Exhibit 10






July 3, 1996






Mr. E. Joseph Zemke
21891 Via Regina
Saratoga, California  95070

Dear Joe:

                  The purpose of this letter  agreement  is to document  (i) the
severance benefits to which you are entitled in connection with your resignation
as the Company's  President and Chief  Executive  Officer and as a member of the
Company's Board of Directors and (ii) the consulting arrangement and restrictive
covenants which will be in effect for you through March 14, 1998.


                         PART ONE -- SEVERANCE BENEFITS

                  1.  Your  resignation  as the  Company's  President  and Chief
Executive  Officer  and as a  member  of the  Company's  Board of  Directors  is
effective as of March 14, 1996. Your employment with the Company also terminated
as of that date.

                  2. You will receive your normal salary through March 14, 1996,
and all regular and mandatory  payroll  deductions will be taken from your final
paycheck. Your final paycheck will also include payment for all your accrued but
unused  vacation  days through  March 14,  1996,  subject to the  collection  of
applicable  withholding  taxes.  Your  participation  in the Company's  employee
benefit programs,  including (without  limitation) the group term life insurance
plan,  the  disability  income  plan,  the  accidental  death and  dismemberment
insurance  program,  the flexible dollars benefit program,  the Employee Savings
Program  (including  your ability to make pre-tax and after-tax  contributions),
the Employee Stock Purchase Plan and the 1994 Stock  Incentive  Plan, will cease
as of your  March  14,  1996  termination  date,  except to the  limited  extent
provided  in  Paragraphs  6 and 9 of this  Part  One.  You  will  also  cease to
participate in any special executive benefit programs, effective with your March
14, 1996 termination date.

                  3.       Effective with your March 14, 1996 termination


<PAGE>



date,  you will  cease to have any  further  access  to  confidential  and other
non-public  information  concerning  the  Company and its  business  operations,
except to the  limited  extent  necessary  to perform  any  consulting  services
required of you pursuant to Part Two of this letter agreement.

                  4. You will receive an aggregate of  $2,382,000  of salary and
bonus  continuation  payments over the two-year period  beginning March 15, 1996
and ending March 14, 1998. These payments will be made in equal  installments at
bi-weekly  intervals over the two-year period, with the first payment to be made
as of March 29, 1996.  All payments will be subject to the Company's  collection
of applicable  withholding taxes. In addition to these bi-weekly  payments,  you
will also receive a total of $120,000 over the two-year  consulting period to be
in  effect  under  Part  Two  of  this  letter  agreement.   However,  all  such
continuation  payments and  consulting  fees will  immediately  terminate in the
event of a material  breach of any of your covenants  under Paragraph 15 of this
letter agreement.



<PAGE>



Mr. E. Joseph Zemke
July 3, 1996
Page 2



                  5. During  your period of  employment  with the  Company,  you
received  restricted stock awards for a total of 190,400 shares of the Company's
common stock.  As of July 3, 1996;  137,400 of those shares were  unvested.  The
specific  break-down of your vested and unvested  restricted  stock awards as of
July 3, 1996 is attached as Schedule A. All of your  remaining  unvested  shares
will vest on August 30, subject to your  compliance with Paragraph 15. Prior to
August 30, you will  designate the number of shares of  restricted  stock to be
issued to you and the  number to be  issued  to your  wife.  At the time of such
vesting,  you will recognize  immediate  taxable income equal to the fair market
value of those  previously  unvested  shares,  less the issue price you paid for
such shares,  and you will have to satisfy the applicable  withholding  taxes on
that income before the certificates for the shares will be released.

