<PAGE>   1

                                                                   EXHIBIT 10.26


                               SEVERANCE AGREEMENT

     This Agreement (the "Agreement") is made and entered into as of May 30,
2001, between MTI Technology Corporation, a corporation organized under the laws
of the State of Delaware (the "Company"), and Kenneth Simpson (the "Executive").

                                    RECITALS

     A.   Executive is currently serving as an officer of the Company.

     B.   The Board of Directors of the Company (the "Board") recognizes that
the possibility of a Change in Control (as hereinafter defined) exists and that
the threat or the occurrence of a Change in Control can result in significant
distractions to its key management personnel because of the uncertainties
inherent in such a situation;

     C.   The Board has determined that it is essential and in the best interest
of the Company and its stockholders to retain the services of the Executive in
the event of a threat or occurrence of a Change in Control and to ensure the
Executive's continued dedication and efforts in such event without undue concern
for the Executive's personal, financial and employment security; and

     D.   In order to induce the Executive to remain in the employ of the
Company, particularly in the event of a threat or the occurrence of a Change in
Control, the Company desires to enter into this Agreement with the Executive to
provide the Executive with certain benefits in the event that the Executive's
employment is terminated as a result of, or in connection with, a Change in
Control.

                                    AGREEMENT

     In consideration of the respective agreements of the parties contained
herein, it is agreed as follows:

     1.   Term Of Agreement. This Agreement shall commence as of the date first
set forth above and shall continue in effect until May 30, 2003; provided,
however, that commencing on May 30 and on each May 30 thereafter, the term of
this Agreement shall automatically be extended for one (1) year unless the
Company or the Executive shall have given written notice to the other at least
ninety (90) days prior thereto that the term of this Agreement shall not be so
extended; and provided, further, however, that notwithstanding any such notice
by the Company not to extend, the term of this Agreement shall not expire prior
to the expiration of twelve (12) months after the occurrence of a Change in
Control.

<PAGE>   2

     2.   Definitions.

          2.1. Accrued Compensation. For purposes of this Agreement, "Accrued
Compensation" shall mean an amount which shall include all amounts earned or
accrued through the "Termination Date" (as hereinafter defined) but not paid as
of the Termination Date, including (i) base salary, (ii) reimbursement for
reasonable and necessary expenses incurred by the Executive on behalf of the
Company during the period ending on the Termination Date, (iii) vacation pay and
(iv) bonuses and incentive compensation (other than the Pro Rata Bonus (as
hereinafter defined)).

          2.2. Base Amount. For purposes of this Agreement, "Base Amount" shall
mean the greater of the Executive's annual base salary (a) at the rate in effect
on the Termination Date or (b) at the highest rate in effect at any time during
the ninety (90) day period prior to the Change in Control, and shall include all
amounts of base salary that are deferred under the Executive benefit plans of
the Company or any other agreement or arrangement.

          2.3. Bonus Amount. For purposes of this Agreement, "Bonus Amount"
shall mean the greatest of: (a) 100% of the annual bonus payable to the
Executive under the Company's Executive Management Bonus Plan for the fiscal
year in which the Termination Date occurs; (b) the annual bonus paid or payable
to the Executive under the Company's Executive Management Bonus Plan for the
full fiscal year ended prior to the fiscal year during which the Termination
Date occurred; (c) the annual bonus paid or payable to the Executive under the
Company's Executive Management Bonus Plan for the full fiscal year ended prior
to the fiscal year during which a Change in Control occurred; (d) the average of
the annual bonuses paid or payable to the Executive under the Company's
Executive Management Bonus Plan during the three full fiscal years ended prior
to the fiscal year during which the Termination Date occurred; or (e) the
average of the annual bonuses paid or payable to the Executive under the
Company's Executive Management Bonus Plan during the three (3) full fiscal years
ended prior to the fiscal year during which the Change in Control occurred.

          2.4. Cause. The Company may terminate this Agreement for Cause (as
defined) at any time upon written notice. For purposes of this Agreement, the
term "Cause" shall mean: (i) a material breach of any term of this Agreement and
failure to cure such breach within ten (10) days after written notice thereof
from the Company; (ii) the willful and continued failure by Executive
substantially to perform his duties for the Company (other than any such failure
resulting from his incapacity due to death or physical or mental illness), after
written demand for substantial performance is delivered to Executive by the
Company, which specifically identifies the manner in which the Company believes
that Executive has not substantially performed his duties; (iii) the failure by
Executive to follow the reasonable instructions of the Board of Directors; (iv)
the willful engaging by Executive in misconduct that is materially injurious to
the Company, monetarily or otherwise; (v) Executive's final conviction for fraud
or of any felony; or (vi) Executive's habitual use of illegal drugs and/or abuse
of alcohol; provided, however, that as to alcohol abuse, Executive shall be
given notice and a thirty (30) day opportunity to remedy the problem. For
purposes of this paragraph, no act, or failure to act, on Executive's part shall
be considered "willful" unless done, or omitted to be done, by Executive other
than in good faith


                                       2
<PAGE>   3

and without reasonable belief that Executive's action or omission was in the
best interest of the Company.

