OVERLAND DATA INC, DEF 14A, 2000-10-06

OVERLAND DATA INC
DEF 14A, 2000-10-06
COMPUTER STORAGE DEVICES

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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF
THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the Registrant /X/
Filed by a party other than the Registrant / /

Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12

OVERLAND DATA, INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

/X/ No fee required.

/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1) Title of each class of securities to which transaction applies:

------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:

------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):

------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:

------------------------------------------------------------------------
(5) Total fee paid:

------------------------------------------------------------------------

/ / Fee paid previously with preliminary materials.

/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:

------------------------------------------------------------------------
(3) Filing Party:

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(4) Date Filed:

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OVERLAND DATA, INC.
8975 BALBOA AVENUE
SAN DIEGO, CALIFORNIA 92123-1599

------------------------------

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 14, 2000

------------------------------

The Annual Meeting of Shareholders of Overland Data, Inc., a California
corporation (the "Company"), will be held at the principal executive offices of
the Company at 8975 Balboa Avenue, San Diego, California 92123-1599 on November
14, 2000, at 9:00 a.m. (the "Meeting"), for the following purposes:

1. To elect five (5) directors of the Company to hold office until the
2001 Annual Meeting of Shareholders or until their respective
successors are duly elected and qualified;

2. To approve the adoption of the 2000 Stock Option Plan;

3. To ratify the selection of PricewaterhouseCoopers LLP as the
independent auditors of the Company for the fiscal year ending June 30,
2001; and

4. To transact such other business as may properly come before the Meeting
or any adjournment or postponement of the Meeting.

The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice. Only shareholders of record at the close of
business on September 29, 2000 will be entitled to vote at the Meeting. Each of
these shareholders is cordially invited to be present and vote at the Meeting in
person.

By Order of the Board of Directors

/s/ Vernon A. Loforti
----------------------------------
Vernon A. LoForti
SECRETARY

San Diego, California
October 6, 2000

WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN AND DATE THE ENCLOSED
PROXY CARD AND RETURN IT PROMPTLY. THIS IS IMPORTANT BECAUSE A MAJORITY OF THE
SHARES MUST BE REPRESENTED, EITHER IN PERSON OR BY PROXY, TO CONSTITUTE A QUORUM
AT THE MEETING. IF YOU ATTEND THE MEETING, YOU MAY VOTE IN PERSON EVEN THOUGH
YOU SEND IN YOUR PROXY NOW. IN ADDITION, YOU MAY REVOKE THE PROXY AT ANY TIME
BEFORE IT IS VOTED.

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OVERLAND DATA, INC.

PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 14, 2000

TABLE OF CONTENTS
Page
----
<S> <C>
GENERAL INFORMATION.................................................................1

SHARES OUTSTANDING AND VOTING RIGHTS................................................2

PROPOSAL ONE--ELECTION OF DIRECTORS.................................................3

PROPOSAL TWO--APPROVAL OF THE ADOPTION OF THE 2000 STOCK OPTION PLAN...............21

PROPOSAL THREE--RATIFICATION OF INDEPENDENT AUDITORS...............................25

OTHER BUSINESS.....................................................................26
</TABLE>

<PAGE>

OVERLAND DATA, INC.
8975 BALBOA AVENUE
SAN DIEGO, CALIFORNIA 92123-1599

--------------------------

PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 14, 2000

--------------------------

GENERAL INFORMATION

Your proxy in the enclosed form is solicited by the Board of Directors
(the "Board") of Overland Data, Inc., a California corporation (the "Company"),
for use at the Company's Annual Meeting of Shareholders to be held at the
principal executive offices of the Company at 8975 Balboa Avenue, San Diego,
California 92123-1599 on November 14, 2000 at 9:00 a.m. (the "Meeting"), for the
purposes set forth in the accompanying notice and at any adjournment or
postponement of the Meeting. The mailing of this Proxy Statement and the
accompanying form of proxy (the "Proxy") to the Company's shareholders is
expected to commence on or about October 9, 2000.

The shares of the Company's Common Stock ("Common Stock") represented
by proxy will be voted in accordance with the instructions given on the Proxy,
subject to the proper execution of the Proxy and its receipt by the Company
prior to the close of voting at the Meeting, or any adjournment or postponement
thereof. Proxies received by the Company on which no contrary instruction has
been given will be voted:

- FOR the election of the directors to the Board nominated by
management;

- FOR the approval of the adoption of the 2000 Stock Option Plan;
and

- FOR the ratification of the selection of independent auditors for
the fiscal year ending June 30, 2001.

In addition, the individuals designated as proxies by the Company in
connection with the Meeting will have discretionary authority to vote for or
against any other shareholder matter presented at the Meeting. A shareholder
giving a proxy has the power to revoke it at any time before it is exercised by
filing with the Secretary of the Company an instrument revoking it or a duly
executed proxy bearing a later date. The powers of the proxy holders will be
suspended if the person executing the Proxy is present at the Meeting and votes
in person.

The cost of soliciting proxies will be borne by the Company. Original
solicitation of proxies by mail may be supplemented, if deemed desirable or
necessary, by either telephone, telegram, facsimile, Internet or personal
solicitation by directors, officers or employees of the

1
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Company. No additional compensation will be paid for any such services. The
Company will furnish copies of solicitation material to brokerage houses,
fiduciaries and custodians holding shares of Common Stock in their names
("record holders"), which shares are beneficially owned by others, to forward
the solicitation material to such beneficial owners. In addition, the Company
may reimburse such record holders for their cost of forwarding the
solicitation material to such beneficial owners.

SHARES OUTSTANDING AND VOTING RIGHTS

Only holders of shares of Common Stock of record as of the close of
business on September 29, 2000 (the "Record Date") are entitled to vote at the
Meeting. On the Record Date, 10,328,425 shares of Common Stock (collectively,
the "Shares") were issued and outstanding. Each of the Shares is entitled to one
vote on all matters to be voted upon at the Meeting. The presence, in person or
by proxy duly authorized, of the holders of a majority of the Shares will
constitute a quorum for the transaction of business at the Meeting and any
continuation or adjournment thereof. Broker non-votes (i.e., shares of Common
Stock held by a broker or nominee which are represented at the Meeting, but with
respect to which such broker or nominee is not empowered to vote on a particular
purpose) will be counted in determining whether a quorum is present at the
Meeting. Directors will be elected by a plurality of votes of the Shares present
in person or represented by proxy at the Meeting. Any of the Shares not voted
(whether by abstention, broker non-votes or otherwise) will have no impact on
the election of directors, except to the extent that the failure to vote for one
director nominee results in another nominee receiving a larger portion of votes.
The proposals submitted to the Company's shareholders to (i) approve the
adoption of the Company's 2000 Stock Option Plan and (ii) ratify the selection
of the Company's auditors, must be approved by the vote of the holders of a
majority of the Shares represented in person or by proxy and entitled to vote at
the Meeting. In determining whether the proposals of the preceding sentence have
been approved, abstentions and broker non-votes are not counted as votes for or
against such proposals.

Your execution of the enclosed Proxy will not affect your right as a
shareholder to attend the Meeting and to vote in person. Any shareholder giving
a proxy has a right to revoke it at any time by either (i) a later-dated proxy,
(ii) a written revocation sent to and received by the Secretary of the Company
prior to the Meeting or (iii) attendance at the Meeting and voting in person.

2
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PROPOSAL ONE--ELECTION OF DIRECTORS
(ITEM 1 ON THE PROXY CARD)

The Company's Bylaws (the "Bylaws") provide that the authorized number
of directors of the Company shall not be less than five (5) and not more than
seven (7), with the exact number of directors to be set by resolution duly
adopted by the Board or by the shareholders. The current number of directors of
the Company has been set by the Board at five (5), all of whom are to be elected
to the Board at the Meeting. Each director nominee elected at the Meeting will
hold office until the next Annual Meeting of Shareholders, or until his
successor is duly elected and qualified, unless he resigns or his seat on the
Board becomes vacant due to his death, removal or other cause in accordance with
the Bylaws. Management knows of no reason why any of the director nominees would
be unable or unwilling to serve; but, in the event that any director nominee is
unable or unwilling to serve, the proxies will be voted for the election of such
other person(s) for the office of director as management may recommend in the
place of such nominee. Any votes cast may be distributed among the director
nominees voted for in such proportions as the person named in the Proxy shall in
his or her sole judgment determine.

The Company's shareholders have cumulative voting rights with respect
to the election of the director nominees to the Board. The Bylaws provide that
no shareholder is entitled to cumulate votes (i.e., cast for any candidate a
number of votes greater than the number of the shareholder's shares), unless
such candidate's name (or candidates' names) have been placed in nomination
prior to commencement of the voting and a shareholder has given notice of such
shareholder's intention to cumulate votes prior to commencement of the voting.
If any shareholder has given such notice, then each shareholder entitled to vote
may cumulate such shareholder's votes for candidates in nomination and give one
candidate a number of votes equal to the number of directors to be elected
multiplied by the number of votes to which such shareholder's shares are
entitled, or distribute such shareholder's votes on the same principle among as
many candidates as such shareholder shall elect. The candidates receiving the
highest number of affirmative votes of the Shares entitled to be voted for them,
up to the number of directors to be elected by such shares, will be elected. If
voting for directors is conducted by cumulative voting, the person named on the
Proxy will have discretionary authority to cumulate votes among the director
nominees named.

INFORMATION REGARDING DIRECTOR NOMINEES

The following table sets forth the names, ages, principal occupations
for the periods indicated and other directorships of the five (5) director
nominees at the Meeting, each of whom is currently a director of the Company.

3
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PRINCIPAL OCCUPATION FOR THE DIRECTOR
NAME AGE PAST FIVE YEARS AND OTHER DIRECTORSHIPS SINCE
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Scott McClendon 61 Mr. McClendon has served as President, Chief Executive 1991
Officer and a director since joining the Company in
October 1991. Prior thereto, he was employed by
Hewlett-Packard, a global manufacturer of computing,
communications and measurement products and services,
for over 32 years in various positions in engineering,
manufacturing, sales and marketing. He last served as
the General Manager of the San Diego Technical Graphics
Division and Site Manager of Hewlett-Packard in San
Diego, California. Mr. McClendon holds B.S. and M.S.
degrees in Electrical Engineering from Stanford
University.

Martin D. Gray 52 Mr. Gray, one of the co-founders of the Company, has 1980
served as Secretary and a director since the Company's
inception in September 1980 through November 1997 and as
Assistant Secretary and a director from then until the
present. He also has served as Chief Technical Officer
since November 1997 and as staff engineer at the Company
from January 1986 until November 1997. From January
1977 to July 1985, Mr. Gray was Manager of Research and
Development at Cipher Data Products, Inc. ("Cipher"), a
tape drive manufacturer. Mr. Gray has numerous patents
in the tape drive industry and holds a B.S. degree in
Electrical Engineering from the California Institute of
Technology.

