The following table sets
forth the annual salary rates for the our current executive officers as of the
date of this report on Form 10-Q:


 


	
  Scott McClendon

  	
   

  	
  $

  	
  395,000 

  	
  (1)

  
	
  W. Michael Gawarecki

  	
   

  	
  $

  	
  246,500

  	
   

  
	
  Christie Huff

  	
   

  	
  $

  	
  195,000

  	
   

  
	
  Michael S.
  Kerman

  	
   

  	
  $

  	
  225,000

  	
   

  
	
  Vernon A.
  LoForti

  	
   

  	
  $

  	
  297,750

  	
   

  
	
  Robert J. Scroop

  	
   

  	
  $

  	
  220,500

  	
   

  



 






(1)  In connection with his appointment as Interim
President and Chief Executive Officer, the Compensation Committee has approved
a temporary compensation package for Mr. McClendon that consists of a
monthly salary of $32,916.67.


 



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Employment
Arrangements with Current Executive Officers


 


The following discussion
summarizes the employment arrangements between us and our current executive
officers as of the date of this report on Form 10-Q:


 


Scott McClendon.   On November 1, 2006, the
Board appointed Scott McClendon as our Interim President and Chief Executive Officer
effective immediately. The Compensation Committee has approved a temporary
compensation package for Mr. McClendon that consists of a monthly salary
of $32,916.67. The base salary is equivalent to the base salary earned by
Mr. Calisi at the time of his departure. Mr. McClendon will also be
entitled to participate in the company’s employee benefit plans.
Mr. McClendon will not receive fees paid to the company’s non-employee
directors or the Chairman of the Board fee while serving as Interim President
and Chief Executive Officer.


 


W. Michael Gawarecki.   Mr.
Gawarecki, our Vice President of Operations is an at-will employee and may be
terminated by us for any reason, with our without notice.  Mr. Gawarecki currently earns an annual
salary of $246,500.


 


Christie Huff.  Ms. Huff, our Vice President of Worldwide
Marketing, is an at-will employee and may be terminated by us for any reason,
with or without notice.  Ms. Huff
currently earns an annual salary of $195,000 per year.


 



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Michael S. Kerman.  Mr. Kerman, our Vice President and General
Manager of the Appliance Business Unit, is an at-will employee and may be
terminated by us for any reason, with or without notice.  Mr. Kerman currently earns an annual salary
of $225,000 per year.


 


Vernon A. LoForti.  We entered into an employment agreement with
Mr. LoForti on December 4, 2000, pursuant to which Mr. LoForti is employed as
our Vice President and Chief Financial Officer. The employment agreement has a
one-year term, automatically renews for successive one-year terms, and provides
that our Board may unilaterally modify Mr. LoForti’s compensation at any
time.  If we terminate Mr. LoForti’s
employment without cause, then we are obligated to pay him a severance payment
equal to his base salary, payable on a pro-rated basis according to our normal
payroll cycle for the 12 months following his termination. In addition, he
is entitled to receive accelerated vesting for any stock options that would
otherwise have vested during the 12-month period following his termination. He
is also entitled to receive the cash severance payment if he resigns for good
reason because of any of the following events: (i) reduction in compensation of
more than 10%; (ii) change in position or duties so that his duties are no
longer consistent with his previous position; or (iii) change in principal place
of work to more than 50 miles from our current facility without his
approval.  Mr. LoForti currently earns a
salary of $297,750 per year.


 


Robert J. Scroop.  Mr. Scroop, our Vice
President Engineering, is an at-will employee and may be terminated by us for
any reason, with or without notice.  Mr.
Scroop currently earns an annual salary of $220,500 per year.


 


Stock Option Acceleration Program


 


In
July 2005, our Board of Directors approved the accelerated vesting of all
unvested stock options, held by the company’s officers and employees, with an
exercise price at or above $12.00 per share, effective July 3, 2005. The stock
option acceleration program does not apply to stock options held by our
non-employee directors. The accelerated options were issued under the 2000
Stock Option Plan, the 2001 Supplemental Stock Option Plan and the 2003
Incentive Plan.  In connection with the
acceleration of vesting of options held by our executive officers, each
executive officer agreed not to sell or transfer any shares subject to
accelerated vesting until the original vesting date would have occurred based
on the original vesting schedule (without giving effect to any future
termination of service). The primary purpose of the accelerated vesting was to
eliminate future stock-based employee compensation expense.


 


Retention
Agreements


 


We entered into retention
agreements with Messrs. LoForti, Scroop and Gawarecki effective
January 27, 2000, with Mr. Kerman effective August 30, 2004 and with
Ms. Huff effective September 14, 2005.   These agreements provide that the officer will
receive a severance payment if, within two years of the consummation of a
change in control of Overland, he or she is terminated without cause or resigns
with good reason. These severance payments are based on the officer’s base
salary at the time of the consummation of the change in control or the
termination date, whichever is higher, plus his or her target bonus for the
year prior to the consummation of the change in control. The agreements provide
that, upon a change in control, Mr. LoForti would be entitled to receive
an amount equal to 2.0 times his base salary plus target bonus; and Ms. Huff, and
Messrs. Gawarecki, Kerman, and Scroop each would be entitled to an amount
equal to his or her respective base salary plus target bonus. If any portion of
any payment under any of the agreements would constitute an “excess parachute
payment” within the meaning of Section 280G of the Internal Revenue Code,
then that payment will be reduced to an amount that is one dollar less than the
threshold for triggering the tax imposed by Section 4999 of the Internal
Revenue Code.


 


 



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