          2.5. Change In Control.

               (a)  For purposes of this Agreement, "Change of Control" shall
mean:

                    (i) any "person" as such term is defined in Sections 13(d)
     and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
     Act"), other than (1) a trustee or other fiduciary holding securities under
     an Executive benefit plan of the Company, (2) a corporation owned, directly
     or indirectly, by the stockholders of the Company in substantially the same
     proportions as their ownership of stock of the Company, or (3) any current
     beneficial stockholder or group, as defined by Rule 13d-5 of the Exchange
     Act, of securities possessing more than twenty-five percent (25%) of the
     total combined voting power of the Company's outstanding securities,
     hereafter becomes the "beneficial owner," as defined in Rule 13d-3 under of
     the Exchange Act, directly or indirectly, of securities of the Company
     representing twenty-five percent (25%) or more of the total combined voting
     power of the Company's then outstanding securities; or

                    (ii) during any period of two (2) consecutive years,
     individuals who at the beginning of such period constitute the Board of
     Directors of the Company and any new director whose election by the Board
     of Directors or nomination for election by the Company's stockholders was
     approved by a vote of at least two-thirds (2/3) of the directors then still
     in office who either were directors at the beginning of the period or whose
     election or nomination for election was previously so approved, cease for
     any reason to constitute a majority thereof; or

                    (iii) the stockholders of the Company approve a 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) at least eighty percent (80%) 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 the stockholders of the Company approve a plan of
     complete liquidation of the Company or an agreement for the sale or
     disposition by the Company, in one transaction or a series of transactions,
     of all or substantially all of the Company's assets; or

                    (iv) the sale of substantially all of the Company's assets.

          2.6. Company. For purposes of this Agreement, the "Company" shall mean
MTI Technology Corporation and its Subsidiaries and shall include MTI's
Successors and Assigns (as hereinafter defined).


                                       3
<PAGE>   4

          2.7. Disability. For purposes of this Agreement, "Disability" shall
mean a physical or mental infirmity which impairs the Executive's ability to
substantially perform the Executive's duties with the Company for a total period
of ninety (90) days and the Executive has not returned to full time employment
prior to the Termination Date as stated in the "Notice of Termination."

          2.8. Good Reason.

               (a) For purposes of this Agreement, "Good Reason" shall mean any
of the events or conditions described in subsections (1) through (8) hereof:

                    (i) a change in the Executive's status, title, position or
     responsibilities (including reporting responsibilities) which, in the
     Executive's reasonable judgment, represents an adverse change from the
     Executive's status, title, position or responsibilities as in effect at any
     time within ninety (90) days preceding the date of a Change in Control or
     at any time thereafter; the assignment to the Executive of any duties or
     responsibilities which, in the Executive's reasonable judgment, are
     inconsistent with the Executive's status, title, position or
     responsibilities as in effect at any time within ninety (90) days preceding
     the date of a Change in Control or at any time thereafter; or any removal
     of the Executive from or failure to reappoint or reelect the Executive to
     any of such offices or positions, except in connection with the termination
     of the Executive's employment for Disability, Cause, as a result of the
     Executive's death or by the Executive;

                    (ii) a reduction in the Executive's base salary or any
     failure to pay the Executive any compensation or benefits to which the
     Executive is entitled within ten (10) days of the date due after receipt of
     written notice from Executive;

                    (iii) the Company's requiring the Executive to be based at
     any place outside a 25-mile radius from the Company's Anaheim Office,
     located at 4905 East La Palma Avenue, Anaheim, California 92807, except for
     reasonably required travel on the Company's business which is not
     materially greater than such travel requirements prior to the Change in
     Control;

                    (iv) the failure by the Company to (A) continue in effect
     (without reduction in benefit level and/or reward opportunities) any
     material compensation or Executive benefit plan in which the Executive was
     participating at any time within ninety (90) days preceding the date of a
     Change in Control or at any time thereafter unless such plan is replaced
     with a plan that provides substantially equivalent compensation or benefits
     to the Executive, or (B) provide the Executive with compensation and
     benefits, in the aggregate, at least equal (in terms of benefit levels
     and/or reward opportunities) to those provided for under each other
     Executive benefit plan, program and practice in which the Executive was
     participating at any time within ninety (90) days preceding the date of a
     Change in Control or at any time thereafter;


                                       4
<PAGE>   5

                    (v) the insolvency or the filing (by any party, including
     the Company) of a petition for bankruptcy of the Company, which petition is
     not dismissed within sixty (60) days;

                    (vi) any material breach by the Company of any provision of
     this Agreement, and failure of the Company to cure such breach within ten
     (10) days from the Company's receipt of written notice from the Executive
     setting forth the nature of the alleged breach;

                    (vii) any purported termination of the Executive's
     employment for Cause by the Company which does not comply with the terms of
     Section 2.4; or

                    (viii) the failure of the Company to obtain an agreement,
     satisfactory to the Executive, from any Successors and Assigns to assume
     and agree to perform this Agreement, as contemplated in Section 6 hereof.

               (b)  The Executive's right to terminate the Executive's
employment pursuant to this Section 2.8 shall not be affected by the Executive's
incapacity due to physical or mental illness.

          2.9. Notice Of Termination. For purposes of this Agreement, "Notice of
Termination" shall mean a written notice of termination of the Executive's
employment from the Company, which notice indicates the date on which
termination is to be effective, the specific termination provision in this
Agreement relied upon and which sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated.