4
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PRINCIPAL OCCUPATION FOR THE DIRECTOR
NAME AGE PAST FIVE YEARS AND OTHER DIRECTORSHIPS SINCE
-------------------------------------------------------------------------------------------------------------------
Robert A. Degan 61 Mr. Degan has served as a director of the Company since 2000
February 2000. Since January 2000, Mr. Degan has been a
private investor. From November 1998 to December 1999,
Mr. Degan served as General Manager of the Enhanced
Services & Migration Unit (formerly, Summa Four, Inc.)
of Cisco Systems, Inc., an Internet networking
company. From July 1998 to November 1998, Mr. Degan
was chairman, president and chief executive officer of
Summa Four, Inc., and from January 1997 to July 1998 he
served as its president and chief executive officer and
as a director. From August 1996 to December 1996, Mr.
Degan served as an executive vice president of Sync
Research Inc., a leading provider of wide area network
("WAN") access and management solutions. From 1991 to
1996, Mr. Degan was the president, chief executive
officer and a director of Tylink Corporation, a data
communications company. Mr. Degan is also a director of
FlexiInternational Software, Inc., a financial
accounting software company, and Gensym Corporation, a
business process software company, each of which is a
public company. Mr. Degan was formerly on the research
staff at Massachusetts Institute of Technology (MIT).

5
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John A. Shane 67 Mr. Shane has served as a director of the Company since 1992
July 1992. He is the founder and has served as
President of Palmer Service Corporation, a venture
capital firm, since 1972. He is a director of Arch
Wireless Holdings, Inc., a wireless messaging and
communications services company, and Gensym Corporation,
a business process software company, each of which is a
public company. Mr. Shane holds a B.A. degree in
Economics from Princeton University and an M.B.A. from
Harvard Business School.
</TABLE>
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VOTE REQUIRED AND RECOMMENDATION

The five (5) nominees for director receiving the highest number of
affirmative votes of the Shares present in person or represented by proxy at the
Meeting, and entitled to be voted for them, shall be elected as directors of the
Company. Votes withheld from any director nominee are counted for purposes of
determining the presence or absence of a quorum for the transaction of business,
but have no other legal effect under California law. Holders of proxies
solicited by this Proxy Statement will vote the proxies received by them as
directed on the proxy card or, if no direction is made, for the election of the
director nominees above listed.

THE BOARD UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE DIRECTOR NOMINEES ABOVE
LISTED.

7
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INFORMATION CONCERNING DIRECTORS AND EXECUTIVE OFFICERS

Information concerning the Company's current directors and executive
officers is set forth below.

NAME AGE POSITION WITH THE COMPANY
------------------------------------------ --- -------------------------
<S> <C> <C>
Scott McClendon 61 President, Chief Executive Officer and Director

Martin D. Gray 52 Vice President, Chief Technical Officer, Assistant Secretary
and Director

Vernon A. LoForti 47 Vice President, Chief Financial Officer and Secretary

W. Michael Gawarecki 52 Vice President of Operations

Steven E. Richardson 49 Vice President of Marketing

Robert J. Scroop 52 Vice President of Engineering

Robert A. Degan (1) 61 Director

Peter Preuss (1) 57 Director

John A. Shane (1) 67 Director

</TABLE>

(1) Member of the Compensation and Audit Committees.

A description of the background of each of the Company's current
directors has been provided above under "Information Concerning Director
Nominees." The following biographies describe the backgrounds of the Company's
executive officers who are not directors:

W. MICHAEL GAWARECKI. Mr. Gawarecki has served as Vice President of
Operations since joining the Company in July 1998. From October 1997 to June
1998, he was Vice President of Operations for SubMicron Systems Corporation, a
supplier of equipment to the semiconductor industry; and, from February 1994
to September 1997, he was director of California operations for Millipore
Corporation, a supplier of purification products to the biopharmaceutical and
semiconductor industries. From February 1993 to January 1994, he was Director
of Advanced Manufacturing at Telectronics Pacing Systems, a medical device
company. Mr. Gawarecki holds a B.A. degree in Business Administration from
National University.

<PAGE>

VERNON A. LOFORTI. Mr. LoForti has served as Vice President and
Chief Financial Officer since joining the Company in December 1995, as
Secretary from November 1997 until the present and as Assistant Secretary from
December 1995 through November 1997. From August 1992 to December 1995, he was
the Chief Financial Officer for Priority Pharmacy, a privately held pharmacy
company. From 1981 to 1992, Mr. LoForti was Vice President of Finance for
Intermark, Inc., a publicly held conglomerate. He holds a B.S. degree in
Accounting from Brigham Young University and is a Certified Public Accountant.

STEVEN E. RICHARDSON. Mr. Richardson has served as Vice President of
Marketing since joining the Company in August 1997. From March 1997 to July
1997, he was Vice President of Marketing for Proxima Corporation, a multimedia
projection company. From December 1987 to March 1997, he served in various
marketing capacities at Compression Labs, Inc., a provider of video
communications solutions, including Vice President of Marketing. From June
1976 to December 1987, he served in various capacities at Hewlett-Packard,
including Product Marketing Manager for the Information Networks Division in
Cupertino, California. Mr. Richardson holds a B.S. degree in Electrical
Engineering from the Massachusetts Institute of Technology and an M.B.A. from
Harvard Business School.

ROBERT J. SCROOP. Mr. Scroop has served as Vice President of
Engineering since joining the Company in February 1993. From April 1990 to
February 1993, he was Vice President of Engineering of the Cipher Division of
Archive Corporation, a computer storage company. From December 1985 to April
1990, he was Director of Engineering for Cipher. Mr. Scroop holds a First
Class Honours degree in Electrical Engineering from Brunel University, England.

There are no family relationships among any of the Company's directors and
executive officers.

BOARD MEETINGS AND COMMITTEES

During the fiscal year ended June 30, 2000 ("Fiscal 00"), the Board
held ten (10) regular meetings and two (2) special meetings. Each director
attended at least 75% of the meetings held during Fiscal 00 that occurred on
or after the initiation of his term as a director.

During Fiscal 00, the Board had an Audit Committee and a Compensation
Committee. The Company does not have a Nominating Committee or a committee
that performs equivalent functions of a Nominating Committee. The Audit
Committee, composed of Messrs. Preuss, Shane and Degan, is responsible for
reviewing financial statements, accounting and financial policies and internal
controls and reviewing the scope of the independent auditor's activities and
fees. Mr. Shane is chairman of the Audit Committee. The Audit Committee held
four (4) meetings during Fiscal 00. The Compensation Committee, also composed
of Messrs. Preuss, Shane and Degan, is responsible for reviewing and
approving, within its authority, compensation, benefits, training and other
human resource policies. Mr. Preuss is chairman of the Compensation Committee.
The Compensation Committee held four (4) meetings during Fiscal 00. Each
director who served on the Audit Committee or the Compensation Committee
during Fiscal 00 attended at least 75% of such respective committee's meetings
held during Fiscal 00 that occurred on or after the initiation of his term as
a director.

<PAGE>

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding the
beneficial ownership of the shares of Common Stock issued and outstanding as
of September 22, 2000 by (i) each person who is known by the Company to own
beneficially more than five percent (5%) of the issued and outstanding shares
of Common Stock, (ii) each of the Company's directors and director nominees,
(iii) the Company's Chief Executive Officer and the other four (4) most highly
compensated executive officers of the Company who were employed as executive
officers at the end of Fiscal 00 and whose total annual salary and bonus
exceeded $100,000 during Fiscal 00 (collectively, the "Named Executive
Officers"), and (iv) all current directors and executive officers as a group.
The table is based upon information supplied by directors, officers and
principal shareholders of the Company.

SHARES BENEFICIALLY OWNED
-------------------------------
NAME AND ADDRESS NUMBER PERCENT (1)
---------------- --------- -----------
<S> <C> <C>
Martin D. Gray (2)................................................. 1,773,507 17.1%

Scott McClendon (3)................................................ 570,880 5.5%

Kennedy Capital Management, Inc. (4)............................... 560,100 5.4%

Peter Preuss (5)................................................... 90,896 *

Robert A. Degan (6) ............................................... 16,000 *

John A. Shane (7).................................................. 62,875 *

Steven E. Richardson (8)........................................... 72,500 *

Robert J. Scroop (9)............................................... 118,418 1.1%

W. Michael Gawarecki (10).......................................... 37,018 *

Vernon A. LoForti (11)............................................. 83,412 *

All current directors and officers as a group (9 persons).......... 2,825,506 26.1%

-------------------------------------------------------------------------------------------------------------

</TABLE>

* Indicates ownership of less than one percent.

<PAGE>

(1) Except as otherwise indicated, each beneficial owner has the sole power
to vote and, as applicable, dispose of all shares of Common Stock owned
by such beneficial owner, subject to community property laws where
applicable. Amounts shown for each shareholder include all shares of
Common Stock issuable upon the exercise of options, which are
exercisable as of, or will become exercisable within 60 days of
September 22, 2000. The address for all of the above listed individuals
is 8975 Balboa Avenue, San Diego, California 92123.

(2) Includes 26,610 shares of Common Stock issuable pursuant to stock
options exercisable by Mr. Gray within 60 days of September 22, 2000.

(3) Includes: 223,261 shares of Common Stock held by Scott McClendon,
Trustee, McClendon Trust u/t/d December 31, 1991, over which Mr.
McClendon holds voting and dispositive power; 1,000 shares of Common
Stock held by Fred T. Clifton, Trustee, for FTC/ESC Trust u/t/d January
4, 1988; 500 shares of Common Stock held by Philip S. McClendon; 1,000
shares of Common Stock held by Financial Services Corp. for the benefit
of Elizabeth C. McClendon; and 116,869 shares of Common Stock issuable
pursuant to stock options exercisable by Mr. McClendon within 60 days
of September 22, 2000.

(4) Data based on information contained in a Schedule 13G filed with the
Securities and Exchange Commission on February 10, 2000 on behalf of
Kennedy Capital Management, Inc. ("KCM"). The address of KCM is 10829
Olive Boulevard, St. Louis, Missouri 63141. KCM has sole voting power
over 501,650 shares of Common Stock and sole dispositive power over
560,100 shares of Common Stock, and therefore may be deemed to
beneficially own 560,100 shares of Common Stock.

(5) Includes 36,000 shares of Common Stock issuable pursuant to stock
options exercisable by Mr. Preuss within 60 days of September 22, 2000.

(6) Includes 1,000 shares of Common Stock held by Robert A. Degan; 1,000
shares of Common Stock held by Frances M. Degan; and 14,000 shares of
Common Stock issuable pursuant to stock options exercisable by Mr.
Degan within 60 days of September 22, 2000.

(7) Includes 3,202 shares of Common Stock held by Palmer Service
Corporation, of which Mr. Shane is the president, and 46,000 shares of
Common Stock issuable pursuant to stock options exercisable by Mr.
Shane within 60 days of September 22, 2000.

(8) Includes 65,000 shares of Common Stock issuable pursuant to stock
options exercisable by Mr. Richardson within 60 days of September 22,
2000.

(9) Includes: 21,600 shares of Common Stock held by Robert J. Scroop and
Virginia L. Scroop; 1,200 shares of Common Stock held by Amanda L.
Scroop; and 95,618 shares issuable pursuant to stock options
exercisable by Mr. Scroop within 60 days of September 22, 2000.

<PAGE>

(10) Includes 36,668 shares of Common Stock issuable pursuant to stock
options exercisable by Mr. Gawarecki within 60 days of September 22,
2000.

(11) Includes 82,485 shares of Common Stock issuable pursuant to stock
options exercisable by Mr. LoForti within 60 days of September 22,
2000.

COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange
Act") requires the Company's officers and directors, and persons who own more
than ten percent (10%) of a registered class of the Company's equity
securities, to file reports of ownership and changes in ownership with the
SEC. Officers, directors and greater than ten-percent shareholders are
required by SEC regulations to furnish the Company with copies of all Section
16(a) forms that they file.

To the Company's knowledge, based solely on review of the copies of
such reports furnished to the Company and written representation that no other
reports were required, the Company's officers, directors and greater than
ten-percent shareholders complied with all applicable Section 16(a) filing
requirements during Fiscal 00.

