Exhibit 10.36

STORAGE TECHNOLOGY CORPORATION

AMENDED AND RESTATED CEO EMPLOYMENT AGREEMENT

MARCH 27, 2003

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AMENDED AND RESTATED CEO EMPLOYMENT AGREEMENT

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This Amended and Restated CEO Employment Agreement (this “Agreement”) by and
between Storage Technology Corporation (together with its successors and
assigns, hereinafter the “Company”), a Delaware corporation, and Patrick J.
Martin (hereinafter, “you” or “your”) is entered into as of March 27, 2003 (the
“Effective Date”) and amends and restates the CEO Employment Agreement dated
June 28, 2000, as amended on February 12, 2003 (the “Original Agreement”). This
Agreement sets forth the terms and conditions of your employment with the
Company. In consideration of your agreement to extend the term of the Original
Agreement 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. During the Term (as defined in Section 2 below), you will be
employed full-time by the Company in the positions of Chairman of the Board of
Directors, President and Chief Executive Officer of the Company, and shall
report directly to the Company’s Board of Directors (the “Board”). You will
perform such duties and have such responsibilities as may be assigned by the
Board from time to time that are normally inherent in such capacities in
corporations of similar size and character. During the Term, you shall devote
substantially all of your working time, attention and energies to the business
of the Company and shall be subject to the Company’s Corporate Policies and
Practices from time to time in effect during the Term. Nothing herein shall
preclude you from (i) serving on the boards of directors of a reasonable number
of other corporations with the concurrence of the Board (which approval shall
not be unreasonably withheld), (ii) serving on the boards of a reasonable number
of trade associations and/or charitable organizations, (iii) engaging in
charitable activities and community affairs, and (iv) managing your personal
investments and affairs, provided that such activities do not conflict or
interfere with the effective discharge of your duties and responsibilities under
this Section 1.

2.     Employment. The term of your employment with the Company commenced on
July 11, 2000 and shall continue through June 30, 2006 (the “Term”). Any
termination of your employment after June 30, 2006 (whether by you or the
Company) shall be deemed to be a retirement hereunder (hereinafter referred to
as “Retirement”) and shall be deemed to qualify as a retirement for purposes of
any Company plan, program, policy, arrangement or other agreement, including,
but not limited to, the 1995 Equity Participation Plan (the “Plan”).
Notwithstanding the expiration of the Term hereunder, the provisions of this
Agreement that apply in the event of your Retirement shall survive the
expiration of such Term.

3.     Base Compensation. Commencing on the Effective Date and thereafter during
the Term, the Company will pay you a base salary at the annualized rate equal to
one million dollars ($1,000,000) (“Base Salary”). Such salary shall be paid
periodically in accordance with the normal payroll practices of the Company in
effect from time to time during the Term, less any withholding taxes. The amount
of your Base Salary may be increased by the Board from time to time during the
Term, but shall not be decreased, and, as increased from time to time, “Base
Salary” shall mean the base salary as so increased. After the Effective Date,
your base salary in 2003 eligible for deferral, less appropriate deductions and
withholdings as may otherwise be required by applicable law, will be credited to
your deferred compensation account in the Company’s Deferred Compensation Plan
which shall be deemed amended to the extent necessary to permit such
arrangement. The portion of such deferred compensation account attributable to
such deferred base salary will be distributed to you in accordance with your
elections as to time and manner of distribution permitted under the Company’s
Deferred Compensation Plan, including the election provided for in Section 12(a)
below.

4.     Incentive Plans.

a)     Annual Incentive Bonuses. You shall be eligible to receive bonuses, under
the terms and conditions of the Management by Objectives Program, as modified
from time to time (“MBO Program”), approved by the Board or the Human Resources
and Compensation Committee of the Board, based upon the achievement of
pre-established financial and other corporate or personal performance goals.
Under the MBO Program for calendar year 2003 and thereafter, you shall be
eligible to receive a bonus equal to 100% of your Base Salary (“Target Bonus”)
at the target level of performance. Your Target Bonus as a percentage of Base
Salary may be increased by the Board from time to time during the Term, but
shall not be decreased and, as increased from time to time, “Target Bonus” shall
mean the Target Bonus as so increased. Additionally, under the MBO Program you
will be eligible to receive a bonus payment equal to 200% of your Base Salary if
certain “stretch” goals are achieved (as that term is defined in the MBO
Program) or a payment of up to 350% of your Base Salary should certain
“ultra-stretch” goals be achieved (as that term is defined in the MBO Program).
Any payments under the MBO Program shall be made in accordance with the
provisions of, and under the conditions contained in, the MBO Program, except as
otherwise provided in this Agreement. Upon your Retirement (if applicable) in
calendar year 2006, your Annual Incentive Bonus will be prorated based upon the
percentage of the year that elapsed from January 1, 2006 until your Retirement
and shall be paid in 2007 when annual incentive awards are paid to other senior
executives (but in no event later than March 31, 2007) based upon your Target
Bonus and the MBO Program calculation for 2006. If you retire on a date later
than December 31, 2006 you shall be entitled to an annual incentive award
payment as if you were employed for the full calendar year 2006 in accordance
with this Section 4(a).

b)     Additional Long-Term Incentive Awards. You shall be eligible to
participate annually in all long-term incentive plans made available to senior
executives, including stock option or other equity-based awards, in accordance
with Company practices applicable to its senior-level executives, at the
discretion of the Board. For calendar year 2006, assuming your Retirement on
July 1, 2006, you shall be entitled to one half of the value of the long term
incentive award that would have been awarded and paid to you as if you had
remained employed for the full calendar year in your current positions. If you
retire on a date later than July 1, 2006 appropriate adjustments will be made in
the proportion of the long-term incentive award for calendar year 2006.

5.     Extension Bonus.

In consideration of your agreement to extend the term of the Original Agreement,
the Company agrees as follows:

a)     Cash Portion. On the Effective Date, the Company will credit the amount
of two million dollars ($2,000,000), less appropriate deductions and
withholdings as may otherwise be required by applicable law, to your deferred
compensation account in the Company’s Deferred Compensation Plan. The portion of
such deferred compensation account attributable to such two million dollars
($2,000,000) will be distributed to you in accordance with your elections as to
time and manner of distribution permitted under the Company’s Deferred
Compensation Plan which shall be deemed amended to the extent necessary to
permit such arrangement, including the election provided for in Section 12(a)
below.

b)     Equity Portion. On the Effective Date, the Company will grant to you two
hundred and fifty thousand shares (250,000) shares of restricted stock to be
granted under the Plan. Such shares will all vest on the earliest of: (i) your
Retirement; (ii) your death or an Involuntary Termination (as defined in Section
9 below); or (iii) immediately prior to a Change of Control (as defined in
Section 9 below). Attached as Exhibit C hereto is the form of Restricted Stock
Agreement to be used with respect to the restricted stock granted pursuant to
this Agreement.

6.    Reimbursement of Business and Other Expenses; Relocation.

a)     Expenses. You are authorized to incur reasonable expenses in carrying out
your duties and responsibilities under this Agreement and the Company shall
promptly reimburse you for all reasonable business expenses incurred in
connection with carrying out the business of the Company, subject to
documentation in accordance with the Company’s policy. The Company shall
reimburse you for all reasonable financial and tax consultant and legal fees and
expenses incurred by you in the review and advice with respect to this Agreement
with the Company. The Company will also directly pay your legal counsel for
assistance which has been provided to the Company in developing the analysis,
data and language to support the development and execution of this Agreement.
You authorize your attorney to assist the Company with these tasks and both the
Company and you waive any conflict of interest with respect to these tasks.

b)     Post-Termination Relocation. Following Involuntary Termination of your
employment with the Company under Section 7(a) below, or your Retirement or your
death, the Company will relocate you (in the case of Involuntary Termination or
Retirement) and your family (in the case of Involuntary Termination, Retirement
or death) to the location of your choice (or that of your family in the case of
your death) in the United States, covering the same expenses provided in Section
8 of the Original Agreement on a tax-grossed-up basis (in a manner similar to
the process outlined in Section 10 below). In addition, in the event that you
(or your family, in the case of your death) suffer a loss (as calculated for
purposes of determining your Federal income tax) on an arms length sale of your
principal residence in Colorado, the Company will reimburse you for the loss.

