Exhibit 10.36

# STORAGE TECHNOLOGY
CORPORATION

# Amended and Restated
CEO Employment Agreement

# March 27, 2003

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# AMENDED AND RESTATED
CEO EMPLOYMENT AGREEMENT

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This Amended and Restated CEO
Employment Agreement (this Agreement) by and between Storage Technology
Corporation (together with its successors and assigns, hereinafter the
Company), a Delaware corporation, and Patrick J. Martin (hereinafter,
you or your) is entered into as of March 27, 2003 (the
Effective Date) and amends and restates the CEO Employment Agreement dated
June 28, 2000, as amended on February 12, 2003 (the Original Agreement). This
Agreement sets forth the terms and conditions of your employment with the Company. In
consideration of your agreement to extend the term of the Original Agreement on the terms
and conditions set forth below, and the mutual covenants and agreements contained herein,
you and the Company agree as follows:

1.    
          Position. During the Term (as defined in Section 2 below), you
          will be employed full-time by the Company in the positions of Chairman of the
          Board of Directors, President and Chief Executive Officer of the Company, and
          shall report directly to the Companys Board of Directors (the
          Board). You will perform such duties and have such responsibilities
          as may be assigned by the Board from time to time that are normally inherent in
          such capacities in corporations of similar size and character. During the Term,
          you shall devote substantially all of your working time, attention and energies
          to the business of the Company and shall be subject to the Companys
          Corporate Policies and Practices from time to time in effect during the Term.
          Nothing herein shall preclude you from (i) serving on the boards of directors of
          a reasonable number of other corporations with the concurrence of the Board
          (which approval shall not be unreasonably withheld), (ii) serving on the boards
          of a reasonable number of trade associations and/or charitable organizations,
          (iii) engaging in charitable activities and community affairs, and (iv) managing
          your personal investments and affairs, provided that such activities do not
          conflict or interfere with the effective discharge of your duties and
          responsibilities under this Section 1.

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

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

4.    
          Incentive Plans.

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

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

5.    
          Extension Bonus.

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

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

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

6.Reimbursement
of Business and Other Expenses; Relocation.

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

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

7.Termination
of Employment; Severance Benefits.

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

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

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

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

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

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

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

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

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

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

9.Certain
Defined Terms.

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

b)     Change
of Control. Change of Control means the occurrence of
                    any of the following events:

|i) | the acquisition by any person (as such term is used in Sections
          13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), other than
          the Company or a person that, on the Effective Date and immediately prior to
          such acquisition, directly or indirectly controls, is controlled by, or is under
          common control with, the Company, of the beneficial ownership (as
          defined in Rule 13d-3 under said Act), directly or indirectly, of securities of
          the Company representing thirty-five percent (35%) or more of the total voting
          power represented by the Companys then outstanding voting securities;
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|ii) | the majority of the Board consists of individuals other than Incumbent
          Directors, which term means the members of the Board on the Effective Date;
          provided that any person becoming a director subsequent to such date whose
          election or nomination for election was supported by three-quarters of the
          directors who then comprised the Incumbent Directors shall be considered to be
          an Incumbent Director;
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|iii) | merger or consolidation of the Company with any other corporation, other than a
          merger or consolidation which would result in the voting securities of the
          Company outstanding immediately prior thereto continuing to represent (either by
          remaining outstanding or by being converted into voting securities of the
          surviving entity (including the parent corporation of such surviving entity)) at
          least fifty-one percent (51%) of the total voting power represented by the
          voting securities of the Company or such surviving entity outstanding
          immediately after such merger or consolidation; or
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|iv) | the approval by the stockholders of the Company of a plan of complete
          liquidation of the Company, or the approval by the stockholders of the Company,
          and the closing by the Company, of the sale or other disposition by the Company
          of all or substantially all the Companys assets.
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c)    
          Disability. Disability means that you have been unable to
          substantially perform your duties under this Agreement as the result of your
          incapacity due to physical or mental illness for a period of twenty-six
          consecutive weeks after its commencement, as determined by a medical doctor
          selected by the Company and you. If the parties cannot agree on a medical
          doctor, each party shall select a medical doctor and the two doctors shall
          select a third, who shall be the approved medical doctor for this purpose.