EXECUTIVE COMPENSATION

NON-EMPLOYEE DIRECTOR COMPENSATION. The Company's non-employee
director compensation plan consists of both a cash component and an equity
component. During Fiscal 00, each of the Company's non-employee directors
received cash compensation of $3,000 per quarter, plus reimbursement for such
director's expenses relating to his activities as a director. Non-employee
directors receive a grant of stock options exercisable into 50,000 shares of
Common Stock upon such director's appointment to the Board. These options,
which are exercisable at the fair market value of the Common Stock on the date
of grant, vest at the rate of 2,000 shares per meeting of the Board attended,
with a maximum vesting of 20,000 shares per year. Beginning in the fiscal year
ending June 30, 2001 ("Fiscal 01"), the cash compensation plan will provide
for a quarterly retainer of $5,000, meeting fees of $1,500 per meeting ($750
if telephonic) and committee fees of $500 per meeting ($250 if telephonic and
no fee if held on the same day as a board meeting).

1995 STOCK OPTION PLAN. In October 1995, the shareholders of the
Company approved the Company's 1995 Stock Option Plan as amended (the "1995
Plan"). A total of 1,000,000 shares of Common Stock currently are authorized
for issuance under the 1995 Plan, of which 91,750 shares remain available for
issuance. The 1995 Plan provides that non-employee directors, employees and
consultants of the Company and its wholly-owned subsidiaries are eligible to
receive options exercisable into shares of Common Stock. The options granted
under the 1995 Plan are exercisable at fair market value on the date of
issuance, vest over a maximum of five (5) years and have a term of ten (10)
years from the date of grant. Unless sooner terminated by the Board, the 1995
Plan expires on October 10, 2005. The Board may amend,

<PAGE>

suspend, modify or terminate the 1995 Plan; provided, however, that
shareholder approval is required to make any amendment that: (i) materially
increases the number of shares available for issuance under the 1995 Plan
(except as expressly permitted); (ii) materially changes the class of persons
who are eligible for the grant of incentive stock options; or (iii) if
required by Rule 16b-3 (or any successor rules) under the Exchange Act,
materially increases the benefits accruing to participants under the 1995 Plan
or materially modifies the requirements as to eligibility for participation in
the 1995 Plan.

1997 EXECUTIVE STOCK OPTION PLAN. In November 1997, the shareholders
of the Company approved the Company's 1997 Executive Stock Option Plan (the
"1997 Plan"). A total of 800,000 shares of Common Stock currently are
authorized for issuance under the 1997 Plan, of which 148,500 shares remain
available for issuance. The 1997 Plan provides that only employees of the
Company and its wholly-owned subsidiaries are eligible to receive options
exercisable into shares of Common Stock. The options granted under the 1997
Plan are exercisable at fair market value on the date of issuance, vest over a
maximum of five (5) years and have a term of ten (10) years from the date of
grant. Unless sooner terminated by the Board, the 1997 Plan expires on August
12, 2007. The Board may amend, suspend, modify or terminate the 1997 Plan;
provided, however, that shareholder approval is required to make any amendment
that: (i) materially increases the number of shares available for issuance
under the 1997 Plan (except as expressly permitted); (ii) materially changes
the class of persons who are eligible for the grant of incentive stock
options; or (iii) if required by Rule 16b-3 (or any successor) under the
Exchange Act, materially increases the benefits accruing to participants under
the 1997 Plan or materially modifies the requirements as to eligibility for
participation in the 1997 Plan.

2000 STOCK OPTION PLAN. The Board adopted the 2000 Stock Option Plan
(the "2000 Plan") in September 2000, subject to shareholder approval. You are
being asked to approve the adoption of the 2000 Plan in "Proposal Two" of this
Proxy Statement. See "Proposal Two" for more information regarding the 2000
Plan.

1996 EMPLOYEE STOCK PURCHASE PLAN. In December 1996, the Board
adopted the 1996 Employee Stock Purchase Plan (the "Purchase Plan") to provide
an opportunity for the Company's employees to purchase shares of Common Stock
and thereby have an additional incentive to contribute to the prosperity of
the Company. The Purchase Plan became effective in February 1997. The Purchase
Plan allows employees to purchase shares of Common Stock through payroll
deductions. An administrative committee appointed by the Board (the
"Administrative Committee") determines periods of up to 27 months (each an
"Option Period"), during which each participant in the Purchase Plan is
granted an option to purchase the number of shares of Common Stock that may be
purchased with the payroll deductions accumulated on behalf of such
participant during a particular Option Period, as approved by the Board.
Option periods currently are set at six (6) months. The Purchase Plan provides
that: (i) no employee shall be entitled to accrue rights to purchase shares
under the Purchase Plan at a rate that exceeds $25,000 of the fair market
value of such stock (determined at the time the option is granted) for any
calendar year in which such option is outstanding at any time; and (ii) the
maximum number of shares subject to any option shall not exceed 1,500.
Employees participating in the Purchase Plan may purchase shares of Common
Stock under each option at a price per share equal to the lower of (x) not
less than 85% of the fair market value of the Common Stock on the date of
commencement of participation in an Option Period or (y) not less than 85% of
the fair market

<PAGE>

value of a share of Common Stock on the date of purchase. Generally, any
employee, including executive officers (but excluding persons who hold five
percent (5%) or more of the Company's voting stock), regularly employed on a
full-time basis by the Company and its wholly-owned subsidiaries, on the first
day of each Option Period is eligible to participate in the Purchase Plan,
subject to minimum eligibility periods, if any, as established by the
Administrative Committee. Participants may authorize payroll deductions of up
to 15% of their compensation, including base, overtime and commissions, for
the purchase of shares of Common Stock under the Purchase Plan. The Purchase
Plan currently authorizes the Company to issue up to 500,000 shares of Common
Stock under the Purchase Plan. As of the date hereof, 197,825 shares of Common
Stock have been purchased under the Purchase Plan. The Purchase Plan will
terminate in January 2007.

401(k) PLAN. In February 1994, the Company adopted the Overland Data,
Inc. On-Track 401(k) Savings Plan (the "401(k) Plan"), that covers all
eligible employees of the Company who complete six months of service and are
at least 21 years old. Employees may elect to defer up to 15% of their
eligible compensation (not to exceed the statutorily prescribed annual limit)
in the form of elective deferral contributions to the 401(k) Plan. The
elective deferral contributions are fully vested and nonforfeitable at all
times and are invested in accordance with the directions of the participants.
The 401(k) Plan is intended to qualify under Section 401 of the Internal
Revenue Code, as amended (the "Code"), so that employee contributions and
income earned on such contributions are not taxable to employees until
withdrawn. During Fiscal 00 the Company made matching contributions on the
first 6% of eligible compensation deferred by the 401(k) Plan participants at
the rate of 50% and increased the matching rate to 75% effective with Fiscal
01.

<PAGE>

COMPENSATION OF EXECUTIVE OFFICERS

SUMMARY OF COMPENSATION

The following table sets forth, for each of the last three fiscal years
ended June 30, 2000, the cash compensation for services in all capacities to the
Company of those persons who were the Named Executive Officers as of June 30,
2000:

<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE

ANNUAL COMPENSATION LONG-TERM
-------------------------------------------------- COMPENSATION
FISCAL OTHER AWARDS
NAME YEAR SALARY BONUS(1) COMPENSATION # OF OPTIONS
------------------ ----- -------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Scott McClendon, 2000 $260,000 $47,486 - 50,000
President and CEO 1999 260,000 76,633 - -
1998 240,000 38,220 - 100,000

Frank R. Kirchhoff, 2000 $175,000 $42,000 $28,016 (3) 20,000
VP of Sales (2) 1999 175,000 20,017 30,217 -
1998 175,000 32,160 - 32,200

Steven E. Richardson, 2000 $175,000 $ 9,500 - -
VP of Marketing 1999 175,000 24,685 - 20,000
1998 157,500(4) 29,650 77,790 80,000

W. Michael Gawarecki, 2000 $150,000 $25,482 - 40,000
VP of Operations(5) 1999 150,000 25,618 21,130 50,000
1998 - - - -

Robert Scroop, 2000 $150,000 $21,688 - 45,000
VP of Engineering 1999 150,000 20,368 - -
1998 150,000 20,000 - 75,000

Vernon A. LoForti, 2000 $140,000 $23,159 - 51,500
VP, Chief Financial 1999 140,000 17,213 - -
Officer and Secretary 1998 135,000 16,880 - 32,167
</TABLE>

---------------------

(1) The bonus amounts for the fiscal years ended June 30, 2000, 1999 and
1998 were earned in their respective fiscal years, but were paid in
August 2000, August 1999 and August 1998, respectively, except for the
Fiscal 00 bonus for Mr. LoForti, $16,286 of which represented a bonus
for concluding the acquisition of Tecmar assets which was paid in March
2000.

(2) Mr. Kirchhoff retired from the Company effective June 30, 2000.

(3) Represents commissions earned.

15
<PAGE>

(4) Mr. Richardson became Vice President of Marketing effective August 4,
1997. His annual base salary was $175,000 at June 30, 1998.

(5) Mr. Gawarecki became Vice President of Operations effective July 8,
1998.

STOCK OPTION GRANTS

The following table shows all individual grants of stock options to the
Named Executive Officers during Fiscal 00:

OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
POTENTIAL RELIZABLE VALUE AT
ASSUMED ANNNUAL RATES OF
STOCK
PRICE APPRECIATION FOR OPTION
INDIVIDUAL GRANTS TERM (2)
---------------------------------------------------------------------------------- -----------------------------
PERCENT OF
TOTAL
NUMBER OF OPTIONS
SECURITIES GRANTED TO
UNDERLYING EMPLOYEES EXERCISE
OPTIONS IN FISCAL PRICE PER EXPIRATION 5% 10%
NAME GRANTED (1) YEAR SHARE DATE PER YEAR PER YEAR
--------------------- ----------- ----------- --------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Scott McClendon 50,000 6.94% $ 5.63 10/12/09 $176,877 $448,240
President and CEO

Frank R. Kirchhoff 20,000 2.78% 5.63 7/30/00 5,625 11,250
VP of Sales

Robert J. Scroop 30,000 4.16% 5.63 10/12/09 106,126 268,944
VP of Engineering 15,000 2.08% 10.00 4/21/10 94,334 239,061

W. Michael Gawarecki 20,000 2.78% 5.63 10/12/09 70,751 179,296
VP of Operations 20,000 2.78% 10.00 4/21/10 125,779 318,748

Vernon A. LoForti 30,000 4.16% 5.63 10/12/09 106,126 268,944
VP, Chief Financial 1,500 0.21% 8.25 2/18/10 7,783 19,723
Officer and Secretary 20,000 2.78% 10.00 4/21/10 125,779 318,748
</TABLE>

---------------------

(1) Based on a total of 720,500 options granted to all employees during
Fiscal 00.

(2) In accordance with the rules of the Securities and Exchange Commission,
the potential realizable values for the options are based on assumed
rates of stock price appreciation of 5% and 10% compounded annually
from the date the respective options were granted to

16
<PAGE>

their expiration dates. The gains shown are net of the option exercise
price, but do not include deductions for taxes or other expenses
associated with the exercise. These assumed rates of appreciation do
not represent the Company's estimate or projection of the appreciation
of shares of the Common Stock and actual gains, if any, on stock option
exercises will depend on the future performance of the Common Stock.