7.    Termination of Employment; Severance Benefits.

a)     Involuntary Termination. If your employment terminates as a result of an
Involuntary Termination (as defined in Section 9(d) below), you shall be
entitled to receive a severance payment equal to the sum of (i) two times your
Base Salary, plus (ii) two times the Target Bonus; provided, that in the event
of an Involuntary Termination upon or following a Change of Control (as defined
in Section 9(b), below), you shall be entitled to receive a severance payment
equal to the sum of (x) three times your Base Salary, plus (y) three times the
Target Bonus. You shall also be entitled to the following payments: (i) Base
Salary through the Termination Date; (ii) a pro rata Target Bonus for the year
of termination (to the extent such a bonus is payable to other participants in
the MBO Program); (iii) the balance of any incentive awards due for performance
periods which have been completed, but which have not yet been paid; (iv) to the
extent your Termination Date is after year end, but before the determination of
a LEAP (or replacement plan) payout, you shall at the same time as previously
scheduled, receive your full LEAP (or replacement plan) award based upon the
prior year’s results. In addition, you shall receive a prorated LEAP award for
the year of termination (if the LEAP program is in place) or prorated portion of
any similar replacement plan equal to the product of (x) the LEAP or other plan
award at target and (y) a fraction, the numerator of which is the number of days
in the fiscal year in which the Termination Date occurs through the Termination
Date and the denominator of which is 365; (v) stock options or restricted stock
pursuant to Section 8(a); (vi) any expense reimbursements or other unpaid
amounts earned, accrued or owing to you; or (vii) other benefits, if any, in
accordance with applicable plans and programs of the Company. Any severance
payments to which you become entitled pursuant to this Section 7(a) shall be
paid to you in a lump sum within thirty calendar days of your Termination Date
and shall be paid contingent upon your execution and delivery to the Company of
a Settlement and Release Agreement in the form attached hereto as Exhibit A
(provided such release is not revoked by you during the applicable revocation
period thereunder). The Company will execute and deliver to you simultaneously
therewith a Settlement and Release Agreement in the form attached hereto as
Exhibit B. In case of Disability, you shall, in addition, be entitled to any
benefits available under the Company’s employee or executive disability
policies. For purposes of this Section 7(a), any reference to your Base Salary
or Target Bonus shall be understood to refer to the amount thereof disregarding
any reduction that constitutes grounds for Involuntary Termination as
contemplated by Section 9(d). In addition for purposes of this Section 7(a) any
reference to Base Salary and Target Bonus shall be deemed to be the highest Base
Salary in effect or approved at the time of termination with the Target Bonus
calculated from such highest Base Salary.

b)     Voluntary Resignation; Termination For Cause. 1) If you voluntarily
resign from the Company (other than pursuant to an Involuntary Termination or
your Retirement), or if the Company terminates your employment for Cause, then
you shall not be entitled to receive any severance or other benefits other than
(i) Base Salary through your Termination Date; (ii) stock options or restricted
stock pursuant to Section 8(a); (iii) any expense reimbursements or other unpaid
amounts earned, accrued or owing to you; and (iv) other benefits, if any, in
accordance with applicable plans or programs of the Company. Further, you hereby
authorize the Company to offset any amounts owed by you to the Company against
any amounts the Company might otherwise owe to you on the Termination Date. 2)
There will be no termination for Cause without your first having been given
written notice thereof in accordance with Section 7(e), and then having been
given a reasonable opportunity to be heard by the Board.

c)     Death. In the event of your death, your legal representative shall
receive (i) your Base Salary through the end of the month in which death occurs;
(ii) your pro-rata Target Bonus amount for the fiscal year in which death
occurs, at the Target Bonus for the fiscal year then in effect, whether or not
such Bonus would otherwise have been payable; (iii) any incentives, other than
stock options or restricted stock, on a pro-rata basis, payable when scheduled
to be paid; (iv) stock options or restricted stock pursuant to Section 8(a); (v)
any expense reimbursements or other earned, accrued or unpaid amounts owing to
you; and (vi) other benefits, if any, in accordance with applicable plans or
programs of the Company.

d)     Additional Severance Benefits. In the event you are entitled to severance
payments pursuant to Section 7(a), then, in addition to such severance payments,
(i) for a period of twenty-four months after the Termination Date (for a period
of thirty-six months in the event of an Involuntary Termination upon a Change of
Control), the Company shall continue to provide you with (A) long-term
disability insurance benefits as in effect as of the Termination Date, or such
comparable benefits as the Company may determine to be sufficient to satisfy its
obligations to you under this Agreement; and (B) the provision and allowance for
all of the benefits provided in Section 12(b) below or in effect on the
Termination Date (as defined in Section 9(e) below). Notwithstanding the
foregoing, if you become covered under any health, life or disability insurance
plan or are provided other similar benefits provided by a subsequent employer,
then the amount of coverage/benefit required to be provided by the Company
hereunder shall be reduced by the amount of coverage/benefit provided by the
subsequent employer’s plans or programs on a coverage/benefit by
coverage/benefit basis.

e)     Notice of Termination. Except as otherwise provided herein, any
termination of your employment with the Company (other than by reason of your
death) shall be communicated by a notice of termination given by one party to
the other in accordance with Section 15(d) of this Agreement. Except for
Disability, such notice shall indicate the specific termination provision in
this Agreement relied upon, shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination under the provision so
indicated and shall specify the Termination Date (as defined in Section 9(e),
below). No notice of Retirement shall be required in the event you retire on
July 1, 2006 and if you retire thereafter notice of such Retirement shall be
communicated by a notice by one party to the other in accordance with Section 15
(d).

f)     No Mitigation; No Offset. In the event of any termination of employment
under this Section 7 or upon your Retirement, you shall be under no obligation
to seek other employment and, except as otherwise stated explicitly herein,
including, but not limited to Section 7(d), there shall be no offset against
amounts due you under this Agreement on account of any remuneration received
from any subsequent employer.

g)     Nature of Payments. Any amounts due under this Section 7 are in the
nature of severance payments considered to be reasonable by the Company and are
not in the nature of a penalty.

8.    Additional Benefits Upon Retirement, Death, an Involuntary Termination
under Section 7(a) above or a Change of Control.

a)     Restricted Stock, Stock Options and Other Long-Term Incentive Awards. (i)
Upon Retirement or a Change of Control or in the event your employment
terminates for any reason other than a termination pursuant to Section 7(b)
above, then, in addition to such severance as you may otherwise receive, all
unvested stock options granted to you under the Company’s stock option plans (or
under any successor company’s stock option plans) shall vest and become
exercisable in full on the Termination Date or immediately prior to the Change
of Control, as the case may be, and the Company’s right to repurchase any shares
of restricted stock purchased under any of the Company’s stock plans shall
terminate on the Termination Date or immediately prior to the Change of Control,
as the case may be, and all such stock shall become fully vested on such date.
In addition, any stock options granted to you shall thereafter remain
exercisable for their originally scheduled terms, provided, however, that,
except for vesting, the post-termination exercise period in the event of no
Change of Control and as otherwise provided in Section 11(b) below, such options
shall continue to be subject to the other original terms and conditions of such
options, applicable plans and this Agreement, as amended from time to time. In
the event of a Change of Control your post-termination exercise period will be
treated no less favorably than for any other individual whose options remain
exercisable for their originally scheduled terms. (ii) In the event your
employment is terminated pursuant to Section 7(b), you shall be entitled to
exercise your vested options for a period of 180 days (plus any number of days
during which exercise would be restricted for any reason) following your
termination and, except as otherwise provided in the applicable award agreement
or plan, unvested options shall be forfeited and the Company shall retain its
rights to repurchase any shares of restricted stock from you. Any long-term
incentive awards other than restricted stock and stock options shall vest or be
treated on the same basis as provided in this Section 8(a) for restricted stock
and stock options.

b)     Other Benefits. Upon (x) Retirement, (y) your Involuntary Termination
pursuant to Section 7(a) or (z) your death, then, in addition to the above, the
Company shall provide you with: (i) Retiree Medical Benefits to you and your
spouse (and upon your death, to your spouse if she survives you) in an amount,
nature and duration of no less than that which the Separation and Mutual Release
dated July 10, 2000 provided to your predecessor in the positions of Chairman of
the Board, President and Chief Executive Officer of the Company (“Predecessor”)
during his retirement; (ii) an allowance for financial and tax and estate
planning services provided pursuant to Section 12(b) below at the value for the
full year for the year in which your Retirement or other termination of
employment occurs; and (iii) life insurance benefits in an amount, nature and
duration no less than that which the Separation and Mutual Release dated July
10, 2000 provided to your Predecessor during his retirement and thereafter, the
Company agrees to use its reasonable best efforts to work with its insurance
carriers (and others) to permit you, at your expense, to continue such insurance
benefits (based on similar coverage and rate). Upon your Retirement, you will
also be entitled to the payments and benefits provided pursuant to subclauses
(i) through (iv) of Section 7(b) above, provided that in no event shall you be
entitled to duplicate payments or benefits on a payment-by-payment or
benefit-by-benefit basis. 