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

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

10.    
          Excise Tax.

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

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

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

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

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

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

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

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

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

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

11.    
          Non-Compete; Non-Solicit.

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

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

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

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

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

12.    
          Employee Benefit Programs.

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

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

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

13.    
          Successors.

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

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

14.    
          Indemnification; Liability Insurance.

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

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

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

15.    
          Miscellaneous Provisions.

a)    
          Withholding. All payments to you pursuant to this Agreement shall be
          subject to withholding of all amounts required to be withheld by applicable
          Internal Revenue Service and State tax authorities by the Company and shall be
          conditioned upon your submission of all information or execution of all
          instruments necessary to enable the Company to comply with such withholding
          requirements.

b)    
          Confidentiality Agreement. As a condition of your employment, you will
          have executed the Companys standard form of confidential inventions and
          trade secrets agreement. You hereby reaffirm that during the Term and thereafter
          you will comply with all provisions of such agreement and agree that you will
          enter into such modifications or amendments thereof as the Company may
          reasonably request from time to time.

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

d)    
          Notice. Any notice required to be given under this Agreement shall be
          given in writing, either by personal delivery or by causing such written notice
          to be mailed, first class postage prepaid, in the United States mail, to the
          parties at the addresses set forth below, or at such other address for a party
          as shall be specified by like notice, provided that notices of change of address
          shall be effective only upon receipt thereof

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

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

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

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

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

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

i)    
          Severability. If any provision of this Agreement shall be held to be
          invalid, illegal or unenforceable, such invalidity, illegality or
          unenforceability shall not affect or impair the validity or enforceability of
          the remaining provisions of this Agreement, which shall remain in full force and
          effect in accordance with their terms.

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

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

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

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

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

STORAGE TECHNOLOGY
CORPORATION

By:
_____________________________Robert E. LeeChairman, Human Resources and
CompensationCommittee of the Board of Directors

Patrick J. Martin

________________________________

---

EXHIBIT A

SETTLEMENT AND RELEASE

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

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

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

ACKNOWLEDGMENT:

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

|Date |  | 
EMPLOYEE
|------------------ |  | -----------------------

This Release presented to Employee
on ___________________________

---

EXHIBIT B

SETTLEMENT AND RELEASE

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

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

|DateAccepted: |  | STORAGE TECHNOLOGY CORPORATIONBY: 
Name:Title:
|----------------------------------------- |  | --------------------------------------------------------------------------

---

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

StorageTek

# RESTRICTED STOCK
PURCHASE AGREEMENT

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

1.     
PURCHASE AND SALE OF SHARES

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

2.     
VESTING DATES AND OTHER RESTRICTIONS

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

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

|(i) | the
date of Employees Retirement as defined in Section 2 of the Amended           and
Restated CEO Employment Agreement effective March 27, 2003 (the           Amended
and Restated CEO Employment Agreement);
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

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

B.       
          Other Restrictions.

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

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

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

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

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

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

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

3.     
ESCROW OF SHARES

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

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

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

4.     
WAIVER

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

5.     
MISCELLANEOUS

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

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

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

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

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

|Employee:Patrick J. Martin |  | STORAGE TECHNOLOGY CORPORATIONBY:
Roger C. Gaston,Corporate Vice President, Human Resources
|---------------------------------------- |  | ---------------------------------------------------------------------------------------------------------

Patrick J. Martin1401 White
Hawk Ranch Drive Boulder, CO 80303

# AUTHORIZATION FOR TAX
REIMBURSEMENT TOSTORAGE TECHNOLOGY CORPORATION FOR RESTRICTED STOCK

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

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

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

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

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

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

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

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

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

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

|                                |                                         
|------------------------------- | ----------------------------------------
|Patrick J. Martin | Date:___________________________________

# ESCROW AGREEMENT

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

# RECITALS

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

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

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

# AGREEMENT

NOW,
THEREFORE, the parties agree as follows:

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

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

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

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

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

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

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

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

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

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

EMPLOYEE

|                                |                                         
|------------------------------- | ----------------------------------------
|Patrick J. Martin | Date:___________________________________

|STORAGE TECHNOLOGYCORPORATIONBy: 
Roger C. Gaston,Corporate Vice President, Human Resources |  | AMERICAN STOCK TRANSFER & TRUST COMPANY
By: 
Trust Officer
|--------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------