Document:

Exhibit No. 10.6
          Teaming agreement with Rafael Armament Development Authority
<PAGE>

                               TEAMING AGREEMENT

Agreement made the 3rd day of FEB 1998, by and between ECSI International, Inc.,
23 Just Road, Fairfield, New Jersey 07004 USA, (hereinafter "ECSI") and RAFAEL
Armament Development Authority, P.O. Box 2250, Haifa, Israel (hereinafter
"RAFAEL").

WHEREAS RAFAEL is the developer of GAMMA 2000, Pre-emptive Intrusion Prevention
System (hereinafter "System") retains rights therein, including but not limited
to patents pending, and

WHEREAS, ECSI is in the Security Business with expertise in Infrared Perimeter
Intrusion Detection (IPID)systems, Fiber Optic Intelligence Detection Systems
(FOIDS), and the marketing and sales thereof to military and paramilitary forces
in the United States and worldwide; and

WHEREAS, in the manner described in this Agreement, the parties desire to team
together on an exclusive basis for the United States for the purpose of
marketing and selling the System; and

WHEREAS the parties desire to define and record the terms and conditions of
their teaming arrangement.

NOW THEREFORE, in consideration of the terms, conditions and mutual covenants
herein contained, the parties hereto agree as follows:

1.    Preamble and Annexes

      The preamble to this Teaming Agreement and all annexes attached hereto
      form an integral part hereof.

2.    Formation and Purpose

      2.1   The parties hereby associate themselves together and team up on an
            exclusive basis for the purpose of marketing and selling the System
            in the United States. Further, in conjunction with this purpose, the
            parties shall prepare proposals for submission to prospective
            purchasers of the System. Nothing herein shall be deemed to confer
            any rights or impose any obligation or restriction on either party,
            except as set forth in this Teaming Agreement.

/s/ J.N.

                                       1
<PAGE>

      2.2   Each party shall bear its own costs and expenses arising out of the
            fulfillment of the terms of this Teaming Agreement. RAFAEL and ECSI
            shall at all times remain independent contractors and the team shall
            not constitute a joint venture, partnership or other business
            association. Nothing contained in this Agreement shall be construed
            as providing for the sharing of profits or losses arising out of the
            efforts of the parties hereunder.

3.    Marketing of the System and Division of Responsibilities

      3.1   ECSI shall be responsible for the creation of marketing
            opportunities for the System and shall acquire Request for Proposals
            for the System in the United States (hereinafter "RFP"). ECSI shall
            deliver copies of the RFP to RAFAEL and recommend actions by RAFAEL
            for the preparation and submittal of the proposals for the System to
            prospective purchasers in the United States.

      3.2   Unless otherwise agreed by the parties, ECSI shall act as the
            Contractor to the purchaser and RAFAEL shall act as ESCI's supplier
            in connection with the projects arising from the RFPs proposals
            pursuant to the provisions of Clause 3.1 (when agreed upon by ESCI
            and RAFAEL), and in accordance with the workshare as set forth
            below.

      3.3   ECSI shall lead all marketing efforts for the System in the United
            States. RAFAEL shall assist ECSI in the marketing of the System in
            the United States in accordance with an agreed marketing plan to be
            developed within 3 months of the date of this Agreement. In
            accordance with the aforesaid marketing plan each party will make
            available appropriate management and technical personnel for
            meetings and other contacts with the prospective purchaser of the
            System in an effort to win contract award. Each party shall provide
            relevant marketing information to the other so as to assist in the
            marketing effort.

/s/ J.N.
/s/ [ILLEGIBLE]

      3.4   The workshare division of responsibilities between the parties shall
            be in accordance with the following principles:

            a)    The System is assembled from several Sub-Systems:

            b)    RAFAEL shall produce all the Sub-Systems and provide the
                  technical support required for the System, and ECSI shall
                  provide application engineering, site design, System assembly
                  and installation, testing, field supervision, maintenance and
                  training in relation to the System.

            c)    In accordance with a training plan and license, which shall be
                  attached hereto as Annex B, RAFAEL shall provide training

/s/ J.N.

                                       2
<PAGE>

                  material and train ESCI personnel and license ECSI for the
                  purpose of final System assembly and testing, installation and
                  field testing, maintenance and provision of training in
                  relation to the System.

4.    Proposal Preparation and Subcontract Negotiation

      4.1   In response to an RFP or where the parties have agreed to submit an
            unsolicited proposal to a prospective purchaser; ESCI shall prepare
            it's part of the proposal (based on its workshare) and shall be
            responsible for the integration of the RAFAEL Proposal (see Clause
            4.2, below) and the submission of the integrated proposal to the
            prospective purchaser (hereinafter "Proposal"). In addition, ESCI
            shall present to RAFAEL for review and comment the Proposal prior to
            its submission to the prospective purchaser. Finally, a copy of the
            Proposal actually submitted to the prospective purchaser shall be
            provided by ESCI to RAFAEL.