          2.10. Pro Rata Bonus. For purposes of this Agreement, "Pro Rata Bonus"
shall mean an amount equal to the Bonus Amount multiplied by a fraction the
numerator of which is the number of days in the fiscal year through the
Termination Date and the denominator of which is 365.

          2.11. Successors And Assigns. For purposes of this Agreement,
"Successors and Assigns" shall mean a corporation or other entity acquiring all
or substantially all of the assets and business of the Company (including this
Agreement) whether by operation of law or otherwise.

          2.12. Termination Date. For purposes of this Agreement, "Termination
Date" shall mean in, the case of the Executive's death, the Executive's date of
death, in the case of Good Reason, the last day of the Executive's employment
and, in all other cases, the date specified in the Notice of Termination;
provided, however, that if the Executive's employment is terminated by the
Company for Cause or due to Disability, the date specified in the Notice of
Termination shall be at least thirty (30) days from the date the Notice of
Termination is given to the Executive, provided that, in the case of Disability,
the Executive shall not have returned to the full-time performance of the
Executive's duties during such period of at least thirty (30) days.


                                       5
<PAGE>   6

     3.   Termination Of Employment.

          3.1. If, during the term of this Agreement, the Executive's employment
with the Company shall be terminated within twelve (12) months following a
Change in Control, the Executive shall be entitled to the following compensation
and benefits:

               (a)  If the Executive's employment with the Company shall be
terminated (1) by the Company for Cause or Disability, (2) by reason of the
Executive's death or (3) by the Executive other than for Good Reason, the
Company shall pay to the Executive the Accrued Compensation and, if such
termination is other than by the Company for Cause, the Company shall also pay
the Executive a Pro Rata Bonus.

               (b)  If the Executive's employment with the Company shall be
terminated for any reason other than as specified in Section 3.1(a), the
Executive shall be entitled to the following:

                    (i) the Company shall pay the Executive all Accrued
     Compensation and a Pro Rata Bonus;

                    (ii) the Company shall pay the Executive as severance pay
     and in lieu of any further compensation for periods subsequent to the
     Termination Date, in a single payment, an amount in cash equal to the sum
     of (A) the Base Amount and (B) the Bonus Amount; and

                    (iii) for a number of months equal to twelve (12) (the
     "Continuation Period"), the Company shall, at its expense, continue on
     behalf of the Executive and the Executive's dependents and beneficiaries
     the life insurance, disability, medical, dental and hospitalization
     benefits provided (A) to the Executive at any time during the 90-day period
     prior to the Change in Control or at any time thereafter or (B) to other
     similarly situated executives who continue in the employ of the Company
     during the Continuation Period. The coverage and benefits (including
     deductibles and costs) provided in this Section 3.1(b)(iii) during the
     Continuation Period shall be no less favorable to the Executive and the
     Executive's dependents and beneficiaries, than the most favorable of such
     coverages and benefits during any of the periods referred to in clauses (A)
     and (B) above. The Company's obligation hereunder with respect to the
     foregoing benefits shall be limited to the extent that the Executive
     obtains any such benefits pursuant to a subsequent employer's benefit
     plans, in which case the Company may reduce the coverage of any benefits it
     is required to provide the Executive hereunder as long as the aggregate
     coverages and benefits of the combined benefit plans are no less favorable
     to the Executive than the coverages and benefits required to be provided
     hereunder. This subsection (iii) shall not be interpreted so as to limit
     any benefits to which the Executive or the Executive's dependents or
     beneficiaries may be entitled under any of the Company's Executive benefit
     plans, programs or practices following the


                                       6
<PAGE>   7

     Executive's termination of employment, including without limitation,
     retiree medical and life insurance benefits.

               (c)  The amounts provided for in Sections 3.1(a) and 3.1(b)(i)
and (ii) shall be paid in a single lump sum cash payment within forty-five (45)
days after the Executive's Termination Date (or earlier, if required by
applicable law).

               (d)  The Executive shall not be required to mitigate the amount
of any payment provided for in this Agreement by seeking other employment or
otherwise, and no such payment shall be offset or reduced by the amount of any
compensation or benefits provided to the Executive in any subsequent employment
except as provided in Section 3.1(b)(iii).

          3.2. (a)  The severance pay and benefits provided for in this Section
3 shall be in lieu of any other severance or termination pay to which the
Executive may be entitled under any Company severance or termination plan,
program, practice or arrangement.

               (b)  The Executive's entitlement to any other compensation or
benefits shall be determined in accordance with the Company's Executive benefit
plans and other applicable programs, policies and practices then in effect.

     4.   Notice Of Termination. Within one (1) year following a Change in
Control, any purported termination of the Executive's employment shall be
communicated by Notice of Termination to the Executive. For purposes of this
Agreement, no such purported termination shall be effective without such Notice
of Termination.