9.    Certain Defined Terms.

a)     Cause. “Cause” means (i) you are convicted of a felony involving moral
turpitude or involving fraud against the Company, or (ii) you are guilty of
willful gross neglect or willful gross misconduct in carrying out your duties
under this Agreement, resulting, in either case, in material economic harm to
the Company, unless you believed in good faith that your action or non-action
was in or not opposed to the best interests of the Company.

b)     Change of Control. “Change of Control” means the occurrence of any of the
following events:

i)         the acquisition by any “person” (as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), other than
the Company or a person that, on the Effective Date and immediately prior to
such acquisition, directly or indirectly controls, is controlled by, or is under
common control with, the Company, of the “beneficial ownership” (as defined in
Rule 13d-3 under said Act), directly or indirectly, of securities of the Company
representing thirty-five percent (35%) or more of the total voting power
represented by the Company’s then outstanding voting securities;

ii)         the majority of the Board consists of individuals other than
Incumbent Directors, which term means the members of the Board on the Effective
Date; provided that any person becoming a director subsequent to such date whose
election or nomination for election was supported by three-quarters of the
directors who then comprised the Incumbent Directors shall be considered to be
an Incumbent Director;

iii)         merger or consolidation of the Company with any other corporation,
other than a merger or consolidation which would result in the voting securities
of the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity (including the parent corporation of such surviving
entity)) at least fifty-one percent (51%) of the total voting power represented
by the voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation; or

iv)         the approval by the stockholders of the Company of a plan of
complete liquidation of the Company, or the approval by the stockholders of the
Company, and the closing by the Company, of the sale or other disposition by the
Company of all or substantially all the Company’s assets.

c)     Disability. “Disability” means that you have been unable to substantially
perform your duties under this Agreement as the result of your incapacity due to
physical or mental illness for a period of twenty-six consecutive weeks after
its commencement, as determined by a medical doctor selected by the Company and
you. If the parties cannot agree on a medical doctor, each party shall select a
medical doctor and the two doctors shall select a third, who shall be the
approved medical doctor for this purpose.

d)     Involuntary Termination. “Involuntary Termination” means any of the
following: (i) termination of your employment by the Company which is not
effected for Cause; (ii) termination of your employment with the Company by
reason of your Disability; (iii) during the twenty-four month period following a
Change of Control, termination of your employment for any reason other than for
Cause; (iv) termination of employment by you following the occurrence of any of
the following without your prior written consent: (i) the failure of the Company
to obtain the assumption of this Agreement by any successor contemplated in
Section 13(a) below; (ii) your relocation to a facility or a location more than
50 miles from the Company’s principal business offices located in Louisville,
Colorado; (iii) a reduction in your Base Salary or Target Bonus as in effect
immediately prior to such reduction; (iv) the failure to elect or reelect you to
any of the positions described in Section 1 above or the removal of you from
such positions; (v) a change in the reporting structure so that you report to
someone other than the Board; (vi) a significant reduction of your duties,
authority (including reporting lines to you) or responsibilities relative to
your duties, authority and responsibilities as in effect immediately prior to
such reduction (except with respect to sale or other disposition of a division
or subsidiary of the Company); (vii) the taking of any action by the Company,
including eliminating a plan without providing a substitute or reducing your
awards under a plan, the result of which would substantially diminish the
aggregate projected value of your awards under the Company’s bonus and benefit
plans; or (viii) the taking of any action by the Company that could
substantially diminish the aggregate value of the benefits provided to you under
the Company’s medical, health, accident, disability, life insurance, thrift,
retirement and deferred compensation plans. For the purposes of this Agreement,
Retirement does not constitute Involuntary Termination and execution of this
Agreement does not constitute a termination of any kind under the Original
Agreement.

e)     Termination Date. “Termination Date” means any of the following: (i) the
date on which the Company delivers to you a written notice of termination or
such later date, not to exceed ninety (90) days, specified in the notice of
termination; (ii) in the event the Term ends by reason of your death or
Disability, the date of death or determination of Disability; and (iii) in the
event your employment is terminated by you, the date on which you deliver to the
Company a written notice of termination or such later date, not to exceed ninety
(90) days, specified in the notice of termination. Except for Disability, any
notice of termination required hereunder shall specify the provision(s) in this
Agreement claimed to provide a basis for termination. It is the intention of the
parties that you shall retire on July 1, 2006 but if your Retirement occurs
thereafter your Retirement date shall be as designated in a notice pursuant to
Section 7(e) above.

10.     Excise Tax.

a)     In the event that any payment benefit or other entitlement received or to
be received by you in connection with a Change of Control of the Company or the
termination of your employment (whether payable pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with the Company, any
person whose actions result in a Change of Control of the Company or any person
affiliated with the Company or such person (the “Total Payments”, and each a
“Payment”)) would be subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code of 1986, as amended (the “Code”), or any corresponding
provisions of state or local tax laws, or any interest or penalties are incurred
by you with respect to such excise tax (such excise tax, together with any such
interest and penalties, is hereinafter collectively referred to as (the “Excise
Tax”), then you shall be entitled to receive an additional payment (a “Gross-Up
Payment”) in an amount such that after payment by you of all taxes (including,
but not limited to, any income taxes, employment taxes, Excise Taxes and any
interest or penalties imposed with respect to any such taxes) imposed upon the
Gross-Up Payment, you will retain an amount of the Gross-Up Payment equal to the
Excise Tax imposed upon the Payments. Those Payments that are subject to the
Excise Tax shall be referred to herein as the “Parachute Payments”.
Notwithstanding the foregoing provisions of this Section 10, if it shall be
determined that you are entitled to a Gross-Up Payment, but that the portion of
the Payments that would be treated as “parachute payments” under Section 280G of
the Code does not exceed 105% of the greatest amount of Parachute Payments that
could be paid or otherwise provided to you such that the receipt of Parachute
Payments would not give rise to any Excise Tax (the “Safe Harbor Amount”) then
no Gross-Up Payment shall be made to you and the amounts payable under this
Agreement shall be reduced so that the total Parachute Payments are reduced to
the Safe Harbor Amount. The reduction of the amounts payable or otherwise
provided under this Agreement, if applicable, shall be made by first reducing
the Parachute Payments under Section 7(a); unless an alternative method of
reduction is elected by you. For purposes of reducing the total Parachute
Payments to the Safe Harbor Amount, only Parachute Payments payable or otherwise
provided under this Agreement (and no other Payments) shall be reduced. If the
reduction of the amount payable or otherwise to be provided under this Agreement
would not result in a reduction of the total Parachute Payments to the Safe
Harbor Amount, no amounts payable or otherwise to be provided under this
Agreement shall be reduced pursuant to this Section 10. The Company’s obligation
to make Gross-Up Payments under this Section 10 shall not be conditioned upon
your termination of employment. To the extent it is reasonable and proper for
you to do so, you will cooperate with the Company and its tax advisors to
minimize exposure to Excise Tax pursuant to this Section, including agreement to
reasonable allocation of your compensation and reasonable changes in this
Agreement, provided that any such allocation or change does not result in any
loss of value or other adverse consequence to you.

b)     All determinations required to be made under this Section 10, including
whether and when a Gross-Up Payment is required and the amount of such Gross-Up
Payment and the assumptions to be utilized in arriving at such determination,
shall be made by third party independent accountants (the “Accountants”) in
consultation with you and your advisors. The Accountants shall provide detailed
supporting calculations to you within fifteen (15) business days of the receipt
of notice from you that there has been a Payment (or, if later, within fifteen
(15) days of the date it is determined by the Accountants that the Payment is
subject to the Excise Tax). In connection with any such calculations, the
Accountants shall provide you with a written opinion explaining the basis for
their conclusions with respect to the applicability or inapplicability of
Section 4999 of the Code. Any Gross-Up Payment, as determined pursuant to this
Section, shall be paid by the Company to you within five days of the receipt of
the Accountant’s determination. As a result of the uncertainty in the
application of Section 4999 of the Code, it is possible that Gross-Up Payments
may not have been made by the Company that should have been made
(“Underpayment”), consistent with the calculations required to be made
hereunder. In the event that either (A) the Company does not dispute that you
are required to make a payment of Excise Tax or (B) the Company exhausts its
remedies pursuant to this Section 10 and you thereafter are required to make a
payment of any Excise Tax, any such Underpayment shall be promptly paid by the
Company to or for your benefit. If (x) it is established pursuant to (i) a final
determination of a court or (ii) an Internal Revenue Service proceeding from
either of which no appeal can be taken or (y) a written opinion is provided by
independent counsel agreed upon by the parties that the Excise Tax is less than
the amount taken into account under Section 10 of this Agreement, you shall
repay to the Company within thirty (30) days of your receipt of notice of such
final determination or opinion the portion of the Gross-Up Payment attributable
to such reduction plus any interest received by you on the amount of such
repayment (after taxes applicable thereto).

