Form 10-Q
================================================================================


                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

           [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                  For the Quarterly Period Ended March 30, 2001
                                       OR
          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
               For the transition period from _______ to ________


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

                          Commission File Number 1-7534

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



                         STORAGE TECHNOLOGY CORPORATION
             (Exact name of registrant as specified in its charter)

                  Delaware                          84-0593263
        (State or other jurisdiction of          (I.R.S. Employer
         incorporation or organization)        Identification Number)

   One StorageTek Drive, Louisville, Colorado       80028-4309
   (Address of principal executive offices)         (Zip Code)



       Registrant's Telephone Number, including area code: (303) 673-5151




     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. /X/ YES / / NO
                                          --      --

                      APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.

Common stock ($.10 Par Value) - 103,984,628 shares outstanding as of May 4,
2001.


<PAGE>


                 STORAGE TECHNOLOGY CORPORATION AND SUBSIDIARIES
                               INDEX TO FORM 10-Q
                                 March 30, 2001

                                                                            PAGE
                                                                            ----

PART I - FINANCIAL INFORMATION

       Item 1 - Financial Statements

                  Consolidated Balance Sheet                                   3

                  Consolidated Statement of Operations                         4

                  Consolidated Statement of Cash Flows                         5

                  Consolidated Statement of Changes in Stockholders' Equity    6

                  Notes to Consolidated Financial Statements                   7

       Item 2 - Management's Discussion and Analysis of Financial
                       Condition and Results of Operations                    12

       Item 3 - Quantitative and Qualitative Disclosures about Market Risk    24



PART II - OTHER INFORMATION

       Item 1 - Legal Proceedings                                             25

       Item 6 - Exhibits and Reports on Form 8-K                              26

       Exhibit Index                                                          30





<PAGE>


                 STORAGE TECHNOLOGY CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                            (In Thousands of Dollars)


                                                       03/30/01       12/29/00
                                                      ------------------------
                                                     (Unaudited)
ASSETS
 Current assets:
    Cash and cash equivalents                       $   292,119    $   279,731
    Accounts receivable                                 437,653        553,790
    Inventories (Note 2)                                248,416        218,218
    Deferred income tax assets                          121,197        121,703
    Other current assets (Note 4)                        21,034             --
                                                    -----------    -----------
      Total current assets                            1,120,419      1,173,442

 Property, plant, and equipment, net                    259,462        267,082
 Spare parts for maintenance, net                        39,029         41,614
 Deferred income tax assets                              74,282         73,997
 Other assets                                            97,838         97,423
                                                    -----------    -----------
      Total assets                                  $ 1,591,030    $ 1,653,558
                                                    ===========    ===========




 LIABILITIES
 Current liabilities:
    Credit facilities                               $    60,281    $    78,381
    Current portion of long-term debt                        38          6,110
    Accounts payable                                     87,045         99,675
    Accrued liabilities                                 332,044        363,048
    Income taxes payable                                155,962        155,626
                                                    -----------    -----------
      Total current liabilities                         635,370        702,840
 Long-term debt                                          10,872         12,083
                                                    -----------    -----------
      Total liabilities                                 646,242        714,923
                                                    -----------    -----------

 Commitments and contingencies (Note 5)

 STOCKHOLDERS' EQUITY
 Common stock, $.10 par value, 300,000,000 shares
    authorized; 103,166,285 shares issued at
    March 30, 2001, and 103,172,244 shares issued
    at December 29, 2000                                 10,317         10,320
 Capital in excess of par value                         854,674        854,744
 Retained earnings                                       79,918         82,922
 Accumulated other comprehensive income (Note 4)          8,695             --
 Treasury stock of 160,230 shares at
    March 30, 2001, and 113,774 shares at
    December 29, 2000                                    (2,938)        (2,334)
 Unearned compensation                                   (5,878)        (7,017)
                                                    -----------    -----------
      Total stockholders' equity                        944,788        938,635
                                                    -----------    -----------
      Total liabilities and stockholders' equity    $ 1,591,030    $ 1,653,558
                                                    ===========    ===========


               The accompanying notes are an integral part of the
                       consolidated financial statements.


<PAGE>


                 STORAGE TECHNOLOGY CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF OPERATIONS
                                   (Unaudited)
                    (In Thousands, Except Per Share Amounts)



                                              Quarter Ended
                                          ---------------------
                                          03/30/01     03/31/00
                                          ---------------------
Revenue
   Storage products                      $ 305,360    $ 301,112
   Storage services                        163,459      158,557
                                         ---------    ---------
      Total revenue                        468,819      459,669
                                         ---------    ---------

Cost of revenue
   Storage products                        173,615      196,754
   Storage services                         97,934      108,362
                                         ---------    ---------
      Total cost of revenue                271,549      305,116
                                         ---------    ---------


   Gross profit                            197,270      154,553


Research and product development costs      64,194       65,180
Selling, general, administrative, and
 other income and expense, net             138,243      134,120
Restructuring expense (Note 6)                  --       11,442
                                         ---------    ---------

   Operating loss                           (5,167)     (56,189)


Interest expense                            (1,635)      (6,325)
Interest income                              2,248        1,676
                                         ---------    ---------

   Loss before income taxes                 (4,554)     (60,838)


Benefit for income taxes                     1,550       21,300
                                         ---------    ---------

   Net loss                              $  (3,004)   $ (39,538)
                                         =========    =========


LOSS PER COMMON SHARE (Note 8)

Basic loss per share                     $   (0.03)   $   (0.39)
                                         =========    =========

Weighted-average shares                    102,274      100,387
                                         =========    =========


Diluted loss per share                  $    (0.03)   $   (0.39)
                                         =========    =========

Weighted-average and dilutive
 potential shares                          102,274      100,387
                                         =========    =========


               The accompanying notes are an integral part of the
                       consolidated financial statements.

<PAGE>


                 STORAGE TECHNOLOGY CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (Unaudited)
                            (In Thousands of Dollars)

                                                             Quarter Ended
                                                          ---------------------
                                                          03/30/01     03/31/00
                                                          ---------------------
OPERATING ACTIVITIES
Cash received from customers                             $ 572,250    $ 615,104
Cash paid to suppliers and employees                      (512,380)    (465,310)
Cash paid for restructuring activities                          --      (10,142)
Interest paid                                               (1,451)      (5,927)
Interest received                                            2,248        1,676
Income tax refunded (paid)                                  (1,985)       2,547
                                                         ---------    ---------
   Net cash provided by operating activities                58,682      137,948
                                                         ---------    ---------

INVESTING ACTIVITIES
Purchases of property, plant, and equipment                (16,818)     (22,086)
Proceeds from sale of property, plant, and equipment            76        1,131
Other assets                                                (3,078)      (7,588)
                                                         ---------    ---------
   Net cash used in investing activities                   (19,820)     (28,543)
                                                         ---------    ---------

FINANCING ACTIVITIES
Repayments of credit facilities, net                       (16,421)     (89,326)
Proceeds from other debt                                       588        2,095
Repayments of other debt                                    (7,249)      (6,187)
Proceeds from employee stock plans                              --          183
                                                         ---------    ---------
   Net cash used in financing activities                   (23,082)     (93,235)
                                                         ---------    ---------

   Effect of exchange rate changes on cash                  (3,392)      (3,124)
                                                         ---------    ---------

Increase in cash and cash equivalents                       12,388       13,046
   Cash and cash equivalents - beginning of the period     279,731      215,421
                                                         ---------    ---------
Cash and cash equivalents - end of the period            $ 292,119    $ 228,467
                                                         =========    =========


RECONCILIATION OF NET LOSS TO NET CASH
   PROVIDED BY OPERATING ACTIVITIES
Net loss                                                 $  (3,004)   $ (39,538)
Depreciation and amortization expense                       30,502       38,521
Inventory write downs                                        5,881       33,831
Non-cash restructuring expense                                  --        1,300
Translation (gain) loss                                       (662)       7,902
Other non-cash adjustments to income                           117       10,558
Decrease in accounts receivable                            104,532      157,914
Increase in other current assets                            (7,860)          --
Increase in inventories, net                               (34,993)      (3,543)
(Increase) decrease in spare parts                           4,130      (11,511)
(Increase) decrease in deferred income tax assets, net        (407)       2,334
Decrease in accounts payable and accrued liabilities       (36,426)     (38,221)
Decrease in income taxes payable                            (3,128)     (21,599)
                                                         ---------    ---------
   Net cash provided by operating activities             $  58,682    $ 137,948
                                                         =========    =========

               The accompanying notes are an integral part of the
                       consolidated financial statements.