     5.   Excise Tax Limitation.

          (a)  Notwithstanding anything in this Agreement to the contrary, if
any portion of any payments to Executive by the Company under this Agreement and
any other present or future plan of the Company or other present or future
agreement between Executive and the Company would not be deductible by the
Company (collectively, "Payments") for federal income tax purposes by reason of
application of Section 162(m) of the Internal Revenue Code (the "Code"), then
payment of that portion to Executive shall be deferred until the earliest date
upon which payment thereof can be made to Executive without being non-deductible
pursuant to Section 162(m) of the Code. In the event of such deferral, the
Company shall pay interest to Executive on the deferred amount at 120% of the
applicable federal rate provided for in Section 1274(d)(1) of the Code. In
addition, notwithstanding any provision of this Agreement to the contrary, the
aggregate present value of the payments and benefits (excluding those payments
and benefits not treated as parachute payments under Code Section 280G(b)) to be
made or provided to the Executive by the Company (whether pursuant to this
Agreement or otherwise) shall not exceed three times the Executive's annualized
includible compensation for the base period, as defined in Code Section 280G(d)
of the Code, minus one dollar ($1.00) (the "Limited Payment Amount"), and any
excess payments or benefits shall be forfeited; provided, however, that the
forfeiture provision of this sentence shall apply only if such forfeiture
provision results in larger aggregate after-tax payments and benefits to the
Executive than if the forfeiture provision


                                       7
<PAGE>   8

did not apply. The intent of this portion of this subsection 5(a) is to prevent
any payment or benefit to the Executive from being subject to the excise tax
imposed by Code Section 4999 and to prevent any item of expense or deduction of
the Company from being disallowed as a result of the application of Code Section
280G, but only if the after-tax payments and benefits payable or provided to the
Executive are greater after application of the forfeiture provision than if the
forfeiture provision did not apply. The interpretation of this subsection 5(a),
its application to any occurrence or event, the determination of whether any
payment or benefit would not be treated as a parachute payment, the
determination of the aggregate present value of all payments and benefits to be
made or provided to the Executive, the determination of the value of the
payments and benefits payable or to be provided to the Executive after reduction
for all applicable taxes, and what specific payments or benefits otherwise
available to the Executive shall be limited or eliminated by operation of this
subsection 5(a) shall be reasonably made by the Company and shall be binding on
all persons.

          (b)  An initial determination as to whether the Payments shall be
reduced to the Limited Payment Amount and the amount of such Limited Payment
Amount shall be made, at the Company's expense, by the accounting firm that is
the Company's independent accounting firm as of the date of the Change in
Control (the "Accounting Firm"). The Accounting Firm shall provide its
determination (the "Determination"), together with detailed supporting
calculations and documentation, to the Company and the Executive within twenty
(20) days of the Termination Date if applicable, or such other time as requested
by the Company or by the Executive (provided the Executive reasonably believes
that any of the Payments may be subject to the Excise Tax), and if the
Accounting Firm determines that there is substantial authority (within the
meaning of Section 6662 of the Code) that no Excise Tax is payable by the
Executive with respect to a Payment or Payments, it shall furnish the Executive
with an opinion reasonably acceptable to the Executive that no Excise Tax will
be imposed with respect to any such Payment or Payments. Within ten (10) days of
the delivery of the Determination to the Executive, the Executive shall have the
right to dispute the Determination (the "Dispute"). If there is no Dispute, the
Determination shall be binding, final and conclusive upon the Company and the
Executive.

     6.   Successors; Binding Agreement.

          (a)  This Agreement shall be binding upon and shall inure to the
benefit of the Company, its Successors and Assigns and the Company shall require
any Successors and Assigns to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession or assignment had taken place.

          (b)  Neither this Agreement nor any right or interest hereunder shall
be assignable or transferable by the Executive or the Executive's beneficiaries
or legal representatives, except by will or by the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable by
the Executive's legal personal representative.


                                       8
<PAGE>   9

     7.   Confidential Information. Executive understands and acknowledges that
his work as an employee of the Company involves access to and creation of
confidential, proprietary, and trade secret information of the Company and its
affiliates, consultants, customers, clients, and business associates
(collectively, as defined more extensively in Exhibit "A," "Proprietary
Information"). As part of this Agreement, Executive agrees to execute, and be
bound by, the Company's "Employee/ Consultant Proprietary Information
Agreement," a copy of which is attached hereto as Exhibit "A."

     8.   Notice. All notices, requests, demands, and other communications
hereunder shall be in writing, and shall be delivered in person, by facsimile,
or by certified or registered mail with return receipt requested. Each such
notice, request, demand, or other communication shall be effective (a) if
delivered by hand, when delivered at the address specified in this Section; (b)
if given by facsimile, when such facsimile is transmitted to the telefacsimile
number specified in this Section and confirmation is received; or (c) if given
by certified or registered mail, three days after the mailing thereof. Notices
shall be delivered as follows:

                           If to the Company:
                           MTI Technology Corporation
                           4905 E. La Palma Avenue
                           Anaheim, California 92807
                           Attention:  Chief Financial Officer
                           Fax:  (714) 693-2202

                           With a copy to:

                           Morrison & Foerster LLP
                           19900 MacArthur Boulevard
                           12th Floor
                           Irvine, California 92612
                           Attention:  Tamara Powell Tate
                           Fax:  (714) 251-0900

                           If to the Executive:

                           Kenneth Simpson
                           547 KiKi Drive
                           Pleasant Hill, CA 94523
                           (925) 825-2767

Any party may change its address by notice giving notice to the other party of a
new address in accordance with the foregoing provisions.

     9.   Non-Exclusivity Of Rights. Nothing in this Agreement shall prevent or
limit the Executive's continuing or future participation in any benefit, bonus,
incentive or other plan or program provided by the Company (except for any
severance or termination policies, plans,


                                       9
<PAGE>   10

programs or practices) and for which the Executive may qualify, nor shall
anything herein limit or reduce such rights as the Executive may have under any
other agreements with the Company (except for any severance or termination
agreement). Amounts which are vested benefits or which the Executive is
otherwise entitled to receive under any plan or program of the Company shall be
payable in accordance with such plan or program, except as explicitly modified
by this Agreement.

