Employment Agreement - Storage Technology Corp. and David E. Lacey


June 24, 1996


David E. Lacey
1860 East Cedar Avenue
Denver, CO  80209

Dear David:

This letter (the 'Agreement') sets forth the terms and conditions of your
employment with Storage Technology Corporation (the 'Company').  It is
intended to replace all prior agreements, including but not limited to the
letter agreements of February 17, 1995 and May 22, 1996.  In consideration
of your employment by the Company on the terms and conditions set forth
below, and the mutual covenants and agreements contained herein, you and the
Company agree as follows:

     1.   Position:  You will be employed full-time by the Company as
Executive Vice President and Chief Financial Officer.  You will report to
the Chief Executive Officer of the Company, or such other officer as he or
she may designate from time to time, and perform such duties as may be
assigned you from time to time.  During the Employment Term (as herein
defined), you shall devote your entire working time, attention and energies
to the business of the Company.  Except for personal investments, which
shall not conflict with the business of the Company, you shall not engage in
any other business activity or activities that require personal services by
you that may conflict with the proper performance of your duties hereunder.

     2.   Employment.  The term of your employment pursuant to this
agreement (the 'Employment Term') is effective as of May 22, 1996 and shall
thereafter continue on an 'at will' basis at the salary and terms contained
herein unless otherwise modified by the chief executive officer ('CEO') or
his or her designee.

     3.   Base Compensation.  For your services during the Employment Term,
the Company will pay you an annual base salary, effective May 22, 1996, of
$255,000.00 per year.  

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                                                         StorageTek Top Security


David E. Lacey
June 24, 1996
Page 2



Such salary shall be payable in installments in accordance with the regular
payroll policies of the Company in effect from time to time during the
Employment Term.  The amount of your base salary may be adjusted either upward
or downward by the Company from time to time during the Employment Term.
        
     4.   Stock Options:  In addition to stock options earlier granted to
you, you have received a grant for an additional 35,000 shares, 40% of which
vest over the next three years in equal installments on the anniversary of
the grant date and 60% of which vest eight years from the date of grant,
unless vesting is accelerated to the first, second or third year
anniversaries of the grant date, in one-third increments, based on
performance against goals to be established by the Board.  You continue to
be eligible for future grants in accordance with the policies of the Company
in effect from time to time.

     5.   Bonuses.

          (a)  MBO Bonus Program.  The Company currently maintains a
Management By Objective Bonus Program (the 'MBO Program').  During the
Employment Term, you shall be eligible for such bonuses as may be
established from time to time in accordance with the MBO Program by the
Company's Board of Directors (the 'Board').  For 1996, the Board has
established for you an On Plan Bonus potential percentage of 50%.  Such
percentage may be adjusted either upward or downward for subsequent years
during the Employment Term.  Any payments under the MBO Program shall be
made in accordance with the provisions of, and under the conditions
contained in, the MBO Program and the terms of any bonus award authorized
for you by the Board.

     6.   Termination of Employment.

          (a)  Termination Without Cause.  If, during the Employment Term,
the Company elects to terminate your employment without 'Cause' (as that
term is defined in paragraph 6(d)), except for terminations covered by the
provisions of paragraph 6(b), or if you should die without Cause existing at
such time, you shall be entitled to receive, as a severance payment, a
payment equal to the sum of (i) your then current rate of annual base salary
and (ii) 100% of your On Plan Bonus potential percentage under the MBO
Program for the year of termination (whether or not such bonus would be
otherwise payable).  Such amount shall be 



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                                                         StorageTek Top Security

David E. Lacey
June 24, 1996
Page 3




paid to you in a cash lump sum within thirty days after your termination of
employment pursuant to this paragraph 6(a).  In addition, you shall be entitled
to exercise any vested stock options then held to acquire shares of Common
Stock in accordance with the Option Agreement.
        
