Sphere 3D Corp. - Exhibit 10.3 - Filed by newsfilecorp.com






Exhibit 10.3

RETENTION AGREEMENT


  
    
      THIS RETENTION AGREEMENT made as of the 15th
        day of August, 2019

    

  



B E T W E E N:


  
    
      SPHERE 3D CORP., a corporation existing pursuant to the
        laws of the Province of Ontario

      (herein called the "Corporation")

    

  



OF THE FIRST PART 


  
    
      and 

      JOSEPH O’DANIEL, residing in

      (herein called the "Executive")

    

  



OF THE SECOND PART

          
   WHEREAS the Executive currently serves as
President – Virtualization & Professional Services of the Corporation (the
"Position");

         
    AND WHEREAS in accordance with an
employment letter dated January 25, 2017, the Corporation agreed to provide the
Executive with a retention bonus in the amount of US$700,442 of which US$533,802
is unpaid (the “Outstanding Retention Payment”);

        
     AND WHEREAS the Corporation does
not have sufficient financial resources to pay the Outstanding Retention Payment
to the Executive. Accordingly, the Executive is prepared to waive his
entitlement to receive the Outstanding Retention Payment and restructure such
payment entitlement on the terms set forth in this Agreement;

         
    AND WHEREAS the Corporation considers
the continuance of a sound and vital management team of the Corporation to be
essential to protecting and enhancing the best interest of the Corporation and
its shareholders and wishes to enter into this Retention 




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Agreement (the "Agreement") to encourage the Executive
to continue to perform all of his responsibilities in a diligent manner;

         
    IN CONSIDERATION of the mutual covenants set out
herein, the parties agree as follows:

1.      
   Waiver of Outstanding Retention Payment


         
    The Executive hereby agrees to waive and forfeit the
Outstanding Retention Payment. 

2.    
     Ongoing Services 

        
     The Executive shall devote sufficient time and
attention towards the interests of the Corporation in connection with holding
the Position. Without limiting the generality of the foregoing, the Executive
shall continue to perform all of his responsibilities related to the Position in
a diligent, faithful and professional manner. Executive's resignation as the
President of the Corporation or from any other office for which he receives no
compensation, or the Corporation's removal or termination of Executive from any
such position, shall have no effect on this Agreement or the parties'
obligations hereunder.

3.      
   New Retention Bonus

         
    Provided the Executive continues to be employed by the
Corporation on January 12, 2020 (or such earlier date as is agreed in writing by
the Corporation and the Executive) (the “Retention Date”), the
Corporation shall pay the Executive within 5 business days of such Retention
Date an amount equal to the Outstanding Retention Payment plus US$10.00 (the
"New Retention Payment").

        
     The Corporation shall pay the New Retention
Payment to the Executive in one lump sum payment, net of any applicable
withholdings required under U.S. federal, provincial, state, and local law. Any
portion of the New Retention Payment not paid on or before the deadline for
payment shall bear interest at the maximum rate permitted under Texas law. This
Agreement is intended to comply with, or be exempt from, Section 409A of the
Internal Revenue Code of 1986, as amended ("Section 409A") and shall be
construed and administered in accordance with Section 409A. The Corporation
shall indemnify and hold harmless the Executive and promptly reimburse the
Executive for all losses, costs, expenses, taxes, and fees incurred by Executive
as a result of this Agreement not complying with Section 409A or one of the
exemptions from Section 409A. 

       
      Notwithstanding the foregoing, if the
Corporation shall terminate the Executive prior to the Retention Date without
Cause (as defined below), or the Executive resigns his 




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employment for Good Reason (as defined below), then the
Executive shall be entitled to receive the New Retention within 5 business days
of such termination date. 

