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Separation Agreement and Release - Storage Technology Corp. and Karen N.


         This Separation Agreement and Release ("Agreement") is made this 7th
day of February, 2001 (the "Effective Date") by and between Storage Technology
Corporation (the "Company") and Karen N. (the "Employee").

         WHEREAS, Employee was employed by the Company as Chief Administrative

         WHEREAS, Employee signed a Storage Technology Corporation Proprietary
Rights Agreement in consideration of employment with the Company;

         WHEREAS, Employee's employment with the Company and Corporate Officer
Employment Agreement dated October 1, 1999 (the "Employment Agreement") are both
terminated effective February 14, 2001 (the "Termination Date"); with salary and
benefits paid through the Termination Date;

         WHEREAS, the Company has agreed to provide Employee with valuable
consideration to facilitate Employee's transition from the Company;

         WHEREAS, Employee has agreed to release the Company from any claims
arising from or related to Employee's employment relationship with the Company;

         WHEREAS, this Separation and Release Agreement supersedes all previous
oral and written agreements regarding Employee's employment with Storage
Technology Corporation, provided, however, that the terms and conditions of
Employee's Employment Agreement, to the degree that they do not conflict with
the terms and conditions of this Separation Agreement, shall remain in full
force and effect;

         NOW THEREFORE, in consideration of the mutual promises made herein, the
Company and Employee (jointly referred to as "the Parties") hereby agree as

         1. CONSIDERATION: The Company agrees to pay Employee a separation
payment of $250,000.00, which amount equals one year's current base salary, said
amount to be paid to Employee less applicable withholding (the "Consideration").
Employee acknowledges that she is not entitled to the Consideration recited in
this Separation Agreement and Release but for the execution of this Separation
Agreement and Release. The Consideration will be paid within thirty days upon
the full execution and acceptance of this Agreement and upon expiration of the
revocation period as described in Paragraph 6 below. The Parties acknowledge and
agree that 25% of the severance payment is made solely in consideration of
Employee executing and not revoking the ADEA Waiver and Release as set forth in
Paragraph 6 below.

         2. STOCK OPTIONS & RESTRICTED STOCK: As of the Termination Date,
Employee agrees and acknowledges that she has 29,742 vested shares of the
Company's common

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stock under the 1995 Storage Technology Corporation Equity Participation Plan.
Employee's stock will continue to be governed by the respective Storage
Technology Equity Participation Plan as listed above. Employee shall not be
entitled to continue vesting in Company stock after the Termination Date.
Pursuant to the terms of the company's 1995 Equity Participation Plan, Employee
will have ninety (90) days from the Termination Date to exercise the vested
options. On the Termination Date, the Company shall exercise its right to
repurchase all of Employee's unvested restricted stock.

         3. BENEFITS: Employee's insurance benefits (medical, dental, long-term
disability, accidental death and dismemberment and life insurance) will cease on
the Termination Date, subject to Employee's rights to continue her health
insurance under COBRA. Employee will not be entitled to accrual of any employee
benefits, including, but not limited to, vacation and personal time off
benefits, after the Termination Date. In addition to the consideration recited
above, the Parties further acknowledge and agree that Employee will be paid the
lump sum payment of $8,753.24, which represents twelve (12) months of COBRA
health insurance premium payments for family medical and dental coverage.

         4. PAYMENT OF SALARY: Employee acknowledges and represents that the
Company has paid all salary, wages, bonuses, earned unused vacation, and any and
all other benefits and compensation due to Employee up to the Termination Date.
The parties further acknowledge and agree that Employee is entitled to receive a
performance bonus in the amount of 50% of Employee's current base salary
($137,500.00) for the achievement of performance objectives through December 31,
2000, said bonus to be paid on the Termination Date or on the next paycheck.
Employee acknowledges and agrees that with the exception of the bonus payment
referenced herein, she is not eligible or entitled to receive any other type of
bonus payment by the Company for the calendar years 2000 or 2001. Employee
specifically acknowledges that she is not entitled to receive any type of bonus
through the Management By Objective Bonus Program ("MBO Program") or any type of
bonus through the Retention Bonus Program paid by the Company for the calendar
years 2000 or 2001.