c)     You shall notify the Company in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by the Company of
the Gross-Up Payment. Such notification shall be given as soon as practicable
but no later than ten (10) business days after you are informed in writing of
such claim and shall apprise the Company of the nature of such claim and the
date on which such claim is requested to be paid. You shall not pay such claim
prior to the expiration of the 30-day period following the date on which you
give such notice to the Company (or such shorter period ending on the date that
any payment of taxes with respect to such claim is due). If the Company notifies
you in writing prior to the expiration of such period that it desires to contest
such claim, you shall:

i)         give the Company any information reasonably requested by the Company
relating to such claim,

ii)         take such action in connection with contesting such claim as the
Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim by
an attorney reasonably selected by the Company,

iii)         cooperate with the Company in good faith in order effectively to
contest such claim, and

iv)         permit the Company to participate in any proceedings relating to
such claim;

provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold you harmless, on an after-tax
basis, for any Excise Tax or income tax (including interest and penalties with
respect thereto) imposed as a result of such representation and payment of costs
and expenses. Without limitation on the foregoing provisions of this Section 10,
the Company shall control all proceedings taken in connection with such contest
and, at its sole option, may pursue or forgo any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in respect of
such claim and may, at its sole option, either direct you to pay the tax claimed
and sue for a refund or contest the claim in any permissible manner, and you
agree to prosecute such contest to a determination before any administrative
tribunal, in a court of initial jurisdiction and in one or more appellate
courts, as the Company shall determine; provided, however, that if the Company
directs you to pay such claim and sue for a refund, the Company shall advance
the amount of such payment to you, on an interest-free basis, and shall
indemnify and hold you harmless, on an after-tax basis, from any Excise Tax or
income tax (including interest or penalties with respect thereto) imposed with
respect to such advance or with respect to any imputed income with respect to
such advance; and further provided that any extension of the statute of
limitations relating to payment of taxes for your taxable year with respect to
which such contested amounts claimed to be due is limited solely to such
contested amount. Furthermore, the Company’s control of the contest shall be
limited to issues with respect to which a Gross-Up Payment would be payable
hereunder and you shall be entitled to settle or contest, as the case may be,
any other issue raised by the Internal Revenue Service or any other taxing
authority.

d)     If, after the receipt by you of an amount advanced by the Company
pursuant to Section 10, you become entitled to receive any refund with respect
to such claim, you shall (subject to the Company’s complying with the
requirements of Section 10) promptly pay to the Company the amount of such
refund (together with any interest paid or credited thereon after taxes
applicable thereto). If, after the receipt by you of an amount advanced by the
Company pursuant to Section 10, a determination is made that you shall not be
entitled to any refund with respect to such claim and the Company does not
notify you in writing of its intent to contest such denial of refund prior to
the expiration of 30 days after such determination, then such advance shall be
forgiven and shall not be required to be repaid and the amount of such advance
shall offset, to the extent thereof, the amount of Gross-Up Payment required to
be paid.

e)     Notwithstanding any other provision of this Section 10, the Company may,
in its sole discretion, withhold and pay over to the Internal Revenue Service or
any other applicable taxing authority, for your benefit, all or any portion of
any Gross-Up Payment, and you hereby consent to such withholding; provided, that
such withholding shall in no event place you in a less favorable after-tax
position.

11.     Non-Compete; Non-Solicit.

a)     Each of the parties hereto recognizes that your services are special and
unique and that the level of compensation and the other provisions herein for
compensation and benefits are partly in consideration of and conditioned upon
your agreement not to compete with the Company, and that your covenant not to
compete or solicit as set forth in this Section during and after the Term is
essential to protect the business and good will of the Company. This Section 11
shall supersede any provision of the Plan or any other plan or agreement
covering substantially the same matters.

b)     You agree that during the Term and for a period ending twenty-four months
following either (i) your Retirement or (ii) the Termination Date during which
you shall have received severance due under this Agreement as a result of
Involuntary Termination (the “Covenant Period”), you will not either directly or
indirectly, engage in Competitive Business (as defined below) including, but not
limited to, accepting employment with or serving as a consultant or advisor or
director to any Competitive Business; disclosing or misusing any proprietary or
material confidential information concerning the Company (such information
includes, without limitation, information regarding the Company’s operations,
its products and services, product designs, business plans, strategic plans,
marketing and distribution plans and arrangements, customers, and financial
statements, budgets and forecasts, and employee names, titles, compensation,
skills and performance); or participating in any hostile takeover attempt of the
Company. “Competitive Business” means a business which produces data storage
systems, including disk and tape drives, cartridge libraries or corporate
network backup and recovery software, networking hardware and such new products
and services in such new businesses or markets as the Company shall have prior
to the Termination Date committed to produce or provide. The foregoing
restrictions shall not apply (a) in connection with performance of your duties
hereunder, (b) if you are required to make any disclosure or take any action by
law or by a court, agency, or other governmental order, (c) in making any
disclosure in confidence to a lawyer or other professional advisor for the
purpose of securing professional advice or (d) with respect to any arbitration
or litigation involving this Agreement, including your right to enforce this
Agreement. The restrictions set forth in this Section 11(b) shall not apply to
any document, record or other information, that (i) has previously been
disclosed to the public or is in the public domain other than as a result of
your breach of this Section 11(b), or (ii) is known or generally available
within any trade or industry in which the Company or any of its affiliates is
active. Anything herein to the contrary notwithstanding, you shall not be in
breach of this Section 11(b) by serving as a member of the board of directors of
any company you were serving on, in accordance with Section 1 above, immediately
prior to the Termination Date. You agree that in the event after the Covenant
Period you engage in any activities which would constitute a material violation
of this Section 11(b) the time period to exercise any outstanding options of the
Company will be reduced to ninety (90) days, provided, that you shall continue
to have the right to exercise such options until (i) the Board makes a good
faith determination based on reliable evidence that you have engaged in an
activity or activities constituting a material violation of this Section 11(b)
and provides you with written notice to such effect and 15 days after receipt of
such notice to cure such violation; and (ii) if the Board determines that you
have failed to cure such violation and you chose to contest the Board’s
determination, there is a determination made in accordance with Section 15(h)
below that you have materially violated this Section 11(b). For the avoidance of
doubt, following the completion of the steps described in the preceding
sentence, you shall have 90 days from the date that an arbitrator makes a final
determination that you have materially violated the provisions of this Section
11(b) to exercise any outstanding options. This Section 11(b) replaces in its
entirety paragraph 11.5(f) of the Plan, as amended from time to time (including
any successor to such paragraph).

c)     You agree that during the Covenant Period, you will not, other than in
the performance of your duties hereunder, either directly or indirectly: (i)
induce or attempt to influence any then-current employee of the Company to leave
his/her employ with the Company; or (ii) solicit or encourage then-current
employees of the Company to apply for employment with any person or entity with
which you are employed or with which you intend to become employed, or in which
you have or intend to have a financial interest, as a consultant, recruiter,
independent contractor or otherwise, or in which you have a substantial
financial or equity interest. For purposes of this Section, the term “Company”
shall mean and include the Company, any subsidiary or affiliate of the Company,
any successor to the business of the Company (by merger, consolidation, sale of
assets or stock or otherwise) and any other corporation or entity for which you
may serve as a director, officer or employee at the request of the Company or
any successor of the Company.

d)     You agree that the Company would suffer an irreparable injury if you were
to breach the covenants contained in Sections 11(b) or 11(c) and that the
Company would by reason of such breach or threatened breach be entitled to
injunctive relief in a court of appropriate jurisdiction.

e)     If any of the restrictions contained in this Section 11 shall be deemed
to be unenforceable by reason of the extent, duration or geographical scope or
other provisions thereof, then the parties hereto contemplate that the court
shall reduce such extent, duration, geographical scope or other provision hereof
and enforce this Section 11 in its reduced form for all purposes in the manner
contemplated hereby.

12.     Employee Benefit Programs.

a)     You shall be eligible to participate in the employee and executive
benefit programs maintained by the Company, including (without limitation) any
qualified or non-qualified retirement plans or programs, savings and
profit-sharing plans, deferred compensation plans, life, short-term and
long-term disability, medical, accident and other insurance programs, paid
vacations in accordance with the policy for executive officers as may be in
effect from time to time, and similar plans or programs, subject in each case to
the generally applicable terms and conditions of any such plan or program and to
the sole determination of the Board, or any committee of the Board, or other
committee administering such plan or program. In particular, you may participate
in the Company’s Profit Sharing and Thrift Plan (the Company’s 401 (k) Plan) and
the Company’s Deferred Compensation Plan. The Company shall allow you to elect
to defer receipt of up to one hundred percent (100%) of your base salary
(including any portion of your base salary for 2003 eligible for deferral) and
of up to one hundred percent (100%) of any bonus amounts (including, but not
limited to, your Annual Incentive Bonus earned for 2003) provided to you by the
Company into the Company’s Deferred Compensation Plan which shall be deemed
amended to the extent necessary to permit such arrangement. You will have the
opportunity within thirty (30) days of the signing of this Agreement to complete
a distribution election form for the amounts credited to your deferred
compensation account pursuant to Sections 2 and 5(a) above. The time for
distribution so elected shall be no earlier than the earlier of one (1) year
from the Effective Date or the termination of your employment with the Company.
The Company will allow you to choose under the Company’s Deferred Compensation
Plan to receive your distribution in equal annual installments over a period of
up to ten (10) years, with such installments to commence on the first
anniversary of any termination of your employment with the Company, including
your Retirement. Unless prohibited by law or regulation, at any time during your
employment, you may elect to change the manner of any distribution that you have
selected to commence after your Retirement or termination (as to lump sum,
installments or number of installments), but such change of election will not
become effective unless made thirteen (13) months prior to your Retirement or
termination as the case may be. Without your express prior written consent, the
Company agrees not to terminate your participation in the Company’s Deferred
Compensation Plan or your ability to defer salary or bonuses under the Company’s
Deferred Compensation Plan. The Company also agrees not to offset amounts
credited to your account in the Company’s Deferred Compensation Plan or amounts
otherwise payable to you pursuant to the Company’s Deferred Compensation Plan
for any reason, including to satisfy any indebtedness you may have to the
Company or any of its affiliates. If you desire, the Company will work with you,
only if there is no additional cost to the Company (including, but not limited
to, taking into account tax costs or tax benefits to the Company), to take steps
to transfer your balance in any existing deferred compensation plans you have
previously established with the Company into the Company’s Deferred Compensation
Plan. The Company agrees to defend, indemnify and hold you harmless with respect
to any loss you may incur as a result of any tax liability (including interest
and penalties) which you incur as a result of your past elections to defer
salary or bonuses into any Company deferred compensation plans or arrangements
in 2002 and 2003 to the extent you incur any tax liability (including interest
and penalties) in excess of any amounts which you would have incurred if you had
participated in the Company’s Deferred Compensation Plan. The process for
handling any such excess tax liability (including interest and penalties) under
this paragraph will be the same as that for addressing an excise tax liability
set forth in Section 10(c).