<PAGE>

<TABLE>
<CAPTION>
                                           STORAGE TECHNOLOGY CORPORATION AND SUBSIDIARIES
                                      CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                                                      (In Thousands of Dollars)

                                                                              Accumulated
                                                     Capital in                 Other
                                           Common    Excess of    Retained   Comprehensive Treasury     Unearned
                                            Stock    Par Value    Earnings      Income       Stock    Compensation     Total
                                        ----------   ---------    ---------    ---------   ---------   ----------    ---------
<S>                                     <C>          <C>          <C>          <C>         <C>          <C>          <C>
Balances, December 29, 2000             $  10,320    $ 854,744    $  82,922    $      --   $  (2,334)   $  (7,017)   $ 938,635
                                        ---------    ---------    ---------    ---------   ---------    ---------    ---------

Components of comprehensive income:
    Net loss                                   --           --       (3,004)          --          --           --       (3,004)
    Cumulative effect of change in
     accounting principle, net of
     tax (Note 4)                              --           --           --       (7,535)         --           --       (7,535)
    Net gains on foreign currency
     cash flow hedges, net of
     tax (Note 4)                              --           --           --       18,194          --           --       18,194
    Reclassification adjustment for
     net gains included in net loss,
     net of tax (Note 4)                       --           --           --       (1,964)         --           --       (1,964)
                                        ---------    ---------    ---------    ---------   ---------    ---------    ---------
           Total comprehensive income          --           --       (3,004)       8,695          --           --        5,691
                                        ---------    ---------    ---------    ---------   ---------    ---------    ---------

  Other                                        (3)         (70)          --           --        (604)       1,139         462

                                        ---------    ---------    ---------    ---------   ---------    ---------    ---------
Balances, March 30, 2001                $  10,317    $ 854,674    $  79,918    $   8,695   $  (2,938)   $  (5,878)   $ 944,788
                                        ---------    ---------    ---------    ---------   ---------    ---------    ---------

                                         The accompanying notes are an integral part of the
                                                 consolidated financial statements.
</TABLE>

<PAGE>


                 STORAGE TECHNOLOGY CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


NOTE 1 - BASIS OF PREPARATION

The accompanying consolidated financial statements of Storage Technology
Corporation and its wholly owned subsidiaries (StorageTek or the Company) have
been prepared in accordance with the Securities and Exchange Commission
requirements for Form 10-Q. In the opinion of management, these statements
reflect all adjustments necessary for the fair presentation of results for the
periods presented, and such adjustments are of a normal, recurring nature.
Certain prior quarter information has been reclassified to conform to the
current quarter presentation. For further information, refer to the consolidated
financial statements and footnotes included in the Company's Annual Report on
Form 10-K for the year ended December 29, 2000.

The consolidated results for interim periods are not necessarily indicative of
expected results for the full year.

NOTE 2 - INVENTORIES

Inventories, net of associated reserves, consist of the following (in thousands
of dollars):

                                       03/30/01   12/29/00
                                       -------------------

                     Raw materials     $ 41,823   $ 54,773
                     Work-in-process     65,653     43,175
                     Finished goods     140,940    120,270
                                       --------   --------
                                       $248,416   $218,218
                                       ========   ========

NOTE 3 - DEBT AND FINANCING ARRANGEMENTS

The Company has a financing agreement with a bank that provides for the sale of
promissory notes in the principal amount of up to $120,000,000 at any one time.
The agreement, which expires in January 2002, provides for commitments by the
bank to purchase the Company's promissory notes denominated in a number of
foreign currencies. As of March 30, 2001, the Company had promissory notes of
$60,281,000 outstanding under this financing agreement and had committed to
borrowings between April 2001 and January 2002 in the cumulative principal
amount of approximately $323,417,000. The notes must be repaid only to the
extent of future revenue. Obligations under the agreement are not cancelable by
the Company or the bank. The promissory notes, together with accrued interest,
are payable in U.S. dollars within 40 days from the date of issuance. The
weighted average interest rate associated with the promissory notes outstanding
as of March 30, 2001, was 7.23%. Under the terms of the agreement, the Company
is required to comply with certain covenants and, under certain circumstances,
may be required to maintain a collateral account, including cash and qualifying
investments, in an amount up to the outstanding balance of the promissory notes.
See Note 4 for a discussion of the accounting treatment for gains and losses
under this arrangement.

<PAGE>

See the Company's Annual Report on Form 10-K for the year ended December 29,
2000, for additional information regarding the Company's debt and financing
arrangements.

NOTE 4 - ACCOUNTING FOR DERIVATIVE INSTRUMENTS

On December 30, 2000, the Company adopted Statement of Financial Accounting
Standards (SFAS) No. 133, "Accounting for Derivative Instruments and Hedging
Activities," and SFAS No. 138, "Accounting for Certain Derivative Instruments
and Certain Hedging Activities - an amendment of FASB Statement No. 133." These
accounting standards require that all derivatives be recorded on the balance
sheet at their estimated fair value. Changes in fair value are recorded each
period either in the Consolidated Statement of Operations or, in the case of
certain hedges, as a component of Other Comprehensive Income (OCI). In
accordance with the transition provisions of SFAS No. 133, the Company recorded
a loss of approximately $7,535,000, net of tax, in OCI to recognize the fair
value of all derivatives that were designated as cash flow hedges as of December
30, 2000. The adoption of SFAS No. 133 and SFAS No. 138 did not have a material
impact on the Consolidated Statement of Operations.

The functional currency for the Company's foreign subsidiaries is the U.S.
dollar. A significant portion of the Company's revenue is generated by its
international operations. As a result, the Company's financial position,
earnings, and cash flows can be materially affected by changes in foreign
currency exchange rates. The Company monitors and manages this exposure as part
of its risk management program. The primary goal of the Company's foreign
currency risk management strategy is to reduce the risk of adverse foreign
currency movements on the reported financial results of its non-U.S. dollar
transactions. To implement this strategy, the Company uses a combination of
foreign currency forwards embedded in a financing agreement, as well as
standalone foreign currency options and forwards. The Company does not believe
that these derivatives present significant credit risks, because the
counterparties to the derivatives consist of major financial institutions and
the Company manages the notional value of contracts entered into with any one
counterparty.

The Company does not hold or issue derivatives or any other financial
instruments for trading purposes.

Cash Flow Hedges

     The Company hedges the risk that forecasted cash flows associated with
revenue denominated in foreign currencies may be adversely affected by changes
in foreign currency exchange rates through a combination of embedded foreign
currency forwards in the Company's borrowing commitments under a financing
agreement, standalone foreign currency options, and standalone foreign currency
forwards. See Note 3 for further discussion of the financing agreement.
Typically, the maximum length of time over which the Company hedges its exposure
to the variability of forecasted cash flows with these derivatives is 16 months.
The Company's derivatives used for hedging forecasted cash flows had a notional
value of $323,417,000 as of March 30, 2001, and $396,502,000 as of December 29,
2000.

The Company records these derivatives designated as cash flow hedges at their
estimated fair value within other current assets or liabilities in the
Consolidated Balance Sheet. The gains and losses associated with changes in the
fair value of the derivatives are deferred in OCI to the extent that the
derivatives are effective in offsetting the changes in value of the forecasted
cash flows being hedged. The gains and losses are then reclassified as an
adjustment to revenue in the same period that the related forecasted revenue is
recognized in the Consolidated Statement of Operations. If a derivative is
terminated or de-designated as a hedge, the effective portion of gains and
losses to that date are deferred

<PAGE>

in OCI and subsequently recognized in the Consolidated Statement of Operations
in the same period that the related forecasted revenue is recognized. The
ineffective portion of the derivatives is immediately recognized as a component
of selling, general, administrative, and other income and expense (SG&A) on the
Consolidated Statement of Operations.

In evaluating hedge effectiveness for foreign currency forwards, the Company
assesses changes in the forward rates. The forward rates are defined as the sum
of the forward points as quoted by independent quote services and the spot rates
as of the end of the fiscal period. In evaluating hedge effectiveness for
foreign currency options, the Company compares the fair value of the options to
their intrinsic value. The fair value is based on a Black-Scholes option pricing
model, and the intrinsic value is based on the difference between the forward
rates and the strike price of the options.

During the quarter ended March 30, 2001, the Company recognized approximately
$500,000 of SG&A expense for ineffectiveness associated with foreign currency
options. This amount represents the change in time value of foreign currency
options, which is characterized as ineffective pursuant to SFAS No. 133 and SFAS
No. 138. The net estimated gain of $8,695,000 recorded in Accumulated OCI as of
March 30, 2001, associated with cash flow hedges is expected to be reclassified
into revenue during the next twelve months.

Other Derivatives

The Company also utilizes foreign currency forwards, generally with durations of
less than two months, to reduce its exposure to foreign currency exchange rate
fluctuations in connection with monetary assets and liabilities denominated in
foreign currencies. The Company accounts for these derivatives in accordance
with SFAS No. 52, "Foreign Currency Translation." The Company records these
forwards at their estimated fair value within other current assets or
liabilities in the Consolidated Balance Sheet. Changes in the fair value of
these derivatives are immediately recognized as a component of SG&A in the
Consolidated Statement of Operations. These foreign currency forwards had a
notional value of $191,337,000 as of March 30, 2001, and $230,515,000 as of
December 29, 2000.


NOTE 5 - LITIGATION

In January 1994, Stuff Technology Partners II, a Colorado Limited Partnership
(Stuff), filed suit in Boulder County, Colorado, District Court (the District
Court) against the Company and certain subsidiaries. The suit alleged that the
Company breached a 1990 settlement agreement that had resolved earlier
litigation between the parties concerning an optical disk drive storage
development project entered into in 1981 which was unsuccessful and terminated
in 1985. The suit sought injunctive relief and damages in the amount of
$2,400,000,000. On December 28, 1995, the District Court granted the Company's
motion for summary judgment and dismissed the complaint. Stuff appealed the
dismissal to the Colorado Court of Appeals (the Court of Appeals). In March
1997, the Court of Appeals reversed the District Court's judgment and remanded
the case to the District Court for further proceedings. In July, 1999, the
District Court again dismissed, with prejudice, all of Stuff's material claims
against the Company. In August, 1999, Stuff filed a notice of appeal with the
Appeals Court seeking to overturn the decision of the District Court. In August,
2000, the Court of Appeals remanded the case back to the District Court for a
trial on the factual issues relating to the interpretation of the language
embodied in the 1990 Settlement Agreement. The Company filed a Petition for
Rehearing with the Court of Appeals. In October, 2000, the Court of Appeals
modified its decision, but denied the Company's Petition for Rehearing. In
November 2000, the Company filed a Petition for Certiorari with the Supreme
Court of

<PAGE>

Colorado (the Supreme Court). In April 2001, the Supreme Court denied the
Company's petition. The case has been remanded to the District Court for trial.
The date for the trial has not yet been determined. The Company continues to
believe that Stuff's claims are wholly without merit and intends to defend
vigorously any further actions arising from this complaint.