     10.  No Implied Employment Rights. Executive acknowledges and agrees that
nothing in this Agreement shall be construed to imply that his employment is
guaranteed for any period of time. Executive understands that his employment is
"at will," which means that either the Company or the Executive can terminate
the employment relationship at any time, with or without advance notice, for any
reason or no reason, with or without cause. Executive understands that the only
way that his "at will" employment relationship can be altered is by a written
agreement signed by the Executive and the President of the Company.

     11.  Settlement Of Claims. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including, without
limitation, any set-off, counterclaim, recoupment, defense or other right which
the Company may have against an Executive or others.

     12.  Miscellaneous. No provision of this Agreement may be modified, waived
or discharged, unless such waiver, modification or discharge is agreed to in
writing and signed by the Executive and the Company. No waiver by either party
hereto at any time of any breach by the other party hereto, or compliance with,
any condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreement or representation,
oral or otherwise, express or implied, with respect to the subject matter hereof
have been made by either party which are not expressly set forth in this
Agreement.

     13.  Governing Law. This Agreement has been negotiated and executed in the
State of California and is to be performed in Orange County, California. This
Agreement shall be governed by and interpreted in accordance with the laws of
the State of California, including all matters of construction, validity,
performance, and enforcement, without giving effect to principles of conflict of
laws. Any dispute, action, litigation, or other proceeding concerning this
Agreement shall be instituted, maintained, heard, and decided in Orange County,
California.

     14.  Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.

     15.  Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto and supersedes all prior agreements, if any,
understandings and arrangements, oral or written, between the parties hereto
with respect to the subject matter hereof.


                                       10
<PAGE>   11

     16.  Remedies. All rights, remedies, undertakings, obligations, options,
covenants, conditions, and agreements contained in this Agreement shall be
cumulative and no one of them shall be exclusive of any other.

     17.  Interpretation. The language in all parts of this Agreement shall be
in all cases construed simply according to its fair meaning and not strictly for
or against any party. Whenever the context requires, all words used in the
singular will be construed to have been used in the plural, and vice versa. The
descriptive headings of the sections and subsections of this Agreement are
inserted for convenience only and shall not control or affect the interpretation
or construction of any of the provisions herein.

     18.  Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.

     19.  Further Documents and Acts. Each of the parties hereto agrees to
cooperate in good faith with the other and to execute and deliver such further
instruments and perform such other acts as may be reasonably necessary or
appropriate to consummate and carry into effect the transactions contemplated
under this Agreement.

     20.  Consultation with Counsel. Executive acknowledges (a) that he has been
given the opportunity to consult with counsel of his own choice concerning this
Agreement, and (b) that he has read and understands the Agreement, is fully
aware of its legal effect, and has entered into it freely based upon his own
judgment with or without the advice of such counsel.

EXECUTIVE ACKNOWLEDGES THAT HE HAS READ THIS AGREEMENT AND UNDERSTANDS ITS
CONTENTS. EXECUTIVE FURTHER ACKNOWLEDGES THAT THE COMPANY HAS ADVISED HER OF HER
RIGHT TO CONSULT WITH LEGAL COUNSEL OF HER OWN CHOICE CONCERNING THIS AGREEMENT.
BY SIGNING THIS AGREEMENT, EXECUTIVE AND THE COMPANY AGREE TO BE BOUND BY ALL OF
THE TERMS AND CONDITIONS OF THIS AGREEMENT.

     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by
its duly authorized officer and the Executive has executed this Agreement as of
the day and year first above written.

                                        MTI TECHNOLOGY CORPORATION

                                        By:
                                            ------------------------------------
                                        Title:
                                               ---------------------------------


                                        ----------------------------------------
                                        Kenneth Simpson


                                       11
<PAGE>   12

                                   EXHIBIT "A"


                                   Exhibit "A"

<PAGE>   13

                     STATEMENT REGARDING EMPLOYEE/CONSULTANT
                        PROPRIETARY INFORMATION AGREEMENT

Attached to this statement is your Employee/Consultant Proprietary Information
Agreement (the "Agreement") with MTI Technology Corporation (together with its
subsidiaries, the "Company").

Please take the time to review the Agreement carefully. It contains material
restrictions on your right to disclose or use, during or after your employment,
certain information and technology learned or developed by you during your
employment with the Company. The Company considers this Agreement to be very
important to the protection of its business.

If you have any questions concerning the Agreement, you may wish to consult an
attorney. Managers, legal counsel, and others in the Company are not authorized
to give you legal advice concerning the Agreement.

If you have read and understand the Agreement, and if you agree to its terms and
conditions, please return a fully executed copy of it to the Company, retaining
one copy for yourself.



