EXABYTE CORPORATION
NONSTATUTORY STOCK OPTION
AGREEMENT

Tom Ward, Optionee:

     Exabyte Corporation (the "Corporation") has this day granted to you, the
Optionee named above, an option to purchase shares of the common stock of the
Corporation ("Common Stock"). This option is not intended to qualify as and will
not be treated as an "incentive stock option" within the meaning of Section 422
of the Internal Revenue Code of 1986, as amended (the "Code").

     The terms and conditions of Options granted pursuant to this Nonstatutory
Stock Option Agreement are as follows:

1.     Definitions.

As used herein, the following definitions shall apply:

     (a)

     "Act" shall mean the Securities Act of 1933, as amended.

     (b)     "Affiliate"

shall mean any Parent or Subsidiary, whether now or hereafter existing.

     (c)     "Board"

shall mean the Board of Directors of the Corporation.

     (d)     

"Continuous Status as an Employee or Director" shall mean the absence of any
interruption or termination of service as an Employee or Director, as
applicable. Continuous Status as an Employee or Director shall not be considered
interrupted in the case of sick leave, military leave, or any other leave of
absence approved by the Plan Administrator.

     (e)     "Date of Grant"

shall mean the date that the stockholders of the Corporation approve this
Nonstatutory Stock Option Agreement.

     (f)     "Director"

shall mean a member of the Board of Directors.

     (g)     "Employee"

shall mean any person employed by the Corporation or by any Affiliate of the
Corporation. The payment of a director's fee by the Corporation shall not be
sufficient to constitute "employment" by the Corporation.

     (h)     "Exchange Act"

shall mean the Securities Exchange Act of 1934, as amended.

     (i)     "Fair Market Value"

shall mean, as of any date, the value of the Common Stock of the Corporation
determined as follows:

          (1)     

If the Common Stock is listed on any established stock exchange, or traded on
the Nasdaq National Market or the Nasdaq SmallCap Market, the Fair Market Value
of a share of Common Stock shall be the closing sales price for such stock (or
the closing bid, if no sales were reported) as quoted on such exchange or market
(or the exchange or market with the greatest volume of trading in Common Stock)
on (i) the day of determination, as reported in the Wall Street Journal or such
other source as the Board deems reliable, or (ii) if the day of determination is
not a trading day, then the trading day prior to the day of determination, as
reported in the Wall Street Journal or such other source as the Board deems
reliable.

          (2)     

In the absence of such markets for the Common Stock, the Fair Market Value shall
be determined in good faith by the Board.

     (j)     "Nonstatutory Stock Option"

shall mean an Option not intended to qualify as an Incentive Stock Option.

     (k)     "Option"

shall mean a Stock Option granted pursuant to this Nonstatutory Stock Option
Agreement.

     (l)     "Optioned Stock"

shall mean the Stock subject to an Option.

     (m)     "Parent"

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

     (n)     "Share"

shall mean a share of the Stock, as adjusted in accordance with Section 7 of
this Nonstatutory Stock Option Agreement.

     (o)     "Stock"     

shall mean the Common Stock of the Corporation.

     (p)     "Subsidiary"

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

2.     Administration of Nonstatutory Stock Option Agreement.

     (a)     Plan Administrator.

The Nonqualified Stock Option Agreement shall be administered by the Board,
unless and until such time as the Board delegates the administration of the
Nonqualified Stock Option Agreement to a committee, which shall be appointed by
and shall serve at the pleasure of the Board (the "Plan Administrator"). The
Plan Administrator shall consist of a committee of two or more directors of the
Company, all of whom qualify as "non-employee directors" within the meaning of
Rule 16b-3, promulgated by the Securities Exchange Commission under the Exchange
Act, together with any successor rule, as in effect from time to time. The Plan
Administrator shall consist of a committee of two or more directors of the
Company, all of whom qualify as "outside directors" within the meaning of
Section 162(m) of the Internal Revenue Code of 1986, as amended from time to
time. The Board may from time to time remove members from or add members to any
such committee; fill vacancies on the committee, howsoever caused; and otherwise
increase or decrease the number of members of such committee, in each case as
the Board deems appropriate to permit transactions in Shares pursuant to the
Nonqualified Stock Option Agreement and to satisfy such conditions of Rule 16b-3
or Section 162(m) of the Code as then in effect.