The Company is also involved in various other less significant legal actions.
While the Company currently believes that the amount of any ultimate potential
loss would not be material to the Company's financial position, the outcome of
these actions is inherently difficult to predict. In the event of an adverse
outcome, the ultimate potential loss could have a material adverse effect on the
Company's financial position or reported results of operations in a particular
quarter. An unfavorable decision, particularly in patent litigation, could
require material changes in production processes and products or result in the
Company's inability to ship products or components found to have violated
third-party patent rights.

NOTE 6 - RESTRUCTURING

On October 28, 1999, the Company announced a broad restructuring program
intended to return the Company to profitability. The key elements of the
restructuring included a reduction in headcount, a reduction of investment in
certain businesses, a recommitment to the Company's core strengths,
modifications to the sales model for the United States and Canada, and other
organizational and operational changes.

The Company incurred approximately $11,442,000 of restructuring expense in the
first quarter of 2000. Of this amount, approximately $10,429,000 related to
employee severance expense, $760,000 related to asset writedowns associated with
the spin-off of the Company's managed storage services business, and $253,000
related to legal expenses associated with the spin-off of the Company's managed
storage services business.

The restructuring program described above was completed in the third quarter of
2000.

NOTE 7 - OPERATIONS OF BUSINESS SEGMENTS

The Company is organized into two reportable segments based on the definitions
of segments provided under SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information": storage products and storage services. The
storage products segment includes revenue from tape, disk, and network and other
products for the enterprise and open systems computing environment, including
storage area networks (SANs). The products segment also includes revenue from
licensed software tools and applications for improving storage product
performance and simplifying information storage management. The storage services
segment provides maintenance services for Company and third-party products, as
well as storage consulting services associated mainly with SANs, virtual
technologies, and software solutions.

The Company does not have any intersegment revenue and evaluates segment
performance based on gross profit. The sum of the segment gross profits equals
the consolidated gross profit. The Company does not allocate research and
product development costs; selling, general, administrative, and other income
and expense; interest expense; interest income; or provision for income taxes to
the segments. The revenue and gross profit by segment are as follows (in
thousands of dollars):

<PAGE>

                                                  Quarter Ended
                                               -------------------
                                               03/30/01   03/31/00
                                               -------------------
              Revenue:
               Storage products                $305,360   $301,112
               Storage services                 163,459    158,557
                                               --------   --------
               Total revenue                   $468,819   $459,669
                                               ========   ========

              Gross profit:
               Storage products                $131,745   $104,358
               Storage services                  65,525     50,195
                                               --------   --------
              Total gross profit               $197,270   $154,553
                                               ========   ========

The following table provides supplemental financial data regarding revenue from
the Company's storage products segment (in thousands of dollars):

                                                  Quarter Ended
                                               -------------------
                                               03/30/01   03/31/00
                                               -------------------

              Tape products                    $247,437   $233,668
              Disk products                      25,956     31,828
              Network and other                  31,967     35,616
                                               --------   --------
              Total storage products revenue   $305,360   $301,112
                                               ========   ========

NOTE 8 - LOSS PER COMMON SHARE

The following table presents the calculation of basic and diluted loss per share
(in thousands, except per share amounts):

                                                  Quarter Ended
                                             ----------------------
                                              03/30/01     03/31/00
                                             ----------------------

           Net loss                          $  (3,004)   $ (39,538)
                                             =========    =========

           Denominator:
           Basic weighted-average shares       102,274      100,387
           Effect of dilutive shares                --           --
                                             ---------    ---------
           Diluted weighted-average shares     102,274      100,387
                                             =========    =========

           Basic loss per share              $   (0.03)   $   (0.39)

           Diluted loss per share            $   (0.03)   $   (0.39)

Options to purchase 10,969,742 shares of common stock as of March 30, 2001, and
12,481,628 shares of common stock as of March 31, 2000, were excluded from the
respective computations of diluted loss per share because they were
antidilutive.

<PAGE>


                 STORAGE TECHNOLOGY CORPORATION AND SUBSIDIARIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                 MARCH 30, 2001


All assumptions, anticipations, expectations, and forecasts contained in the
following discussion regarding the Company's future products, business plans,
financial results, performance, and events are forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. The
Company's actual results may differ materially because of a number of risks and
uncertainties. Some of these risks are detailed below in "Factors That May
Affect Future Results" and elsewhere in this Form 10-Q. The forward-looking
statements contained herein represent a good-faith assessment of the Company's
future performance for which management believes there is a reasonable basis.
The Company disclaims any obligation to update the forward-looking statements
contained herein, except as may be otherwise required by law.

GENERAL

The Company reported a net loss for the first quarter ended March 30, 2001, of
$3.0 million, or $0.03 per share, on revenue of $468.8 million, compared to a
net loss for the first quarter ended March 31, 2000, of $39.5 million, or $0.39
per share, on revenue of $459.7 million. The Company's reported results for the
first quarter of 2000 included $26.3 million of one-time pre-tax expenses
associated with restructuring and other related charges. Excluding the one-time
expense, net of tax, the Company would have reported a net loss of $22.5
million, or $0.22 per share, for the quarter ended March 31, 2000.

Many of the Company's customers undertake detailed procedures relating to the
evaluation, testing, implementation, and acceptance of the Company's products.
This evaluation process results in a variable sales cycle and makes it difficult
to predict if or when revenue will be earned. Further, gross margins may be
adversely impacted in an effort to complete the sales cycle. The Company's
financial results may be adversely impacted by its variable sales cycle. Future
financial results are also dependent on the Company's ability to manage its
costs and operating expenses in line with revenue; the timely development,
manufacture, and introduction of new products and services; and the
implementation of its storage area network (SAN) strategy. For a discussion of
these and other risk factors, see "Factors That May Affect Future Results."

The Company's operating activities provided cash of $58.7 million during the
first quarter of 2001, compared to cash of $137.9 million generated from
operations during the same period in 2000. The decrease in cash generated from
operations during the first quarter of 2001, compared to the same period in
2000, was primarily a result of reduced cash received from customers due to a
lower level of sales revenue in the fourth quarter of 2000, as compared to the
fourth quarter of 1999. In addition, inventory purchases increased in
anticipation of increased sales in future periods. See "Liquidity and Capital
Resources -- Working Capital" for additional discussion of working capital. Cash
used in investing activities decreased from $28.5 million during the first
quarter of 2000 to $19.8 million during the first quarter of 2001, primarily
because of efforts to control capital spending on property, plant, and
equipment. Cash used in financing activities decreased from $93.2 million during
the first quarter of 2000, to $23.1 million during the first quarter of 2001.
The Company has continued to reduce its outstanding debt balance, and its
debt-to-capitalization ratio was 7% as of March 30, 2001.

<PAGE>

The following table, stated as a percentage of total revenue, presents
Consolidated Statement of Operations information and revenue by segment.

                                                          Quarter Ended
                                                       ------------------
                                                       03/30/01  03/31/00
                                                       ------------------
        Storage products:
           Tape products                                 52.8%     50.8%
           Disk products                                  5.5       6.9
           Network and other products                     6.8       7.8
                                                        -----     -----
             Total storage products                      65.1      65.5
        Storage services                                 34.9      34.5
                                                        -----     -----
                 Total revenue                          100.0     100.0
        Cost of revenue                                  57.9      66.4
                                                        -----     -----
                 Gross profit                            42.1      33.6
        Research and product development costs           13.7      14.2
        Selling, general, administrative, and other
          income and expense, net                        29.5      29.1
        Restructuring expense                              --       2.5
                                                        -----     -----
                 Operating loss                          (1.1)    (12.2)
        Interest income (expense), net                     .1      (1.0)
                                                        -----     -----
                 Loss before income taxes                (1.0)    (13.2)
        Benefit for income taxes                           .4       4.6
                                                        -----     -----
                 Net loss                                 (.6)%    (8.6)%
                                                        =====     =====

REVENUE

STORAGE PRODUCTS

The Company's storage products revenue includes sales of tape, disk, and network
products for the enterprise and open systems markets, including SANs. The open
systems market consists of products designed to operate in the UNIX, NT, and
other non-MVS operating environments. Revenue from storage products was largely
unchanged during the first quarter of 2001, compared to the same period in 2000.

Tape Products

Tape product revenue increased 6% during the first quarter of 2001, compared to
the same period in 2000, primarily because of increased sales of tape automation
products and the Virtual Storage Manager(R) (VSM). Revenue from tape drives was
largely unchanged. Continuing to extend the Company's reach into the growing
UNIX and NT markets with tape and tape automation products will be key in
growing tape product revenue. See "Factors That May Affect Future Results -
Emerging Markets" for a discussion of the risks associated with future revenue
growth in the open systems market.

Disk Products

Disk product revenue decreased 18% during the first quarter of 2001, compared to
the same period in 2000, primarily because of a decrease in OEM sales to
International Business Machines Corporation (IBM) of disk storage products and
software designed for the enterprise market. The Company does not anticipate any
significant sales revenue from IBM in the future. Excluding the effects of IBM
revenue,

<PAGE>

disk product revenue was largely unchanged in the first quarter of
2001, compared to the first quarter of 2000.

Network and Other Products

Network and other product revenue decreased 10% during the first quarter of
2001, compared to the same period in 2000, primarily because of decreased sales
of third-party network products. This decrease was partially offset by increased
sales of StorageTek networking hardware and connectivity products. In October
2000, the Company introduced the StorageNet(TM) 6000 series of domain managers.
No significant revenue was recognized from the StorageNet(TM) 6000 during the
first quarter of 2001, as the Company's development activities for enhancing the
functionality of this product continue. See "Factors That May Affect Future
Results - Emerging Markets" for a discussion of the risks associated with the
Company's SAN strategy.