b)     During the Term and thereafter pursuant to Section 7(d) above the Company
shall provide you with (i) life insurance coverage in an amount equal to five
million dollars ($5,000,000) and (ii) a medical benefits program with a
supplemental payment coverage of fifteen thousand dollars ($15,000) per year,
which benefits will be provided to you in addition to the programs maintained
for other employees; In addition, during the Term and thereafter pursuant to
Section 7(d) above, the Company shall provide you, with no tax liability to you,
with (i) an annual reimbursement for financial and tax and estate planning
expenses incurred by you in an amount not to exceed 2.5% of your Base Salary;
(ii) reasonable and customary car allowance for an executive of your position;
(iii) membership in a country club of your choosing with the Company’s approval;
and (iv) the various executive officer perquisites to the extent the Company
continues to offer them from time to time, including first class air travel for
business purposes and a Company-paid annual physical.

c)     The Company agrees to take any steps necessary so that any life insurance
required to be provided to you by the Company may be owned by you, any trust,
estate, or other entity designated by you, and that any trust, estate or other
entity designated by you may be the beneficiary of any such life insurance,
provided such steps are possible to implement without additional cost to the
Company (including, but not limited to, taking into account tax liability or tax
benefits to the Company).

13.     Successors.

a)     Company’s Successors. Any successor to the Company (whether direct or
indirect and whether by purchase, lease, merger, consolidation, liquidation or
otherwise) to all or substantially all of the Company’s business and assets
shall assume the obligations under this Agreement and agree expressly to perform
the obligations under this Agreement in the same manner and to the same extent
as the Company would be required to perform such obligations in the absence of a
succession. For all purposes under this Agreement, the term “Company” shall
include any successor to the Company’s business and assets which executes and
delivers the assumption agreement described in this Section or which becomes
bound by the terms of this Agreement by operation of law.

b)     Employee’s Successors. The terms of this Agreement and all your rights
hereunder shall inure to the benefit of, and be enforceable by, your personal or
legal representatives, executors, administrators, successors, heirs, devisees
and legatees.

14.     Indemnification; Liability Insurance.

a)     In addition to any other contractual rights to indemnification, the
Company agrees that if you are made a party, or are threatened to be made a
party, to any action, suit or proceeding, whether civil, criminal,
administrative or investigative (a “Proceeding”), by reason of the fact that you
are or were a director, officer or employee of the Company or are or were
serving at the request of the Company as a director, officer, member, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, whether or
not the basis of such Proceeding is your alleged action in an official capacity
while serving as a director, officer, member, employee or agent, you shall be
indemnified and held harmless by the Company to the fullest extent legally
permitted or authorized by the Company’s certificate of incorporation or bylaws
or resolutions of the Company’s Board of Directors or, if greater, by the laws
of the State of Delaware, against all cost, expense, liability and loss
(including, without limitation, attorney’s fees, judgments, fines, ERISA excise
taxes or other liabilities or penalties and amounts paid or to be paid in
settlement) reasonably incurred or suffered by you in connection therewith, and
such indemnification shall continue as to you even if you have ceased to be a
director, member, employee or agent of the Company or other entity and shall
inure to the benefit of your heirs, executors and administrators. To the extent
not prohibited under applicable law, including the Sarbanes-Oxley Act of 2002,
the Company shall advance to you all reasonable costs and expenses incurred by
you in connection with a Proceeding within 20 calendar days after receipt by the
Company of a written request for such advance. Such request shall include an
undertaking by you to repay the amount of such advance if it shall ultimately be
determined that you are not entitled to be indemnified against such costs and
expenses.

b)     Neither the failure of the Company (including its board of directors,
independent legal counsel or stockholders) to have made a determination prior to
the commencement of any proceeding concerning payment of amounts claimed by you
under Section 14(a) above that indemnification of you is proper because you have
met the applicable standard of conduct, nor a determination by the Company
(including its board of directors, independent legal counsel or stockholders)
that you have not met such applicable standard of conduct, shall create a
presumption that you have not met the applicable standard of conduct. Nothing in
these subsections (a) and (b) of this Section 14 shall be construed as reducing
or waiving any right to indemnification, or advancement of expenses, you would
otherwise have under the Company’s certificate of incorporation or bylaws or
under applicable law or any other agreement.

c)     The Company agrees to continue and maintain a directors’ and officers’
liability insurance policy covering you at least to the extent the Company
provides such coverage for its other executive officers.

15.     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 will
have executed the Company’s standard form of confidential inventions and trade
secrets agreement. You hereby reaffirm that during the Term and thereafter you
will comply with all provisions of such agreement and agree that you will enter
into such modifications or amendments thereof as the Company may reasonably
request from time to time.

c)     Stock Ownership Guidelines. During the Term, you agree to comply with the
corporate officer stock ownership guidelines approved by the Board or any
committee of the Board, as they may be amended from time to time. You agree to
consult with the Board on a strategy or plan which will allow you the
opportunity to sell a portion of your equity prior to your Retirement.

d)     Notice. Any notice required to be given under 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 the
parties at the addresses set forth below, 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

Company: Storage Technology Corporation
One StorageTek Drive
Louisville, Colorado 80028
Attention: General Counsel
Executive:
Patrick J. Martin
Storage Technology Corporation
One StorageTek Drive
Louisville, Colorado 80028

with a copy to his personal address most recently notified to the Company.

e)     Amendment or Modification. This Agreement may not be amended or modified
and no provision shall be waived unless agreed to in writing and signed by you
and the Company. No waiver by either party of any breach of this Agreement shall
be deemed a waiver of any other provision or condition at another time.

f)     Assignment. Except as otherwise provided herein, the rights of any person
to payments or benefits under this Agreement shall not be made subject to option
or assignment, either by voluntary or involuntary assignment or by operation of
law, including (without limitation) bankruptcy, garnishment, attachment or other
creditor’s process, and any action in violation of this Section shall be void.

g)     Governing Law. This Agreement is entered into in accordance with, and
shall be interpreted pursuant to the provisions of, the laws of the State of
Colorado.

h)     Arbitration. Any controversy or claim arising between you and the Company
including, without limitation, any claims, demands or causes of action alleging
wrongful discharge; unlawful discrimination based on sex, age, race, national
origin, disability, religion or other unlawful basis; breach of contract; or any
claims seeking damages under any federal, state or local law, rule, regulation
or common law theory; but excluding any claims by you for worker’s compensation
or unemployment compensation, and excluding any claims by the Company for
injunctive relief (for instance, for breach of confidentiality, breach of a
covenant not to compete, violation of trade secrets, or unfair competition),
shall be resolved by final and binding arbitration. By signing below, you
voluntarily waive any right to submit claims to a judge or jury in either state
or federal court. The arbitration shall be held in Denver, Colorado, or
elsewhere by mutual agreement. The selection of the arbitrator and procedure
shall be governed by the Employment Arbitration Rules of the American
Arbitration Association, as amended. The arbitrator shall be someone with a
minimum seven years of employment law background and from the AAA Commercial
Arbitration Panel or, if both parties agree, the Judicial Arbiters Group. The
arbitrator shall apply the applicable substantive law to any claim; for any
state law claim or damages issues, the law of Colorado shall govern, including
but not limited to the provisions of C.R.S. Sections 13-21-102(5). Judgment upon
an award rendered by an arbitration may be entered by any court having
jurisdiction. The Company will pay the cost normally associated with the
arbitration, including the arbitrator’s fee and any fee for a hearing facility.
Following resolution of all claims between the parties in an arbitration
proceeding, if the arbitrator so determines, the Company shall reimburse you for
all reasonable legal fees and expenses that you incurred in connection with a
successful claim to enforce your rights under this Agreement.