     (b)     Powers of the Plan Administrator. Subject to the provisions of this
Nonstatutory Stock Option Agreement, the Plan Administrator shall have the
authority, in its discretion: (i) to grant this Nonstatutory Stock Option; (ii)
to determine the exercise price per share of this Option, which exercise price
shall be determined in accordance with Section 4 of this Nonstatutory Stock
Option Agreement; (iii) to determine the number of Shares to be represented by
this Option; (iv) to interpret this Nonstatutory Stock Option Agreement; (iv) to
determine the terms and provisions of this Nonstatutory Stock Option Agreement
and, with the consent of the holder thereof, modify, terminate or amend the
Option provided, however, that the Plan Administrator shall not have the power
to lower the Option price except pursuant to the terms of Section 7 of this
Nonstatutory Stock Option Agreement; (v) to accelerate or defer (with the
consent of the Optionee) the exercise date of this Option; (vi) to authorize any
person to execute on behalf of the Corporation any instrument required to
effectuate the grant of this Option; and (vii) to make all other determinations
deemed necessary or advisable for the administration of this Nonstatutory Stock
Option Agreement.

3.     Shares Subject to this Nonstatutory Stock Option Agreement.

The total number of shares subject to and reserved under this Nonstatutory Stock
Option Agreement is 7,000,000 shares of Stock of $0.001 par value of the
Corporation. Subject to adjustment under Section 7, no individual shall be
eligible to be granted Options covering more than 7,000,000 shares of Stock
during any calendar year. As the Board shall determine in its discretion, the
Shares may be in whole or in part, authorized but unissued Shares or issued
Shares which shall have been reacquired by the Corporation.

4.     Prices for Options.

     (a)     Generally. The per share exercise price for the Shares to be issued
pursuant to exercise of the Options granted hereunder shall be the the Fair
Market Value on the date such Options are approved by the stockholders of the
Corporation. Unless approved by the holders of a majority of the shares present
and entitled to vote at a duly convened meeting of the Stockholders, neither the
Board nor the Plan Administrator shall reduce the exercise price of the Option.

     (b)     Payment. Payment of the exercise price per share is due in full in
cash (including check) upon exercise of all or any part of each installment
which has become exercisable by Optionee. Notwithstanding the foregoing, this
Option may be exercised pursuant to a program developed under Regulation T as
promulgated by the Federal Reserve Board which results in the receipt of cash
(or check) by the Corporation prior to the issuance of Common Stock.

5.     Option Provisions.

     This Nonstatutory Stock Option Agreement is subject to the approval of the
Corporation's stockholders. Options granted hereunder are granted in
consideration for the Optionee's future services as President and/or Chief
Executive Officer. No other office shall be eligible for Options under this
plan. Notwithstanding the foregoing, this Nonstatutory Stock Option Agreement is
not an employment contract and nothing in this option shall be deemed to create
in any way whatsoever any obligation on Optionee's part to continue in the
employ of the Corporation, or of the Corporation to continue Optionee's
employment with the Corporation.

     (a)     Exercise of Option.

          (i)     The shares subject to the Nonstatutory Stock Option, as set
forth in Section 3 above, shall vest as follows:

               (1)     3,000,000 shares shall vest at the rate of 2% (or 60,000
shares) as of the 3rd day of each month following June 3, 2002, until December
30, 2005, at which time any remaining unvested options pursuant to this
subsection (1) will be deemed to be fully vested. Notwithstanding anything in
this subsection (1), vesting on these 3,000,000 shares will cease immediately
upon the termination of Optionee's Continuous Status as an Employee or Director
for any reason.

               (2)     

4,000,000 shares shall fully vest as to 100% of the shares herein on June 5,
2007, provided however, that vesting on these 4,000,000 shares will cease
immediately upon the termination of Optionee's Continuous Status as an Employee
or Director for any reason. Notwithstanding anything in this subsection (2),
vesting of these 4,000,000 shares shall accelerate as follows:

                              --     

at such time as the Corporation's stock price, as listed and reported on the
Nasdaq National Market,
                                     meets or exceeds a closing sale price of
$2.00 for thirty (30) consecutive trading days, 25% of the
                                     shares set forth in this subsection (2)
shall immediately vest, so long as Optionee is employed by the
                                     Corporation at such time;

                              --     

at such time as the Corporation's stock price meets or exceeds a closing sale
price of $4.00 for thirty
                                      (30) consecutive trading days, 25% of the
shares set forth in this subsection (2) shall immediately
                                     vest, so long as Optionee is employed by
the Corporation at such time;

                              --     

at such time as the Corporation's stock price meets or exceeds a closing sale
price of $5.00 for thirty
                                      (30) consecutive trading days, 25% of the
shares set forth in this subsection (2) shall immediately
                                     vest, so long as Optionee is employed by
the Corporation at such time; and

                              --     

at such time as the Corporation's stock price meets or exceeds a closing sale
price of $6.00 for thirty
                                      (30) consecutive trading days, 25% of the
shares set forth in this subsection (2) shall immediately
                                     vest, so long as Optionee is employed by
the Corporation at such time.