STORAGE SERVICES

The Company's storage services revenue primarily includes revenue associated
with the maintenance of the Company's and third-party storage products, as well
as integration service revenue associated with storage consulting activities.
Storage services revenue increased 3% during the first quarter of 2001, compared
to the same period in 2000.

GROSS PROFIT

Gross profit margins increased to 42% during the first quarter of 2001, compared
to 34% in the same period in 2000, as a result of improvements in profit margins
for both the products and services segments. The gross profit margin for the
first quarter of 2000 included certain restructuring and other related costs.
Gross profit margins for the storage products segment increased to 43% in the
first quarter of 2001, compared to 35% in the first quarter of 2000. This
increase reflects favorable product mixes for the Company's tape drive and VSM
products, along with the continued benefits obtained from operational
efficiencies gained from previous restructuring activities. Gross margins from
the storage services segment increased to 40% in the first quarter of 2001,
compared to 32% in the first quarter of 2000. Storage service margins in the
first quarter of 2001 also benefited from operational efficiencies gained from
previous restructuring activities.

RESEARCH AND PRODUCT DEVELOPMENT

Research and product development expenses were largely unchanged during the
first quarter of 2001, compared to the same period in 2000. Research and product
development activities continue to focus on the core businesses of tape and tape
automation, virtual technologies, and SANs.

SELLING, GENERAL, ADMINISTRATIVE, AND OTHER

Selling, general, administrative, and other income and expense (SG&A) increased
3% during the first quarter of 2001, compared to the same period in 2000. The
increase is primarily a result of increased spending on sales headcount,
training and sales tools, and E-commerce business initiatives.

<PAGE>

LITIGATION

In January 1994, Stuff Technology Partners II, a Colorado Limited Partnership
(Stuff), filed suit in Boulder County, Colorado, District Court (the District
Court) against the Company and certain subsidiaries. The suit alleged that the
Company breached a 1990 settlement agreement that had resolved earlier
litigation between the parties concerning an optical disk drive storage
development project entered into in 1981 which was unsuccessful and terminated
in 1985. The suit sought injunctive relief and damages in the amount of $2.4
billion. On December 28, 1995, the District Court granted the Company's motion
for summary judgment and dismissed the complaint. Stuff appealed the dismissal
to the Colorado Court of Appeals (the Court of Appeals). In March 1997, the
Court of Appeals reversed the District Court's judgment and remanded the case to
the District Court for further proceedings. In July, 1999, the District Court
again dismissed, with prejudice, all of Stuff's material claims against the
Company. In August, 1999, Stuff filed a notice of appeal with the Appeals Court
seeking to overturn the decision of the District Court. In August, 2000, the
Court of Appeals remanded the case back to the District Court for a trial on the
factual issues relating to the interpretation of the language embodied in the
1990 Settlement Agreement. The Company filed a Petition for Rehearing with the
Court of Appeals. In October, 2000, the Court of Appeals modified its decision,
but denied the Company's Petition for Rehearing. In November 2000, the Company
filed a Petition for Certiorari with the Supreme Court of Colorado (the Supreme
Court). In April 2001, the Supreme Court denied the Company's petition. The case
has been remanded to the District Court for trial. The date for the trial has
not yet been determined. The Company continues to believe that Stuff's claims
are wholly without merit and intends to defend vigorously any further actions
arising from this complaint.

The Company is also involved in various other less significant legal actions.
While the Company currently believes that the amount of any ultimate potential
loss would not be material to the Company's financial position, the outcome of
these actions is inherently difficult to predict. In the event of an adverse
outcome, the ultimate potential loss could have a material adverse effect on the
Company's financial position or reported results of operations in a particular
quarter. An unfavorable decision, particularly in patent litigation, could
require material changes in production processes and products or result in the
Company's inability to ship products or components found to have violated
third-party patent rights.

RESTRUCTURING

On October 28, 1999, the Company announced a broad restructuring program
intended to return the Company to profitability. The key elements of the
restructuring included a reduction in headcount, a reduction of investment in
certain businesses, a recommitment to the Company's core strengths,
modifications to the sales model for the United States and Canada, and other
organizational and operational changes.

The Company incurred approximately $11.4 million of restructuring expense in the
first quarter of 2000. Of this amount, approximately $10.4 million related to
employee severance expense, $760,000 related to asset writedowns associated with
the spin-off of the Company's managed storage services business, and $253,000
related to legal expenses associated with the spin-off of the Company's managed
storage services business.

The restructuring program described above was completed in the third quarter of
2000.

<PAGE>

INTEREST INCOME AND EXPENSE

Interest expense decreased $4.7 million during the first quarter of 2001,
compared to the same period in 2000, primarily because of a decrease in
outstanding debt. Interest income increased $572,000 during the first quarter of
2001, compared to the same period in 2000, primarily as a result of an increase
in cash available for investment.

INCOME TAXES

The Company's effective tax rate decreased from 35% in the first quarter of
2000, to 34% for the first quarter of 2001.

Statement of Financial Accounting Standards (SFAS) No. 109 requires that
deferred income tax assets be recognized to the extent realization of such
assets is more likely than not. Based on the currently available information,
management has determined that the Company will more likely than not realize
$195.5 million of deferred income tax assets as of March 30, 2001. The Company's
valuation allowance of approximately $21.4 million as of March 30, 2001, relates
principally to net deductible temporary differences, tax credit carryforwards,
and net operating loss carryforwards.

LIQUIDITY AND CAPITAL RESOURCES

Working Capital

The Company's operating activities provided cash of $58.7 million during the
first quarter of 2001, compared to cash of $137.9 million generated from
operations during the same period in 2000. The decrease in cash generated from
operations during the first quarter of 2001, compared to the same period in
2000, was primarily a result of reduced cash received from customers due to a
lower level of sales revenue in the fourth quarter of 2000, as compared to the
fourth quarter of 1999. In addition, inventory purchases increased in
anticipation of increased sales in future periods. Cash used in investing
activities decreased from $28.5 million during the first quarter of 2000 to
$19.8 million during the first quarter of 2001, primarily because of efforts to
control capital spending on property, plant, and equipment. Cash used in
financing activities decreased from $93.2 million during the first quarter of
2000, to $23.1 million during the first quarter of 2001. The Company has
continued to reduce its outstanding debt balance, and its debt-to-capitalization
ratio was 7% as of March 30, 2001.

The average collection period for Company receivables decreased from 96 days for
the first quarter of 2000, to 85 days for the first quarter of 2001, a 12%
decrease. Inventory balances increased from $218.2 million as of December 29,
2000, to $248.4 million as of March 30, 2001, as the Company built additional
inventory in anticipation of increased sales in future periods, introduced new
tape and network products, and had lower than anticipated disk sales.

Available Financing Lines

The Company has a financing agreement with a bank that provides for the sale of
promissory notes in the principal amount of up to $120.0 million at any one
time. The agreement, which expires in January 2002, provides for commitments by
the bank to purchase the Company's promissory notes denominated in a number of
foreign currencies. As of March 30, 2001, the Company had promissory notes of
$60.3 million outstanding under this financing agreement and had committed to
borrowings between April 2001 and January 2002 in the cumulative principal
amount of approximately $323.4 million. The notes must be

<PAGE>

repaid only to the extent of future revenue. Obligations under the agreement are
not cancelable by the Company or the bank. The promissory notes, together with
accrued interest, are payable in U.S. dollars within 40 days from the date of
issuance. The weighted average interest rate associated with the promissory
notes outstanding as of March 30, 2001, was 7.23%. Under the terms of the
agreement, the Company is required to comply with certain covenants and, under
certain circumstances, may be required to maintain a collateral account,
including cash and qualifying investments, in an amount up to the outstanding
balance of the promissory notes.

The Company has a revolving credit facility (the Revolver) which expires in
October 2001. The credit limit available under the Revolver ($225.0 million as
of March 30, 2001) is reduced by $12.5 million on the last day of each fiscal
quarter. The interest rates under the Revolver depend upon the repayment period
of the advance selected and the Company's Total Debt to rolling four quarter
Earnings Before Interest Expense, Taxes, Depreciation, and Amortization (EBITDA)
ratio. Depending on the term of the outstanding borrowing, the rate ranges from
the applicable LIBOR plus 2.00% to 2.50% or the agent bank's base rate plus
0.00% to 0.50%. The Company had no outstanding borrowings as of March 30, 2001,
but had outstanding letters of credit for approximately $286,000 under the
Revolver. The remaining available credit under the Revolver as of March 30,
2001, was approximately $224.7 million. The Revolver is secured by the Company's
U.S. accounts receivable and U.S. inventory. The Revolver contains certain
financial and other covenants, including restrictions on payment of cash
dividends on the Company's common stock.

The Company's $150.0 million revolving credit facility expired in January 2001
and was not renewed.

The Company believes it has adequate working capital and financing capabilities
to meet its anticipated operating and capital requirements for the next 12
months. Over the longer term, the Company may choose to fund these activities
through the issuance of additional equity or debt financing. The issuance of
equity or convertible debt securities could result in dilution to the Company's
stockholders. There can be no assurance that any additional long-term financing,
if required, can be completed on terms acceptable to the Company.

Total Debt-to-Total Capitalization

The Company's total debt-to-capitalization ratio decreased from 9% as of
December 29, 2000, to 7% as of March 30, 2001, primarily because of a net
decrease in borrowings of $18.1 million under the Company's credit facilities.
See "Working Capital," above, for discussion of cash sources and uses.