I HAVE READ AND UNDERSTAND

THE ATTACHED AGREEMENT:




Executive Name:  Kenneth Simpson

Executive Signature:
                     -------------------------

Title:
       ---------------------------------------

Date:
      ----------------------------------------


                                      A-1
<PAGE>   14

              EMPLOYEE/CONSULTANT PROPRIETARY INFORMATION AGREEMENT

     In consideration of my present and future employment by MTI Technology
Corporation (together with its subsidiaries, the "Company"), I agree to the
following:

     1.   Proprietary Information.

          (a) I understand and acknowledge that my work as an employee of the
Company has involved and will continue to involve access to and creation of
confidential, proprietary, and trade secret information of the Company and its
affiliates, consultants, customers, clients, and business associates
(collectively, as defined more extensively below, "Proprietary Information"). I
further understand and acknowledge that the Company and its clients have
developed, compiled, and otherwise obtained this Proprietary Information often
at great expense, and that such information has great value to their respective
businesses. I agree to hold in strict confidence and in trust for the sole
benefit of the Company and its clients all Proprietary Information. I further
agree that I shall treat all Proprietary Information as private, privileged, and
confidential, and that I shall not use, disclose, or release any Proprietary
Information in any way to any person, firm, or institution at any time, even
after termination of my employment, except to the extent necessary to carry out
my responsibilities as an Executive of the Company. I further understand and
agree that the publication of Proprietary Information through literature or
speeches must be approved in advance in writing by a duly authorized officer of
the Company.

          (b) I understand and acknowledge that, for purposes of this Agreement,
"Proprietary Information" means all confidential, proprietary, or trade secret
information and ideas in whatever form, tangible or intangible, whether
disclosed to or learned or developed by me, prior or subsequent to the date
hereof, pertaining in any manner to the business of the Company or to the
Company's affiliates, consultants, clients, or business associates, unless: (i)
the information is or becomes publicly known through lawful means; (ii) the
information was rightfully in my possession or part of my general knowledge
prior to my employment by the Company; or (iii) the information is disclosed to
me without confidential or proprietary restriction by a third party who
rightfully possesses the information (without confidential or proprietary
restriction) and did not learn of it, directly or indirectly, from the Company.

          (c) Without limiting the generality of the foregoing, I understand and
acknowledge that "Proprietary Information" includes all: (i) inventions,
computer codes, computer programs, formulas, schematics, techniques, algorithms,
employee suggestions, development tools and processes, computer printouts,
design drawings and manuals, and improvements or modification to any of the
foregoing; (ii) information about costs, profits, markets, and sales; (iii)
plans for future development and new product concepts; and (iv) all documents,
books, papers, drawings, models, sketches, and other data of any kind and
description, including electronic data recorded or retrieved by any means, that
have been or will be given to me by the Company (or any present or future
affiliates, consultants, customers, clients, and business associates of the
Company), as well as written or verbal instructions or comments.


                                      A-2
<PAGE>   15

     2.   Use Of Proprietary Information.

     I agree that I will maintain at my work station or in other places under my
control only such Proprietary Information that I have a current "need to know,"
and that I will return to the appropriate person or location, or otherwise
dispose of, Proprietary Information once my need to know no longer exists. I
agree that I will not make copies of information unless I have a legitimate need
for such copies in connection with my work.

     3.   Third-Party Information.

     I recognize that the Company has received and in the future will receive
from third parties their confidential or proprietary information subject to a
duty on the Company's part to maintain the confidentiality of such information
and to use it only for certain limited purposes. I agree that I owe the Company
and such third parties, during the term of my employment and thereafter, a duty
to hold all such confidential or proprietary information in the strictest
confidence and not to disclose it to any person, firm, or corporation (except as
necessary in carrying out my work for the Company consistent with the Company's
agreement with such third party) or to use it for the benefit of anyone other
than for the Company or such third party (consistent with the Company's
agreement with such third party) without the express written authorization of a
duly authorized officer of the Company.

     4.   Inventions.

          (a) Subject to Section 9 below, I hereby assign to the Company,
without additional consideration, all right, title and interest (throughout the
United States and in all foreign countries) in all ideas, processes, inventions,
technology, writings, computer programs, designs, formulas, discoveries,
patents, copyrights, trademarks, service marks, original works of authorship,
any claims or rights, and any improvements or modifications to the foregoing
(collectively, "Inventions"), whether or not subject to patent or copyright
protection, relating to any activities of the Company that have been or will be
conceived, developed, or reduced to practice by me alone or with others (i)
during the term of my employment, whether or not conceived or developed during
regular business hours, and whether or not conceived before, on, or after the
date hereof or (ii) if based on Proprietary Information, after termination of my
employment. Such Inventions shall be the sole property of the Company and, to
the maximum extent permitted by applicable law, shall be deemed works made for
hire.

          (b) I will, whether during or after my employment by the Company,
execute such written instruments and do other such acts as may be necessary in
the opinion of the Company to obtain a patent, register a copyright, or
otherwise enforce the Company's rights in such Inventions (and I hereby
irrevocably appoint the Company and any of its officers as my attorney in fact
to undertake such acts in my name).

          (c) I understand that the assignment by me to the Company does not
apply to Inventions that qualify fully under Section 2870(a) of the California
Labor Code, which is set forth on Schedule "A." I understand that nothing in
this Agreement is intended to expand the scope of protection provided by
Sections 2870 through 2872 of the California Labor Code. Except as disclosed in
Schedule "B", there are no ideas, inventions, technology, computer


                                      A-3
<PAGE>   16

programs, processes, trademarks, service marks, original works of authorship,
designs, formulas, discoveries, patents, copyrights, any claims or rights, and
any improvements or modifications to the foregoing that I wish to exclude from
the operation of this Agreement.