         5. RELEASE OF CLAIMS:

                  (a) By Employee

                  Employee agrees that the foregoing Full Consideration
represents settlement in full of all outstanding obligations owed to Employee by
the Company and its officers, managers, supervisors, agents and employees.
Employee hereby and forever releases the Company and its officers, directors,
employees, managers, supervisors, agents, investors, shareholders,
administrators, affiliates, divisions, subsidiaries, predecessor and successor
corporations, and assigns ("the Releasees") from, and agrees not to sue
concerning, or, in any manner to institute, prosecute or pursue, any claim,
complaint, charge, duty, obligation or cause of action relating to any matters
of any kind, whether presently known or unknown, suspected or unsuspected,
disclosed or undisclosed, liquidated or contingent, that Employee may possess
against any of the Releasees arising from any omissions, acts or facts that have
occurred up until and including the Effective Date of this Agreement including,
without limitation,

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                  (1) any and all claims or demands, directly or indirectly,
relating to or arising out of Employee's employment relationship with the
Company, the termination of that relationship, salary, bonuses, commissions,
stock, stock options, or any ownership interest in the Company, vacation pay,
personal time off, fringe benefits, expense reimbursements, or any other form of
compensation; however, Employee shall have thirty (30) days after Termination
Date within which to submit requests for reimbursement for expenses.

                  (2) any and all claims for wrongful discharge of employment;
termination in violation of public policy; discrimination; harassment;
retaliation; breach of contract, both express and implied; breach of a covenant
of good faith and fair dealing, both express and implied; promissory estoppel;
negligent or intentional infliction of emotional distress; negligent or
intentional misrepresentation; negligent or intentional interference with
contract or prospective economic advantage; unfair business practices;
defamation; libel; slander; negligence; personal injury; assault; battery;
invasion of privacy; false imprisonment; conversion; workers' compensation and
disability benefits;

                  (3) any and all claims for violation of any federal, state or
municipal statute, including, but not limited to, the Colorado
Anti-Discrimination Act; the Americans with Disabilities Act; Title VII of the
Civil Rights Act of 1964, as amended; the Civil Rights Act of 1991; the Civil
Rights Acts of 1866 and 1871; attorney's fees, costs and other expenses under
Title VII of the Civil Rights Act of 1964, as amended, or any other statute,
agreement or source of law; the Age Discrimination in Employment Act; the Equal
Pay Act; the Fair Labor Standards Act; the Family and Medical Leave Act; the
National Labor Relations Act; the Occupational Safety and Health Act; the
Rehabilitation Act; Executive Order 11246; the Colorado Labor Peace Act; the
Colorado Wage Claim Act; the Colorado Constitution; the Worker Adjustment and
Retraining Notification Act; the Employee Retirement Income Security Act of
1974; and the Labor Peace Act;

                  (4) any and all claims for violation of federal, or any state,
constitution, law or statute;

                  (5) any and all claims arising out of any other laws and
regulations relating to employment or employment discrimination; and

                  (6) any and all claims for attorneys' fees and costs.

                  Employee agrees that in the event that she brings a claim
covered by this release in which she seeks damages or other remedies against the
Company or in the event she seeks to recover against the Company in any claim
brought by a government agency on his behalf, this Agreement shall serve as a
complete defense to such claims.

                  Employee acknowledges and agrees that any breach of this
paragraph shall constitute a material breach of the Agreement, and shall entitle
the Company immediately to recover the monetary consideration described in
Paragraph 1 above, in addition to all other remedies available. Employee shall
also be responsible to the Company for all costs, attorneys' fees and any and
all damages incurred by the Company in: (a) enforcing these obligations,
including the bringing of any action to recover the monetary consideration, and
(b) defending against a claim brought or pursued by Employee in violation of the
provisions of this paragraph regarding release of claims.

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                  Employee agrees that the release set forth in this section
shall be and remain in effect in all respects as a complete general release as
to the matters released. This release does not extend to any obligations
incurred under this Agreement.

                  (b) By Company

                  Company agrees that this Agreement represents settlement in
full of all obligations, claims, and disputes between Employee and Company.
Company, on behalf of itself and on behalf of any company, partnership, limited
liability company, joint venture, or any other person or entity with which
Company is affiliated or its officer(s), director(s), partner(s),
shareholder(s), member(s) or controlling person(s), as well as on behalf of any
other party claiming by or through Company, agree(s) to full and complete
settlement, release and discharge of all past, present and future claims,
demands, actions, liabilities, obligations, losses, damages and compensation,
whether known, unknown, suspected or unsuspected, whether based on tort,
contract, equity, statute or any other theory of recovery against Employee,
Employee's past, present and future agents, representatives, spouses, heirs and
successors in interest; provided, however, that the foregoing release shall not
operate to release Company from its obligations, representations and covenants
to comply with its obligations under this Agreement, it being understood that
the same shall survive the execution of this Agreement.