OPTION EXERCISES

The following table sets forth information for the Named Executive
Officers with respect to exercises of options to purchase shares of Common Stock
during Fiscal 00 and the number and value of unexercised stock options held at
June 30, 2000.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES

<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY
ACQUIRED OPTIONS AT JUNE 30, 2000 OPTIONS AT JUNE 30, 2000 (1)
ON VALUE ---------------------------- -----------------------------
EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
-------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Scott McClendon -- -- 79,369 100,000 $ 692,900 775,000
Frank R. Kirchhoff 44,221 299,045 17,200 -- 109,650 --
Steven E. Richardson -- -- 45,000 55,000 270,625 301,875
Robert J. Scroop 10,000 108,875 64,367 82,500 577,840 544,688
W. Michael Gawarecki -- -- 12,500 77,500 110,938 575,313
Vernon A. LoForti 10,000 98,750 60,817 65,000 618,408 420,625
</TABLE>

--------------------------

(1) Based upon the difference between the closing bid price of the Common
Stock of $13.88 as quoted on the Nasdaq National Market System on June
30, 2000 and the exercise price.

COMPENSATION AGREEMENTS

The Company entered into retention agreements with each of its Named Executive
Officers effective January 27, 2000. These agreements provide that the Named
Executive Officer will receive a severance payment if, within two years of the
consummation of a change in control of the Company, he is terminated without
cause or resigns with good reason. These severance payments are based on the
Named Executive Officer's base salary at the time of the consummation of the
control or the termination date, whatever is higher ("Base Salary"), plus his
target bonus for the year prior to the consummation of the change in control
("Target Bonus"). Mr. McClendon and Mr. LoForti are entitled to receive an
amount equal to 2.5 times and 2.0 times Base Salary plus Target Bonus,
respectively, while Messrs. Scroop, Richardson and Gawarecki are each entitled
to an amount equal to his Base Salary plus Target Bonus. However, 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 Code, then that payment will
be reduced to

17
<PAGE>

an amount that is one dollar less than the threshold for triggering the tax
imposed by Section 4999 of the Code.

REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION

The Compensation Committee of the Board (the "Committee") makes
recommendations to the Board regarding compensation of the Company's directors
and officers and oversees the administration of the Company's employee stock
option plans. All decisions of the Committee relating to compensation of the
Company's executive officers are reviewed and approved by the entire Board. The
policy of the Committee with respect to executive compensation is that such
compensation should (i) be effective in attracting and retaining key executives
critical to the Company's success, (ii) align the interests of the executives
with the interests of the Company's shareholders, (iii) reflect the Company's
financial performance and (iv) reward executives for their individual
performance. Executive compensation includes base salary, bonuses based on the
Company's performance and the individual performance of the officers, and stock
option grants. These programs are designed to provide incentives for both short
and long-term performance.

BASE SALARY

The base salary of the Company's Chief Executive Officer (the "CEO") is
set at an amount which the Committee believes is competitive with the salaries
paid to the chief executive officers of other companies of comparable size in
similar industries. Salary levels of the Company's other executive officers are
set in a like manner. In evaluating salaries, the Committee utilizes information
and surveys of the compensation practices of high technology companies provided
by the management and human resource consulting firms of Watson Wyatt and
Radford Associates. The Committee also relies on information provided by the
Company's Human Resources Department and its knowledge of local pay practices.
Furthermore, the Committee considers the executives' performance of their job
responsibilities and the overall financial performance of the Company. Mr.
McClendon has served as the President and CEO of the Company since 1991. His
base salary during Fiscal 00 was set by the Committee at $260,000, a level which
has been unchanged since Fiscal 97. Beginning in Fiscal 01, Mr. McClendon's
salary was set at $275,000, an increase of 5.8%, which the Committee viewed as
appropriate given market conditions and the long period of time since his salary
was last adjusted.

BONUSES

The CEO and executive officers participate in the Company's executive
bonus plan which is the performance-based component of compensation desired by
the Committee. For Fiscal 00, the plan established by the Committee included
three performance measurement points: (1) actual net revenues achieved by the
Company in comparison to the approved annual financial plan; (2) actual net
income achieved by the Company in comparison to the approved annual financial
plan; and (3) individual job performance goals and qualitative objectives
related to

18
<PAGE>

management and employee development. The bonus plan for each executive was
tailored to be unique to his/her area of responsibility. Net revenues
actually achieved by the Company exceeded the approved annual financial plan
by 10.5% and net income fell short of the planned level by 47.4%. Individual
job performance goals were partially achieved by the executive officers. As a
result of these performances, the aggregate Fiscal 00 bonus for the executive
officers fell 56.8% short of the bonus potential. Mr. McClendon's individual
bonus fell 63.5% short of his bonus potential. The Committee believes that
these bonus results are appropriate and consistent with its goals to pay the
Company's executive officers for achievement of their targeted objectives and
to align the interests of the executives and the shareholders.

STOCK OPTION GRANTS

The Company provides its executive officers with long-term incentives
through the grant of stock options. The exercise price of all options is equal
to the closing market price of the Common Stock on the date of grant and the
options generally vest over a four year period. An initial grant of options is
made at the time an executive is hired and the Committee considers on an annual
basis additional grants based on the performance of both the individual
executives and the Company as a whole. The Committee takes into account the
executive's position and level of responsibility, existing stock and unvested
option holdings and the potential reward if the stock price appreciates in the
public market. In October 1999, the Committee made an annual grant of 150,000
aggregate options to the executive officers, including 50,000 options to Mr.
McClendon. In February 2000, the Committee made a grant of 1,500 options to Mr.
LoForti in consideration of his efforts in connection with the Company's
acquisition of certain assets from Tecmar Technologies International, Inc. and
its affiliates which was consummated on February 23, 2000. In April 2000, the
Committee made a special grant of options designed to retain the employment of
certain of the executive officers including 20,000 options to Mr. Gawarecki,
20,000 options to Mr. LoForti and 15,000 options to Mr. Scroop. Beginning in
Fiscal 01, the Committee modified the vesting provisions of option grants to
generally provide for monthly vesting over a three year period for existing
employees and, for new employees, one-third vesting after the first year of
employment and monthly vesting over the next two years.

The Compensation Committee believes that in total, management
compensation levels during Fiscal 00 appropriately reflect the application of
the Compensation Committee's compensation policy.

COMPENSATION COMMITTEE:
-----------------------

Peter Preuss, Chairman
John A. Shane
Robert A. Degan

The foregoing report of the Compensation Committee shall not be deemed
incorporated by reference by any general statement incorporating by reference
this Proxy Statement into any filing under the Securities Act of 1933 (the
"Securities Act") or the Exchange Act except to the extent that the Company
specifically incorporates this information by reference, and shall not otherwise
be deemed filed under such acts.

19
<PAGE>

PERFORMANCE GRAPH

COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG OVERLAND DATA, THE NASDAQ 100 INDEX, AND THE
NASDAQ COMPUTER INDUSTRY COMPOSITE INDEX

[GRAPH]

NASDAQ Computer Ind. Index NASDAQ Composite Index Overland
<S> <C> <C> <C>
21-Feb-97 100.00 100.00 100.00
31-Mar-97 91.10 91.56 43.96
30-Apr-97 100.84 94.49 47.25
30-May-97 111.10 104.95 58.24
30-Jun-97 110.86 108.08 47.25
31-Jul-97 130.28 119.45 61.54
29-Aug-97 128.43 118.96 61.54
30-Sep-97 131.30 126.33 68.69
31-Oct-97 121.97 119.43 58.24
28-Nov-97 124.21 119.95 60.44
31-Dec-97 115.56 117.69 48.35
30-Jan-98 126.21 121.36 45.05
27-Feb-98 142.21 132.69 49.45
31-Mar-98 144.39 137.57 54.95
30-Apr-98 149.04 140.03 47.81
29-May-98 138.77 133.32 44.51
30-Jun-98 158.60 142.00 44.51
31-Jul-98 160.37 140.33 43.96
31-Aug-98 133.33 112.36 38.46
30-Sep-98 163.69 126.94 40.66
30-Oct-98 159.89 132.76 43.96
30-Nov-98 191.66 146.11 46.15
31-Dec-98 210.82 164.33 62.64
29-Jan-99 252.49 187.80 72.53
26-Feb-99 228.95 171.48 70.33
31-Mar-99 246.52 184.47 65.93
30-Apr-99 240.26 190.57 52.75
28-May-99 225.11 185.15 57.14
25-Jun-99 243.03 191.31 53.30
30-Jul-99 255.00 197.74 52.20
27-Aug-99 280.45 206.76 48.35
24-Sep-99 281.43 205.38 46.15
29-Oct-99 301.43 222.32 43.41
26-Nov-99 353.84 258.39 58.24
31-Dec-99 434.37 304.97 65.93
28-Jan-00 408.13 291.31 78.58
25-Feb-00 490.17 344.03 81.32
31-Mar-00 504.58 342.71 123.63
28-Apr-00 421.01 289.34 101.10
26-May-00 349.23 240.21 66.49
30-Jun-00 437.84 297.24 121.98

</TABLE>

The above graph assumes that $100.00 was invested in the Common Stock
and in each index on February 21, 1997, the effective date of the Company's
initial public offering. Although the Company has not declared a dividend on
its Common Stock, the total return for each index assumes the reinvestment of
dividends. Shareholder returns over the period presented should not be
considered indicative of future returns. Pursuant to SEC regulations, the
graph shall not be deemed to be "soliciting material" or to be "filed" with
the SEC, nor shall it be incorporated by reference into any filing under the
Securities Act or the Exchange Act.

<PAGE>

PROPOSAL TWO-APPROVAL OF THE ADOPTION OF
THE 2000 STOCK OPTION PLAN
(ITEM 2 ON THE PROXY CARD)

The Company's shareholders are being asked to approve the Board's
adoption of the Company's 2000 Stock Option Plan (the "2000 Plan"). The 2000
Plan provides for the issuance of stock options covering up to 1,000,000
shares of Common Stock.

The Board believes that the attraction and retention of high quality
personnel are essential to the Company's continued growth and success, and
that a stock option plan, such as the 2000 Plan, is necessary for the Company
to remain competitive in its compensation practices.

PLAN BENEFITS

As of the date of this Proxy Statement, no director, executive
officer, director nominee, employee or consultant, and no associate of any
director, executive officer, director nominee, employee or consultant, has
been granted any options under the 2000 Plan. The benefits to be received
pursuant to the 2000 Plan by the Company's directors, executive officers,
employees and consultants are not determinable at this time.

A general description of the principal terms of the 2000 Plan is set
forth below. However, the summary does not purport to be a complete
description of all of the provisions of the 2000 Plan and is subject to, and
qualified in its entirety by, the specific language of the 2000 Plan. Any
shareholder of the Company who wishes to obtain a copy of the actual plan
document may obtain a copy by writing to the Company, attention: CHIEF
FINANCIAL OFFICER.

GENERAL DESCRIPTION

The 2000 Plan was approved by the Board in September 2000. The
purposes of the 2000 Plan are to give the Company's employees and others who
perform substantial services to the Company an incentive, through ownership of
Common Stock, to continue in service to the Company, and to help the Company
compete effectively with other enterprises for the services of qualified
individuals.

ADMINISTRATION

The 2000 Plan is administered, with respect to grants to directors,
officers, consultants, and employees, by the Compensation Committee of the
Board (the "Committee"). The Committee is constituted in such a manner as to
satisfy applicable laws and regulations, including Rule 16b-3 promulgated
under the Securities Exchange Act of 1934, as amended ("Rule 16b-3"). For
grants of options to individuals not subject to Rule 16b-3 and Code Section
162(m), the Board may authorize one or more officers to grant such options.