          (d)  To the best of my knowledge, there is no existing contract in
conflict with this Agreement or any other contract in existence between me and
any other person or entity to assign ideas, inventions, technology, computer
programs, processes, trademarks, service marks, original works of authorship,
designs, formulas, discoveries, patents, copyrights, any claims or rights, and
any improvements or modifications to the foregoing.

     5.   Termination of Employment.

          (a)  I hereby acknowledge and agree that nothing in this Agreement
shall be construed to imply that the term of my employment is of any definite
duration. I further acknowledge and agree that I am employed on an "at-will"
basis, which means that I may quit at any time with or without cause, and the
Company may terminate my employment at any time with or without cause.

          (b)  I acknowledge that, because of my responsibilities at the
Company, I have helped and will continue to help to develop and have been and
will be exposed to the Company's research and development, products, business
strategies, information on customers and clients, and other valuable Proprietary
Information, and that use or disclosure of such Proprietary Information in
breach of this Agreement would be extremely difficult to detect or prove. I also
acknowledge that the Company's relationships with its employees, affiliates,
consultants, customers, clients, business associates, and other persons are
valuable business assets. To forestall any use or disclosure of Proprietary
Information in breach of this Agreement, I agree that for the term of this
Agreement and for a period of one (1) year after termination of my employment
with the Company, I shall not, for myself or any third party, directly or
indirectly:

               (i) divert or attempt to divert from the Company any business of
     any kind in which it is engaged, including, without limitation, the
     solicitation of or interference with any of its suppliers or customer; or

               (ii) employ, solicit for employment, or recommend for employment
     any person employed by the Company.

     Furthermore, I agree that during the period of my employment with the
Company I shall not engage in any business activity that is or may be
competitive with the Company. I understand that none of my activities will be
prohibited under this section if I can prove that the action was taken without
the use in any way of Proprietary Information.

          (c)  I acknowledge that, because of the difficulty of establishing
when any Invention is first conceived or developed by me, or whether it results
from access to Proprietary Information or the Company's equipment, facilities,
and data, I agree that any ideas, inventions, technology, computer programs,
processes, trademarks, service marks, original works of authorship, designs,
formulas, discoveries, patents, copyrights, any claims or rights, and any
improvements or modifications to the foregoing shall be presumed to be an
Invention if


                                      A-4
<PAGE>   17

conceived, developed, used, sold, exploited, or reduced to practice by me or
with my aid within one (1) year after my termination of employment with the
Company. I can rebut the above presumption if I prove that the invention, idea,
process, etc., is not an Invention as defined in paragraph 4(a).

          (d)  I hereby acknowledge and agree that all personal property
including, without limitation, all books, manuals, records, models, drawings,
reports, notes, contracts, lists, files, computer software, computer tapes or
disks, blueprints, and other documents or materials (or copies thereof),
Proprietary Information, and equipment furnished to or prepared by me in the
course of or incident to my employment, belong to the Company and shall be
promptly returned to the Company once my employment with the Company is
terminated, for any reason. I will not retain any written or other tangible
information pertaining to any Invention. In the event of the termination of my
employment, I agree to sign and deliver the Termination Certificate attached as
Schedule "C" to this Agreement.

          (e)  I understand that my obligations contained in this Agreement will
survive the termination of my employment with the Company, and that I will
continue to make all disclosures required of me by Paragraph 6.

     6.   Disclosure.

     I agree to maintain adequate and current written records on the development
of all Inventions and to disclose promptly to the Company all Inventions and
relevant records, which records will remain the sole property of the Company. I
further agree that all information and records pertaining to any Inventions
conceived, developed, or reduced to practice by me (alone or with others) during
my period of employment or during the one-year period following termination of
my employment, shall be promptly disclosed to the Company (any such disclosures
made after the termination of my employment shall be received by the Company in
confidence for the purpose of determining if they have been based on any
Proprietary Information). The Company shall examine such information to
determine if in fact such information are Inventions subject to this Agreement.

     7.   Former or Conflicting Agreements.

     During my employment with the Company, I will not disclose to the Company,
or use, or induce the Company to use, any confidential, proprietary, or trade
secret information of others. I represent and warrant that I have returned all
property and confidential, proprietary and trade secret information belonging to
all prior employers, if any. I further represent and warrant that my performance
of the terms of this Agreement will not breach any agreement to keep in
confidence confidential proprietary and trade secret information acquired by me
in confidence or in trust prior to my employment by the Company. I have not
entered into, and I agree I will not enter into, any oral or written agreement
in conflict herewith.

     8.   Information on Company Premises.

     I acknowledge that all information generated, received, or maintained by or
for me on the premises or equipment of the Company (including, without
limitation, computer systems and


                                      A-5
<PAGE>   18

electronic-mail or voicemail systems) is the property of the Company, and I
hereby waive any property or privacy rights that I may have with respect to such
information.

     9.   Reserved Inventions.

     To avoid future confusion, I have listed on Schedule "B" a description of
all Inventions, if any, developed or conceived by me in which I claim any
ownership or other right. I understand that, by not listing an Invention, I am
acknowledging that the Invention was not developed or conceived before
commencement of my employment.

     10.  Choice of Law.

     The validity, interpretation, enforceability, and performance of this
Agreement shall be governed by and construed in accordance with the laws of the
State of California without giving effect to its conflict of law rules. Any
dispute, action, litigation, or other proceeding concerning this Agreement shall
be instituted, maintained, heard, and decided in Orange County, California.