                  6. You currently  hold  outstanding  stock options for 364,000
shares of the  Company's  common  stock.  As of July 3, 1996,  those options are
exercisable  for a total of 232,400  shares.  The  specific  break-down  of your
vested  and  unvested  stock  options  as of July 3,  1996 is also  included  in
attached  Schedule  A. Upon  execution  of this letter  agreement,  each of your
options  will  be  fully  vested  and  may be  exercised  for  any or all of the
outstanding  option  shares at any time prior to March 14, 1998,  except for the
August 5, 1986 option grant which you have already  exercised in full.  Prior to
your  exercise,  you will designate the number of shares to be issued to you and
the number to be issued to your wife. Since all of your outstanding  options are
non-qualified  options  under the federal  income tax laws,  you will  recognize
compensation  income in connection with your exercise of those options,  and you
must  satisfy  all  applicable  withholding  taxes  associated  with  each  such
exercise.

                  7. You are  currently  vested in your entire  account  balance
under  the  Long-Term  Executive  Incentive   Performance  Plan,  and  you  will
immediately vest in all your outstanding accounts under the Short-Term Executive
Incentive  Performance  Plan upon your  execution of this letter  agreement.  On
August 30, 1996,  you will  receive a lump sum  payment  of your  outstanding
account  balances under both the Short-Term  and Long-Term  Executive  Incentive
Performance Plans, subject to the Company's collection of applicable withholding
taxes.  Prior to August 30, you will designate the amount to be paid to you and
the amount to be paid to your wife. As of July 3, 1996, the aggregate balance of
your outstanding  accounts under the Short-Term Plan was $185,353.59  (inclusive
of interest  through  December 31, 1995) and your  outstanding  account  balance
under the Long-Term Plan was $1,879,390  (inclusive of interest through December
31, 1995).


<PAGE>



Your  lump sum  payment  will  also  include  interest  on your  Short-Term  and
Long-Term  Plan  accounts  at the rate of 6.5  percent  per annum for the period
January 1, 1996 through the payment date.

                  8. At the  time  you  receive  your  lump  sum  payment  under
Paragraph  7, you will repay to the  Company  your  outstanding  loans under the
Company's  Officer Loan Program.  On July 3, 1996,  the  outstanding  balance of
those loans will be $444,844.06. A specific break-down of your outstanding loans
as of July 3, 1996 is set forth in attached  Schedule B. This  schedule  will be
updated  to state the amount  owed as of  November  1,  1996,  the lump sum date
referred to in Paragraph 7.





<PAGE>



Mr. E. Joseph Zemke
July 3, 1996
Page 3



                  9. The  Company  will,  at its  expense,  provide you and your
spouse with continued health care coverage under the Company's executive officer
medical/dental plan. Your individual coverage will continue until the earlier of
(i) your  attainment of age 65 or (ii) the first date that you are covered under
another employer's health benefit program which provides  substantially the same
level of benefits without  exclusion for pre-existing  medical  conditions.  The
coverage for your spouse will  continue  until the earlier of (i) March 31, 1998
or (ii) the first  date that she is  covered  under  another  employer's  health
benefit program which provides  substantially the same level of benefits without
exclusion for pre-existing  medical  conditions.  The Company believes that such
continued  health care coverage will not constitute  taxable income to you under
current federal tax laws, regulations and rulings. The coverage provided you and
your spouse under this Paragraph 9 will be in lieu of any other continued health
care coverage to which you or your spouse would  otherwise be entitled  pursuant
to the  requirements  of Code  Section  4980B by reason of your  termination  of
employment  or your  subsequent  divorce,  and  neither you nor your spouse will
accordingly  be entitled to any further  health care coverage under Code Section
4980B following the coverage period in effect under this Paragraph 9.

                  10. You also  acknowledge  that you will remain subject to the
reporting  requirements in effect under Section 16(a) of the Securities Exchange
Act of 1934, as amended,  until  September 14, 1996,  and you will work with Ms.
Patricia  Boepple of the Company in filing all  required  Section 16 (a) reports
for your transactions in the Company's common stock through that date.