21
<PAGE>

AMENDMENT AND TERMINATION

The Board may at any time amend, suspend or terminate the 2000 Plan.
To the extent necessary to comply with applicable provisions of federal
securities laws, state corporate and securities laws, the Code, the rules of
any applicable stock exchange or national market system, and the rules of any
foreign jurisdiction applicable to options granted to residents therein, the
Company will obtain shareholder approval of any amendment to the 2000 Plan in
such a manner and to such a degree as required. The 2000 Plan will terminate
in September 2010 unless previously terminated by the Board.

OTHER TERMS

The 2000 Plan permits the grant of "incentive stock options" ("ISOs")
within the meaning of Section 422 of the Code only to employees, including
officers and employee directors, of the Company or its wholly-owned
subsidiaries. Nonqualified stock options may be granted to officers,
directors, employees and consultants. Options may be granted to such officers,
directors, employees or consultants who are residing in foreign jurisdictions
as the Committee may determine from time to time.

The Committee has the authority to select individuals who are to
receive options under the 2000 Plan and to specify the terms and conditions of
options granted including whether or not the options are ISOs or nonqualified
stock options, the vesting provisions, the option term and the exercise price.
The exercise price of ISOs granted under the 2000 Plan shall equal the fair
market value of the Common Stock on the date of grant (except in the case of
grants to any person holding more than 10% of the total combined voting power
of all classes of stock of the Company, or any of the Company's subsidiaries'
stock, in which case the exercise price shall equal 110% of the fair market
value on the date of grant). The exercise price of nonqualified stock options
shall not be less than 85% of the fair market value on the date of grant. The
exercise price of options intended to qualify as performance-based
compensation for purposes of Code Section 162(m) shall not be less than 100%
of the fair market value. Optionees may pay for an exercise in cash or other
consideration, including a promissory note or shares of Common Stock, as
approved by the Committee. The aggregate fair market value of the Common Stock
with respect to any incentive stock options that are exercisable for the first
time by an eligible employee in any calendar year may not exceed $100,000.

No participant in the 2000 Plan may be granted stock options for more
than 500,000 shares in any fiscal year. However, in connection with his or her
initial commencement of service with the Company, a participant in the 2000
Plan may be granted stock options for up to an additional 500,000 shares,
which shares shall not count against the limit set forth in the previous
sentence.

Unless otherwise provided by the Committee, an option granted under
the 2000 Plan generally expires ten years from the date of grant (five years
in the case of an incentive stock option granted to any person holding more
than 10% of the total combined voting power of all classes of stock of the
Company or any of its subsidiaries).

<PAGE>

The options may be granted subject to vesting schedules, which may be
accelerated upon the occurrence of certain events, as specified in the
agreements to be issued under the 2000 Plan.

The 2000 Plan also permits the Committee to include a provision
whereby the optionee may elect at any time while an officer, director,
employee or consultant to exercise any part or all of the option prior to full
vesting of the option.

Under the 2000 Plan, incentive stock options may not be sold,
pledged, assigned, hypothecated, transferred or disposed of in any manner
other than by will or by the laws of descent or distribution and may be
exercised during the lifetime of the optionee only by the optionee. However,
the 2000 Plan permits the designation of beneficiaries by holders of incentive
stock options. Other options are transferable to the optionee's immediate
family to the extent provided in the option agreement or in the manner and to
the extent permitted by the Committee.

The Committee may establish one or more programs under the 2000 Plan
to permit selected optionees the opportunity to elect to defer receipt of
consideration payable under an option. The Committee also may establish
separate programs for the grant of particular forms of options to one or more
classes of optionees.

CERTAIN FEDERAL TAX CONSEQUENCES

The grant of a nonqualified stock option under the 2000 Plan will not
result in any federal income tax consequences to the optionee or to the
Company. Upon exercise of a nonqualified stock option, the optionee is subject
to income taxes at the rate applicable to ordinary compensation income on the
difference between the option exercise price and the fair market value of the
shares on the date of exercise. This income is subject to withholding for
federal income and employment tax purposes. The Company is entitled to an
income tax deduction in the amount of the income recognized by the optionee,
subject to possible limitations imposed by Section 162(m) of the Code. Any
gain or loss on the optionee's subsequent disposition of the shares of Common
Stock will receive long or short-term capital gain or loss treatment,
depending on whether the shares are held for more than one year following
exercise. The Company does not receive a tax deduction for any such gain.

The grant of an ISO under the 2000 Plan will not result in any
federal income tax consequences to the optionee or to the Company. An optionee
recognizes no federal taxable income upon exercising an ISO (subject to the
alternative minimum tax rules discussed below), and the Company receives no
deduction at the time of exercise. In the event of a disposition of stock
acquired upon exercise of an ISO, the tax consequences depend upon how long
the optionee has held the shares of Common Stock. If the optionee does not
dispose of the shares within two years after the ISO was granted, nor within
one year after the ISO was exercised, the optionee will recognize a long-term
capital gain (or loss) equal to the difference between the sale price of the
shares and the exercise price. The Company is not entitled to any deduction
under these circumstances.

If the optionee fails to satisfy either of the foregoing holding
periods, he or she must recognize ordinary income in the year of the
disposition (referred to as a "disqualifying

<PAGE>

disposition"). The amount of such ordinary income generally is the lesser of
(i) the difference between the amount realized on the disposition and the
exercise price, or (ii) the difference between the fair market value of the
stock on the exercise date and the exercise price. Any gain in excess of the
amount taxed as ordinary income will be treated as a long or short-term
capital gain, depending on whether the stock was held for more than one year.
The Company, in the year of the disqualifying disposition, is entitled to a
deduction equal to the amount of ordinary income recognized by the optionee.

The "spread" under an ISO -- i.e., the difference between the fair
market value of the shares at exercise and the exercise price -- is classified
as an item of adjustment in the year of exercise for purposes of the
alternative minimum tax.

THE FOREGOING IS ONLY A SUMMARY OF THE CURRENT EFFECT OF FEDERAL INCOME
TAXATION UPON THE OPTIONEE AND THE COMPANY WITH RESPECT TO THE SHARES
PURCHASED UNDER THE 2000 PLAN. REFERENCE SHOULD BE MADE TO THE APPLICABLE
PROVISIONS OF THE CODE. IN ADDITION, THE SUMMARY DOES NOT DISCUSS THE TAX
CONSEQUENCES OF A GRANTEE'S DEATH OR THE INCOME TAX LAWS OF ANY MUNICIPALITY,
STATE OR FOREIGN COUNTRY TO WHICH THE GRANTEE MAY BE SUBJECT.

VOTE REQUIRED AND RECOMMENDATION

The affirmative vote by the holders of a majority of the Shares
present in person or represented by proxy at the Meeting is required to
approve the adoption of the 2000 Plan. Abstentions will have the same effect
as votes against the proposal and broker non-votes will not be counted as
votes cast and will have no effect on the result of the vote.

THE BOARD UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE ADOPTION OF THE 2000 STOCK
OPTION PLAN.

<PAGE>

PROPOSAL THREE--RATIFICATION OF INDEPENDENT AUDITORS
(ITEM 3 ON THE PROXY CARD)

The Board has selected PricewaterhouseCoopers LLP as the Company's
independent auditors for the fiscal year ending June 30, 2001, and has further
directed that management submit the selection of independent auditors for
ratification by the shareholders at the Meeting. PricewaterhouseCoopers LLP
has audited the Company's financial statements annually since the Company's
inception. Its representatives are expected to be present at the Meeting, will
have the opportunity to make a statement if they desire to do so and will be
available to respond to appropriate questions.

Shareholder ratification of the selection of PricewaterhouseCoopers
LLP as the Company's independent auditors is not required by the Company's
Bylaws or otherwise. The Board is submitting the selection of
PricewaterhouseCoopers LLP to the shareholders for ratification as a matter of
good corporate practice. In the event that the shareholders fail to ratify the
selection, the Board will reconsider whether or not to retain that firm. Even
if the selection is ratified, the Board in its discretion may direct the
appointment of a different independent accounting firm at any time during the
year if the Board determines that such a change could be in the best interests
of the Company and its shareholders.

VOTE REQUIRED AND RECOMMENDATION

An affirmative vote by the holders of a majority of the shares
presented in person or represented by proxy at the Meeting is required for
approval by ratification of auditors.

THE BOARD UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE
SELECTION OF PRICEWATERHOUSECOOPERS LLP TO SERVE AS THE COMPANY'S INDEPENDENT
AUDITORS FOR THE FISCAL YEAR ENDING JUNE 30, 2001.

<PAGE>

OTHER BUSINESS

The Company knows of no other matters to be submitted at the Meeting.
If any other matters are properly brought before the Meeting, it is the
intention of the persons named in the enclosed proxy to vote the shares they
represent in accordance with their judgment.

SHAREHOLDER PROPOSALS TO BE PRESENTED
AT NEXT ANNUAL MEETING

Proposals and suggestions received from shareholders are given
careful consideration by the Company in accordance with Rule 14a-8 under the
Exchange Act. Any proposal intended to be (i) presented by a shareholder for
action at the Company's 2001 Annual Meeting of Shareholders (the "2001
Meeting"), and (ii) included in the proxy statement and proxy relating to the
2001 Meeting, must be received by the Secretary of the Company (at its
principal executive offices) no later than June 8, 2001. Nothing in this
paragraph shall be deemed to require the Company to include in such proxy
statement and proxy any shareholder proposal that does not meet all of the
requirements for such inclusion established by the SEC at that time in effect.

A shareholder who intends to present at the 2001 Meeting a proposal
that is not discussed in the related proxy materials should notify the Company
of such proposal on or before August 25, 2001. Otherwise, the individuals
designated as proxies by the Company in connection with the 2001 Meeting will
have discretionary authority to vote for or against such proposal at the 2001
Meeting.

FORM 10-K

A copy of the Company's Annual Report for Fiscal 00 is being mailed
with this Proxy Statement to shareholders entitled to notice of the Meeting.
At any shareholder's written request, the Company will provide, without
charge, a copy of the Annual Report for Fiscal 00 which incorporates the Form
10-K as filed with the SEC, including the financial statements and a list of
exhibits. Requests should be sent to Investor Relations, Overland Data, Inc.,
8975 Balboa Avenue, San Diego, California 92123-1599.

By Order of the Board of Directors

/s/ Vernon A. Loforti
--------------------------------------
Vernon A. LoForti
SECRETARY
San Diego, California

<PAGE>

OVERLAND DATA, INC.
2000 STOCK OPTION PLAN

1. PURPOSES OF THE PLAN. The purposes of this 2000 Stock Option
Plan are to attract and retain the best available personnel, to provide
additional incentive to Employees, Directors and Consultants and to promote
the success of the Company's business.

2. DEFINITIONS. As used herein, the following definitions shall
apply:

(a) "ADMINISTRATOR" means the Board or any of the
Committees appointed to administer the Plan.

(b) "AFFILIATE" and "ASSOCIATE" shall have the respective
meanings ascribed to such terms in Rule 12b-2 promulgated under the Exchange
Act.

(c) "APPLICABLE LAWS" means the legal requirements
relating to the administration of stock option plans, if any, under applicable
provisions of federal securities laws, state corporate and securities laws,
the Code, the rules of any applicable stock exchange or national market
system, and the rules of any foreign jurisdiction applicable to Awards granted
to residents therein.

