Offer Letter between Quantum and James J. Lerner, dated June 22, 2018

In addition to the time-based RSUs described above, the Company will grant you an award of performance-based restricted stock units (“PSUs”) covering a maximum of 450,000 Shares. The PSUs will be eligible to vest based on the achievement of specified levels of the average closing prices of a Share on the New York Stock Exchange (symbol: QTM) as quoted in the Wall Street Journal during any sixty (60) day trading period (the “60-Day Average Price”), occurring during the time frames specified below, subject to the LCC’s certification of the performance criteria which must occur within 10 calendar days of satisfying the applicable price targets. The PSUs eligible to vest based on achievement of a 60-Day Average Price of at least $4.00 will vest upon the later of the LCC’s certification and July 1, 2019, subject to your continued service with the Company through the later of the achievement date and July 1, 2019. The PSUs eligible to vest based on achievement of a 60-Day Average Price of at least $5.00 will vest upon the later of the LCC’s certification and July 1, 2020, subject to your continued service with the Company through the later of the achievement date and July 1, 2020. The PSUs eligible to vest based on achievement of a 60-Day Average Price of at least $6.00 will vest upon the later of the LCC’s certification and July 1, 2021, subject to your continued service with the Company through the later of the achievement date and July 1, 2021. The PSUs will be granted under the Plan, and the specific terms of the PSUs, including the applicable performance criteria and service requirements, will be set forth in an award agreement under the Plan. Generally, the PSUs will be subject to the following performance criteria, as determined by the Board or LCC, as applicable, in its sole discretion:

•    150,000 Shares will be earned, if, at any time between July 1, 2018 and June 30, 2022, the 60-Day Average Price is at least $4.00.

•    An additional 150,000 Shares will be earned, if, at any time between July 1, 2018 and June 30, 2022, the 60-Day Average Price is at least $5.00.

•    An additional 150,000 Shares will be earned, if, at any time between July 1, 2018 and June 30, 2022, the 60-Day Average Price is at least $6.00.

•    In the event of a Change of Control, the PSUs will be treated as provided in the Change of Control Agreement to be entered into by you and the Company concurrently with this offer letter (the “Change of Control Agreement”).

Timing of RSU and PSU Grants

The RSU Grants and PSU Grant outlined above will be made effective as of the first business day on which the Company becomes current with respect to its filings under the Securities Exchange Act of 1934, as amended (the “Grant Date”). If the Company experiences a “Change in Control” (as defined in the Company’s 2012 Long‑Term Incentive Plan (the “Plan”)) before the Grant Date, and you remain a Service Provider (as defined in the Plan) up to the Change of Control (unless you incur an Involuntary Termination during the Change of Control Period), the Company will provide for Economic Equivalent Payments (as defined below) to you as if the RSU Grants and PSU Grant had been made immediately prior to the Change of Control (provided that, in this case, the RSU Grants and PSU Grant will not actually be made and the Economic Equivalent Payments will be in lieu of the RSU Grants and PSU Grant). For purposes hereof, Economic Equivalent Payments shall mean restricted cash payments or securities with value equal to the number of shares underlying the RSU and PSU Grants (i.e., 1,000,000 shares) multiplied by the Change of Control per-share transaction price, with the original vesting schedule of the RSU and PSU Grants and full acceleration upon the occurrence of an Involuntary Termination.

As an executive of the Company, you will be eligible to receive certain severance benefits under certain circumstances pursuant to the Change of Control Agreement.

In addition, in the event that (a) you incur an Involuntary Termination other than for Cause (and other than due to your death or Disability, as such terms are defined in your Change of Control Agreement), and (b) the termination of your employment with the Company occurs outside of the Change of Control Period, as defined in the Change of Control Agreement, the Company will provide to you the following severance payments and benefits (the “Severance”):

(i)    a lump sum cash payment equal to twelve (12) months of your then-annual base salary,

(ii)    if you elect continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) within the time period prescribed by COBRA for you and your eligible dependents (if any), monthly reimbursements from the Company for COBRA premiums for continued coverage under the Company’s group health plans for you and your eligible dependents, if any, in which you (and your eligible dependents, if any) participated on the day immediately before the date of termination of your employment with the Company through the earlier of (A) twelve (12) months after the date of termination of your employment with the Company, or (B) the date you (and your eligible dependents, if any) no longer are eligible to receive continuation coverage pursuant to COBRA (the “COBRA Benefits”). Notwithstanding the foregoing, if the Company determines in its sole discretion that it cannot provide the COBRA Benefits without potentially violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), then in lieu of the COBRA Benefits, the Company will provide to you a taxable monthly payment, during the twelve (12) months after the termination of your employment with the Company, in a monthly amount equal to the monthly COBRA premium that you would be required to pay to continue coverage under the Company’s group health plans for you and your eligible dependents (if any) in effect on the day immediately before the date of termination of your employment with the Company (which amount will be based on the premium for the first month of COBRA coverage), which payments will be made regardless of whether you elect COBRA continuation coverage; and

(iii)    in the event the Involuntary Termination contemplated by this paragraph occurs on or before July 1, 2019, twelve (12) months of accelerated vesting for your outstanding RSUs and PSUs (which shall vest regardless of performance criteria attainment); provided that, if the Involuntary Termination occurs prior to the Grant Date, then in lieu of the accelerated vesting contemplated above, the Company will provide you with a cash payment equal to the number of shares that would have vested multiplied by the closing price of a Share on the date of the Involuntary Termination.