INTERNATIONAL OPERATIONS

During the first quarter of both 2001 and 2000, approximately 49% of the
Company's revenue was generated by its international operations. The Company
also sells products through domestic indirect distribution channels that have
end-user customers located outside the United States. The Company expects that
it will continue to generate a significant portion of its revenue from
international operations in the future. The majority of the Company's
international operations involve transactions denominated in the local
currencies of countries within Western Europe, principally Germany, France, and
the United Kingdom; Japan; Canada; and Australia. An increase in the exchange
value of the United States dollar reduces the value of revenue and profits
generated by the Company's international operations. As a result, the Company's
operating and financial results can be materially affected by fluctuations in
foreign currency exchange rates. To mitigate the impact of foreign currency
fluctuations, the Company employs a foreign currency hedging program. See
"Market Risk Management," below.

<PAGE>

The Company's international business may be affected by changes in demand
resulting from global and localized economic, business, and political
conditions. The Company is subject to the risks of conducting business outside
the United States, including adverse political and economic conditions;
impositions of, or changes in, tariffs, quotas, and legislative or regulatory
requirements; difficulty in obtaining export licenses; potentially adverse
taxes; the burdens of complying with a variety of foreign laws; and other
factors outside the Company's control. The Company expects this risk to increase
in the future as it plans to expand its operations in Eastern Europe and Asia.
There can be no assurance that these factors will not have a material adverse
effect on the Company's business or financial results in the future.

MARKET RISK MANAGEMENT

Foreign Currency Exchange Rate Risk

The Company's primary market risk relates to changes in foreign currency
exchange rates. The functional currency for the Company's foreign subsidiaries
is the U.S. dollar. A significant portion of the Company's revenue is generated
by its international operations. As a result, the Company's financial position,
earnings, and cash flows can be materially affected by changes in foreign
currency exchange rates. The Company monitors and manages this exposure as part
of its risk management program. The primary goal of the Company's foreign
currency risk management strategy is to reduce the risk of adverse foreign
currency movements on the reported financial results of its non-U.S. dollar
transactions. Factors that could have an impact on the effectiveness of the
Company's foreign currency risk management strategy include the accuracy of
forecasts and the volatility of foreign currency markets. All foreign currency
derivatives are authorized and executed pursuant to the Company's policies. The
Company does not hold or issue derivatives or any other financial instruments
for trading purposes.

To implement its foreign currency risk management strategy, the Company uses a
combination of foreign currency forwards embedded in a financing agreement, as
well as standalone foreign currency options and forwards. These derivatives are
used to hedge the risk that forecasted revenue denominated in foreign currencies
may be adversely affected by changes in foreign currency exchange rates. Foreign
currency forwards are also used to reduce the Company's exposure to foreign
currency exchange rate fluctuations in connection with monetary assets and
liabilities denominated in foreign currencies.

A hypothetical 10% adverse movement in foreign exchange rates applied to the
Company's foreign currency exchange rate sensitive instruments held as of March
30, 2001, and as of December 29, 2000, would result in a hypothetical loss of
approximately $51.2 million and $69.5 million, respectively. The decrease in the
hypothetical loss for the first quarter of 2001 is primarily due to a decrease
in outstanding borrowing commitments under the financing agreement. These
hypothetical losses do not take into consideration the Company's underlying
international operations. The Company anticipates that any hypothetical loss
associated with the Company's foreign currency exchange rate sensitive
instruments would be offset by gains associated with its underlying
international operations.

Interest Rate Risk

Changes in interest rates affect interest income earned on the Company's
cash investments, as well as interest expense on short-term borrowings. A
hypothetical 10% adverse movement in interest rates applied to cash investments
and short-term borrowings would not have a material adverse effect on the
Company's financial position, earnings, or cash flows.

<PAGE>

Credit Risk

The Company is exposed to credit risk associated with cash investments, foreign
currency derivatives, and trade receivables. The Company does not believe that
its cash investments and foreign currency derivatives present significant credit
risks, because the counterparties to the instruments consist of major financial
institutions and the Company manages the notional value of contracts entered
into with any one counterparty. Substantially all trade receivable balances are
unsecured. The concentration of credit risk with respect to trade receivables is
limited due to the large number of customers in the Company's customer base and
their dispersion across various industries and geographic areas.

FACTORS THAT MAY AFFECT FUTURE RESULTS

New Products and Services

The Company's results of operations and competitive strength depend on its
ability to successfully develop, manufacture, and market innovative new products
and services. Short product life cycles are inherent in the high-technology
market. The Company must devote significant resources to research and product
development projects and effectively manage the risks inherent in new product
transitions. Developing new technology, products, and services is complex and
involves various uncertainties. The Company introduced a significant number of
new products in the second half of 2000, including the StorageNet(TM) 6000, the
9940 high-capacity tape drive, and Virtual Storage Manager(R) III, as well as
enhancements to the 9500 Shared Virtual Array(TM). Delays in product
development, manufacturing, or in customer evaluation and purchasing decisions
may make product transitions difficult. The manufacture of new products involves
integrating complex designs and processes, collaborating with sole source
suppliers for key components, and increasing manufacturing capacities to
accommodate demand. A design flaw, the failure to obtain sufficient quantities
of key components, or manufacturing constraints could adversely affect the
Company's operating and financial results. The Company has experienced product
development and manufacturing delays in the past that adversely affected the
Company's financial results and competitive position. There can be no assurance
that the Company will be able to successfully manage the development and
introduction of new products, services, and software in the future.

Emerging Markets

Future revenue growth is dependent on successfully developing and introducing
products for the open systems market, including products designed to operate in
the UNIX and NT operating environments. Competition in the open systems market
is aggressive and is primarily based on performance, quality, system
scalability, price, service, and name recognition. The open systems market
includes a broad range of customers, including customers outside of the
Company's traditional customer base. Many of the Company's potential customers
in the open systems market purchase their storage requirements as part of a
bundled product, which may provide a competitive advantage to the Company's
rivals. The Company expects to address these competitive factors through the
delivery of storage solutions that provide customers with superior
functionality, performance, and quality. The Company's customer base continues
to shift to the open systems market and the Company is placing increased
emphasis on its indirect distribution channels. There can be no assurance that
maintenance revenue will not decline in future periods as a result of the
indirect channel's customers electing to purchase maintenance services from
other vendors.

<PAGE>

The storage networking market has only recently begun to develop and is
characterized by rapidly changing technology and standards. Because this market
is new, it is difficult to predict its potential size or future growth rate.
Customers may be reluctant to adopt new data storage standards, and competing
standards may emerge that will be preferred by customers.

Competition

The markets for the Company's products and services are intensely competitive
and are subject to continuous, rapid technological change, frequent product
performance improvements, short product life cycles, and aggressive pricing. The
Company competes in a number of markets that include a broad spectrum of
customers primarily on the basis of technology, product availability,
performance, quality, reliability, price, distribution, and customer service.
The Company believes that its ability to compete depends on a number of factors,
both within and outside of its control. These factors include the price and cost
of the Company's and its competitors' product offerings, the timing and success
of new products and applications, new product introductions by the Company's
competitors, and general economic and business conditions within and outside the
United States. Strong competition has resulted in price erosion in the past and
the Company expects this trend to continue. The Company anticipates that price
competition for its products and services will continue to have a significant
impact on the Company's gross profit margins as well. The Company's ability to
sustain or improve gross margins is significantly dependent on achieving cost
improvements associated with the sourcing of production materials, the design
and development of competitive products, the implementation of pricing controls
and asset management disciplines, and margin improvement from the Company's disk
and network products. Storage product gross margins may be affected in future
periods by inventory reserves and writedowns resulting from rapid technological
changes or delays in gaining market acceptance for products.

The Company expects that the markets for its products and services, and its
competitors within these markets, will continue to change in response to
shifting customer storage requirements and technological advances. The Company's
competitors include, among others, Advanced Digital Information Corporation,
Compaq Computer Corporation, EMC Corporation, Hewlett-Packard Company, Hitachi
Ltd., IBM, Network Appliance Inc., Quantum Corporation, and Sun Microsystems. A
number of the Company's competitors have significantly greater financial
resources than the Company.

Partners/Competitors

The markets in which the Company competes are characterized by various alliances
formed to promote industry standards and deliver tested, interoperable
technology. For example, Seagate Technology, Inc., IBM, and Hewlett-Packard
Company have jointly developed the Linear Tape Open (LTO) drive, a high-capacity
tape drive technology for the open systems market. The Company is currently
developing versions of its tape libraries that will support LTO tape drives.
However, the Company may be at a cost disadvantage in manufacturing tape
libraries that use LTO tape drives. The Company also competes with vendors with
which it has established relationships, including Legato Systems, Inc. and
VERITAS Software Corporation. The Company anticipates that it will continue to
establish distribution alliances with other equipment manufacturers, software
vendors, and service providers to address competitive factors. There can be no
assurance that the Company will be able to successfully realize the benefits
from these alliances while competing against these companies at the same time.

An increasing portion of the Company's revenue comes from indirect channel
customers, including original equipment manufacturers (OEMs), value-added
distributors (VADs), value-added resellers (VARs), and other distributors. The
Company's financial results may be negatively affected if the

<PAGE>

financial condition of one or more of these customers weakens or if the
Company's relationship with indirect channel customers deteriorates. The
Company's ability to forecast future demand for its products may be adversely
affected by unforeseen changes in demand from its indirect channel customers.
There can be no assurance that the Company will be successful in maintaining or
expanding its indirect channel sales.

Significant Personnel Changes and Restructuring Activities

The Company has experienced significant changes in its executive management
team. Since December 29, 2000, three executive officers have departed and three
new executive officers have been appointed to positions in the Company. There
can be no assurance that there will not be any future changes in the executive
management team, and it may take a period of time before the new executive
management team becomes fully productive.

