Document:

Exhibit
10.22

ADDENDUM
TO PRODUCT PURCHASE AGREEMENT

This ADDENDUM TO PRODUCT
PURCHASE AGREEMENT (the “Addendum”) supplements that certain Product Purchase
Agreement No. PRO1585-042103 effective as of the 30th day of July, 2003 by and
between Hewlett-Packard Company (herein “HP”) on the one hand and Overland
Storage Inc. (herein “Supplier”) on the other hand.  There are no third party beneficiaries to
this Addendum.

RECITALS

WHEREAS, HP and
Supplier have previously entered into the aforesaid Product Purchase Agreement
(the “Agreement”) or are concurrently entering into the Agreement and this
Addendum;

WHEREAS, the
purpose of this Addendum is to set forth commercial and other terms and
conditions for Product sold by Supplier and purchased by HP pursuant to the
Agreement; and

WHEREAS, HP and
Supplier desire to supplement the Agreement as herein provided.

NOW, THEREFORE,
for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, HP and Supplier hereby agree as follows:

1.1       The
effective date (“Effective Date”) of this Addendum is July 30th 2006.

1.2       Capitalized
terms used herein, unless otherwise defined, will have the meanings given in
the Agreement.

1.3       The original
Term of Agreement will be extended effective upon execution of
this Addendum by the parties and covers a period (the “Term”) which commences
as of the Effective Date of this Addendum and continues for one (1) year and
thereafter continues indefinitely unless terminated earlier under the terms of
the Agreement; provided that in no event will this Agreement continue longer
than three (3) years from the Addendum Effective Date unless extended or
renewed upon mutual written agreement of the parties.

1.4   THIS
ADDENDUM IS SUBJECT TO THE AGREEMENT, AND IN THE EVENT OF ANY CONFLICT BETWEEN
A PROVISION OF THE AGREEMENT AND A PROVISION OF THIS ADDENDUM, THE PROVISIONS
OF THE AGREEMENT WILL GOVERN.

1.5   Termination

1.5.1        Termination
or expiration of the Agreement will ipso  facto terminate this
Addendum.

1.5.2        This
Addendum may be terminated as set forth Article 24 of the Agreement.

1.5.3        Termination
or expiration of this Addendum will not terminate otherwise affect the
Agreement which will continue unaffected and in full force and effect according
to the terms thereof.

1.5.4        This
Addendum can be executed in original, telecopied or emailed counterparts, and
each counterpart will be considered an original, but all of which together will
constitute one and the same instrument.

1.5.5        This
Addendum will inure to the benefit of each of the party’s permitted assigns or
successors in interest and will be effective as of the Effective Date.

 

1.5.6        Additional
terms and conditions (if any):

.

1.6   The
Agreement continues in full force and effect; and except as may be expressly
set forth in this Addendum, the Agreement is unchanged.

IN WITNESS
WHEREOF, the parties, intending to be legally bound hereby, have executed this
Addendum as of the Effective Date.

	
  OVERLAND STORAGE INC.

  	
   

  	
  HEWLETT-PACKARD COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
    /s/
  V.A. LoForti

  	
   

  	
  By 

  	
    /s/ Richard Gentilini

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Print Name

  	
    Vernon
  A. LoForti

  	
   

  	
  Print Name

  	
    Richard Gentilini

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title

  	
    VP
  & CFO

  	
   

  	
  Title

  	
    Director, Global Procurement

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date 

  	
    6/8/06

  	
   

  	
  Date

  	
    6/19/06Exhibit 10.48

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) since formation of the
committee.  Such fee will not be paid for
committee meeting in joint session with the full board.

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-K:

	
  Christopher Calisi

  	
   

  	
  $

  	
  395,000

  	
  (1)

  
	
  W. Michael
  Gawerecki

  	
   

  	
  $

  	
  246,500

  	
   

  
	
  Christie Huff

  	
   

  	
  $

  	
  195,000

  	
   

  
	
  Michael S.
  Kerman

  	
   

  	
  $

  	
  225,000

  	
   

  
	
  Vernon A.
  LoForti

  	
   

  	
  $

  	
  297,750

  	
   

  
	
  Robert J. Scroop

  	
   

  	
  $

  	
  220,500

  	
   

  

 

(1)  Effective November
15, 2005, at the request of Mr. Calisi, we reduced his annual salary from
$500,000 to $395,000 as described more fully under “Employment Arrangements
with Current Executive Officers” below.

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-K:

 1
 

 

Christopher Calisi.  We entered into an employment agreement with
Mr. Calisi on March 12, 2001, pursuant to which Mr. Calisi is employed as our
President and Chief Executive 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. Calisi’s compensation at any time.  If we terminate Mr. Calisi’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.