                  11. You have  previously  been provided with certain  computer
and telephone equipment for home use. That equipment may be retained by you. All
copies of  proprietary  information  and other  confidential  information of the
Company  currently in your possession,  whether in hard copy,  diskette or other
computer-readable format, must either be destroyed or returned to Mr. Anthony M.
Pozos at the time you execute this letter agreement,  and you may not retain any
files,  documents  or  other  tangible  manifestations  of such  proprietary  or
confidential information.

                  12. You will be entitled  to  indemnification,  in  accordance
with the applicable  provisions of Article Eleventh of the Company's Articles of
Incorporation  and  Article  IX of the  Company's  Bylaws  (copies  of which are
attached as Schedule C),  against all  expense,  liability  and loss  (including
attorney fees and settlement payments) which you may incur by reason of


<PAGE>



any action,  suit or proceeding  arising from or relating to the  performance of
your duties as an officer or  director  of the  Company  prior to your March 14,
1996 termination date.


         PART TWO -- CONSULTING ARRANGEMENT AND RESTRICTIVE COVENANTS

                  13. You will make  yourself  available  to perform  consulting
services  reasonably  requested of you during the two (2) year period  beginning
March 15, 1996 and ending March 14, 1998 (the "Consultancy Period"). You will be
paid a monthly  retainer  fee of $5,000 at the start of each  month  during  the
period April 1, 1996 through February 28, 1998. In addition,  you will receive a
pro-rated retainer fee of $2,500 for the period March 15, 1996 to March 31, 1996
(to be paid  upon your  execution  of this  letter  agreement)  and a  pro-rated
retainer  fee of $2,500  for the period  March 1, 1998 to March 14,  1998 (to be
paid on March 1, 1998). In  consideration  of the monthly retainer fee, you will
make yourself available to render up to 10 hours of consulting




<PAGE>



Mr. E. Joseph Zemke
July 3, 1996
Page 4



services  per  month (5 hours per month for a  pro-rated  retainer)  during  the
Consultancy Period. All assignments will come from the Chairman of the Company's
Board of Directors,  and you will report directly to such person with respect to
each  assignment.  Should you be requested to render more than the required 5 or
10 hours of  consulting  services per month,  then you will be  compensated  for
those  additional  hours  at an  hourly  rate to be  agreed  upon by you and the
Chairman  of the  Company's  Board  of  Directors  at the time  such  consulting
services  are  to be  rendered.  You  will  be  reimbursed  for  all  reasonable
out-of-pocket  expenses incurred in rendering such consulting services upon your
submission of appropriate documentation for those expenses.

                  14.  During  the  Consultancy  Period,  you  will not make any
representations to any third party that you are an officer, director or employee
of the Company. Any proprietary information or other confidential information of
the Company to which you may have access in the  performance of your  consulting
services will be held in confidence and will not be disclosed to any third party
or otherwise  directly or indirectly used by you, except to the extent necessary
to perform your consulting services.

                  15. As a condition to, and in consideration for, the severance
benefits you are to receive under Part One and the additional  retainer fees you
are to receive  under this Part Two, you will not at any time during the two (2)
year period beginning March 15, 1996 and ending March 14, 1998:

                           (i)      directly or indirectly, whether for your own
account or as an employee, director,  consultant or advisor, provide services to
any  business  enterprise  which is at the time in  competition  with any of the
Company's then existing or formally  planned  product lines and which is located
geographically  in an area  where the  Company  maintains  substantial  business
activities,  unless you obtain the prior written  consent of the Company's Board
of Directors, or

                           (ii)     directly or indirectly encourage or solicit
any individual to leave the Company's  employ for any reason or interfere in any
other manner with the employment  relationships at the time existing between the
Company and its current or prospective employees, or

                           (iii)     induce or attempt to induce any customer, 
supplier,  distributor,  licensor, licensee or other business relation
of the Company to cease doing  business with the Company or in any way interfere
with the existing business


<PAGE>



relationship  between  any  such  customer,  supplier,  distributor,   licensor,
licensee or other business relation and the Company.