(d) "ASSUMED" means for the purposes of terminating the
Award (in the case of a Corporate Transaction) and the termination of the
Continuous Service of the Grantee (in the case of a Related Entity
Disposition) (i) pursuant to a Corporate Transaction or Related Entity
Disposition, as applicable, that the Award is replaced with a comparable Award
with respect to shares of capital stock of the successor entity or its parent
in connection with the Corporate Transaction or Related Entity Disposition or
(ii) pursuant to a Corporate Transaction defined in SECTION 2(p)(iv) or
2(p)(v), that the Award is affirmed by the Company. In addition, for purposes
of accelerating the vesting and release of restrictions applicable to Awards,
"Assumed" also means that, pursuant to a Corporate Transaction or Related
Entity Disposition, the Award is replaced with a cash incentive program of the
successor entity or Parent thereof which preserves the compensation element of
such Award existing at the time of the Corporate Transaction or Related Entity
Disposition and provides for subsequent payout in accordance with the same
vesting schedule applicable to such Award. The determination of Award
comparability shall be made by the Administrator and its determination shall
be final, binding and conclusive.

(e) "AWARD" means the grant of an Option or other right or
benefit under the Plan.

(f) "AWARD AGREEMENT" means the written agreement
evidencing the grant of an Award executed by the Company and the Grantee,
including any amendments thereto.

(g) "BOARD" means the Board of Directors of the Company.

<PAGE>

(h) "CHANGE IN CONTROL" means a change in ownership or
control of the Company effected through either of the following transactions:

(i) the direct or indirect acquisition by any
person or related group of persons (other than an acquisition from or by the
Company or by a Company-sponsored employee benefit plan or by a person that
directly or indirectly controls, is controlled by, or is under common control
with, the Company) of beneficial ownership (within the meaning of Rule 13d-3
of the Exchange Act) of securities possessing more than fifty percent (50%) of
the total combined voting power of the Company's outstanding securities
pursuant to a tender or exchange offer made directly to the Company's
shareholders which a majority of the Continuing Directors who are not
Affiliates or Associates of the offeror do not recommend such shareholders
accept, or

(ii) a change in the composition of the Board over
a period of thirty-six (36) months or less such that a majority of the Board
members (rounded up to the next whole number) ceases, by reason of one or more
contested elections for Board membership, to be comprised of individuals who
are Continuing Directors.

(i) "CODE" means the Internal Revenue Code of 1986, as
amended.

(j) "COMMITTEE" means any committee appointed by the Board
to administer the Plan.

(k) "COMMON STOCK" means the common stock, no par value
per share, of the Company.

(l) "COMPANY" means Overland Data, Inc., a California
corporation.

(m) "CONSULTANT" means any person (other than an Employee
or a Director, solely with respect to rendering services in such person's
capacity as a Director) who is engaged by the Company or any Related Entity to
render consulting or advisory services to the Company or such Related Entity.

(n) "CONTINUING DIRECTORS" means members of the Board who
either (i) have been Board members continuously for a period of at least
thirty-six (36) months or (ii) have been Board members for less than
thirty-six (36) months and were elected or nominated for election as Board
members by at least a majority of the Board members described in clause (i)
who were still in office at the time such election or nomination was approved
by the Board.

(o) "CONTINUOUS SERVICE" means that the provision of
services to the Company or a Related Entity in any capacity of Employee,
Director or Consultant, is not interrupted or terminated. Continuous Service
shall not be considered interrupted in the case of (i) any approved leave of
absence, (ii) transfers among the Company, any Related Entity, or any
successor, in any capacity of Employee, Director or Consultant, or (iii) any
change in status as long as the individual remains in the service of the
Company or a Related Entity in any capacity of Employee, Director or
Consultant (except as otherwise provided in the Award Agreement). An approved
leave of absence shall include sick leave, military leave, or any other
authorized

<PAGE>

personal leave. For purposes of each Incentive Stock Option granted under the
Plan, if such leave exceeds ninety (90) days, and reemployment upon expiration
of such leave is not guaranteed by statute or contract, then the Incentive
Stock Option shall be treated as a Non-Qualified Stock Option on the day three
(3) months and one (1) day following the expiration of such ninety (90) day
period.

(p) "CORPORATE TRANSACTION" means any of the following
transactions:

(i) a merger or consolidation in which the
Company is not the surviving entity, except for a transaction the principal
purpose of which is to change the state in which the Company is incorporated;

(ii) the sale, transfer or other disposition of
all or substantially all of the assets of the Company (including the capital
stock of the Company's subsidiary corporations);

(iii) approval by the Company's shareholders of any
plan or proposal for the complete liquidation or dissolution of the Company;

(iv) any reverse merger in which the Company is
the surviving entity but in which securities possessing more than fifty
percent (50%) of the total combined voting power of the Company's outstanding
securities are transferred to a person or persons different from those who
held such securities immediately prior to such merger; or

(v) acquisition by any person or related group of
persons (other than the Company or by a Company-sponsored employee benefit
plan) of beneficial ownership (within the meaning of Rule 13d-3 of the
Exchange Act) of securities possessing more than fifty percent (50%) of the
total combined voting power of the Company's outstanding securities (whether
or not in a transaction also constituting a Change in Control), but excluding
any such transaction that the Administrator determines shall not be a
Corporate Transaction.

(q) "COVERED EMPLOYEE" means an Employee who is a "covered
employee" under Section 162(m)(3) of the Code.

(r) "DIRECTOR" means a member of the Board or the board of
directors of any Related Entity.

(s) "EMPLOYEE" means any person, including an Officer or
Director, who is an employee of the Company or any Related Entity. The payment
of a director's fee by the Company or a Related Entity shall not be sufficient
to constitute "employment" by the Company.

(t) "EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended.

(u) "FAIR MARKET VALUE" means, as of any date, the value
of Common Stock determined as follows:

<PAGE>

(i) Where there exists a public market for the
Common Stock, the Fair Market Value shall be (A) the closing price for a Share
for the last market trading day prior to the time of the determination (or, if
no closing price was reported on that date, on the last trading date on which
a closing price was reported) on the stock exchange determined by the
Administrator to be the primary market for the Common Stock or the Nasdaq
National Market, whichever is applicable or (B) if the Common Stock is not
traded on any such exchange or national market system, the average of the
closing bid and asked prices of a Share on the Nasdaq Small Cap Market for the
day prior to the time of the determination (or, if no such prices were
reported on that date, on the last date on which such prices were reported),
in each case, as reported in THE WALL STREET JOURNAL or such other source as
the Administrator deems reliable; or

(ii) In the absence of an established market for
the Common Stock of the type described in (i), above, the Fair Market Value
thereof shall be determined by the Administrator in good faith.

(v) "GRANTEE" means an Employee, Director or Consultant
who receives an Award pursuant to an Award Agreement under the Plan.

(w) "IMMEDIATE FAMILY" means any child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling,
niece, nephew, mother-in-law, father-in-law, son-in law, daughter-in-law,
brother-in-law, or sister-in-law, including adoptive relationships, any person
sharing the Grantee's household (other than a tenant or employee), a trust in
which these persons have more than fifty percent (50%) of the beneficial
interest, a foundation in which these persons (or the Grantee) control the
management of assets, and any other entity in which these persons (or the
Grantee) own more than fifty percent (50%) of the voting interests.

(x) "INCENTIVE STOCK OPTION" means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code.

(y) "NON-QUALIFIED STOCK OPTION" means an Option not
intended to qualify as an Incentive Stock Option.

(z) "OFFICER" means a person who is an officer of the
Company or a Related Entity within the meaning of Section 16 of the Exchange
Act and the rules and regulations promulgated thereunder.

(aa) "OPTION" means an option to purchase Shares pursuant
to an Award Agreement granted under the Plan.

(bb) "PARENT" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.

(cc) "PERFORMANCE - BASED COMPENSATION" means compensation
qualifying as "performance-based compensation" under Section 162(m) of the
Code.

(dd) "PLAN" means this 2000 Stock Option Plan.

<PAGE>

(ee) "RELATED ENTITY" means any Parent, Subsidiary and any
business, corporation, partnership, limited liability company or other entity
in which the Company, a Parent or a Subsidiary holds a substantial ownership
interest, directly or indirectly.

(ff) "RELATED ENTITY DISPOSITION" means the sale,
distribution or other disposition by the Company, a Parent or a Subsidiary of
all or substantially all of the interests of the Company, a Parent or a
Subsidiary in any Related Entity effected by a sale, merger or consolidation
or other transaction involving that Related Entity or the sale of all or
substantially all of the assets of that Related Entity, other than any Related
Entity Disposition to the Company, a Parent or a Subsidiary.

(gg) "RULE 16b-3" means Rule 16b-3 promulgated under the
Exchange Act or any successor thereto.

(hh) "SHARE" means a share of the Common Stock.

(ii) "SUBSIDIARY" means a "subsidiary corporation," whether
now or hereafter existing, as defined in Section 424(f) of the Code.

3. SHARES SUBJECT TO THE PLAN.

(a) Subject to the provisions of SECTION 10, below, the
maximum aggregate number of Shares which may be issued pursuant to all Awards
(including Incentive Stock Options) is One Million (1,000,000). The Shares to
be issued pursuant to Awards may be authorized, but unissued, or reacquired
Common Stock.

(b) Any Shares covered by an Award (or portion of an
Award) which is forfeited or canceled, expires or is settled in cash, shall be
deemed not to have been issued for purposes of determining the maximum
aggregate number of Shares which may be issued under the Plan. Shares that
actually have been issued under the Plan pursuant to an Award shall not be
returned to the Plan and shall not become available for future issuance under
the Plan, except that if unvested Shares are forfeited, or repurchased by the
Company at their original purchase price, such Shares shall become available
for future grant under the Plan.

4. ADMINISTRATION OF THE PLAN.

(a) PLAN ADMINISTRATOR.

(i) ADMINISTRATION WITH RESPECT TO DIRECTORS AND
OFFICERS. With respect to grants of Awards to Directors or Employees who are
also Officers or Directors of the Company, the Plan shall be administered by
(A) the Board or (B) a Committee designated by the Board, which Committee
shall be constituted in such a manner as to satisfy the Applicable Laws and to
permit such grants and related transactions under the Plan to be exempt from
Section 16(b) of the Exchange Act in accordance with Rule 16b-3. Once
appointed, such Committee shall continue to serve in its designated capacity
until otherwise directed by the Board.

<PAGE>

(ii) ADMINISTRATION WITH RESPECT TO CONSULTANTS
AND OTHER EMPLOYEES. With respect to grants of Awards to Employees or
Consultants who are neither Directors nor Officers of the Company, the Plan
shall be administered by (A) the Board or (B) a Committee designated by the
Board, which Committee shall be constituted in such a manner as to satisfy the
Applicable Laws. Once appointed, such Committee shall continue to serve in its
designated capacity until otherwise directed by the Board. The Board may
authorize one or more Officers to grant such Awards and may limit such
authority as the Board determines from time to time.

(iii) ADMINISTRATION WITH RESPECT TO COVERED
EMPLOYEES. Notwithstanding the foregoing, grants of Awards to any Covered
Employee intended to qualify as Performance-Based Compensation shall be made
only by a Committee (or subcommittee of a Committee) which is comprised solely
of two or more Directors eligible to serve on a committee making Awards
qualifying as Performance-Based Compensation. In the case of such Awards
granted to Covered Employees, references to the "Administrator" or to a
"Committee" shall be deemed to be references to such Committee or subcommittee.

(iv) ADMINISTRATION ERRORS. In the event an Award
is granted in a manner inconsistent with the provisions of this subsection
(a), such Award shall be presumptively valid as of its grant date to the
extent permitted by the Applicable Laws.