         6. ACKNOWLEDGMENT OF WAIVER OF CLAIMS UNDER ADEA: Employee acknowledges
that she is waiving and releasing any rights she may have under the Age
Discrimination in Employment Act of 1967, as amended ("ADEA") and that this
waiver and release is knowing and voluntary. Employee agrees that this waiver
and release does not apply to any rights or claims that may arise under the ADEA
after the Effective Date of this Agreement. Employee acknowledges that the
consideration given for this waiver and release is in addition to anything of
value to which Employee was already entitled. Employee further acknowledges that
she has been advised by this writing as required by the ADEA that:

                  (a) she has the right to and is advised to consult with an
attorney prior to executing this Agreement;

                  (b) she has twenty-one (21) days within which to consider this
Agreement (although she may choose to execute this Agreement earlier);

                  (c) she has seven (7) days following the execution of this
Agreement to revoke the Agreement after which time, the Company shall pay to
Employee the Consideration set forth above and implement the forgiveness of the
amounts set forth in the Full Consideration; and

                  (d) this Agreement shall not be effective until the revocation
period has expired.

         7. NO FUTURE LAWSUITS: Employee represents that she does not currently
intend to bring any claims on behalf of Employee or on behalf of any other
person or entity against the Company or any other person or entity referred to

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                  Employer represents that it does not currently intend to bring
any claims on behalf of Company against Employee or cooperate with any other
person or entity in bringing a claim against Employee.

reaffirms and agrees to observe and abide by the terms of the Proprietary Rights
Agreement and that said Proprietary Rights Agreement survives this Agreement,
specifically including the provisions therein regarding nondisclosure of the
Company's trade secrets and confidential and proprietary information related to
inventions, and strategic planning, customers, financial projections, revenue
projections, financing, staffing, operation and accounting information related
to the Company's business.

         9. NON-COMPETE PROVISIONS: Per the terms of Section 8 of your
Employment Agreement, you confirm that for a period of twelve months from the
Termination Date that you will not, either directly or indirectly, engage in any
activity in competition with any product or service of the Company (said
competitive activities to be determined and identified at the reasonable
discretion of the Company), or harmful or contrary to the best interest of the
Company, including accepting employment with or serving as a consultant to any
entity that is in competition with the Company. Per Section 8, and for the
purposes of Section 8, those companies deemed to be competitors to StorageTek
are Advanced Digital Information Corporation, ATL/Quantum Corporation, Benchmark
Tape Systems Corporation, EMC Corp., Exabyte, Inc., Front Porch Digital, Inc.,
Hewlett-Packard Company, IBM Corporation, McData Corporation, Managed Storage
International, Inc., Storage Networks, Inc., and Sun Microsystems, Inc. With
respect to aforementioned companies, if you were to seek employment with a
non-storage related entity/division within these companies, then you may notify
StorageTek, in writing, of your desire to become employed by such
entity/division and StorageTek may at its reasonable discretion and
notwithstanding the aforesaid provisions, grant you permission to seek
employment with such entity/division, such permission not to be unreasonably
withheld or delayed.

         10. NON-SOLICITATION: Per the terms of Section 8 of your Employment
Agreement, you confirm that during the two-year period commencing with the
Termination Date, you will not, directly, or indirectly, hire, solicit, or
encourage any then-current Company employees to apply for employment with any
person or entity (a) with which you are (or intend to be) employed, (b) by whom
you or an entity in which you are employed or have a financial interest is
engaged as a consultant, recruiter, independent contractor or otherwise, or (c)
in which you further covenant and agree that you will not provide to any other
person or entity the names of or references on any person who is then employed
by the Company.

         11. RETURNING COMPANY PROPERTY. Employee agrees to deliver to the
Company on or before the Termination Date, and not to keep in her possession,
recreate or deliver to anyone else, any and all devices, records, data, notes,
reports, e-mail messages, proposals, lists, correspondence, specifications,
drawings, blueprints, sketches, materials, equipment, other documents or
property, reproductions of any aforementioned items, or electronically stored or
accessible copies or versions of such items, which were provided to Employee by
the Company, developed or obtained by Employee as a result of her employment
with the Company, or otherwise belonging to the Company, its successors or

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         12. CONFIDENTIALITY: Employee agrees to maintain in complete confidence
the existence of this Agreement, the contents and terms of this Agreement and
the consideration for this Agreement (hereinafter collectively referred to as
"Separation Information"). Except as required by law or in communications with
immediate family members, Employee agrees to disclose Separation Information
only to those attorneys, accountants, tribunals and governmental entities who
have a reasonable need to know of such Separation Information, and to prevent
disclosure of any Separation Information by them or by family members to other
third parties. Employee agrees that there will be no publicity, directly or
indirectly, concerning any Separation Information, unless required by any
reporting laws or regulations or any other state or federal law, statute or

         13. NO COOPERATION WITH OTHERS: Employee agrees that she will not
counsel or assist any attorneys or their clients in the presentation or
prosecution of any disputes, differences, grievances, claims, charges, or
complaints by any third party against the Company and/or any officer, director,
employee, agent, representative, shareholder or attorney of the Company, unless
under a subpoena or other court order to do so. Employee further agrees that she
will not knowingly encourage, advise or assist any Company employee or former
Company employee to prosecute any claim, charge or complaint against any of the

         14. NON-DISPARAGEMENT: The Company and Employee mutually agree that the
terms of the separation of Employee are amicable and mutually acceptable and
each agree with the other that neither shall malign, defame, blame, or otherwise
disparage the other, either publicly or privately regarding the past of future
business or personal affairs of the Company or Employee, or any other officer,
director or employee of the Company.