The Company experienced increased turnover in its sales force in the first half
of 2000 as a result of its restructuring activities. While the Company has
completed the rehiring of most of these sales positions, financial results
continue to be adversely affected as the Company is still in the process of
delivering the product training and sales tools to increase the effectiveness of
its sales force in the United States and Canada.

The Company experienced significant changes in the remainder of its employee
base during 1999 and 2000 as a result of the voluntary and involuntary severance
programs implemented in connection with its restructuring activities, as well as
increased levels of employee attrition. While the Company's restructuring
activities have now been completed and attrition rates have declined to
historical rates, the future success of the Company depends in large part on its
ability to attract, retain, and motivate highly skilled employees. The Company
faces significant competition for individuals who possess the skills required to
deliver the products and services offered to its customers. An inability to
successfully deliver products and services required by Company customers could
have an adverse effect on future operating results.

There can be no assurance that the Company's past restructuring activities will
be successful or sufficient in returning the Company to profitability. It is
possible that additional changes in the Company's business or its industry may
require additional restructuring activities in the future.

Ability to Develop and Protect Intellectual Property Rights

The Company relies heavily on its ability to develop new intellectual property
rights that do not infringe on the rights of others in order to remain
competitive and develop and manufacture products that are competitive in terms
of technology and cost. There is no assurance that the Company will continue to
be able to develop such new intellectual property.

The Company relies on a combination of United States patent, copyright,
trademark, and trade secret laws to protect its intellectual property rights.
With respect to certain of the Company's international operations, the Company
files patent applications with foreign governments. However, many foreign
countries do not have as well-developed laws as the United States in protecting
intellectual property. The Company enters into confidentiality agreements
relating to its intellectual property with its employees and consultants. In
addition, the Company includes confidentiality provisions in license and
non-exclusive sales agreements with its indirect distributors and its customers.

<PAGE>

Despite all of the Company's efforts to protect its intellectual property
rights, unauthorized parties may attempt to copy or otherwise obtain or use the
Company's intellectual property. Monitoring the unauthorized use of the
Company's intellectual property rights is difficult, particularly in foreign
countries. There can be no assurance that the Company will be able to protect
its intellectual property rights, particularly in foreign countries.

Sole Source Suppliers

The Company generally uses standard parts and components for its products and
believes that, in most cases, there are a number of alternative, competent
vendors for most of those parts and components. Many non-standard parts are
obtained from a single source or a limited group of suppliers. However, there
are other vendors who could produce these parts in satisfactory quantities after
a period of pre-qualification and product ramping. Certain key components and
products are purchased from sole source suppliers that the Company believes are
currently the only manufacturers of the particular components that meet the
Company's qualification requirements and other specifications or for which
alternative sources of supply are not readily available. Imation Corporation is
a sole source supplier for the 9840 and 9940 tape cartridges and the Company is
dependent on Imation to economically produce large volumes of high-quality tape
cartridges at a cost acceptable to the Company and its customers. IBM is
currently a sole source supplier for disk drives used in the Company's SVA and
VSM products. IBM has indicated these drives will no longer be manufactured
after June 2001. The Company has entered into a final purchase commitment with
IBM and believes it will be able to accurately forecast the required number of
drives to meet future demand until the new technology becomes available. The
Company is developing an industry standard drive interface for its SVA and VSM
products. This project is in the engineering and development stage. Failure to
accurately forecast future demand for these products or changes in the
development schedule for the drive interface could result in excess inventory
and related inventory write-offs, or the inability to meet customer needs for
these products.

Certain suppliers have experienced occasional technical, financial, or other
problems that have delayed deliveries in the past. An unanticipated failure of
any sole source supplier to meet the Company's requirements for an extended
period, or the inability to secure comparable components in a timely manner,
could result in a shortage of key components, longer lead times, and reduced
control over production and delivery schedules. These factors could have a
material adverse effect on revenue and operating results. In the event a sole
source supplier was unable or unwilling to continue to supply components, the
Company would need to identify and qualify other acceptable suppliers. This
process could take an extended period, and no assurance can be given that any
additional source would become available or would be able to satisfy production
requirements on a timely basis or at a price acceptable to the Company.

The Company is dependent upon a sole subcontractor, Herald Datanetics Ltd.
(HDL), to manufacture a key component used in certain tape products. HDL is
located in the People's Republic of China (PRC). To date, the Company has not
experienced any material problems with HDL. The Company's dependence on HDL is
subject to additional risks beyond those associated with other sole suppliers,
including the lack of a well-established court system or acceptance of the rule
of law in the PRC, the degree to which the PRC permits economic reform policies
to continue, the political relationship between the PRC and the United States,
and broader political and economic factors, such as whether the PRC is admitted
to the World Trade Organization.

<PAGE>

Manufacturing

A significant portion of the Company's products is manufactured in facilities
located in Puerto Rico. The Company's ability to manufacture product may be
affected by weather-related risks beyond the control of the Company. If the
Puerto Rico manufacturing facility were affected by such an event, the Company
may not have an alternative source to meet the demand for its products without
substantial delays and disruption to its operations. The Company carries
interruption insurance to mitigate some of the risk. There is no assurance that
the Company could obtain sufficient alternate manufacturing sources or repair
the facilities in a timely manner to satisfy the demand for its products.
Failure to fulfill manufacturing demands could adversely affect the Company's
operating and financial results in the future.

The Company, along with the computer industry as a whole, has experienced
delivery delays, increased lead times in ordering parts and components for its
products, and rapid changes in the demand by customers for certain products.
These longer lead times, coupled with rapid changes in the demand for products,
could result in a shortage of parts and components, reduced control over
delivery schedules, and an inability to fulfill customer orders in a timely
manner. The complexities of these issues increase when the Company transitions
to newer technologies and products. These factors could have a material adverse
effect on revenue and operating results.

Volatility of Stock Price/Earnings Fluctuations

The Company's common stock is subject to significant fluctuations in trading
price. The Company's stock price may be impacted if the Company's revenue or
earnings fail to meet the expectations of the investment community. The
Company's stock price may also be affected by broad economic and market trends,
which are unrelated to the Company's performance.

The Company's financial and operating results may fluctuate from quarter to
quarter for a number of reasons. Many of the Company's customers undertake
detailed procedures relating to the evaluation, testing, implementation, and
acceptance of the Company's products. This evaluation process results in a
variable sales cycle and makes it difficult to predict if or when revenue will
be earned. In addition, gross margins may be adversely impacted in an effort to
complete the sales cycle. In the past, the Company's results have followed a
seasonal pattern, which reflects the tendency of customers to make their
purchase decisions at the end of a calendar year. During any fiscal quarter, a
disproportionately large percentage of the total product sales is recognized in
the last weeks or days of the quarter. A number of other factors may also cause
revenue to fall below expectations, such as product and technology transitions
announced by the Company or its competitors, delays in the availability of new
products, changes in the purchasing patterns of the Company's customers and
distribution partners, or adverse global economic conditions. The mix of sales
among the Company's business segments and sales concentration in particular
geographic regions may carry different gross profit margins and may cause the
Company's operating margins to fluctuate. These factors make the forecasting of
revenue inherently difficult. Because the Company plans its operating expenses
on expected revenue, a shortfall in revenue may cause earnings to be below
expectations in that period.

While the Company has not experienced any significant adverse effects from the
recent slowdown in the U.S. economy, some customers have delayed their purchase
decisions and are reevaluating their information technology spending budgets. To
protect itself from an economic downturn, the Company has implemented various
cost saving measures, including delayed merit increases. Although the Company
has a large number of customers who are dispersed across different industries
and geographic areas, a prolonged economic downturn would also increase the
Company's exposure to credit risk on its

<PAGE>

trade receivables. There can be no assurance that the Company's revenue or
operating results will not be adversely affected by macroeconomic trends.

ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information required under this Item 3 is included in the section above
entitled "Market Risk Management."


<PAGE>


                 STORAGE TECHNOLOGY CORPORATION AND SUBSIDIARIES
                           PART II - OTHER INFORMATION


ITEM 1 - LEGAL PROCEEDINGS

In January 1994, Stuff Technology Partners II, a Colorado Limited Partnership
(Stuff), filed suit in Boulder County, Colorado, District Court (the District
Court) against the Company and certain subsidiaries. The suit alleged that the
Company breached a 1990 settlement agreement that had resolved earlier
litigation between the parties concerning an optical disk drive storage
development project entered into in 1981 which was unsuccessful and terminated
in 1985. The suit sought injunctive relief and damages in the amount of $2.4
billion. On December 28, 1995, the District Court granted the Company's motion
for summary judgment and dismissed the complaint. Stuff appealed the dismissal
to the Colorado Court of Appeals (the Court of Appeals). In March 1997, the
Court of Appeals reversed the District Court's judgment and remanded the case to
the District Court for further proceedings. In July, 1999, the District Court
again dismissed, with prejudice, all of Stuff's material claims against the
Company. In August, 1999, Stuff filed a notice of appeal with the Appeals Court
seeking to overturn the decision of the District Court. In August, 2000, the
Court of Appeals remanded the case back to the District Court for a trial on the
factual issues relating to the interpretation of the language embodied in the
1990 Settlement Agreement. The Company filed a Petition for Rehearing with the
Court of Appeals. In October, 2000, the Court of Appeals modified its decision,
but denied the Company's Petition for Rehearing. In November 2000, the Company
filed a Petition for Certiorari with the Supreme Court of Colorado (the Supreme
Court). In April 2001, the Supreme Court denied the Company's petition. The case
has been remanded to the District Court for trial. The date for the trial has
not yet been determined. The Company continues to believe that Stuff's claims
are wholly without merit and intends to defend vigorously any further actions
arising from this complaint.

In December 1999, the Company filed a patent infringement suit against Cisco
Systems, Inc. (Cisco) alleging that certain products made and sold by Cisco
infringe two StorageTek patents. The lawsuit is currently pending in the U.S.
District Court for the Northern District of California (San Francisco). Cisco
filed an answer in January 2000 denying the Company's claims, alleging that the
Company's patents are invalid and asserting that a microchip used in one of the
Company's network security products infringed upon one of Cisco's patents. Cisco
is seeking unspecified compensatory damages that it asserts should be trebled,
along with injunctive relief. The Company purchased the alleged infringing
microchip from Level One, a subsidiary of Intel Corporation. Level One has been
added to the lawsuit as an additional defendant to Cisco's counterclaim. A
hearing date for the claim construction phase of the proceeding is set for June
29, 2001 and a trial date is set for March 4, 2002. The parties have commenced
discovery, which is anticipated to continue for several months. The Company
continues to believe that it has valid claims against Cisco and valid defenses
against Cisco's counterclaim.

The Company is also involved in various other less significant legal actions.
While the Company currently believes that the amount of any ultimate potential
loss would not be material to the Company's financial position, the outcome of
these actions is inherently difficult to predict. In the event of an adverse
outcome, the ultimate potential loss could have a material adverse effect on the
Company's financial position or reported results of operations in a particular
quarter. An unfavorable decision, particularly in patent litigation, could
require material changes in production processes and products or result in the
Company's inability to ship products or components found to have violated
third-party patent rights.


<PAGE>

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

(a)   Exhibits:

The exhibits listed below are filed as part of this Quarterly Report on Form
10-Q or are incorporated by reference into this Quarterly Report on Form 10-Q:

3.1      Restated Certificate of Incorporation of Storage Technology Corporation
         dated July 28, 1987 (previously filed as Exhibit 3.1 to the Company's
         Annual Report on Form 10-K for the year ended December 29, 2000, filed
         on February 21, 2001, and incorporated herein by reference)

3.2      Certificate of Amendment dated May 22, 1989, to the Restated
         Certificate of Incorporation dated July 28, 1987 (previously filed as
         Exhibit 3.2 to the Company's Annual Report on Form 10-K for the year
         ended December 29, 2000, filed on February 21, 2001, and incorporated
         herein by reference)

3.3      Certificate of Second Amendment dated May 28, 1992, to the Restated
         Certificate of Incorporation dated July 28, 1987 (previously filed as
         Exhibit 3.3 to the Company's Annual Report on Form 10-K for the year
         ended December 29, 2000, filed on February 21, 2001, and incorporated
         herein by reference)

3.4      Certificate of Third Amendment dated May 21, 1999, to the Restated
         Certificate of Incorporation dated July 28, 1987 (filed as Exhibit 3.1
         to the Company's Quarterly Report on Form 10-Q for the quarter ended
         June 25, 1999, filed on August 9, 1999, and incorporated herein by
         reference)

3.5      Restated Bylaws of Storage Technology Corporation, as amended through
         November 11, 1998 (filed as Exhibit 3.1 to the Company's Current Report
         on Form 8-K dated November 19, 1998, and incorporated herein by
         reference)

4.1      Specimen Certificate of Common Stock, $0.10 par value of Registrant
         (filed as Exhibit (c)(2) as to the Company's Current Report on Form 8-K
         dated June 2, 1989, and incorporated herein by reference)

10.1(1)  Storage Technology Corporation 1987 Employee Stock Purchase Plan, as
         amended (previously filed as Exhibit 10.3 to the Company's Quarterly
         Report on Form 10-Q for the quarter ended June 30, 2000, filed on
         August 11, 2000, and incorporated herein by reference)

10.2(1)  Storage Technology Corporation Amended and Restated 1995 Equity
         Participation Plan (filed as Exhibit 10.6 to the Company's Annual
         Report on Form 10-K for the fiscal year ended December 31, 1999, filed
         on March 10, 2000, and incorporated herein by reference)

10.3(1,2)Storage Technology Corporation Management by Objective Bonus Plan

10.4(1)  Storage Technology Corporation Amended and Restated Stock Option Plan
         for Non-Employee Directors (filed as Exhibit 10.2 to the Company's
         Quarterly Report on Form 10-Q for the quarter ended June 28, 1996,
         filed on August 12, 1996, and incorporated herein by reference)

----------
1  Contract or compensatory plan or arrangement in which directors and/or
   officers participate.
2  Indicates exhibits filed with this Quarterly Report on Form 10-Q.

<PAGE>

10.5(1)  Agreement between the Company and Gary Francis, dated August 19, 1997
         (filed as Exhibit 10.25 to the Company's Annual Report on Form 10-K for
         the year ended December 26, 1997, filed on March 6, 1998, and
         incorporated herein by reference)

10.6(1)  Form of Executive Officer Employment Agreement between the Company and
         Each Executive Officer Named in Exhibit 10.7 hereto, dated October 1999
         (previously filed as Exhibit 10.8 to the Company's Annual Report on
         Form 10-K for the year ended December 31, 1999, filed on March 10,
         2000, and incorporated herein by reference)

10.7(1)  Schedule of Differences in Terms and Conditions of Executive Officer
         Employment Agreement (previously filed as Exhibit 10.9 to the Company's
         Annual Report on Form 10-K for the year ended December 29, 2000, filed
         on February 21, 2001, and incorporated herein by reference)

10.8(1)  CEO Employment Agreement, dated July 11, 2000, between the Company and
         Patrick J. Martin (previously filed as Exhibit 10.1 to the Company's
         Quarterly Report on Form 10-Q for the quarter ended June 30, 2000,
         filed on August 11, 2000, and incorporated herein by reference)

10.9(1)  Extension of Retention Agreement, dated July 31, 2000, between the
         Company and Robert S. Kocol (previously filed as Exhibit 10.4 to the
         Company's Quarterly Report on Form 10-Q for the quarter ended June 30,
         2000, filed on August 11, 2000, and incorporated herein by reference)

10.10    Amended and Restated Credit Agreement, dated as of January 13, 2000,
         among the Company, Bank of America, N.A., as Administrative Agent,
         Swingline Bank and Letter of Credit Issuing Bank and the other
         financial institutions party thereto (previously filed as Exhibit 10.14
         to the Company's Annual Report on Form 10-K for the year ended December
         31, 1999, filed on March 10, 2000, and incorporated herein by
         reference)

10.11    Credit Agreement, dated as of January 13, 2000, among the Company, Bank
         of America, N.A. and the other financial institutions party thereto
         (previously filed as Exhibit 10.15 to the Company's Annual Report on
         Form 10-K for the year ended December 31, 1999, filed on March 10,
         2000, and incorporated herein by reference)

10.12    Security Agreement, dated as of January 13, 2000, by and among the
         Company, Bank of America, N.A., as Collateral Agent for itself and
         other Secured Parties referred to therein (previously filed as Exhibit
         10.16 to the Company's Annual Report on Form 10-K for the year ended
         December 31, 1999, filed on March 10, 2000, and incorporated herein by
         reference)

10.13    Contingent Multicurrency Note Purchase Commitment Agreement dated as of
         December 12, 1996, between the Company and Bank of America National
         Trust and Savings Association (filed as Exhibit 10.29 to the Company's
         Annual Report on Form 10-K for the year ended December 27, 1996, filed
         on March 7, 1997, and incorporated herein by reference)

10.14    Second Amendment to Second Amended and Restated Contingent
         Multicurrency Note Purchase Commitment Agreement dated November 20,
         1998, between Bank of America National Trust and Savings Association
         and the Company (filed as Exhibit 10.19 to the Company's Annual Report
         on Form 10-K for the year ended December 25, 1998, filed on March 5,
         1999, and incorporated herein by reference)

----------
1  Contract or compensatory plan or arrangement in which directors and/or
   officers participate.
2  Indicates exhibits filed with this Quarterly Report on Form 10-Q.

<PAGE>

10.15    Third Amendment to Second Amended and Restated Contingent Multicurrency
         Note Purchase Commitment Agreement dated August 13, 1999, between Bank
         of America National Trust and Savings Association and the Company
         (previously filed as Exhibit 10.19 to the Company's Annual Report on
         Form 10-K for the year ended December 31, 1999, filed on March 10,
         2000, and incorporated herein by reference)

10.16    Fourth Amendment to Second Amended and Restated Contingent
         Multicurrency Note Purchase Commitment Agreement dated January 5, 2000,
         between the Company and Bank of America, N.A. (previously filed as
         Exhibit 10.20 to the Company's Annual Report on Form 10-K for the year
         ended December 31, 1999, filed on March 10, 2000, and incorporated
         herein by reference)

10.17    Fifth Amendment to Second Amended and Restated Contingent Multicurrency
         Note Purchase Commitment Agreement dated August 15, 2000, between the
         Company and Bank of America, N.A. (previously filed as Exhibit 10.20 to
         the Company's Annual Report on Form 10-K for the year ended December
         29, 2000, filed on February 21, 2001, and incorporated herein by
         reference)

10.18(1) Separation Agreement and Release, dated February 7, 2001, between the
         Company and Karen Niparko (previously filed as Exhibit 10.21 to the
         Company's Annual Report on Form 10-K for the year ended December 29,
         2000, filed on February 21, 2001, and incorporated herein by reference)

10.19(1,2) Offer Letter, dated February 9, 2001, from the Company to Jill F.
           Kenney

10.20(1,2) Offer Letter, dated February 9, 2001, from the Company to Roger
           Gaston

10.21(2) Waiver Agreement, dated as of April 25, 2001, among the Company, the
         several financial institutions from time to time party to the Credit
         Agreement, and Bank of America, N.A., as swingline bank, letter of
         credit issuing bank and sole administrative agent for the Banks

10.22(2) Waiver to Second Amended and Restated Multicurrency Note Purchase
         Commitment Agreement, dated as of April 25, 2001, by and between the
         Company and Bank of America, N.A.


(b)      Reports on Form 8-K.

The Registrant did not file any Current Reports on Form 8-K during the quarterly
period ending March 30, 2001.

----------
1  Contract or compensatory plan or arrangement in which directors and/or
   officers participate.
2  Indicates exhibits filed with this Quarterly Report on Form 10-Q.

<PAGE>



Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                    STORAGE TECHNOLOGY CORPORATION
                                            (Registrant)




      May 11, 2001                       /s/ ROBERT S. KOCOL
------------------------        -------------------------------------------
        (Date)                               Robert S. Kocol
                                         Corporate Vice President
                                        and Chief Financial Officer
                                       (Principal Financial Officer)






      May 11, 2001                       /s/ THOMAS G. ARNOLD
------------------------         ------------------------------------------
         (Date)                              Thomas G. Arnold
                                  Vice President and Corporate Controller
                                        (Principal Accounting Officer)





<PAGE>




                                  EXHIBIT INDEX
Exhibit
No.      Description
--------------------

3.1      Restated Certificate of Incorporation of Storage Technology Corporation
         dated July 28, 1987 (previously filed as Exhibit 3.1 to the Company's
         Annual Report on Form 10-K for the year ended December 29, 2000, filed
         on February 21, 2001, and incorporated herein by reference)

3.2      Certificate of Amendment dated May 22, 1989, to the Restated
         Certificate of Incorporation dated July 28, 1987 (previously filed as
         Exhibit 3.2 to the Company's Annual Report on Form 10-K for the year
         ended December 29, 2000, filed on February 21, 2001, and incorporated
         herein by reference)

3.3      Certificate of Second Amendment dated May 28, 1992, to the Restated
         Certificate of Incorporation dated July 28, 1987 (previously filed as
         Exhibit 3.3 to the Company's Annual Report on Form 10-K for the year
         ended December 29, 2000, filed on February 21, 2001, and incorporated
         herein by reference)

3.4      Certificate of Third Amendment dated May 21, 1999, to the Restated
         Certificate of Incorporation dated July 28, 1987 (filed as Exhibit 3.1
         to the Company's Quarterly Report on Form 10-Q for the quarter ended
         June 25, 1999, filed on August 9, 1999, and incorporated herein by
         reference)

3.5      Restated Bylaws of Storage Technology Corporation, as amended through
         November 11, 1998 (filed as Exhibit 3.1 to the Company's Current Report
         on Form 8-K dated November 19, 1998, and incorporated herein by
         reference)

4.1      Specimen Certificate of Common Stock, $0.10 par value of Registrant
         (filed as Exhibit (c)(2) as to the Company's Current Report on Form 8-K
         dated June 2, 1989, and incorporated herein by reference)

10.1(1)  Storage Technology Corporation 1987 Employee Stock Purchase Plan, as
         amended (previously filed as Exhibit 10.3 to the Company's Quarterly
         Report on Form 10-Q for the quarter ended June 30, 2000, filed on
         August 11, 2000, and incorporated herein by reference)

10.2(1)  Storage Technology Corporation Amended and Restated 1995 Equity
         Participation Plan (filed as Exhibit 10.6 to the Company's Annual
         Report on Form 10-K for the fiscal year ended December 31, 1999, filed
         on March 10, 2000, and incorporated herein by reference)

10.3(1,2)Storage Technology Corporation Management by Objective Bonus Plan

10.4(1)  Storage Technology Corporation Amended and Restated Stock Option Plan
         for Non-Employee Directors (filed as Exhibit 10.2 to the Company's
         Quarterly Report on Form 10-Q for the quarter ended June 28, 1996,
         filed on August 12, 1996, and incorporated herein by reference)

10.5(1)  Agreement between the Company and Gary Francis, dated August 19, 1997
         (filed as Exhibit 10.25 to the Company's Annual Report on Form 10-K for
         the year ended December 26, 1997, filed on March 6, 1998, and
         incorporated herein by reference)

----------
1  Contract or compensatory plan or arrangement in which directors and/or
   officers participate.
2  Indicates exhibits filed with this Quarterly Report on Form 10-Q.

<PAGE>

10.6(1)  Form of Executive Officer Employment Agreement between the Company and
         Each Executive Officer Named in Exhibit 10.7 hereto, dated October 1999
         (previously filed as Exhibit 10.8 to the Company's Annual Report on
         Form 10-K for the year ended December 31, 1999, filed on March 10,
         2000, and incorporated herein by reference)

10.7(1)  Schedule of Differences in Terms and Conditions of Executive Officer
         Employment Agreement (previously filed as Exhibit 10.9 to the Company's
         Annual Report on Form 10-K for the year ended December 29, 2000, filed
         on February 21, 2001, and incorporated herein by reference)

10.8(1)  CEO Employment Agreement, dated July 11, 2000, between the Company and
         Patrick J. Martin (previously filed as Exhibit 10.1 to the Company's
         Quarterly Report on Form 10-Q for the quarter ended June 30, 2000,
         filed on August 11, 2000, and incorporated herein by reference)

10.9(1)  Extension of Retention Agreement, dated July 31, 2000, between the
         Company and Robert S. Kocol (previously filed as Exhibit 10.4 to the
         Company's Quarterly Report on Form 10-Q for the quarter ended June 30,
         2000, filed on August 11, 2000, and incorporated herein by reference)

10.10    Amended and Restated Credit Agreement, dated as of January 13, 2000,
         among the Company, Bank of America, N.A., as Administrative Agent,
         Swingline Bank and Letter of Credit Issuing Bank and the other
         financial institutions party thereto (previously filed as Exhibit 10.14
         to the Company's Annual Report on Form 10-K for the year ended December
         31, 1999, filed on March 10, 2000, and incorporated herein by
         reference)

10.11    Credit Agreement, dated as of January 13, 2000, among the Company, Bank
         of America, N.A. and the other financial institutions party thereto
         (previously filed as Exhibit 10.15 to the Company's Annual Report on
         Form 10-K for the year ended December 31, 1999, filed on March 10,
         2000, and incorporated herein by reference)

10.12    Security Agreement, dated as of January 13, 2000, by and among the
         Company, Bank of America, N.A., as Collateral Agent for itself and
         other Secured Parties referred to therein (previously filed as Exhibit
         10.16 to the Company's Annual Report on Form 10-K for the year ended
         December 31, 1999, filed on March 10, 2000, and incorporated herein by
         reference)

10.13    Contingent Multicurrency Note Purchase Commitment Agreement dated as of
         December 12, 1996, between the Company and Bank of America National
         Trust and Savings Association (filed as Exhibit 10.29 to the Company's
         Annual Report on Form 10-K for the year ended December 27, 1996, filed
         on March 7, 1997, and incorporated herein by reference)

10.14    Second Amendment to Second Amended and Restated Contingent
         Multicurrency Note Purchase Commitment Agreement dated November 20,
         1998, between Bank of America National Trust and Savings Association
         and the Company (filed as Exhibit 10.19 to the Company's Annual Report
         on Form 10-K for the year ended December 25, 1998, filed on March 5,
         1999, and incorporated herein by reference)

10.15    Third Amendment to Second Amended and Restated Contingent Multicurrency
         Note Purchase Commitment Agreement dated August 13, 1999, between Bank
         of America National Trust and Savings Association and the Company
         (previously filed as Exhibit 10.19 to the Company's Annual Report on
         Form 10-K for the year ended December 31, 1999, filed on March 10,
         2000, and incorporated herein by reference)

----------
1  Contract or compensatory plan or arrangement in which directors and/or
   officers participate.
2  Indicates exhibits filed with this Quarterly Report on Form 10-Q.

<PAGE>

10.16    Fourth Amendment to Second Amended and Restated Contingent
         Multicurrency Note Purchase Commitment Agreement dated January 5, 2000,
         between the Company and Bank of America, N.A. (previously filed as
         Exhibit 10.20 to the Company's Annual Report on Form 10-K for the year
         ended December 31, 1999, filed on March 10, 2000, and incorporated
         herein by reference)

10.17    Fifth Amendment to Second Amended and Restated Contingent Multicurrency
         Note Purchase Commitment Agreement dated August 15, 2000, between the
         Company and Bank of America, N.A. (previously filed as Exhibit 10.20 to
         the Company's Annual Report on Form 10-K for the year ended December
         29, 2000, filed on February 21, 2001, and incorporated herein by
         reference)

10.18(1) Separation Agreement and Release, dated February 7, 2001, between the
         Company and Karen Niparko (previously filed as Exhibit 10.21 to the
         Company's Annual Report on Form 10-K for the year ended December 29,
         2000, filed on February 21, 2001, and incorporated herein by reference)

10.19(1,2) Offer Letter, dated February 9, 2001, from the Company to Jill F.
           Kenney

10.20(1,2) Offer Letter, dated February 9, 2001, from the Company to Roger
           Gaston

10.21(2) Waiver Agreement, dated as of April 25, 2001, among the Company, the
         several financial institutions from time to time party to the Credit
         Agreement, and Bank of America, N.A., as swingline bank, letter of
         credit issuing bank and sole administrative agent for the Banks

10.22(2) Waiver to Second Amended and Restated Multicurrency Note Purchase
         Commitment Agreement, dated as of April 25, 2001, by and between the
         Company and Bank of America, N.A.


----------
1  Contract or compensatory plan or arrangement in which directors and/or
   officers participate.
2  Indicates exhibits filed with this Quarterly Report on Form 10-Q.