(b) POWERS OF THE ADMINISTRATOR. Subject to Applicable
Laws and the provisions of the Plan (including any other powers given to the
Administrator hereunder), and except as otherwise provided by the Board, the
Administrator shall have the authority, in its discretion:

(i) to select the Employees, Directors and
Consultants to whom Awards may be granted from time to time hereunder;

(ii) to determine whether and to what extent
Awards are granted hereunder;

(iii) to determine the number of Shares or the
amount of other consideration to be covered by each Award granted hereunder;

(iv) to approve forms of Award Agreements for use
under the Plan;

(v) to determine the terms and conditions of any
Award granted hereunder;

(vi) to amend the terms of any outstanding Award
granted under the Plan, provided that any amendment that would adversely
affect the Grantee's rights under an outstanding Award shall not be made
without the Grantee's written consent;

(vii) to construe and interpret the terms of the
Plan and Awards granted pursuant to the Plan, including without limitation,
any notice of Award or Award Agreement, granted pursuant to the Plan;

<PAGE>

(viii) to establish additional terms, conditions,
rules or procedures to accommodate the rules or laws of applicable foreign
jurisdictions and to afford Grantees favorable treatment under such laws;
PROVIDED, HOWEVER, that no Award shall be granted under any such additional
terms, conditions, rules or procedures with terms or conditions which are
inconsistent with the provisions of the Plan; and

(ix) to take such other action, not inconsistent
with the terms of the Plan, as the Administrator deems appropriate.

5. ELIGIBILITY. Awards other than Incentive Stock Options may
be granted to Employees, Directors and Consultants. Incentive Stock Options
may be granted only to Employees of the Company, a Parent or a Subsidiary. An
Employee, Director or Consultant who has been granted an Award may, if
otherwise eligible, be granted additional Awards. Awards may be granted to
such Employees, Directors or Consultants who are residing in foreign
jurisdictions as the Administrator may determine from time to time.

6. TERMS AND CONDITIONS OF AWARDS.

(a) TYPE OF AWARDS. The Administrator is authorized under
the Plan to award any type of arrangement to an Employee, Director or
Consultant that is not inconsistent with the provisions of the Plan and that
by its terms involves or might involve the issuance of (i) Shares, (ii) an
Option or similar right with a fixed or variable price related to the Fair
Market Value of the Shares and with an exercise or conversion privilege
related to the passage of time, the occurrence of one or more events, or the
satisfaction of performance criteria or other conditions, or (iii) any other
security with the value derived from the value of the Shares.

(b) DESIGNATION OF AWARD. Each Award shall be designated
in the Award Agreement. In the case of an Option, the Option shall be
designated as either an Incentive Stock Option or a Non-Qualified Stock
Option. However, notwithstanding such designation, to the extent that the
aggregate Fair Market Value of Shares subject to Options designated as
Incentive Stock Options which become exercisable for the first time by a
Grantee during any calendar year (under all plans of the Company or any Parent
or Subsidiary) exceeds $100,000, such excess Options, to the extent of the
Shares covered thereby in excess of the foregoing limitation, shall be treated
as Non-Qualified Stock Options. For this purpose, Incentive Stock Options
shall be taken into account in the order in which they were granted, and the
Fair Market Value of the Shares shall be determined as of the date the Option
with respect to such Shares is granted.

(c) CONDITIONS OF AWARD. Subject to the terms of the Plan,
the Administrator shall determine the provisions, terms, and conditions of
each Award including, but not limited to, the Award vesting schedule,
repurchase provisions, rights of first refusal, forfeiture provisions, form of
payment (cash, Shares, or other consideration) upon settlement of the Award,
payment contingencies, and satisfaction of any performance criteria. The
performance criteria established by the Administrator may be based on any one
of, or combination of, increase in share price, earnings per share, total
shareholder return, return on equity, return on assets, return on investment,
net operating income, cash flow, revenue, economic value added, personal
management objectives, or other measure of performance selected by the
Administrator. Partial

<PAGE>

achievement of the specified criteria may result in a payment or vesting
corresponding to the degree of achievement as specified in the Award Agreement.

(d) ACQUISITIONS AND OTHER TRANSACTIONS. The Administrator
may issue Awards under the Plan in settlement, assumption or substitution for,
outstanding awards or obligations to grant future awards in connection with
the Company or a Related Entity acquiring another entity, an interest in
another entity or an additional interest in a Related Entity whether by
merger, stock purchase, asset purchase or other form of transaction.

(e) DEFERRAL OF AWARD PAYMENT. The Administrator may
establish one or more programs under the Plan to permit selected Grantees the
opportunity to elect to defer receipt of consideration upon exercise of an
Award, satisfaction of performance criteria, or other event that absent the
election would entitle the Grantee to payment or receipt of Shares or other
consideration under an Award. The Administrator may establish the election
procedures, the timing of such elections, the mechanisms for payments of, and
accrual of interest or other earnings, if any, on amounts, Shares or other
consideration so deferred, and such other terms, conditions, rules and
procedures that the Administrator deems advisable for the administration of
any such deferral program.

(f) AWARD EXCHANGE PROGRAMS. The Administrator may
establish one or more programs under the Plan to permit selected Grantees to
exchange an Award under the Plan for one or more other types of Awards under
the Plan on such terms and conditions as determined by the Administrator from
time to time.

(g) SEPARATE PROGRAMS. The Administrator may establish one
or more separate programs under the Plan for the purpose of issuing particular
forms of Awards to one or more classes of Grantees on such terms and
conditions as determined by the Administrator from time to time.

(h) INDIVIDUAL OPTION LIMIT. The maximum number of Shares
with respect to which Options may be granted to any Grantee in any fiscal year
of the Company shall be Five Hundred Thousand (500,000). In connection with a
Grantee's commencement of Continuous Service, a Grantee may be granted Options
for up to an additional Five Hundred Thousand (500,000) Shares which shall not
count against the limit set forth in the previous sentence. The foregoing
limitations shall be adjusted proportionately in connection with any change in
the Company's capitalization pursuant to SECTION 10, below. To the extent
required by Section 162(m) of the Code or the regulations thereunder, in
applying the foregoing limitations with respect to a Grantee, if any Option is
canceled, the canceled Option shall continue to count against the maximum
number of Shares with respect to which Options may be granted to the Grantee.
For this purpose, the repricing of an Option shall be treated as the
cancellation of the existing Option and the grant of a new Option.

(i) EARLY EXERCISE. The Award Agreement may, but need not,
include a provision whereby the Grantee may elect at any time while an
Employee, Director or Consultant to exercise any part or all of the Award
prior to full vesting of the Award. Any unvested Shares

<PAGE>

received pursuant to such exercise may be subject to a repurchase right in
favor of the Company or a Related Entity or to any other restriction the
Administrator determines to be appropriate.

(j) TERM OF AWARD. The term of each Award shall be the
term stated in the Award Agreement, PROVIDED, HOWEVER, that the term of an
Award shall be no more than ten (10) years from the date of grant thereof.
However, in the case of an Incentive Stock Option granted to a Grantee who, at
the time the Option is granted, owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or any Parent
or Subsidiary, the term of the Incentive Stock Option shall be five (5) years
from the date of grant thereof or such shorter term as may be provided in the
Award Agreement.

(k) TRANSFERABILITY OF AWARDS. Incentive Stock Options may
not be sold, pledged, assigned, hypothecated, transferred, or disposed of in
any manner other than by will or by the laws of descent or distribution and
may be exercised, during the lifetime of the Grantee, only by the Grantee;
PROVIDED, HOWEVER, that the Grantee may designate a beneficiary of the
Grantee's Incentive Stock Option in the event of the Grantee's death on a
beneficiary designation form provided by the Administrator. Other Awards may
be transferred by gift or through a domestic relations order to members of the
Grantee's Immediate Family to the extent provided in the Award Agreement or in
the manner and to the extent determined by the Administrator.

(l) TIME OF GRANTING AWARDS. The date of grant of an Award
shall for all purposes be the date on which the Administrator makes the
determination to grant such Award, or such other date as is determined by the
Administrator. Notice of the grant determination shall be given to each
Employee, Director or Consultant to whom an Award is so granted within a
reasonable time after the date of such grant.

7. AWARD EXERCISE OR PURCHASE PRICE, CONSIDERATION AND TAXES.

(a) EXERCISE OR PURCHASE PRICE. The exercise or purchase
price, if any, for an Award shall be as follows:

(i) In the case of an Incentive Stock Option:

(A) granted to an Employee who, at the time
of the grant of such Incentive Stock Option owns stock representing more than
ten percent (10%) of the voting power of all classes of stock of the Company
or any Parent or Subsidiary, the per Share exercise price shall be not less
than one hundred ten percent (110%) of the Fair Market Value per Share on the
date of grant; or

(B) granted to any Employee other than an
Employee described in the preceding paragraph, the per Share exercise price
shall be not less than one hundred percent (100%) of the Fair Market Value per
Share on the date of grant.

(ii) In the case of a Non-Qualified Stock Option,
the per Share exercise price shall be not less than eighty-five percent (85%)
of the Fair Market Value per Share on the date of grant.

<PAGE>

(iii) In the case of Awards intended to qualify as
Performance-Based Compensation, the exercise or purchase price, if any, shall
be not less than one hundred percent (100%) of the Fair Market Value per Share
on the date of grant.

(iv) In the case of other Awards, such price as is
determined by the Administrator.

(v) Notwithstanding the foregoing provisions of
this SECTION 7(a), in the case of an Award issued pursuant to SECTION 6(d),
above, the exercise or purchase price for the Award shall be determined in
accordance with the principles of Section 424(a) of the Code.

(b) CONSIDERATION. Subject to Applicable Laws, the
consideration to be paid for the Shares to be issued upon exercise or purchase
of an Award including the method of payment, shall be determined by the
Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant). In addition to any other types of
consideration the Administrator may determine, the Administrator is authorized
to accept as consideration for Shares issued under the Plan the following:

(i) cash;

(ii) check;

(iii) delivery of Grantee's promissory note with
such recourse, interest, security, and redemption provisions as the
Administrator determines as appropriate;

(iv) surrender of Shares or delivery of a properly
executed form of attestation of ownership of Shares as the Administrator may
require (including withholding of Shares otherwise deliverable upon exercise
of the Award) which have a Fair Market Value on the date of surrender or
attestation equal to the aggregate exercise price of the Shares as to which
said Award shall be exercised (but only to the extent that such exercise of
the Award would not result in an accounting compensation charge with respect
to the Shares used to pay the exercise price unless otherwise determined by
the Administrator);

(v) with respect to Options, payment through a
broker-dealer sale and remittance procedure pursuant to which the Grantee (A)
shall provide written instructions to a Company designated brokerage firm to
effect the immediate sale of some or all of the purchased Shares and remit to
the Company, out of the sale proceeds available on the settlement date,
sufficient funds to cover the aggregate exercise price payable for the
purchased Shares and (B) shall provide written directives to the Company to
deliver the certificates for the purchased Shares directly to such brokerage
firm in order to complete the sale transaction; or

(vi) any combination of the foregoing methods of
payment.

(c) TAXES. No Shares shall be delivered under the Plan to
any Grantee or other person until such Grantee or other person has made
arrangements acceptable to the Administrator for the satisfaction of any
foreign, federal, state, or local income and employment tax withholding
obligations, including, without limitation, obligations incident to the
receipt of

<PAGE>

Shares or the disqualifying disposition of Shares received on exercise of an
Incentive Stock Option. Upon exercise of an Award, the Company shall withhold
or collect from Grantee an amount sufficient to satisfy such tax obligations.

8. EXERCISE OF AWARD.

(a) PROCEDURE FOR EXERCISE; RIGHTS AS A SHAREHOLDER.

(i) Any Award granted hereunder shall be
exercisable at such times and under such conditions as determined by the
Administrator under the terms of the Plan and specified in the Award Agreement.

(ii) An Award shall be deemed to be exercised when
written notice of such exercise has been given to the Company in accordance
with the terms of the Award by the person entitled to exercise the Award and
full payment for the Shares with respect to which the Award is exercised,
including, to the extent selected, use of the broker-dealer sale and
remittance procedure to pay the purchase price as provided in SECTION 7(b)(v).
Until the issuance (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or
any other rights as a shareholder shall exist with respect to Shares subject
to an Award, notwithstanding the exercise of an Option or other Award. The
Company shall issue (or cause to be issued) such stock certificate promptly
upon exercise of the Award. No adjustment will be made for a dividend or other
right for which the record date is prior to the date the stock certificate is
issued, except as provided in the Award Agreement or SECTION 10, below.

(b) EXERCISE OF AWARD FOLLOWING TERMINATION OF CONTINUOUS
SERVICE.

(i) An Award may not be exercised after the
termination date of such Award set forth in the Award Agreement and may be
exercised following the termination of a Grantee's Continuous Service only to
the extent provided in the Award Agreement.

(ii) Where the Award Agreement permits a Grantee
to exercise an Award following the termination of the Grantee's Continuous
Service for a specified period, the Award shall terminate to the extent not
exercised on the last day of the specified period or the last day of the
original term of the Award, whichever occurs first.

(iii) Any Award designated as an Incentive Stock
Option to the extent not exercised within the time permitted by law for the
exercise of Incentive Stock Options following the termination of a Grantee's
Continuous Service shall convert automatically to a Non-Qualified Stock Option
and thereafter shall be exercisable as such to the extent exercisable by its
terms for the period specified in the Award Agreement.

9. CONDITIONS UPON ISSUANCE OF SHARES.

(a) Shares shall not be issued pursuant to the exercise of
an Award unless the exercise of such Award and the issuance and delivery of
such Shares pursuant thereto shall

<PAGE>

comply with all Applicable Laws, and shall be further subject to the approval
of counsel for the Company with respect to such compliance.

(b) As a condition to the exercise of an Award, the
Company may require the person exercising such Award to represent and warrant
at the time of any such exercise that the Shares are being purchased only for
investment and without any present intention to sell or distribute such Shares
if, in the opinion of counsel for the Company, such a representation is
required by any Applicable Laws.

10. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. Subject to any
required action by the shareholders of the Company, the number of Shares
covered by each outstanding Award, and the number of Shares which have been
authorized for issuance under the Plan but as to which no Awards have yet been
granted or which have been returned to the Plan, the exercise or purchase
price of each such outstanding Award, the maximum number of Shares with
respect to which Options and may be granted to any Grantee in any fiscal year
of the Company, as well as any other terms that the Administrator determines
require adjustment shall be proportionately adjusted for (i) any increase or
decrease in the number of issued Shares resulting from a stock split, reverse
stock split, stock dividend, combination or reclassification of the Shares, or
similar event affecting the Shares, (ii) any other increase or decrease in the
number of issued Shares effected without receipt of consideration by the
Company, or (iii) as the Administrator may determine in its discretion, any
other transaction with respect to Common Stock to which Section 424(a) of the
Code applies or any similar transaction; PROVIDED, HOWEVER that conversion of
any convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration." Such adjustment shall be made by
the Administrator and its determination shall be final, binding and
conclusive. Except as the Administrator determines, no issuance by the Company
of shares of stock of any class, or securities convertible into shares of
stock of any class, shall affect, and no adjustment by reason hereof shall be
made with respect to, the number or price of Shares subject to an Award.

11. CORPORATE TRANSACTIONS/CHANGES IN CONTROL/RELATED ENTITY
DISPOSITIONS. Except as may be provided in an Award Agreement:

(a) Effective upon the consummation of a Corporate
Transaction, all outstanding Awards under the Plan shall terminate. However,
all such Awards shall not terminate if they are, in connection with the
Corporate Transaction, assumed by the successor corporation or Parent thereof.

(b) Effective upon the consummation of a Related Entity
Disposition, for purposes of the Plan and all Awards, the Continuous Service
of each Grantee who is at the time engaged primarily in service to the Related
Entity involved in such Related Entity Disposition shall be deemed to
terminate and each Award of such Grantee which is at the time outstanding
under the Plan shall be exercisable in accordance with the terms of the Award
Agreement evidencing such Award. However, such Continuous Service shall not be
deemed to terminate if such Award is, in connection with the Related Entity
Disposition, assumed by the successor entity or its parent.

<PAGE>

(c) The portion of any Incentive Stock Option that is
accelerated pursuant to the terms and conditions of an Award Agreement in
connection with a Corporate Transaction, Change in Control or Related Entity
Disposition shall remain exercisable as an Incentive Stock Option under the
Code only to the extent the $100,000 limitation of Section 422(d) of the Code
is not exceeded. To the extent such dollar limitation is exceeded, the
accelerated excess portion of such Option shall be exercisable as a
Non-Qualified Stock Option.

12. EFFECTIVE DATE AND TERM OF PLAN. The Plan shall become
effective upon the earlier to occur of its adoption by the Board or its
approval by the shareholders of the Company. It shall continue in effect for a
term of ten (10) years unless sooner terminated. Subject to SECTION 17, below,
and Applicable Laws, Awards may be granted under the Plan upon its becoming
effective.

13. AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN.

(a) The Board may at any time amend, suspend or terminate
the Plan. To the extent necessary to comply with Applicable Laws, the Company
shall obtain shareholder approval of any Plan amendment in such a manner and
to such a degree as required.

(b) No Award may be granted during any suspension of the
Plan or after termination of the Plan.

(c) Any amendment, suspension or termination of the Plan
(including termination of the Plan under SECTION 12, above) shall not affect
Awards already granted, and such Awards shall remain in full force and effect
as if the Plan had not been amended, suspended or terminated, unless mutually
agreed otherwise between the Grantee and the Administrator, which agreement
must be in writing and signed by the Grantee and the Company.

14. RESERVATION OF SHARES.

(a) The Company, during the term of the Plan, will at all
times reserve and keep available such number of Shares as shall be sufficient
to satisfy the requirements of the Plan.

(b) The inability of the Company to obtain authority from
any regulatory body having jurisdiction, which authority is deemed by the
Company's counsel to be necessary to the lawful issuance and sale of any
Shares hereunder, shall relieve the Company of any liability in respect of the
failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.

15. NO EFFECT ON TERMS OF EMPLOYMENT/CONSULTING RELATIONSHIP.
The Plan shall not confer upon any Grantee any right with respect to the
Grantee's Continuous Service, nor shall it interfere in any way with his or
her right or the Company's right to terminate the Grantee's Continuous Service
at any time, with or without cause.

16. NO EFFECT ON RETIREMENT AND OTHER BENEFIT PLANS. Except as
specifically provided in a retirement or other benefit plan of the Company or
a Related Entity, Awards shall not be

<PAGE>

deemed compensation for purposes of computing benefits or contributions under
any retirement plan of the Company or a Related Entity, and shall not affect
any benefits under any other benefit plan of any kind or any benefit plan
subsequently instituted under which the availability or amount of benefits is
related to level of compensation. The Plan is not a "Retirement Plan" or
"Welfare Plan" under the Employee Retirement Income Security Act of 1974, as
amended.

17. SHAREHOLDER APPROVAL. The grant of Incentive Stock Options
under the Plan shall be subject to approval by the shareholders of the Company
within twelve (12) months before or after the date the Plan is adopted
excluding Incentive Stock Options issued in substitution for outstanding
Incentive Stock Options pursuant to Section 424(a) of the Code. Such
shareholder approval shall be obtained in the degree and manner required under
Applicable Laws. The Administrator may grant Incentive Stock Options under the
Plan prior to approval by the shareholders, but until such approval is
obtained, no such Incentive Stock Option shall be exercisable. In the event
that shareholder approval is not obtained within the twelve (12) month period
provided above, all Incentive Stock Options previously granted under the Plan
shall be exercisable as Non-Qualified Stock Options.

<PAGE>

[OVERLAND LOGO] OVERLAND DATA, INC.
2000 PROXY

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

I appoint Scott McClendon and Vernon A. LoForti, or either of them (the
"Appointed Proxies"), with power of substitution to each, to vote all shares
of Common Stock which I have power to vote at the Annual Meeting of
Shareholders (the "Meeting") of Overland Data, Inc. to be held on Tuesday,
November 14, 2000 at 9:00 a.m., or at any adjournment or postponement thereof,
in accordance with the instructions on the reverse side of this card and with
the same effect as though I were present in person and voting such shares. The
Appointed Proxies are authorized in their discretion to vote upon such other
business as may properly come before the Meeting.

(CONTINUED, AND TO BE SIGNED AND DATED ON REVERSE SIDE)

<PAGE>

THERE ARE THREE WAYS TO VOTE YOUR PROXY
THE DIRECTORS RECOMMEND A VOTE "FOR" ITEMS 1, 2 AND 3

<TABLE>

<S> <C> <C>
VOTE BY PHONE VOTE VIA INTERNET VOTE BY MAIL
1-800-240-6326 HTTP://WWW.EPROXY.COM/OVRL/
Use any touch-tone telephone to vote your Use the Internet to vote your proxy 24 hours a day, 7 Mark, sign and date
proxy 24 hours a day, 7 days a week. days a week. Have your proxy card in hand when you your proxy card and
Have your proxy card in hand when you access the web site. You will be prompted to enter return it in the
call. You will be prompted to enter your your 3-digit company number and a 7-digit control postage-paid envelope
3-digit company number and a 7-digit number, which are located above, to create an we have provided.
control number, which are located above, electronic ballot.
and then follow the simple instructions.

PLEASE DETACH HERE
-----------------------------------------------------------------------------

Your telephone or Internet 1. ELECTION OF DIRECTORS:
vote authorizes the named
proxies to vote your shares FOR electing Scott McClendon, Martin D. Gray, Peter Preuss, John A. Shane and Robert
in the same manner as if A. Degan. (except as marked to the contrary below). / /
you marked, signed and
returned the proxy card. WITHHOLD AUTHORITY to vote for Scott McClendon, Martin D. Gray, Peter Preuss, John
The deadline for telephone A. Shane and Robert A. Degan. / /
or Internet voting is noon
EDT, one business day (INSTRUCTION: To withhold authority to vote for any individual nominee, write that
prior to the annual meeting. nominee's name in the space provided below.)
2. PROPOSAL TO APPROVE THE ADOPTION OF THE 2000 STOCK OPTION PLAN:

FOR AGAINST ABSTAIN
/ / / / / /

3. PROPOSAL TO RATIFY THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT AUDITORS:

FOR AGAINST ABSTAIN
/ / / / / /

</TABLE>

Date:
-------------------------------

-------------------------------
(Signature)

-------------------------------
(Signature if held jointly)

Please sign exactly as your name(s) appear to the left.
When signing in a fiduciary or representative capacity,
please add your full title. If shares are registered in
more than one name, all holders must sign. If signature
is for a corporation or partnership, the handwritten
signature and title of an authorized officer or person
is required, together with the full company name.