The Severance is subject to your entering into and not revoking a release of claims, in substantially the form attached to your Change of Control Agreement (and with such revisions thereto as may be made in accordance with the Change of Control Agreement), in favor of the Company (the “Release”), within the period required by the Release but in no event later than sixty (60) days following the date of termination of your employment with the Company, inclusive of any revocation period set forth in the Release. The Release will include a provision prohibiting the solicitation of employees of the Company for a period of one (1) year following the termination of your employment with the Company. Any salary Severance due to you under clause (i) above will be paid on the sixty‑first (61^st) day following the date of termination of your employment with the Company, or such later date required by applicable law as described below in the section titled “Section 409A.”

For the avoidance of doubt, if the termination of your employment with the Company occurs on a date during the Change of Control Period, then the terms of the Change of Control Agreement will govern the payment of any severance benefits to you and no Severance will be payable to you. Any Severance under this offer letter also will be subject to the provisions set forth in the section of the Change of Control Agreement titled “Limitation on Payments” relating to Section 280G of the Internal Revenue Code of 1986, as amended, and any regulations and guidance promulgated thereunder (the “Code”). Further, the provisions set forth in section of the Change of Control Agreement titled “Offset” will be deemed to apply to your Severance.

Section 409A 

It is intended that this offer letter and the payments and benefits hereunder are exempt from, or otherwise comply with, Section 409A of the Code (“Section 409A”), such that none of the payments and benefits under this offer letter will be subject to any additional tax imposed under Section 409A, and any ambiguities or ambiguous terms herein will be interpreted to be exempt or to so comply. You and the Company agree to work together in good faith to consider amendments to this offer letter and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to you under Section 409A; provided, however, that this Section of this offer letter does not create an obligation on the part of the Company to adopt any such amendment, policy or procedure or take any such other action.

Notwithstanding anything to the contrary in this offer letter, no Deferred Benefits (as defined below) will be considered due or payable until you have a “separation from service” within the meaning of Section 409A. In addition, if you are a “specified employee” within the meaning of Section 409A at the time of your separation from service (other than due to death), then any Deferred Benefits otherwise due to you on or within the six (6) month period following your separation from service will accrue during such six (6) month period and will become payable in a lump sum payment (less any applicable tax and other required withholdings) on the date six (6) months and one (1) day following the date of your separation from service. All subsequent payments, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit. Notwithstanding anything herein to the contrary, in the event of your death following your separation from service but before the six (6) month anniversary of the date of your separation from service, then any payments delayed in accordance with this paragraph will be payable in a lump sum (less any applicable tax and other required withholdings) to your estate as soon as administratively practicable after the date of your death and all other Deferred Benefits will be payable in accordance with the payment schedule applicable to each payment or benefit.

For purposes of this offer letter, “Deferred Benefits” means the Severance and any other severance payments or separation benefits to be paid or provided to you (or your estate or beneficiaries), that in each case, when considered together, are considered deferred compensation under Section 409A.

Each payment and benefit payable under this offer letter is intended to constitute a separate payment for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations. In no event will you have any discretion to determine the taxable year of payment of any Deferred Benefit. For purposes of this offer letter, to the extent required to be exempt from or comply with Section 409A with respect to any Severance, references to the “termination of your employment” or other similar phrases will be references to your “separation from service” within the meaning of Section 409A.

To the extent that any reimbursements provided to you hereunder are deemed to constitute compensation to which Section 409A would apply, such amounts shall be reimbursed to you reasonably promptly, but not later than December 31 of the year following the year in which the expense was incurred (or such shorter time period as specified under this offer letter). The amount of any such reimbursement in one year shall not affect the payments or expenses that are eligible for payment or reimbursement in any other taxable year, and your right to such reimbursement shall not be subject to liquidation or exchange for any other benefit. Except as specifically provided herein, any such reimbursements will be made for expenses incurred, only to the extent such expenses are incurred prior to the termination of your employment with the Company.

In no event will the Company or any of its subsidiaries or affiliates have any liability or obligation to reimburse or indemnify you or hold you harmless for any taxes, interest, or penalties imposed, or other costs incurred, as a result of Section 409A.