     You acknowledge  that monetary  damages may not be sufficient to compensate
the Company for any economic loss which may be incurred by reason of your breach
of the foregoing restrictive  covenants.  Accordingly,  in the event of any such
breach, the Company will, in addition to the cessation of the severance benefits
and consulting fees provided you under this agreement and any remedies available
to the Company at law, be entitled to obtain  equitable relief in the form of an
injunction precluding you from continuing to engage in such breach.


                          PART THREE -- MUTUAL RELEASES

                  16. In  consideration  of the various payments and benefits to
be provided you pursuant to this letter  agreement,  you do hereby for yourself,
your heirs, executors, administrators and assigns agree as follows:



<PAGE>



Mr. E. Joseph Zemke
July 3, 1996
Page 5



                           a.       You fully and forever release and discharge
the Company,  Fujitsu Limited,  their respective affiliates and their respective
officers,  directors,  employees,  agents and assigns (jointly and severally the
"Releasees"),  or any of them, from any claims,  demands,  damages and causes of
action you have or may have  against the  Releasees  and  covenant not to sue or
otherwise  institute  or cause to be  instituted  or in any way  participate  in
(except at the request of the Company or as otherwise  required by law) legal or
administrative  proceedings  against the  Releasees  with  respect to any matter
arising out of or connected with your employment with the Company,  your service
on the Company's  Board of Directors or the  termination  of that  employment or
service, including any and all liabilities,  claims, demands,  contracts, debts,
obligations and causes of action of every nature, kind and description,  in law,
equity or otherwise,  whether or not now known or ascertained,  which heretofore
do or may exist.  However, the foregoing release shall not apply with respect to
any claims arising under this letter agreement or your existing  indemnification
rights under the Company's Articles of Incorporation and Bylaws.

                           b.       You hereby waive and release any and all
rights you may have had or now have to pursue any and all remedies  available to
you  under  any  employment-related  cause  of  action  against  the  Releasees,
including (without limitation) claims of wrongful discharge, emotional distress,
defamation,  breach of  contract,  breach of the covenant of good faith and fair
dealing,  violation of the provisions of the California Labor Code, the Employee
Retirement  Income Security Act, and any other laws and regulations  relating to
employment.

                           c.       You hereby waive and release any and all
rights  you may have  had or now have to  pursue  any  claim of  discrimination,
including  (without  limitation) any claim of discrimination  based on sex, age,
race, national origin or other basis, under Title VII of the Civil Rights Act of
1964, as amended, the California Fair Employment and Housing Act, the California
Constitution,  the Equal Pay Act of 1963, the Age  Discrimination  in Employment
Act of 1967,  the Civil Rights Act of 1866,  and all other laws and  regulations
relating to employment.

                  17. In consideration of the various promises and releases made
by you under this letter agreement, the Company will, upon the expiration of the
seven (7)-day period  measured from the date you execute this letter  agreement,
become fully bound by the  following  releases and waivers,  provided you do not
exercise your right to revoke your general  release under this Part Three during
that period:


<PAGE>



                The Company hereby fully and forever releases and
discharges  you from any and all claims,  demands,  damages and causes of action
the Company has or may have  against you and  covenants  not to sue or otherwise
institute  or  cause  to be  instituted  or in any way  participate  in legal or
administrative proceedings against you with respect to any matter arising out of
or  connected  with  your  employment  with the  Company,  your  service  on the
Company's  Board of Directors or the  termination of that employment or service,
including  any  and  all  liabilities,   claims,  demands,   contracts,   debts,
obligations and causes of action of every nature, kind and description,  in law,
equity or otherwise,  whether or not now known or ascertained,  which heretofore
do or may exist.  However, the foregoing release shall not apply with respect to
any claims arising under this letter agreement.