i)     Severability. If any provision of this Agreement shall be held to be
invalid, illegal or unenforceable, such invalidity, illegality 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.

j)     Entire Agreement. This Agreement amends and restates the Original
Agreement and, except to the extent otherwise provided herein, this Agreement
embodies the entire agreement between the parties relating to the subject matter
hereof, and supersedes all previous agreements or understandings, whether oral
or written, regarding the subject matter hereof. Anything herein to the contrary
notwithstanding, but subject to the modifications herein provided, this
Agreement does not supercede any equity award agreements or any other agreements
relating to compensation or benefits that would have remained in effect absent
the amendment and restatement of the Original Agreement. In the event of any
inconsistency between any provision of this Agreement and any provision of any
plan (including, but not limited to, the Company’s Deferred Compensation Plan),
employee handbook, personnel manual, program, policy, arrangement or agreement
(including any equity, restricted stock or LEAP award agreements) of the Company
or any of its Affiliates (“Company Arrangement”), including, but not limited to,
any provision relating to the definitions of Cause, Change of Control,
Disability, Involuntary Termination or Retirement (or any definitions of similar
effect), any provision regarding non-competition, non-solicitation of employees
or engagement in other activities adverse to the interests of the Company or any
affiliate or any provision regarding vesting of equity and the post-termination
exercise period for stock options, in which the provision of any such Company
Arrangement is less favorable to you, the provisions of this Agreement shall
control. In all events, any references in any agreement to sections of the
Original Agreement shall be deemed to be references to corresponding sections of
this Agreement (whether or not such sections correspond in their numbering and
taking into account that in some cases clarifying changes have been made in this
Agreement in the wording of such sections in the Original Agreement. In
addition, in connection with any escrow agreement for restricted shares granted
to you, the Company agrees that to the extent any restricted shares have vested
pursuant to any equity award agreement, the applicable plan or this Agreement,
the Company agrees to notify the appropriate escrow agent, if any, that the
Company shall not be repurchasing the shares and shall promptly direct the
escrow agent to promptly deliver the vested shares to you free of any
restrictive legend. The parties expressly agree that they waive and release any
claims which they may have or which may exist against the other party as to any
duties or obligations or the failure to comply in any manner with the provisions
of Section 13(a) of the Original Agreement.

k)     Knowledge and Representations. (1) By signing below, you acknowledge that
the terms of this Agreement have been fully explained to you, that you
understand the nature and extent of the rights and obligations provided under
this Agreement, and the you have been encouraged to and have had an opportunity
to consult legal counsel prior to signing this Agreement. (2) The Company
represents and warrants that (i) it is fully authorized by action of its Board
(and of any other body whose action is required) to enter into this Agreement
and to perform its obligations under it; (ii) the execution, delivery and
performance of this Agreement by it does not violate any applicable law,
regulation, order, judgment or decree or any agreement, plan or corporate
governance document to which it is a party or by which it is bound; and (iii)
upon the execution and delivery of this Agreement by the parties, this Agreement
shall be a valid and binding obligation of the Company, enforceable against it
in accordance with its terms, except to the extent that enforceability may be
limited by applicable bankruptcy, insolvency or similar laws affecting the
enforcement of creditors’ rights generally.

l)     Survivability. Except as otherwise expressly provided in this Agreement,
upon the expiration of the Term, the respective rights and obligations of the
parties shall survive such expiration to the extent necessary to carry out the
intentions of the parties as embodied in the rights and obligations of the
parties under this Agreement. This Agreement shall continue in effect until
there are no further rights or obligations of the parties outstanding hereunder
and shall not be terminated by either party without the express prior written
consent of both parties.

m)     Counterparts. This Agreement may be executed in two or more counterparts.

IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case
of the Company by its duly authorized officer or representative, as of the day
and year first above written.

STORAGE TECHNOLOGY CORPORATION

By: _____________________________
Robert E. Lee
Chairman, Human Resources and Compensation
Committee of the Board of Directors

Patrick J. Martin

________________________________

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EXHIBIT A

SETTLEMENT AND RELEASE

1.     In consideration of payment of severance and other benefits pursuant to
Section 7(a) of the Amended and Restated Employment Agreement between Storage
Technology Company (together with its successors and assigns, the “Company”) and
Patrick J. Martin (the “Employee”) dated March ___, 2003 (the “Employment
Agreement”) in the case of an Involuntary Termination as such term is defined
under the Employment Agreement and for other good and valuable consideration,
Employee, on behalf of himself and his dependents, heirs, administrators,
executors, successors and assigns, hereby irrevocably and unconditionally
releases and discharges the Company, its past and present subsidiaries,
divisions, officers, directors, agents, employees, successors, and assigns
(separately and collectively, “releasees”) jointly and individually, from any
and all claims, known or unknown, which he, his dependents, heirs,
administrators, executors, successors or assigns have or may have against
releasees arising out of or related to his employment with the Company or the
termination thereof (the “Released Claims”), including, but not limited to, any
claims of discrimination under the Age Discrimination in Employment Act
(“ADEA”), the Rehabilitation Act, the Family Medical Leave Act, the Americans
with Disabilities Act, Title VII of the Civil Rights Act of 1964, the Civil
Rights Act of 1991 or any federal or state civil rights act, claims for wrongful
discharge, as well as any claim for attorneys’ fees costs or expenses under any
of these or any other applicable statute, ordinance, regulation or law; breach
of contract, or for damages under any other federal, state or local law, rule or
regulation, or common law under any theory; provided, however, that this release
does not affect (1) any claims for benefits, compensation or entitlements which
have vested or shall vest on or before the effective date of this Settlement and
Release (“Release”) under any plans, policies, programs or arrangements of, or
other agreements, with the Company or to which the Executive is entitled
pursuant to the Employment Agreement; (2) any claim for workers’ compensation
benefits under state law; (3) any claims which may arise after the execution of
this Release; (4) the Employee’s eligibility for indemnification in accordance
with applicable law or the certificate of incorporation or bylaws of the Company
or any affiliate or any claim under any applicable insurance policy with respect
to any liability the Employee incurred as a director, officer or employee of the
Company or any affiliate; and (5) any right the Employee may have to obtain
contribution as permitted by law in the event of entry of judgment against the
Executive as a result of any act or failure to act for which the Employee and
the Company are jointly liable. This Release specifically excepts any claim
Employee may wish to make for unemployment compensation and the Company agrees
not to contest any claim made by Employee for unemployment compensation. This
Release with respect to Released Claims is for any relief, no matter how
denominated, including, but not limited to, back pay, front pay, compensatory
damages, punitive damages, or damages for pain and suffering. Employee further
agrees that he will not file or permit to be filed on his behalf any suit or
action with respect to a Released Claim, will not permit himself to be a member
of any class seeking relief against the releasees with respect to a Released
Claim and will not counsel or assist in the prosecution of claims against the
releasees with respect to a Released Claim, whether those claims are on behalf
of himself or others, unless he is under a court order to do so; provided that
nothing in this Release shall preclude the Employee from filing a charge of
discrimination or participating in any investigation or proceeding conducted by
the Equal Employment Opportunity Commission or a state civil rights agency.

2.     Employee agrees that by signing this Release, he is giving up the right
to sue for age discrimination, and that under this Release Employee shall
receive consideration to which he is not otherwise entitled, and would not
receive but for his release of rights under the ADEA. Employee has up to
twenty-one (21) days after delivery of this Release to consider whether to sign
this Release. Employee agrees that, after he has signed and delivered this
Release to the Company, this Release will not be effective or enforceable until
the end of a seven (7) day revocation period beginning the day after the
Employee signs this Release, and that Employee will not receive the severance
payment due under the Employment Agreement until this seven-day period has
expired. During this seven-day period, Employee may revoke this Release, without
reason and in his sole judgment, but he may do so only by delivering a written
statement of revocation to the Company to the attention of General Counsel. If
the Company does not receive a written statement of revocation from Employee by
the end of the revocation period, then this Release will become legally
enforceable and Employee may not thereafter revoke this Release.

3.     Employee agrees that this Release shall be governed by Federal law and
the internal laws of the State of Colorado, irrespective of the choice of law
rules of any state.

ACKNOWLEDGMENT:

Employee’s signature below acknowledges that he has read this document fully,
that he understands and agrees to its contents, that he understands that it is a
legally binding document, and that he has been advised to consult a lawyer of
his choosing before signing this Release, and has had the opportunity to do so.