          (ii)     This Option may not be exercised for a fraction of a Share.

          (iii)     This Option shall be deemed to be exercised when written
notice of such exercise has been given to the Corporation in accordance with the
terms of the Option by the person entitled to exercise the Option and full
payment for the Shares with respect to which the Option is exercised has been
received by the Corporation. Full payment may, as authorized by the Board,
consist of any consideration and method of payment allowable under Section 4 of
this Nonstatutory Stock Option Agreement. Until the issuance (as evidenced by
the appropriate entry on the books of the Corporation or of a duly authorized
transfer agent of the Corporation) of the Stock certificate evidencing such
Shares, no right to vote or receive dividends or any other rights of a
Stockholder shall exist with respect to the Optioned Stock, notwithstanding the
exercise of the Option. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the Stock certificate is issued,
except as provided in Section 7 of this Nonstatutory Stock Option Agreement.

          (iv)     Exercise of this Option in any manner shall result in a
decrease in the number of Shares which thereafter may be available, both for
purposes of this Nonstatutory Stock Option Agreement and for sale under the
Option, by the number of Shares as to which the Option is exercised.

          (v)     Except as otherwise specifically provided herein, this Option
may not be exercised at any time unless the holder thereof shall have maintained
Continuous Status as an Employee or Director of the Corporation or of one or
more of its Affiliates, from the date of commencement of thisOption, as set
forth in Section (b)(i) below, to the date of its exercise.

          (vi)     This Option may be exercised, to the extent specified above,
by delivering a notice of exercise (in a form designated by the Corporation)
together with the exercise price to the Secretary of the Corporation, or to such
other person as the Corporation may designate, during regular business hours,
together with such additional documents as the Corporation may then require
pursuant to this Nonstatutory Stock Option Agreement.

          (vii)     Notwithstanding anything to the contrary contained herein,
this Option may not be exercised unless the shares issuable upon exercise of the
Option are then registered under the Act, or, if such shares are not then so
registered, the Corporation has determined that such exercise and issuance would
be exempt from the registration requirements of the Act.

          (viii)     Optionee will notify the Corporation in writing within
fifteen (15) days after the date of any disposition of any of the shares of the
Common Stock issued upon exercise of this Option that occurs within two (2)
years after the date of grant or within one (1) year after such shares of Common
Stock are transferred upon exercise of the Option.

     (b)     Termination of Employment.

          (i)     Unless sooner terminated as set forth below or in this
Nonstatutory Stock Option Agreement, this Option terminates on June 9, 2012.
This option shall terminate prior to the expiration of its term as follows:
ninety (90) days after the termination of employment with the Corporation or an
affiliate of the Corporation for any reason or for no reason unless:

               (1)     such termination of employment is due to Optionee's
permanent and total disability (within the meaning of Section 422A(c)(7) of the
Code), in which event the Option shall terminate on the earlier of the
termination date set forth above or six (6) months following such termination of
employment; or

               (2)     such termination of employment is due to Optionee's
death, in which event the Option shall terminate on the earlier of the
termination date set forth above or six (6) months after Optionee's death; or

               (3)     during any part of such ninety (90) day period the option
is not exercisable solely because of the condition set forth in Section
5(a)(vii) above, in which event the Option shall not terminate until the earlier
of the termination date set forth above or until it shall have been exercisable
for an aggregate period of ninety (90) days after the termination of employment;
or

               (4)     exercise of the Option within ninety (90) days after
termination of Optionee's employment with the Corporation or with an affiliate
would result in liability under Section 16(b) of the Securities Exchange Act of
1934, in which case the option will terminate on the earlier of (i) the
termination date set forth above; (ii) the tenth (10th) day after the last date
upon which exercise would result in such liability; or (iii) six (6) months and
ten (10) days after the termination of Optionee's employment with the
Corporation or an affiliate. However, this option may be exercised following
termination of employment only as to that number of shares which are exercisable
on the date of termination of employment under the provisions of Paragraph
5(a)(i) above.