<PAGE>




Mr. E. Joseph Zemke
July 3, 1996
Page 6



                  18. The mutual releases  effected by you and the Company under
this Part Three extend to all claims of every nature and kind, known or unknown,
suspected or unsuspected,  past or present, arising from or attributable to your
employment by the Company,  your service as a member of the  Company's  Board of
Directors,  or the termination of that employment or service. Any and all rights
granted to you and the Company under Section 1542 of the  California  Civil Code
or any  analogous  state law or federal law or regulation  are hereby  expressly
waived by you and the Company,  respectively.  Section 1542 of the Civil Code of
the State of California reads as follows:



                A general release does not extend to claims which
the  creditor  does not  know or  suspect  to exist in his  favor at the time of
executing the release, which, if known by him, must have materially affected his
settlement with the debtor.

                      PART FOUR -- MISCELLANEOUS PROVISIONS

                  19. It is the belief of both you and the Company  that none of
the payments and benefits provided under this letter agreement are in the nature
of parachute  payments under Internal Revenue Code Section 280G, and neither you
nor the Company (or its successors)  will take any action or reporting  position
contrary  to such  belief.  However,  should  the  Company  undergo a "change in
ownership or effective  control" or a "change in the  ownership of a substantial
portion" of its assets (within the meaning of those terms under Internal Revenue
Code Section 280G and the applicable  Treasury  Regulations)  prior to March 15,
1997 and you incur in connection  therewith,  whether  through tax  withholdings
made by the Company (or its successor) or upon an audit by the Internal  Revenue
Service,  an excise tax liability under Internal  Revenue Code Section 4999 with
respect to one or more of the  payments or  benefits  provided to you under this
letter agreement,  then the Company will provide you with a tax gross-up payment
to cover (i) the initial excise tax liability you so incur plus (ii) the federal
and state income tax liability and the additional  Internal Revenue Code Section
4999  excise tax  liability  you incur by reason of the  gross-up.  In no event,
however,  will the Company be obligated to provide you with a total tax gross-up
payment under this  Paragraph 19 in excess of $1,250,000  (before  reduction for
all applicable taxes).

                  20.  The benefits to which you may become entitled
under this letter agreement (except those attributable to your


<PAGE>



outstanding  stock options and restricted  stock awards) will be paid, when due,
from  the  general  assets  of the  Company.  Your  right  (or the  right of the
executors or administrators of your estate) to receive any such payments will at
all times be that of a general creditor of the Company and will have no priority
over the claims of other general creditors of the Company.

                  21. Should you die before receipt of all benefits to which you
become entitled under this letter  agreement,  then the payment of such benefits
will be made,  on the due  date or  dates  hereunder  had you  survived,  to the
executors or administrators  of your estate.  Should you die before you exercise
your outstanding stock options,  then each such option may be exercised,  during
the applicable  exercise  period in effect  hereunder for those options,  by the
executors  or  administrators  of your estate or by person to whom the option is
transferred pursuant to your will or in accordance with the laws of inheritance.






<PAGE>




Mr. E. Joseph Zemke
July 3, 1996
Page 7



                  22. The provisions of this letter  agreement will be construed
and  interpreted  under  the laws of the  State of  California.  This  agreement
incorporates  the entire  agreement  between you and the Company relating to the
subject  of  severance   benefits  and  supersedes  all  prior   agreements  and
understandings  with respect to such subject matter.  This agreement may only be
amended by written instrument signed by you and a duly-authorized officer of the
Company. If any provision of this letter agreement as applied to any party or to
any circumstance  should be adjudged by a court of competent  jurisdiction to be
void or unenforceable  for any reason,  the invalidity of that provision will in
no way affect (to the maximum extent permissible by law) the application of such
provision under circumstances different from those adjudicated by the court, the
application  of  any  other   provision  of  this  letter   agreement,   or  the
enforceability  or  invalidity of this letter  agreement as a whole.  Should any
provision  of this  letter  agreement  become or be deemed  invalid,  illegal or
unenforceable in any jurisdiction by reason of the scope,  extent or duration of
its  coverage,  then  such  provision  shall be  deemed  amended  to the  extent
necessary to conform to applicable law so as to be valid and  enforceable or, if
such provision cannot be so amended without materially altering the intention of
the parties,  then such  provision  shall be stricken and the  remainder of this
letter agreement shall continue in full force and effect.