          (b)  Termination in the Event of Sale, Merger or Change of
Control.  If, during the Employment Term, the Company is sold, or merged
with or into another company (in a transaction in which the Company is not
the surviving entity), or in which the stockholders of the Company
immediately prior to the merger own 50% or less of the Company after the
merger, or all or substantially all of the assets of the Company are sold,
or more than 25% of the outstanding voting capital stock of the Company is
acquired by another person or persons (as such term is used in Sections
13(d) and 14(d)(2) of the Securities Exchange Act of 1934) acting as a
group, (any of which events is referred to hereinafter as a 'Change in
Control'), and your employment is terminated either by you for any reason or
by the Company without Cause and such termination occurs within 24 months
after the date of any such Change in Control, then, upon such termination,
and subject to the provisions of paragraphc 6(c) below, (i) the Company will
pay you an amount equal to two times your annual base salary then in effect,
plus two times 100% of your On Plan Bonus under the MBO Program based on
your annual salary and On Plan Bonus potential percentage in effect
immediately prior to the Change in Control (which shall be calculated as if
the Company meets its plan for such year and which shall be payable whether
or not the Company does in fact meet its plan), (ii) all outstanding stock
options shall fully vest and become exercisable in full, and (iii) the
Company's right to repurchase shall terminate with respect to any stock
earlier purchased by you under the Company's 1987 Equity Participation Plan,
and all such stock shall become fully vested.  In addition, after such
termination of employment, you shall be entitled to exercise all stock
options in accordance with the terms of the Option Agreements.  To the
extent you would be entitled to payments or your rights to restricted stock
or stock options would vest not only pursuant to the terms of this
section 6(b), but also pursuant to the provisions of other section(s) of
this agreement, or other agreements with the Company, then such payments
shall be deemed 

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                                                         StorageTek Top Security

David E. Lacey
June 24, 1996
Page 4



made and such vesting shall be deemed to occur pursuant to the terms of such
other section(s) or other agreements, and not under the terms of this section
6(b).
        
          (c)  Limitation on Payments.  In the event that the severance and
other benefits provided for in this Agreement or otherwise payable to you
(i) would constitute 'parachute payments' within the meaning of Section 280G
of the Internal Revenue Code of 1986, as amended (the 'Code') and (ii) but
for this section (c), would be subject to the excise tax imposed by Section
4999 of the Code, then such severance benefits shall be either (i) delivered
in full, or (ii) delivered as to such lesser extent which would result in no
portion of such severance benefits being subject to excise tax under Section
4999 of the Code, whichever of the foregoing amounts, taking into account
the applicable federal, state and local income taxes and the excise tax
imposed by Section 4999, results in the receipt by you on an after-tax
basis, of the greatest amount of severance benefits, notwithstanding that
all or some portion of such severance benefits may be taxable under Section
4999 of the Code.  Unless you and the Company agree otherwise in writing,
any determination required under this section 6(c) shall be made in writing
by the Company's independent public accountants immediately prior to Change
of Control (the 'Accountants'), whose determination shall be conclusive and
binding upon you and the Company for all purposes.  For purposes of making
the calculations required by this section 6(c), the Accountants may make
reasonable assumptions and approximations concerning applicable taxes and
may rely on reasonable, good faith interpretations concerning the
application of Sections 280G and 4999 of the Code.  You and the Company
shall furnish to the Accountants such information and documents as the
Accountants may reasonably request in order to make a determination under
this section.  The Company shall bear all costs the Accountants may
reasonably incur in connection with any calculations contemplated by this
section 6(c).

          (d)  Termination for Cause. If the Company, during the Employment
Term, elects to terminate your employment for Cause, your employment will
terminate on the date fixed for termination by the Company (provided,
however, that if the Company so elects during the 24-month period following
a Change in Control, you shall be given prior notice and shall be permitted
to voluntarily terminate your employment pursuant to section 6(b) hereof, in



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                                                         StorageTek Top Security

David E. Lacey
June 24, 1996
Page 5




which case this section 6(d) shall be inapplicable).  Following a
Termination for Cause under this section, the Company will not be obligated
to pay you any additional compensation, whether in the way of base
compensation, bonus or otherwise, other than the compensation due and owing
through the date of termination.  'Cause,' for purposes of this Agreement,
shall mean any of the following: (i) willful breach by you of any provision
of this Agreement or any other written agreement between you and the
Company; (ii) gross negligence or dishonesty in the performance of your
duties hereunder; (iii) engaging in conduct or activities or holding any
position that materially conflicts with the interest of, or materially
interferes with your duties owed to, the Company; (iv) engaging in conduct
that is materially detrimental to the business of the Company; or (v) any
intentional violation of Company policies applicable to employees of your
position with the Company.