——————————————
Date ——————————————
EMPLOYEE

This Release presented to Employee on ___________________________

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

EXHIBIT B

SETTLEMENT AND RELEASE

1.     In exchange for good and valuable consideration, Storage Technology
Corporation (“Company”) for itself, its past and present subsidiaries,
divisions, officers, directors, agents, employees, successors, and assigns
(separately and collectively, “Affiliates”) hereby irrevocably and
unconditionally releases and discharges Patrick J. Martin (the “Employee”) and
his dependents, heirs, administrators, executors, successors and assigns from
any and all claims, known or unknown, which the Company or its Affiliates have
or may have against him, whether denominated claims or demands, arising out of
or relating to his employment with the Company or the termination thereof
(“Released Claims”), including but not limited to, any claims of breach of
contract, or for damages under any federal, state or local law, rule or
regulation, or common law under any theory; provided, however, that this release
does not affect (1) any claims which may arise after the execution of this
Settlement and Release Agreement (the “Release”) or (2) any right the Company
may have to obtain contribution as permitted by law in the event of entry of
judgment against the Company as a result of any act or failure to act for which
the Employee and the Company are jointly liable. Anything herein to the contrary
notwithstanding, this Release shall not extend to any claim by the Company with
respect to any act by the Employee in his official capacity as an officer or
director of the Company if the release of such claim by the Company is expressly
prohibited by Delaware law.

2.     This Release shall be governed by Federal law and internal laws of the
State of Colorado, irrespective of the choice of law rules of any state.

——————————————
Date

Accepted:

—————————————— ——————————————
STORAGE TECHNOLOGY CORPORATION

BY:
——————————————
Name:
Title:

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

EXHIBIT C Storage Technology Corporation
One StorageTek Drive, MS 4302
Louisville, Colorado 80028
(303) 673-6260

StorageTek

RESTRICTED STOCK PURCHASE AGREEMENT

        This Restricted Stock Purchase Agreement (“Agreement”) sets forth the
agreement between Storage Technology Corporation, a Delaware corporation, and
its subsidiaries (collectively, together with their respective successors and
assigns, the “Company”) and Patrick J. Martin (the “Employee”), made as of March
27, 2003, pursuant to the provisions of the Company’s 1995 Equity Participation
Plan, as amended May 2000 (the “1995 Plan”).

      1.      PURCHASE AND SALE OF SHARES

        The Employee agrees to purchase from the Company, and the Company agrees
to sell to the Employee pursuant to the terms and conditions of this Agreement,
250,000 shares (the “Shares”) of the Company’s common stock (“Common Stock”),
par value $0.10 per share, at a price of $.10 per Share. The total purchase
price for the Shares is equal to the number of Shares multiplied by $.10 (the
“Purchase Price”). The employee further agrees to pay the Purchase Price and
agrees to deliver to the Company a personal check for the full Purchase Price by
no later than April 2, 2003.

      2.      VESTING DATES AND OTHER RESTRICTIONS

        The Employee’s right to retain the Shares is subject to certain vesting
and other restrictions, as set forth below.

    A.        Vesting Schedule. All of the Shares will vest, and all vesting
restrictions with respect to all of the Shares will lapse and terminate and the
Shares will no longer be subject to forfeiture and repurchase by the Company, on
the earliest of the following dates; provided, that during the period commencing
on the date of this Agreement up to and including the date immediately prior to
the vesting date, the Employee remains continuously employed by the Company:

(i)     the date of Employee’s Retirement as defined in Section 2 of the Amended
and Restated CEO Employment Agreement effective March 27, 2003 (the “Amended and
Restated CEO Employment Agreement”);

(ii)     the date of the Employee’s death or the effective date of Involuntary
Termination as defined in Section 9(d) of the Amended and Restated CEO
Employment Agreement; or

(iii)     immediately prior to the occurrence of a Change of Control (as defined
in Section 9(b) of the Amended and Restated CEO Employment Agreement.

    B.        Other Restrictions.

    (i)        Non-Transferability of Shares. The Employee may not transfer,
sell, assign, pledge, hypothecate or otherwise dispose of any Shares in which
the Employee’s interest has not vested. As used in this Agreement, the term
“transfer” includes, without limitation, any sale, encumbrance, gift or other
disposition, but excludes any conversion, as provided in subparagraph (iii)
below. If the Employee attempts to transfer any unvested Shares or any interest
in unvested Shares, or if the Employee’ s employment by the Company is
terminated pursuant to Section 7(b) of the Amended and Restated CEO Employment
Agreement, then the certificate or certificates evidencing any unvested Shares
shall be immediately surrendered to the Company for cancellation and neither the
Employee nor any other person shall any longer possess any interest in, or any
stockholder rights with respect to any such Shares. Upon the surrender and
cancellation of stock certificates pursuant to this paragraph, the Company will
pay the Employee, in cash, an amount equal to the Purchase Price paid by the
Employee for the canceled Shares. All stock certificates representing the Shares
will include a restrictive legend, as specified in subparagraph (ii) below.

    (ii)        Restrictive Legend. Until such time that the Employee’s interest
in the Shares has vested, each stock certificate representing the Shares will
include the following restrictive legend:

  “The sale or other transfer (whether voluntary, involuntary or by operation of
law) of the shares of stock represented by this certificate is subject to the
restrictions on transfer set forth in the Restricted Stock Purchase Agreement
dated March 27, 2003, between Storage Technology Corporation and the holder. A
copy of the Restricted Stock Purchase Agreement may be obtained from the
Secretary of the Corporation.”

        The Company agrees to remove the restrictive legend from stock
certificates representing vested Shares.

    (iii)        Conversion of Shares upon Merger Etc. In the event the
Company’s Common Stock is converted into cash or other shares or securities of
the Company or any other corporation or entity as a result of a merger,
consolidation, reorganization, liquidation or other transaction, any unvested
Shares held by the Employee at the time of any such transaction shall be
converted into cash or other shares or securities of the Company or such other
corporation. Any such assets, to the extent not vested as a result of such
transaction as provided in paragraph 2.A. above, will be held in escrow by the
Company or its successor in accordance with the same terms and conditions
applicable to the Shares prior to any such transaction and will be distributed
to the Employee when and if the Employee’s interest therein vests in accordance
with this Agreement.

    (iv)        Compliance with Securities Laws. Under no circumstances will any
Shares or other assets be issued or delivered to the Employee pursuant to the
provisions of this Agreement unless and until, in the opinion of counsel for the
Company or its successors, there shall have been compliance with all applicable
requirements of the federal and state securities laws, listing requirements of
any securities exchange on which stock of the same class as the Shares is then
listed, and all other requirements of law or of any regulatory bodies having
jurisdiction over the issuance and delivery of the Shares or other assets.

    (v)        Tax Obligation. No Shares will be released from escrow unless the
Employee has reimbursed the Company for the full amount of the Tax Obligation in
accordance with the Authorization for Tax Reimbursement attached to this
Agreement.

      3.      ESCROW OF SHARES

    A.        Establishment of Escrow Account. The Company shall establish an
escrow account for the Employee and maintain on deposit in such account all
stock certificates representing the Shares and other assets in accordance with
the requirements of this paragraph 3. Upon the Employee’s request, the Company
agrees to provide the Employee with information as to the number of stock
certificates held in the escrow account, the number of Shares represented by
each certificate, and a description of any other assets held in the escrow
account.

    B.        Endorsements/Deposit. Upon the Company’s request, the Employee
agrees to endorse in blank and deposit in escrow any stock certificate or
certificates representing unvested Shares purchased pursuant to this Agreement,
any new, additional or different shares of stock issued to the Employee with
respect to the Shares held in escrow, and any other assets received by the
Employee upon any conversion of unvested Shares.

    C.        Distributions. When and if the interest of the Employee vests with
respect to all or any part of the Shares held in the escrow account and upon
full satisfaction of the Employee’s tax obligations with respect to such Shares,
the escrow agent shall, at the request of the Company, deliver to the Employee a
stock certificate representing the vested Shares, together with any other assets
held in the escrow account issued with respect to such Shares. The Employee
agrees to execute whatever documents and take whatever additional action the
Company may reasonably request to enable it to accomplish the foregoing
distributions.

      4.      WAIVER

        Any provision contained in this Agreement may be waived, either
generally or in any particular instance, by the Compensation Committee or the
Board of Directors of the Company. The Compensation Committee, as administrator
of the 1995 Plan, may in its sole discretion waive, in whole or in part, any
loss or forfeiture of any unvested Shares or other assets which would otherwise
occur under the provisions of this Agreement and the Employee’s interest in the
Shares or other assets to which the waiver applies will immediately vest.

      5.      MISCELLANEOUS

    A.        This Agreement is subject to the terms and conditions of the
Amended and Restated CEO Employment Agreement; provided that in the event of any
conflict between the provisions of this Agreement and the Amended and Restated
CEO Employment Agreement, the provisions most favorable to the Employee shall
govern.

    B.        The Employee shall have all the rights of a stockholder with
respect to all of the Shares, whether or not the Employee’s interest in the
Shares has fully vested, including the right to vote all of the Shares and
receive cash dividends or other distributions paid or made with respect to the
Shares. The Shares shall be proportionately adjusted for any increase or
decrease in the number of issued and outstanding shares of Common Stock as a
result of a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock or by reason of a merger, consolidation or
other change in the capital structure of the Company; provided, that any such
additional shares will be subject to the vesting dates, as set forth in
paragraph 2.A. applicable to the Shares and the escrow requirements of paragraph
3 as well as the other terms in this Agreement.