          (ii)     So long as the Optionee shall maintain Continuous Status as
an Employee or Director, his Option shall not be affected by any change of
duties or position. To the extent that the Optionee was not entitled to exercise
his Option at the time of his termination, or insofar as he does not exercise
such Option to the extent he was entitled within the time specified herein, the
Option shall itself terminate at the time of such termination.

          (iii)     Notwithstanding any provision in this Nonstatutory Stock
Option Agreement to the contrary, this Option shall terminate no later than the
original expiration date set forth in Section 5(b)(i) above.

6.     Non-Transferability of Option.

This Option may not be sold, pledged, assigned, hypothecated, transferred, or
disposed of in any manner other than by will or by the laws of descent or
distribution and may be exercised, during the lifetime of the Optionee, only by
the Optionee.

7.     Adjustments Upon Changes in Capitalization or Merger.

     (a)     Proportional Adjustments.

Subject to any required action by the Stockholders of the Corporation, the
number of Shares and price per Share covered by this Option, , shall be
proportionately adjusted for any increase or decrease in the number of issued
Shares resulting from a stock split, the payment of a stock dividend with
respect to the stock, or any other increase or decrease in the number of issued
Shares effected without receipt of consideration by the Corporation; provided,
however, that conversion of any convertible securities of the Corporation shall
not be deemed to have been "effected without receipt of consideration." Such
adjustment shall be made by the Board, whose determination in that respect shall
be final, binding and conclusive. Except as expressly provided herein, no
issuance by the Corporation of shares of stock of any class, shall affect, and
no adjustment by reason thereof shall be made with respect to, the number or
price of Shares subject to this Option.

     (b)     Reorganization. In the event of the proposed dissolution or
liquidation of the Corporation, or in the event of a proposed sale of all or
substantially all of the assets of the Corporation, or the merger of the
Corporation with or into another corporation, at the sole discretion of the
Board and to the extent permitted by applicable law: (i) any surviving
corporation shall assume this Nonstatutory Stock Option Agreement or shall
substitute similar Options for those outstanding under this Nonstatutory Stock
Option Agreement; (ii) this Option shall continue in full force and effect; or
(iii) this Option, provided the Optionee is then performing services as an
Employee or Director, will become fully exercisable with respect to all of the
Shares subject to the Option prior to the consummation of such proposed action
at such time as the Board in its discretion may determine and the Option
terminated if not exercised prior to such event. The Board may also in its
discretion require that all of the Shares purchased pursuant to the foregoing
clause (iii) which would not otherwise be purchasable at such time except by
operation of such clause (iii) shall be subject to a repurchase right of the
Corporation (or its successor) which repurchase right shall expire at the same
(or earlier) times and to the same (or greater) extent as such Shares would have
become purchasable under the Option had the Option not become fully exercisable
pursuant to clause (iii). For this purpose, the Board may require that the
Optionee and the Corporation (or its successor) execute an agreement (in such
form as determined by the Board) with respect to such Shares to reflect the
Corporation's (or its successor's) repurchase right. If this Option is to be
assumed or substituted, then such Option shall be appropriately adjusted to
apply to the kind, class and number of securities or other property which would
have been issuable to the Optionee in the consummation of such transaction had
the Option been exercised immediately prior to such transaction and appropriate
adjustments shall also be made to the price payable per share, provided that the
aggregate Option price payable thereunder shall remain the same.

8.     Effectiveness of Nonstatutory Stock Option Agreement.

The Option granted pursuant to this Nonstatutory Stock Option Agreement shall
become effective on the date approved by the stockholders of the Corporation.
Such date shall serve as the Date of Grant of the Option granted hereunder.

9.     No Employee Contract.

This Nonstatutory Stock Option Agreement shall not confer upon the Optionee any
right with respect to employment or the continuation of employment by or the
rendition of consulting or director services to the Corporation or any Affiliate
of the Corporation, nor shall it interfere in any way with his right or the
Corporation's or its Affiliates', or the Stockholders' right to terminate his
employment or services as a director at any time.

10.     Withholding.

     (a)     The Corporation may require Optionee to enter an arrangement
providing for the payment by Optionee to the Corporation of any tax withholding
obligation of the Corporation arising by reason of (1) the exercise of this
Option; (2) the lapse of any substantial risk of forfeiture to which the shares
are subject at the time of exercise; or (3) the disposition of shares acquired
upon such exercise.