         15. NO ADMISSION OF LIABILITY: Employee and Company understand and
acknowledge that this Agreement constitutes a compromise and settlement of any
and all potential disputed claims. No action taken by the Company hereto, either
previously or in connection with this Agreement, shall be deemed or construed to
be (a) an admission of the truth or falsity of any potential claims or (b) an
acknowledgment or admission by the Company of any fault or liability whatsoever
to Employee or to any third party.

         16. COSTS: The Parties shall each bear their own costs, expert fees,
attorneys' fees and other fees incurred in connection with this Agreement.

         17. ARBITRATION: The Parties agree that any and all disputes arising
out of the terms of this Agreement, their interpretation, including any
potential claims of discrimination, harassment, retaliation, wrongful
termination, or breach of contract, and any of the matters herein release, shall
be subject to Binding Arbitration in Boulder, County, Colorado before the
American Arbitration Association under its national rules for the resolution of
employment disputes, or by a retired judge to be mutually agreed upon. The
Parties agree that the prevailing party in any arbitration shall be entitled to
injunctive relief in any court of competent jurisdiction to enforce the
Arbitration award. The parties agree that the prevailing party in any
arbitration shall be awarded its reasonable attorney's fees and costs to the
extent provided by law. Employee expressly acknowledges that she is waiving any
right to a jury trial for any and all claims covered by this Agreement.

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         18. NO REPRESENTATIONS: Employee represents that she has had the
opportunity to consult with an attorney, and has carefully read and understands
the scope and effect of the provisions of this Agreement. Employee has not
relied upon any representations or statements made by the Company regarding the
subject matter of this Agreement which are not specifically set forth in this

         19. SEVERABILITY: In the event that any provision or any portion of any
provision hereof becomes or is declared by a court of competent jurisdiction to
be illegal, unenforceable or void, this Agreement shall continue in full force
and effect without said provision or portion of provision, unless the absence of
that provision or portion materially alters the rights and obligations of the
signatories under this Agreement.

         20. ENTIRE AGREEMENT: This Agreement represents the entire agreement
and understanding between the Company and Employee concerning Employee's
employment with and separation from the Company and the events leading thereto
and associated therewith, and supersedes and replaces any and all prior
agreements and understandings concerning Employee's relationship with the
Company, with the exception of the Proprietary Rights Agreement (attached as
Exhibit A and incorporated by reference) and the 1995-A Storage Technology
Corporation Equity Participation Plan.

         21. NO ORAL MODIFICATION: This Agreement may only be amended in writing
signed by Employee and the Company's Chief Executive Officer.

         22. GOVERNING LAW: The laws of the State of Colorado shall govern this

         23. COUNTERPARTS: This Agreement may be executed in counterparts, and
each counterpart shall have the same force and effect as an original and shall
constitute an effective, binding agreement on the part of each of the

         24. VOLUNTARY EXECUTION OF AGREEMENT: This Agreement is executed
voluntarily and without any duress or undue influence on the part or behalf of
the Parties hereto, with the full intent of releasing all claims. The Parties
acknowledge that:

                  (a) They have read this Agreement;

                  (b) They have been represented in the preparation,
negotiation, and execution of this Agreement by legal counsel of their own
choice or that they have voluntarily declined to seek such counsel;

                  (c) They understand the terms and consequences of this
Agreement and of the releases it contains;

                  (d) They are fully aware of the legal and binding effect of
this Agreement.

                  (e) Each signatory has full power and authority (including
corporate power and authority) to execute this Agreement.

                  (f) It is expressly understood and agreed that the acceptance
of the above mentioned promises and covenants is a full accord and satisfaction
of all known or unknown claims, and each Party covenants to the other Party that
no other claims are known or contemplated.

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         IN WITNESS WHEREOF, the Parties have executed this Agreement on the
respective dates set forth below.

                                       STORAGE  TECHNOLOGY CORPORATION

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

                                       Patrick J. Martin
                                       Chairman, President and Chief Executive

                                       Karen N., an individual
                                       KAREN N.

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