                  23. All rights and remedies  provided  pursuant to this letter
agreement  or by law will be  cumulative,  and no such  right or remedy  will be
exclusive  of any other.  A party may pursue any one or more  rights or remedies
hereunder  or may seek damages or specific  performance  in the event of another
party's  breach  hereunder  or may  pursue  any other  remedy by law or  equity,
whether or not stated in this letter agreement.

                  24.  Any  controversy  which  may  arise  between  you and the
Company with respect to the  construction,  interpretation or application of any
of the terms,  provisions or conditions of this letter agreement or any monetary
claim arising from or relating to this  agreement will be submitted to final and
binding arbitration in San Francisco, California in accordance with the rules of
the American Arbitration Association then in effect.

                  25. The  provisions of this letter  agreement  will be binding
upon  and  inure  to  the  benefit  of  (i)  you  and  your  heirs,   executors,
administrators and assigns and (ii) the Company and its successors and assigns.



<PAGE>



                           PART FIVE -- SPECIAL RIGHTS

                  26.  You have  twenty-one  (21) days  after  your July 3, 1996
receipt of this  letter  agreement  within  which you may  review and  consider,
discuss  with an attorney  of your own  choosing,  and decide  whether or not to
execute this letter agreement.

                  27. You will have seven (7) days after you execute this letter
agreement within which to revoke such agreement.

                  28. In order to revoke this letter agreement, you must deliver
to the Chairman of the Company's Board of Directors, on or before the end of the
seven (7)-day  period  following the date you execute this letter  agreement,  a
letter stating that you are revoking such agreement.




<PAGE>




Mr. E. Joseph Zemke
July 3, 1996
Page 8



                  29. The  provisions of this letter  agreement  will not become
effective or enforceable  until after the expiration of the seven (7)-day period
following the date you execute this letter agreement.

                  If the  provisions of this letter  agreement are in accordance
with your understanding of the severance  benefits,  consulting  arrangement and
mutual  releases  we have  previously  discussed,  we ask that you  execute  the
Acceptance  and Agreement  section below after you have had the  opportunity  to
discuss this document  with your  attorney and return the executed  agreement to
me.

Very truly yours,



/s/ Anthony M. Pozos

Anthony M. Pozos
Senior Vice President,
Human Resources and
Corporate Services

AMP/cvv

Attachments


                            ACCEPTANCE AND AGREEMENT


                  I have read and  understand  the  provisions  of the foregoing
letter agreement and affix my signature hereto voluntarily and without coercion.
Accordingly,  I hereby  accept and agree to all the terms and  provisions of the
foregoing  letter  agreement,  and I shall  accordingly  be  entitled to all the
benefits  provided under such letter agreement and be bound by all my covenants,
releases and waivers set forth therein.  I acknowledge that I have been given an
opportunity  to consult  with an  attorney  of my own  choosing  concerning  the
releases and waivers contained in this letter  agreement,  and that the releases
and  waivers  I have made and the  terms to which I have  agreed in such  letter
agreement are knowing,  conscious,  and with full appreciation that I am forever
foreclosed from pursuing any of the rights so released or waived.



<PAGE>



                                                          /s/ E. Joseph Zemke
                                                          ----------------------
                                                          E. JOSEPH ZEMKE


                                                          DATED: July 3, 1996
<PAGE>

     The termination and consulting agreement between Amdahl and Mr. E. Joseph
Zemke was amended so that the references in Sections 5 and 7 to August 30 or
August 30, 1996 were changed to November 1 or November 1, 1996.