     (b)     Optionee will notify the Corporation in writing within fifteen (15)
days after the date of any dispostion of any of the shares of the Common Stock
issued upon exercise of this Option that occurs within two (2) years after the
Date of Grant or within one (1) year after such shares of Common stock are
transferred upon exercise of this Option.

11.     Termination and Amendment of Nonstatutory Stock Option Agreement.

     (a)     Termination.

This Nonstatutory Stock Option Agreement shall terminate on June 2, 2012.

     (b)     Amendment. Except as provided in Section 7(a) relating to
adjustments upon changes in Stock, no amendment shall be effective unless
approved by the stockholders of the Corporation with respect to the stockholder
approval required by Section 4(a) or otherwise to the extent stockholder
approval is necessary to comply with the requirements of Rule 16b-3 promulgated
under the Exchange Act, or to satisfy any Nasdaq or securities exchange listing
requirements. The Board may, in its sole discretion, submit any other amendment
to this Nonstatutory Stock Option Agreement for stockholder approval, including,
but not limited to amendments to this Nonstatutory Stock Option Agreement
intended to satisfy the requirements of Section 162(m) of the Code and the
regulations promulgated thereunder regarding the exclusion of performance-based
compensation from the limit on corporate deductibility of compensation paid to
certain executive officers.

     (c)     It is expressly contemplated that the Plan Administrator may amend
this Nonstatutory Stock Option Agreement in any respect the Plan Administrator
deems necessary or advisable to provide the Optionee with the maximum benefits
provided or to be provided under the provisions of the Code and the regulations
promulgated thereunder and/or to bring this Nonstatutory Stock Option Agreement
into compliance therewith.

     (d)     Rights and obligations under this Option granted hereunder shall
not be altered or impaired by any amendment of this Nonstatutory Stock Option
Agreement unless: (i) the Corporation requests the consent of the person to whom
the Option was granted; and (ii) such person consents in writing.

12.     Issuance of Shares.

     (a)

     The Corporation shall not be required to issue Shares pursuant to the
exercise of this Option unless the exercise of such Option and the issuance and
delivery of such Shares pursuant thereto shall comply with all relevant
provisions of law, including, without limitation, the Securities Act of 1933, as
amended, the Exchange Act, the rules and regulations promulgated thereunder, and
the requirements of any Stock exchange upon which the Shares may then be listed,
and shall be further subject to the approval of counsel for the Corporation with
respect to such compliance; provided, however, that this provision shall not
require the Corporation to register under the Securities Act of 1933, as
amended, either this Nonstatutory Stock Option Agreement, any Option or any
Stock issued or issuable pursuant to such Option.

     (b)     As a condition to the exercise of this Option, the Corporation may
impose various conditions, including a requirement that the Optionee represent
and warrant, at the time of any such exercise, that the Shares are being
purchased only for investment and without any present intention to sell or
distribute such Shares.

13.     Reservation of Shares.

The Corporation, during the term of this Nonstatutory Stock Option Agreement,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of this Nonstatutory Stock Option
Agreement. The inability of the Corporation to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the
Corporation's counsel to be necessary to the lawful issuance and sale of any
Shares hereunder, shall relieve the Corporation of any liability in respect of
the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.

14.     Notice.

Any notices provided for in this Nonstatutory Stock Option Agreement shall be
given in writing and shall be deemed effectively given upon receipt or, in the
case of notices delivered by the Corporation to Optionee, five (5) days after
deposit in the United States mail, postage prepaid, addressed to Optionee at the
address specified below or at such other address as Optionee hereafter designate
by writeen notice to the Corporation.

15.     Entire Understanding.

This Nonstatutory Stock Option Agreement sets forth the entire understanding
between the udnersigned Optionee and the Corporation and its affiliates
regarding the acquisition of the shares listed herein.

     Dated this 3rd day of June, 2002.

 

Very truly yours,

 

By Thomas E. Pardun

Chairman, Compensation Committee

of the Board of Directors

of Exabyte Corporation

 

The undersigned:

     (a)     Acknowledges receipt of the foregoing option and the understanding
that all rights and liabilities with respect to this
              option are set forth in this Nonstatutory Stock Option Agreement;
and

     (b)     Agrees to the terms of this Nonstatutory Stock Option Agreement;

      (c)     Acknowledges receipt of the most recent copy of the Annual Report
and Proxy Statement.

 

 

 

 

Optionee

Address: