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                                                                  EXHIBIT 10.16



                         SEVERANCE AGREEMENT AND RELEASE

                                    RECITALS


        This Severance Agreement and Release ("Agreement") is made by and
between ERIK OTTEM ("Employee") and Gadzoox Networks, Inc. ("Company"),
collectively referred to as the ("Parties"):

        WHEREAS, Employee was employed by the Company;

        WHEREAS, the Company and Employee have entered into an Confidential and
Proprietary Agreement (the "Confidentiality Agreement");

        WHEREAS, the Company has terminated the Employee's employment due to
business necessity as part of a reduction in force;

        WHEREAS, the Parties, and each of them, wish to resolve any and all
disputes, claims, complaints, grievances, charges, actions, petitions and
demands that the Employee may have against the Company as defined herein,
including, but not limited to, any and all claims arising or in any way related
to Employee's employment with, or separation from, the Company;

        NOW THEREFORE, in consideration of the promises made herein, the Parties
hereby agree as follows:

                                    COVENANTS

        1. Consideration.

           (a) The Company agrees to pay Employee a sum equivalent to three (3)
months salary, less applicable withholding.

           (b) Payment. The Company will tender the settlement amount for the
three (3) months salary to Employee through salary continuation, for a total
amount of $48,750.00 Dollars, less applicable withholding, made payable to
Employee, beginning with the first regularly scheduled pay period after the
effective date of this agreement.

           (c) Vesting of Stock. Employee shall continue vesting under the
Company's Stock Option Plan through June 3, 2002. The exercise of any stock
options shall continue to be subject to the terms and conditions of the
Company's Stock Option Plan and the applicable Stock Option Agreement between
Employee and the Company.

           (d) Benefits. Employee shall have the right to convert his/her health
insurance benefits to individual coverage pursuant to COBRA. Should Employee so
elect, the Company shall pay for the cost of COBRA coverage between June 4, 2002
and September 3, 2002, after which time the payments for COBRA shall be the
responsibility of Employee.



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        2. Confidential Information. Employee shall continue to maintain the
confidentiality of all confidential and proprietary information of the Company
and shall continue to comply with the terms and conditions of the
Confidentiality Agreement between Employee and the Company. Employee shall
return all of the Company's property and confidential and proprietary
information in his/her possession to the Company on the Effective Date of this
Agreement.

        3. Payment of Salary. Employee acknowledges and represents that the
Company has paid all salary, wages, bonuses, accrued vacation, commissions and
any and all other benefits due to Employee once the above noted payments and
benefits are received.

        4. Release of Claims. Employee agrees that the foregoing consideration
represents settlement in full of all outstanding obligations owed to Employee by
the Company. Employee, on his/her own behalf, and on behalf of his/her
respective heirs, family members, executors, and assigns, hereby fully and
forever releases the Company and its officers, directors, employees, investors,
shareholders, administrators, affiliates, divisions, subsidiaries, predecessor
and successor corporations, and assigns, from, and agree not to sue concerning,
any claim, duty, obligation or cause of action relating to any matters of any
kind, whether presently known or unknown, suspected or unsuspected, that
Employee may possess arising from any omissions, acts or facts that have
occurred up until and including the Effective Date of this Agreement including,
without limitation:

            (a) any and all claims relating to or arising from Employee's
employment relationship with the Company and the termination of that
relationship;

            (b) any and all claims relating to, or arising from, Employee's
right to purchase, or actual purchase of shares of stock of the Company,
including, without limitation, any claims for fraud, misrepresentation, breach
of fiduciary duty, breach of duty under applicable state corporate law, and
securities fraud under any state or federal law;

            (c) any and all claims under the law of any jurisdiction including,
but not limited to, wrongful discharge of employment; constructive discharge
from employment; termination in violation of public policy; discrimination;
breach of contract, both express and implied; breach of a covenant of good faith
and fair dealing, both express and implied; promissory estoppel; negligent or
intentional infliction of emotional distress; negligent or intentional
misrepresentation; negligent or intentional interference with contract or
prospective economic advantage; unfair business practices; defamation; libel;
slander; negligence; personal injury; assault; battery; invasion of privacy;
false imprisonment; and conversion;

            (d) any and all claims for violation of any federal, state or
municipal statute, including, but not limited to, Title VII of the Civil Rights
Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment
Act of 1967, the Americans with Disabilities Act of 1990, the Fair Labor
Standards Act, the Employee Retirement Income Security Act of 1974, The Worker
Adjustment and Retraining Notification Act, Older Workers Benefit Protection
Act; the California Fair Employment and Housing Act, and Labor Code section 201,
et seq. and section 970, et seq.;

            (e) any and all claims for violation of the federal, or any state,
constitution;



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            (f) any and all claims arising out of any other laws and regulations
relating to employment or employment discrimination;

            (g) any claim for any loss, cost, damage, or expense arising out of
any dispute over the non-withholding or other tax treatment of any of the
proceeds received by Employee as a result of this Agreement; and

            (h) any and all claims for attorneys' fees and costs.

        The Company and Employee agree that the release set forth in this
section shall be and remain in effect in all respects as a complete general
release as to the matters released. This release does not extend to any
obligations incurred under this Agreement.

        Employee acknowledges and agrees that any breach of any provision of
this Agreement shall constitute a material breach of this Agreement and shall
entitle the Company immediately to recover the severance benefits provided to
Employee under this Agreement, to the extent permitted by law. Employee shall
also be responsible to the Company for all costs, attorneys' fees and any and
all damages incurred by the Company (a) enforcing the obligation, including the
bringing of any suit to recover the monetary consideration, and (b) defending
against a claim or suit brought or pursued by Employee in violation of this
provision.

        5. Acknowledgement of Waiver of Claims Under ADEA. Employee acknowledges
that he/she is waiving and releasing any rights he/she may have under the Age
Discrimination in Employment Act of 1967 ("ADEA") and that this waiver and
release is knowing and voluntary. Employee and the Company agree that this
waiver and release does not apply to any rights or claims that may arise under
ADEA after the Effective Date of this Agreement. Employee acknowledges that the
consideration given for this waiver and release Agreement is in addition to
anything of value to which Employee was already entitled. Employee further
acknowledges that he/she has been advised by this writing that

           (a) he/she should consult with an attorney prior to executing this
Agreement;

           (b) he/she has up to forty-five (45) days within which to consider
this Agreement;

           (c) he/she has been advised in writing by the Company of the class,
unit, or group of individuals covered by the severance program, and the job
titles and ages of all individuals who participated and did not participate in
the program;

           (d) he/she has seven (7) days following his/her execution of this
Agreement to revoke the Agreement;

           (e) this Agreement shall not be effective until the revocation period
has expired; and

           (f) nothing in this Agreement prevents or precludes Employee from
challenging or seeking a determination in good faith of the validity of this
waiver under the ADEA, nor does it impose any condition precedent, penalties or
costs for doing so, unless specifically authorized by federal law.



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        6. Civil Code Section 1542. The Parties represent that they are not
aware of any claim by either of them other than the claims that are released by
this Agreement. Employee and the Company acknowledge that they have been advised
by legal counsel and are familiar with the provisions of California Civil Code
Section 1542, which provides as follows:

                A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
                CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS
                FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
                KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
                SETTLEMENT WITH THE DEBTOR.

        Employee and the Company, being aware of said code section, agree to
expressly waive any rights they may have thereunder, as well as under any other
statute or common law principles of similar effect.

        7. No Pending or Future Lawsuits. Employee represents that he/she has no
lawsuits, claims, or actions pending in his/her name, or on behalf of any other
person or entity, against the Company or any other person or entity referred to
herein. Employee also represents that he/she does not intend to bring any claims
on his/her own behalf or on behalf of any other person or entity against the
Company or any other person or entity referred to herein.