     11.  Remedies.

     I recognize that nothing in this Agreement is intended to limit any remedy
of the Company under the California Uniform Trade Secrets Act and that I could
face possible criminal and civil actions, resulting in imprisonment and
substantial monetary liability, if I misappropriate the Company's or its
clients' trade secrets. In addition, I recognize that my violation of this
Agreement could cause the Company irreparable harm and significant injury, the
amount of which may be extremely difficult to estimate, thus, making any remedy
at law or in damages inadequate. Therefore, I agree that, in the event of a
breach or threatened breach that involves Proprietary Information of the Company
or its clients, the Company shall have the right to apply to any court of
competent jurisdiction for an order restraining any breach or threatened breach
of this Agreement and for any other relief the Company deems appropriate. This
right shall be in addition to any other remedy available to the Company in law
or equity.

     12.  Successors and Assigns.

          (a) I understand and agree that the Company may assign to another
     person or entity any of its rights under this Agreement.

          (b) I further understand and agree that this Agreement shall be
     binding upon me and my heirs, executors, administrators, and successors,
     and shall inure to the benefit of the Company's successors and assigns.

     13.  Severability.

     If any provision of this Agreement is determined to be invalid, illegal or
unenforceable, the validity or enforceability of the other provisions shall not
be affected.


                                      A-6
<PAGE>   19

     14.  Entire Agreement.

     The terms of this Agreement are the final expression of my agreement with
respect to the subject matter hereof and may not be contradicted by evidence of
any prior or contemporaneous agreement. This Agreement shall constitute the
complete and exclusive statement of its terms and no extrinsic evidence
whatsoever may be introduced in any judicial, administrative, or other legal
proceeding involving this Agreement. No modification or amendment of this
Agreement shall be binding unless executed in writing by me and a duly
authorized officer of the Company.

I HAVE READ THIS AGREEMENT CAREFULLY AND UNDERSTAND ITS TERMS. I HAVE COMPLETELY
NOTED ON SCHEDULE "B" TO THIS AGREEMENT ANY PROPRIETARY INFORMATION, IDEAS,
PROCESSES, CREATIONS, TECHNOLOGY, INVENTIONS, PATENTS, COPYRIGHTS, OR
TRADEMARKS, WRITINGS, PROGRAMS, DESIGNS, FORMULAS, DISCOVERIES, OR IMPROVEMENTS,
RIGHTS, OR CLAIMS RELATING TO THE FOREGOING, THAT I DESIRE TO EXCLUDE FROM THIS
AGREEMENT.

     This Agreement is made and entered into as of _____, 2001.



                                           MTI TECHNOLOGY CORPORATION

                                           By:
                                               ---------------------------------
                                           Title:
                                                  ------------------------------

                                           Executive: Kenneth Simpson

                                           Signature:
                                                      --------------------------


                                      A-7
<PAGE>   20

                                   SCHEDULE A

                      California Labor Code Section 2870(a)

     Any provision in an employment agreement which provides that an employee
shall assign, or offer to assign, any of his or her rights in an invention to
his or her employer shall not apply to an invention that the employee developed
entirely on his or her own time without using the employer's equipment,
supplies, facilities, or trade secret information, except for those inventions
that either:

     (1)  Relate at the time of conception or reduction to practice of the
invention to the employer's business, or actual or demonstrably anticipated
research or development of the employer; or

     (2)  Result from any work performed by the employee for the employer.


                                   Schedule A

<PAGE>   21

                                   SCHEDULE B


1.   Proprietary Information. Except as set forth below, I acknowledge that at
     this time I know nothing about the business or Proprietary Information of
     the Company, other than information I have learned from the Company in the
     course of being hired:

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

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

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

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

2.   Reserved Inventions. Except as set forth below, there are no ideas,
     processes, inventions, technology, writings, programs, designs, formulas,
     discoveries, patents, copyrights, or trademarks, or any claims, rights, or
     improvements to the foregoing, that I wish to exclude from the operation of
     this Agreement:

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

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

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

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

Name:
      -------------------------
Signature:
           --------------------
Date:
      -------------------------


                                   Schedule B

<PAGE>   22

                                   SCHEDULE C

                             TERMINATION CERTIFICATE


     This is to certify that I have returned all personal property of the
Company, including, without limitation, all books, manuals, records, models,
drawings, reports, notes, contracts, lists, blueprints, and other documents and
materials, Proprietary Information, and equipment furnished to or prepared by me
in the course of or incident to my employment with the Company, and that I did
not make or distribute any copies of the foregoing.

     I further certify that I have reviewed the Employee/Consultant Proprietary
Information Agreement signed by me and that I have complied with and will
continue to comply with all of its terms including, without limitation: (i) the
reporting of any invention, process, idea, etc. conceived or developed by me and
covered by the Agreement; and (ii) the preservation as confidential of all
Proprietary Information pertaining to the Company. This certificate in no way
limits my responsibilities or the Company's rights under the Agreement.

     On termination of my employment with the Company, I will be employed by
[NAME OF EMPLOYER AND DIVISION/DEPARTMENT THAT EMPLOYEE WILL BE IN], and I will
be working in connection with the following projects:

Name:
      -------------------------
Signature:
           --------------------
Date:
      -------------------------



                                   Schedule C