    C.        This Agreement and the purchase and sale of the Shares evidenced
hereby are made and effected pursuant to the provisions of the 1995 Plan and are
in all respects limited by and subject to the provisions of the 1995 Plan;
provided that in the event of any conflict between the provisions of this
Agreement and the 1995 Plan, the provisions most favorable to the Employee shall
govern.

    D.        Neither the action of the Company in establishing the 1995 Plan,
nor any action taken thereunder, nor any provision of the 1995 Plan or this
Agreement shall be construed so as to grant the Employee any right to remain in
the employ of the Company or its subsidiaries for any period of specific
duration.

    E.        This Agreement shall be construed and enforced in accordance with,
and shall be governed by, the laws of the State of Colorado without reference to
the principles of conflicts of law.

Employee:

——————————————
Patrick J. Martin STORAGE TECHNOLOGY CORPORATION

BY:
——————————————
Roger C. Gaston,
Corporate Vice President, Human Resources

Patrick J. Martin
1401 White Hawk Ranch Drive
Boulder, CO 80303

AUTHORIZATION FOR TAX REIMBURSEMENT
TO
STORAGE TECHNOLOGY CORPORATION
FOR RESTRICTED STOCK

Tax Obligation. I understand that the obligation of Storage Technology
Corporation (“StorageTek”) to terminate restrictions on the stock (Restricted
Stock) is subject to my satisfaction of all applicable federal, state and local
income and other tax withholding requirements. I understand StorageTek is
required to collect federal and state taxes which I am obligated to pay with
respect to:

  (1) any dividends paid on stock (“Restricted Stock”) which I purchased
pursuant to one or more Restricted Stock Purchase Agreements entered into with
StorageTek that is held in escrow; and

  (2) the amount equal to the difference between the purchase price paid for the
Restricted Stock and the fair market value at the time my interest in the
Restricted Stock vests.

I hereby acknowledge my obligation to pay to StorageTek any amounts due for
federal state and local personal income tax (and other tax) withholding
requirements upon vesting of the Restricted Stock or upon the payment of any
dividends thereon (“Tax Obligation”).

Payment of Tax Obligation. I hereby further acknowledge that the Company’s
obligations to satisfy the payment of my Tax Obligation may be collected as
follows:

  (1) with respect to any dividends, StorageTek may, at my election, collect my
Tax Obligation by means of: (a) payroll deduction or (b) direct payment; and

  (2) with respect to my Tax Obligation arising upon the vesting of the
Restricted Stock, StorageTek will collect the full amount, at my election, by
means of (a) payroll deduction; (b) direct payment; or (c) withholding from
Restricted Stock otherwise issuable to me, Shares having a value equal to or
less than the minimal statutory tax withholding for federal and state taxes.

I hereby specifically approve the foregoing methods of payment. If I do not
reimburse StorageTek for the full amount of my Tax Obligation in accordance with
these procedures, I hereby authorize StorageTek to withhold any Tax Obligation
amounts from my payroll checks If my payroll checks are not sufficient to pay
the Tax Obligation and I fail to reimburse StorageTek the full amount of my Tax
Obligation for Restricted Stock to the applicable tax authority, StorageTek may,
in its sole discretion, elect to retain Restricted Stock with a value
(determined on the date such Restricted Stock vested) equal to my Tax Obligation
in full satisfaction of such Tax Obligation.

Escrow.     I hereby authorize StorageTek to hold all shares of vested
Restricted Stock in escrow until I have reimbursed StorageTek the full amount of
my Tax Obligation.

Termination of Employment/Repurchase of Unvested Shares. I further recognize
that under the Restricted Stock Purchase Agreement, StorageTek has the right,
following termination of my employment pursuant to Section 7(b) of the Amended
and Restated CEO Employment Agreement by and between me and StorageTek effective
as amended and restated March 27, 2003, to repurchase any unvested Restricted
Stock held in escrow

——————————————
Patrick J. Martin Date:___________________________________

ESCROW AGREEMENT

        THIS AGREEMENT, entered into as of March ___, 2003, between STORAGE
TECHNOLOGY CORPORATION, a Delaware corporation, (together with its successors
and assigns, “StorageTek”), Patrick J. Martin, the undersigned employee (the
“Employee”), and AMERICAN STOCK TRANSFER & TRUST COMPANY, as Escrow Agent (the
“Agent”), with respect to the STORAGE TECHNOLOGY CORPORATION 1995 EQUITY
PARTICIPATION PLAN, as amended (the “1995 Plan”), and in conjunction with the
delivery of the Restricted Stock Purchase Agreement dated as of the date hereof
between StorageTek and the Employee (the “Purchase Agreement”).

RECITALS

    A.        The Human Resources and Compensation Committee of the Board of
Directors (“Compensation Committee”) of StorageTek, as Administrator of the 1995
Plan, is requiring Employee to place in escrow with the Agent the shares of
StorageTek Common Stock, par value $.10 per share, purchased by Employee
pursuant to the Purchase Agreement (the “Shares”), which Shares are to remain in
the physical custody of the Agent until the restrictions set forth in the
Purchase Agreement and the 1995 Plan (the “Restrictions”) have lapsed or
terminated.

    B.        The 1995 Plan and the Purchase Agreement are both incorporated
herein by reference and made a part hereof.

    C.        The term “Amended and Restated CEO Employment Agreement” shall be
defined to mean the Amended and Restated CEO Employment Agreement by and between
the Employee and the Company effective March 27, 2003.

AGREEMENT

        NOW, THEREFORE, the parties agree as follows:

    1.        The Employee hereby authorizes StorageTek to deposit with the
Agent and the Agent hereby acknowledges receipt of 250,000 Shares (which, so
long as they are subject to the Restrictions shall be referred to as the
“Restricted Stock”).

    2.        (a) The Agent shall hold the Restricted Stock until all of the
Restrictions have lapsed or terminated in accordance with the terms of the
Purchase Agreement or if termination of restrictions or vesting would occur at
an earlier date than provided in the Purchase Agreement the 1995 Plan, and until
all Tax Obligations pursuant to the Authorization for Tax Reimbursement dated
March ___, 2003 have been satisfied in full. StorageTek shall notify the Agent
at the time the Restrictions on all or a portion of the Restricted Stock have
lapsed or terminated and, subject to the satisfaction of the applicable Tax
Obligation, instruct the Agent to release from Escrow and deliver to Employee
certificates representing the Shares. The Agent shall release and deliver the
Shares to Employee or his or her executor or personal representative, as the
case may be, free of the restrictive legend required under the Purchase
Agreement, unless, in the opinion of corporate counsel, the legend is necessary
to comply with securities or other regulatory requirements.

    (b)        In the event that at any time while this Escrow Agreement is in
effect StorageTek notifies the Agent that Employee’s employment with StorageTek
has been terminated pursuant to Section 7(b) of the Amended and Restated CEO
Employment Agreement, StorageTek shall repurchase all of Employee’s Restricted
Stock then held in escrow for a purchase price of $0.10 per share, by delivering
to the Agent a check payable to the order of Employee in an amount equal to the
purchase price multiplied by the number of shares of Restricted Stock being
repurchased. Upon receipt, the Agent shall deliver the check to Employee and
deliver the certificate representing the Shares to StorageTek. Notwithstanding
the foregoing, StorageTek may, at its election, notify the Agent that StorageTek
will not repurchase the Restricted Stock, in which case the Agent shall deliver
a certificate representing the Shares to the Employee. Notwithstanding any
termination of Employee’s employment with StorageTek pursuant to Section 7(b) of
the Amended and Restated CEO Employment Agreement, the Escrow Agent shall
deliver all Shares that vested pursuant to the Purchase Agreement or the 1995
Plan prior to such termination in accordance herewith.

    (c)        Agent is hereby authorized and directed to hold the Restricted
Shares until Employee has reimbursed StorageTek for the full amount of the Tax
Obligation.

    3.        In the event of any dispute with respect to the disposition of any
or all of the Restricted Stock, the Agent shall refer the matter to the
Administrator of the 1995 Plan and shall only dispose of any such Restricted
Stock in the manner prescribed in writing by the Compensation Committee.

    4.        StorageTek shall pay the fee of the Agent in accordance with the
fee schedule delivered from time to time by the Agent to StorageTek.

    5.        This Escrow Agreement shall terminate upon the earlier of (i) the
release of all Shares held hereunder, or (ii) 20 years from the date first above
written.

    6.        This Escrow Agreement may not be altered or modified without the
express written consent of StorageTek, the Employee and the Agent.

    7.        This Escrow Agreement shall be governed by and construed in
accordance with the laws of the State of Colorado, without reference to
principles of conflicts of law.

    8.        This Escrow Agreement may be executed in one or more counterparts,
each of which shall be deemed an original and all of which shall constitute one
and the same agreement.

EMPLOYEE

——————————————
Patrick J. Martin Date:___________________________________

STORAGE TECHNOLOGY
CORPORATION

By:
——————————————
Roger C. Gaston,
Corporate Vice President, Human Resources AMERICAN STOCK TRANSFER
& TRUST COMPANY

By:
——————————————
Trust Officer