        8. Confidentiality. The Parties acknowledge that Employee's agreement to
keep the terms and conditions of this Agreement confidential was a material
factor on which all parties relied in entering into this Agreement. Employee
hereto agrees to use his/her best efforts to maintain in confidence the
existence of this Agreement, the contents and terms of this Agreement, the
consideration for this Agreement, and any allegations relating to the Company or
his/her employment with the Company except as otherwise provided for in this
Agreement (hereinafter collectively referred to as "Settlement Information").
Employee agrees to take every reasonable precaution to prevent disclosure of any
Settlement Information to third parties, and agrees that there will be no
publicity, directly or indirectly, concerning any Settlement Information.
Employee agrees to take every precaution to disclose Settlement Information only
to those attorneys, accountants, governmental entities, and family members who
have a reasonable need to know of such Settlement Information. The Parties agree
that an enforcement action shall be arbitrated pursuant to Paragraph 15 of this
Agreement and that, if Company proves that Employee breached this
Confidentiality provision, it shall be entitled to an award of its costs spent
enforcing this provision, including all reasonable attorneys' fees associated
with the enforcement action, without regard to whether the Company can establish
actual damages from the breach by Employee.

        9. No Cooperation. Employee agrees he/she will not act in any manner
that might damage the business of the Company. Employee agrees that he will not
counsel or assist any attorneys or their clients in the presentation or
prosecution of any disputes, differences, grievances, claims, charges, or
complaints by any third party against the Company and/or any officer, director,
employee, agent, representative, shareholder or attorney of the Company, unless
under a subpoena or other court order to do so. Employee further agrees both to
immediately notify the Company upon receipt of any court order, subpoena, or any
legal discovery device that seeks or might require the



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disclosure or production of the existence or terms of this Agreement, and to
furnish, within three (3) business days of its receipt, a copy of such subpoena
or legal discovery device to the Company.

        10. Non-Disparagement. Employee agrees to refrain from any defamation,
libel or slander of the Company or tortious interference with the contracts and
relationships of the Company. All inquiries by potential future employers of
Employee will be directed to Human Resources. Upon inquiry, the Company shall
only state the following: Employee 's last position and dates of employment

        11. Non-Solicitation. Employee agrees that for a period of twelve (12)
months immediately following the Effective Date of this Agreement, Employee
shall not either directly or indirectly solicit, induce, recruit or encourage
any of the Company's employees to leave their employment, or take away such
employees, or attempt to solicit, induce, recruit, encourage, take away or hire
employees of the Company, either for him/herself or any other person or entity.

        12. No Admission of Liability. The Parties understand and acknowledge
that this Agreement constitutes a compromise and settlement of disputed claims.
No action taken by the Parties hereto, or either of them, either previously or
in connection with this Agreement shall be deemed or construed to be:

            (a) an admission of the truth or falsity of any claims heretofore
made or

            (b) an acknowledgment or admission by either party of any fault or
liability whatsoever to the other party or to any third party.

        13. Costs. The Parties shall each bear their own costs, expert fees,
attorneys' fees and other fees incurred in connection with this Agreement.

        14. Indemnification. Employee agreed to indemnify and hold harmless the
Company from and against any and all loss, costs, damages or expenses,
including, without limitation, attorneys' fees or expenses incurred by the
Company arising out of the breach of this Agreement by Employee, or from any
false representation made herein by Employee, or from any action or proceeding
which may be commenced, prosecuted or threatened by Employee or for Employee's
benefit, upon Employee's initiative, or with Employee's aid or approval,
contrary to the provisions of this Agreement. Employee further agrees that in
any such action or proceeding, this Agreement may be pled by the Company as a
complete defense, or may be asserted by way of counterclaim or cross-claim.

        15. Arbitration. The Parties agree that any and all disputes arising out
of the terms of this Agreement, their interpretation, and any of the matters
herein released, shall be subject to binding arbitration in Santa Clara County
before the American Arbitration Association under its Employment Dispute
Resolution Rules, or by a judge to be mutually agreed upon. The Parties agree
that the prevailing party in any arbitration shall be entitled to injunctive
relief in any court of competent jurisdiction to enforce the arbitration award.
The Parties agree that the prevailing party in any arbitration shall be awarded
its reasonable attorneys' fees and costs. THE PARTIES HEREBY AGREE TO WAIVE
THEIR RIGHT TO HAVE ANY DISPUTE BETWEEN THEM RESOLVED IN A COURT OF LAW BY A
JUDGE OR



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JURY. This section 15 will not prevent either party from seeking injunctive
relief (or any other provisional remedy) from any court having jurisdiction over
the parties and the subject matter of their dispute relating to Employee's
obligations under this Agreement and the agreements incorporated herein by
reference.