For purposes of this Agreement,
"Good Reason" shall mean:

	 	a) 	
      any act, set of facts or omissions with respect to the
      Executive that would, as a matter of applicable law, constitute a
      constructive termination of the Executive;

	 	b) 	
      a change in the Executive’s position with the Corporation
      which results in a material diminution of the Executive’s authority,
      duties, or responsibilities;

	 	c) 	
      a reduction by the Corporation in the annual rate of the
      Executive’s base salary or, if applicable, target bonus opportunity, and
      in the event of a Change of Control (as defined below), as compared to
      Executive’s base salary and target bonus opportunity in effect immediately
      prior to the public announcement of the Change of Control;

	 	d) 	
      the failure of the Corporation (i) to continue to provide
      the Executive an opportunity to participate in any benefit or compensation
      plans provided to employees who hold positions with the Corporation
      comparable to the Executive’s position, (ii) to provide the Executive all
      other fringe benefits (or the equivalent) in effect for the benefit of any
      employee group which includes any employee who hold a position with the
      Corporation comparable to the Executive’s position, where in the event of
      a Change of Control, such comparison shall be made relative to the time
      immediately prior to the public announcement of such Change of Control);
      or (iii) continue to provide director’s and officers’ insurance;

	 	e) 	
      a change in the location of Executive's principal office
      to a different place that is more than twenty-five miles from the
      Executive's principal office immediately prior to such change;

	 	f) 	
      a restriction or prohibition on Executive’s participation
      in outside activities that have historically been permitted, such as
      third-party board, committee, panel, or association membership;
  or

	 	g) 	
      the Corporation's material breach of this Agreement,
      including, in the event of a Change of Control, failure of the Corporation
      to obtain the consent of a successor to perform all of the obligations of
      the Corporation under this Agreement.



For purposes of this Agreement,
"Cause" shall mean:

	 	a) 	
      the Executive willfully failed to follow the lawful
      written directions of the Board of Directors of the Corporation or
      Executive’s immediate superior; provided that no termination for such
      Cause shall occur unless the Executive: (i) has been provided with notice,
      specifying such willful failure in reasonable detail, of the Corporation’s
      intention to terminate the Executive for Cause; and (ii) has failed to
      cure or correct such willful failure within thirty (30) days of receiving
      such notice;

	 	b) 	
      the Executive engaged in gross misconduct, or gross
      incompetence which is materially detrimental to the Corporation; provided
      that no termination for such







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      Cause shall occur unless the Executive: (i) has been
      provided with notice, specifying such gross misconduct or gross
      incompetence in reasonable detail, of the Corporation’s intention to
      terminate the Executive for Cause; and (ii) has failed to cure or correct
      such gross misconduct within thirty (30) days of receiving such
    notice;

	 	c) 	
      the Executive willfully failed to comply in any material
      respect with the Corporation's policies where non-compliance would be
      materially detrimental to the Corporation; provided that no termination
      for such Cause shall occur unless the Executive: (i) has been provided
      with notice of the Corporation’s intention to terminate the Executive for
      such Cause, and (ii) has failed to cure or correct such willful failure
      within thirty (30) days of receiving such notice, provided that such
      notice and cure period requirements shall not apply in the event that such
      non- compliance is of a nature that it is unable to be remedied;
  or

	 	d) 	
      the Executive is convicted of a felony or crime involving
      moral turpitude (excluding drunk driving unless combined with other
      aggravating circumstances or offenses) or commission of a fraud which the
      Corporation reasonably believes would reflect adversely on the
      Corporation.



4.         
Accelerated Payment Upon a Change of
Control

        
     In the event a Change of Control occurs prior to
the New Retention Payment being paid to the Executive, and provided that the
Executive is employed by the Corporation immediately prior to such Change of
Control, then the Executive shall be entitled, in his sole discretion, to
receive the New Retention Payment by providing written notice to the Corporation
of his election to receive such payment at any time within 30 days of such
event. The Corporation covenants and agrees to use its commercially reasonable
efforts to provide the Executive with written notice of a Change of Control
within 5 days of its occurrence. 

       
      For the purposes of this Agreement, a
"Change of Control" means:

        
     (a)        any
"person" (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) becomes the
"beneficial owner" (as defined in Rule 13d-3 promulgated under the Exchange
Act), directly or indirectly, of securities of the Corporation representing
fifty (50%) percent or more of (i) the outstanding shares of common stock of the
Corporation, or (ii) the combined voting power of the Corporation’s outstanding
securities;

       
      (b)       
the Corporation is party to a merger or consolidation, or series of related
transactions, which results in the voting securities of the Corporation
outstanding immediately prior thereto failing to continue to represent (either
by remaining outstanding or by being converted into voting securities of the
surviving entity), directly or indirectly, at least fifty (50%) percent of the
combined voting power of the voting securities of the 




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Corporation or such surviving entity outstanding immediately
after such merger or consolidation; or

            (c)       
the sale or disposition of all or substantially all of the Corporation’s assets,
or consummation of any transaction, or series of related transactions, having
similar effect (other than to a subsidiary of the Corporation). 