On
November 22, 2005, we amended the terms of Mr. Calisi’s employment
agreement and retention agreement pursuant to a voluntary offer made by Mr. Calisi
at a meeting of our board of directors on November 15, 2005.  Pursuant to the amendments, Mr. Calisi’s
gross annual base salary was reduced from $500,000 to $395,000 effective as of
November 15, 2005, except that solely for purposes of calculating severance
payments under the employment agreement and retention agreement,
Mr. Calisi’s salary will be deemed to be the greater of $500,000 or his
then current salary as of the date of termination or a change of control, as
applicable.  The reduction in salary will reduce the annual bonus for
which Mr. Calisi is eligible under the employment agreement and the
retention agreement, and will not constitute “good reason” to terminate the
employment agreement or retention agreement.  The board of directors will
have sole and absolute discretion to modify Mr. Calisi’s compensation
going forward, including any increase in compensation, subject to the existing
terms of the agreements.

The annual salary
of Mr. Calisi had been increased to $500,000 by the Compensation Committee on
April 28, 2005 effective immediately.  On that day, Mr. Calisi also
received (1) a cash bonus of $21,500 effective immediately, (2) a grant of
50,000 restricted shares of our common stock pursuant to the 2003 Incentive
Plan, which vest in installments of 16,667, 16,667 and 16,666 shares on January
1, 2006, January 1, 2007 and January 1, 2008, respectively, (3) an option to
purchase up to 100,000 shares of our common stock at the purchase price of
$11.00 per share pursuant to the 2003 Incentive Plan, which option is
immediately vested as to 11,200 shares, with the remainder vesting at a rate of
2,775 option shares on the last day of the month commencing May 31, 2005
through December 31, 2007, and (4) a grant of an additional 50,000 restricted
shares of our common stock pursuant to the 2003 Incentive Plan, which will vest
as to 12,500, 12,500 and 25,000 shares, respectively, if the volume weighted
daily average stock price for ten consecutive trading days reaches $20, $25 and
$30, respectively, on or before January 1, 2008, provided that Mr. Calisi is
employed by us as Chief Executive Officer on such dates(s).  Mr. Calisi
continues to be eligible to receive a performance bonus equivalent to 75% of
his base salary pursuant to our MBO and Bonus Program.  The above referenced stock option grant to
Mr. Calisi accelerates upon a Change in Control as defined in the 2003
Incentive Plan.  The vesting of shares underling the stock option and
restricted stock grants pursuant to the 2003 Incentive Plan described above
will cease upon termination of Service to Overland, as defined in the 2003
Incentive Plan.

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.  The September 2005
employment agreement between us and Mr. Gawarecki expired on June 30, 2006.

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.

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

 2
 

 

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. Calisi effective March 12, 2001, 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. Calisi would be
entitled to receive an amount equal to 2.5 times his base salary plus target
bonus, and Mr. LoForti would be entitled to receive an amount equal to 2.0
times his base salary plus target bonus. Ms. Huff, and Messrs. Gawarecki, Kerman,
and Scroop each would be entitled to an amount equal to their 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.

MBO and Bonus Plan

Our Chief Executive Officer and other executive
officers participate in our executive bonus plan which is designed as a
performance-based component of their compensation package. The Compensation
Committee tailors the plan for each executive to be unique to his or her area
of responsibility. For fiscal year 2006, the plan established by the
Compensation Committee has been and will be evaluated and paid on a quarterly
basis, and include two performance measurement points for each executive
officer:

·      our
actual earnings per share (EPS) in comparison to the target approved by the
Compensation Committee; and

·      achievement
of individual job performance goals and objectives.

No bonuses were paid under
the plan during the 2006 fiscal year, because the EPS targets were not achieved.

 3
 

 

Discretionary Bonus

On January 24,
2006, the Compensation Committee of our board of directors approved a $10,000
discretionary bonus payable immediately to certain of our executive officers in
recognition of certain OEM business awarded to Overland.  The $10,000 discretionary bonus was paid in
February 2006 to each of the following persons:

	
  Diane N. Gallo

  	
   

  	
  Former Vice President, Human Resources

  
	
  W. Michael Gawarecki

  	
   

  	
  Vice President, Operations

  
	
  Christie Huff

  	
   

  	
  Vice President, Worldwide Marketing

  
	
  Michael Kerman

  	
   

  	
  Vice President and General Manager, Appliance
  Business Unit

  
	
  Vernon A. LoForti

  	
   

  	
  Vice President, Chief Financial Officer and
  Secretary

  
	
  Robert J. Scroop

  	
   

  	
  Vice President, Engineering

  

 

 4

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