     7.   Benefit Programs.  You shall also be entitled to such benefits and
benefit programs that apply to you and your position as the Company and the
Board may adopt from time to time, in accordance with the provisions of such
programs then in effect.  Certain presently existing benefit programs (which
may or may not remain in effect) are outlined below:

          a.   Life Insurance:  Your life insurance coverage will be three
times your base salary.

          b.   Medical Coverage:  You will have executive medical coverage.
This insurance covers 100% of your family's medical expenses up to $5,000
over our group insurance coverage annually.

     8.   Compensation Deferral:  You will be able to defer your
compensation in accordance with the terms of our Executive Deferred
Compensation Plan.

     9.   Automobile:  You will receive up to $700.00 Auto allowance per
month reimbursement on leased automobile payments and reimbursement for
regular maintenance and automobile insurance on your leased automobile.
Contact Marti Jordan (x33977) for more information on this program.

     10.  Miscellaneous Executive Perquisites:  During your Employment Term,
you shall be eligible for the following:

          -    First class air travel as long as StorageTek is profitable.

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                                                         StorageTek Top Security


David E. Lacey
June 24, 1996
Page 6



          -    Membership in an airline VIP club.

          -    Financial and tax counseling in an amount per year equal to 1% 
               of annual base salary.

          -    Company-paid physical examination.

      10. Miscellaneous Provisions.

          (a)  Withholding.  All payments to you pursuant to this Agreement
shall be subject to withholding of all amounts required to be withheld by
applicable Internal Revenue Service and State tax authorities by the Company
and shall be conditioned upon your submission of all information or
execution of all instruments necessary to enable the Company to comply with
such withholding requirements.

          (b)  Confidentiality Agreement.  As a condition of your
employment, you have executed the Company's standard form of confidential
inventions and trade secrets agreement.  You reaffirm that during the
Employment Term you will comply with all provisions of said agreement and
agree that you will enter into such modifications or amendments thereof as
the Company may reasonably request from time to time.

          (c)  Notice.  Any notice required to be given in accordance with
the provisions of this Agreement shall be given in writing, either by
personal delivery or by causing such written notice to be mailed, first
class postage prepaid, in the United States mail to you at the address set
forth above or to the Company at its principal business address, or at such
other address for a party as shall be specified by like notice, provided
that notices of change of address shall be effective only upon receipt
thereof.

          (d)  Governing Law.  This Agreement is entered into in accordance
with, and shall be interpreted pursuant to the provisions of, the internal
laws of the State of Colorado (without regard to conflict of law
principles).

          (e)  Severability.  If any provision of this Agreement shall be
held to be invalid or unenforceable, such invalidity or unenforceability
shall not affect or impair the validity or enforceability of the remaining
provisions of this Agreement, which shall remain in full force and effect in
accordance with their terms.

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                                                         StorageTek Top Security

David E. Lacey
June 24, 1996
Page 7



          (f)  Entire Agreement.  This Agreement, together with the other
agreements referenced herein, embody the entire agreement between the
parties relating to the subject matter hereof, and supersede all previous
agreements or understandings, whether oral or written.

          (g)  Amendment of Agreement.  This Agreement may not be modified
or amended, and no provision of this Agreement may be waived, except by a
writing signed by the parties hereto.

If this letter accurately sets forth the terms of our agreement relating to
your employment, please sign the enclosed copy of this letter in the space
provided below and return it to the Company.


Very truly yours,


/s/ DAVID E. WEISS

David E.  Weiss
Chairman, President and
  Chief Executive Officer




                                /s/  DAVID E. LACEY
                                --------------------------
                                Name  


                                 7/08/96
                                --------------------------
                                Date  










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                                                         StorageTek Top Security