5.        
 Miscellaneous

5.1        This Agreement
shall be binding upon any successor (whether direct or indirect, by purchase,
merger, amalgamation, business reorganization or otherwise) to all or
substantially all of the business and/or assets of the Corporation. No
transaction shall be completed unless such successor shall have executed and
delivered an agreement whereby such successor expressly assumes the obligations
of the Corporation under this Agreement, but no such agreement shall be
necessary to making this Agreement binding upon such successors. 

5.2        This Agreement
shall enure to the benefit of and be enforceable by the Executive’s successors,
assigns, heirs, legal personal representatives, executors and administrators. If
the Executive should die while any amount would still be payable to the
Executive hereunder if the Executive had continued to live, all such amounts
shall be paid in accordance with the terms of this Agreement to the Executive’s
estate or such other person as may be properly appointed by the Executive for
this purpose. 

5.3        Any notice or
other communication required or permitted pursuant to the terms of this
Agreement shall be in writing and shall be deemed to have been duly given and
received when actually delivered or when mailed postage prepaid and registered
with return receipt requested and received or when transmitted by facsimile (if
provided) provided that the transmitter has received confirmation of the
successful completion thereof, if to the Corporation addressed as follows:

Sphere 3D Corp. 
895 Don Mills
Road
Bldg. 2, Suite 900
Toronto, Ontario
M3C 1W3

Attention: Chief Executive Officer

And if to the Executive addressed as follows:

Joseph O’Daniel




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Or to such other address as the intended recipient may have
theretofore furnished to the sender in writing in accordance herewith. Any
notice given hereunder shall state in reasonable detail the factual basis
underlying such notice. 

5.4        Except as
expressly provided elsewhere in this Agreement, no provision of this Agreement
may be modified, waived or discharged unless such waiver, modification or
discharge is agreed to in writing and signed by the Executive and such officer
of the Corporation as may be specifically designated by the Board. No waiver by
either party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time.

5.5        The laws of the
State of Texas shall govern all matters arising out of or relating to this
Agreement including, without limitation, its validity, interpretation,
construction, and performance but without giving effect to the conflict of laws
principles that may require the application of the laws of another jurisdiction.
ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED HEREBY SHALL BE BROUGHT IN THE COURTS OF THE STATE OF
TEXAS LOCATED IN ELLIS COUNTY, TEXAS OR THE FEDERAL COURTS FOR THE NORTHERN
DISTRICT OF TEXAS, DALLAS DIVISION. EACH PARTY HERETO IRREVOCABLY SUBMITS AND
AGREES TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS FOR THE RESOLUTION OF ALL
CLAIMS, CONTROVERSIES, DISPUTES, AND CAUSES OF ACTION ARISING OUT OF OR RELATING
TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY AND EXPRESSLY WAIVES
ALL OBJECTIONS THEY HAVE NOW OR MAY HAVE TO VENUE, WHETHER BASED ON
INCONVENIENCE OR ANY OTHER REASON. 

5.5        The validity or
unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement, which shall
remain in full force and effect.

5.6        The section
headings herein are for convenience only and shall not limit the scope or affect
of any provision hereof. 

5.7        Unless otherwise
specified, all references to amounts of money in this Agreement refer to the
lawful currency of the United States of America. 

[Signature page to follow]




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     IN WITNESS WHEREOF this Agreement has been
executed by the parties hereto. 

	 	SPHERE 3D CORP. 



	 	By: 	/s/
      Peter Tassiopoulos 
	 	  	Peter Tassiopoulos 
	 	  	Chief Executive Officer




	SIGNED, SEALED & DELIVERED 	) 	  
	  	) 	  
	  	) 	  
	  	) 	  
	/s/ Shailan
      Topiwala 	) 	/s/
      Joseph O’Daniel 
	Witness 	) 	Joseph O’Daniel