        16. Authority. The Company represents and warrants that the undersigned
has the authority to act on behalf of the Company and to bind the Company and
all who may claim through it to the terms and conditions of this Agreement.
Employee represents and warrants that he/she has the capacity to act on his/her
own behalf and on behalf of all who might claim through him/her to bind them to
the terms and conditions of this Agreement. Each party warrants and represents
that there are no liens or claims of lien or assignments in law or equity or
otherwise of or against any of the claims or causes of action released herein.

        17. No Representations. Each party represents that it has had the
opportunity to consult with an attorney, and has carefully read and understands
the scope and effect of the provisions of this Agreement. Neither party has
relied upon any representations or statements made by the other party hereto
which are not specifically set forth in this Agreement.

        18. Severability. In the event that any provision hereof becomes or is
declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Agreement shall continue in full force and effect without said
provision so long as the remaining provisions remain intelligible and continue
to reflect the original intent of the Parties.

        19. Entire Agreement. This Agreement, and the agreements incorporated
herein by reference to the extent they are consistent with this Agreement,
constitute the entire agreement and understanding between the Parties concerning
the subject matter of this Agreement and all prior representations,
understandings, and agreements concerning the subject matter of this Agreement
have been merged into this Agreement.

        20. No Waiver. The failure of any party to insist upon the performance
of any of the terms and conditions in this Agreement, or the failure to
prosecute any breach of any of the terms and conditions of this Agreement, shall
not be construed thereafter as a waiver of any such terms or conditions. This
entire Agreement shall remain in full force and effect as if no such forbearance
or failure of performance had occurred.

        21. No Oral Modification. Any modification or amendment of this
Agreement, or additional obligation assumed by either party in connection with
this Agreement, shall be effective only if placed in writing and signed by both
Parties or by authorized representatives of each party. No provision of this
Agreement can be changed, altered, modified, or waived except by an executed
writing by the Parties.

        22. Governing Law. This Agreement shall be deemed to have been executed
and delivered within the State of California, and it shall be construed,
interpreted, governed, and enforced in accordance with the laws of the State of
California. Any action at law, suit in equity, or other judicial proceedings for
the enforcement of this Agreement, or related to any provision of this
Agreement, shall be instituted only in courts with venue in the State of
California, except that the



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Company may seek injunctive relief in any court having jurisdiction for any
claim relating to the alleged misuse or misappropriation of the Company's trade
secrets or confidential or proprietary information. Employee hereby consents to
personal and exclusive jurisdiction and venue in the State of California.

        23. Attorneys' Fees. In the event that either Party brings an action to
enforce or effect its rights under this Agreement, the prevailing party shall be
entitled to recover its costs and expenses, including the costs of mediation,
arbitration, litigation, court fees, plus reasonable attorneys' fees, incurred
in connection with such an action.

        24. Effective Date. This Agreement is effective after it has been signed
by both parties and after eight (8) days have passed since Employee has signed
the Agreement (the "Effective Date"), unless revoked by Employee within seven
(7) days after the date the Agreement was signed by Employee.

        25. Counterparts. This Agreement may be executed in counterparts, and
each counterpart shall have the same force and effect as an original and shall
constitute an effective, binding agreement on the part of each of the
undersigned.

        26. Voluntary Execution of Agreement. This Agreement is executed
voluntarily and without any duress or undue influence on the part or behalf of
the Parties hereto, with the full intent of releasing all claims. The Parties
acknowledge that:

            (a) They have read this Agreement;

            (b) They have been represented in the preparation, negotiation, and
execution of this Agreement by legal counsel of their own choice or that they
have voluntarily declined to seek such counsel;

            (c) They understand the terms and consequences of this Agreement and
of the releases it contains; and

            (d) They are fully aware of the legal and binding effect of this
Agreement.



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IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective
dates set forth below.

                                             Gadzoox Networks, Inc.



Dated:                                       By
       --------------                           -------------------------------
                                             Barbara Velline
                                             CFO


                                             Erik Ottem, an individual


Dated:
       --------------                        ----------------------------------
                                             Erik Ottem




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