      4.2   RAFAEL shall prepare that part of the proposal relating to its
            assigned workshare (hereinafter, "RAFAEL Proposal"). ESCI shall
            identify RAFAEL in the Proposal, and in all negotiations and
            discussions in connection thereto, as its team member and the
            respective areas of responsibility of the parties. ESCI shall not
            make any changes to the RAFAEL Proposal without RAFAEL's prior
            written approval.

      4.3   In order to accomplish the purpose of this Agreement it may be
            necessary for the parties to exchange between them proprietary
            information. Proprietary Information shall be treated in accordance
            with the Non Disclosure Agreement signed between the parties and
            attached to this Agreement as Annex A. The Non Disclosure Agreement
            shall survive the termination or expiration of this Agreement.

      4.4   Negotiations shall be led by ESCI, but RAFAEL shall have the right
            to actively participate in all such negotiations. ESCI shall not
            enter into a Contract based on a Proposal prior to the agreement of
            ESCI and RAFAEL as to its terms.

      4.5   Upon the award of a Contract based on a Proposal, ESCI shall issue
            and RAFAEL shall accept a contract which shall be flow down from the
            obligations contained in the Contract and which shall be based on
            the RAFAEL Proposal to the extent included in the Contract.

      4.6   Each party shall bear its own costs and expenses in preparation and
            presentation of a proposal, and subsequent contract negotiations.

/s/ J.N.

                                       3
<PAGE>

5.    Exclusivity

      The parties hereto agree that during the term of this Teaming Agreement,
      neither party will participate in any other team efforts, or assist in any
      way, directly or indirectly, any competitor in the Preemptive Intrusion
      Prevention System area in the United States.

6.    Validity, Duration and Termination

      6.1   This Teaming Agreement shall be effective as of the date of the last
            party to sign said Agreement and shall be valid for a period of
            three (3) years therefrom, but shall be extended for the period of
            the validity of any Proposal issued in accordance with the terms of
            this Agreement with respect to said Proposal only. The Agreement
            shall be extended for another period of three (3) years is RAFAEL's
            sales volume in the first three (3) years period will reach the
            amount agreed upon in the marketing plan.

/s/ J.N.
/s/ [ILLEGIBLE]

      6.2   Notwithstanding the aforesaid, this Agreement may be terminated by
            either party under any of the following circumstances:

            (i)   In the event the other party ceases to conduct its operations
                  in the normal course of business, or if a proceeding under any
                  bankruptcy or insolvency law is brought by or against that
                  party, or if a receiver for said party is appointed or applied
                  for, or shall commence winding-up by reason of insolvency or
                  shall make assignment for the benefit of creditors; or

            (ii)  In the event that one party hereto shall be in breach of any
                  material obligation hereunder and shall, after having received
                  written notice from the other party, fail within thirty (30)
                  days of receipt of such notice to remedy such breach.

            (iii) In the event the parties cannot agree on the terms of the ECSI
                  training plan and license within 120 days from signature of
                  this Agreement.

7.    Notices and Correspondence

      Any notice, consent, demand or request, required or permitted by this
      Agreement, shall be in writing, and shall be given, and deemed to have
      been given, as follows: when personally delivered, upon date of delivery;
      or when mailed, ten (10) days after deposit in the United States mail or
      Israeli mail, respectively, postage prepaid, registered, return receipt
      requested; or when telefaxed, upon receipt of answer-back confirmation;
      all addressed as follows:

/s/ J.N.

                                       4
<PAGE>

      RAFAEL ARMAMENT DEVELOPMENT AUTHORITY
      P.O. Box 2250
      Haifa, Israel
      Attn:
      Telefax:

      ECSI
      23 Just Road
      Fairfield, NJ 07004
      USA
      Attn:
      Telefax:
      All correspondence and communication between the parties shall be in the
      English language.

8.    Governing Law and Dispute Resolution

      8.1   This Teaming Agreement shall be governed by and construed in
            accordance with the laws of the State of New York, without regard to
            the State's conflict of laws principles.

      8.2   Any and all disputes arising under or related to this Agreement
            shall be referred to the Head of the RAFAEL Platforms Directorate
            and the President of ECSI for amicable resolution. In the event that
            the parties cannot so amicably resolve said dispute then the matter
            shall be resolved by final and binding arbitration, pursuant to the
            then rules and regulations of the American Arbitration Association
            (AAA) in New York, New York, USA.

9.    Miscellaneous

      9.1   Neither party to this Teaming Agreement shall have the right to bind
            or to make commitments or obligations of any kind for or on behalf
            of the other party without the prior written consent of the other
            party.

      9.2   This Teaming Agreement is severable so that any term or provision
            hereof which is held by a Court having competent jurisdiction
            thereof to be void or illegal under applicable law shall not affect
            the validity and enforceability of the remainder of said Agreement.

/s/ J.N.

                                       5
<PAGE>

      9.3   Neither party shall sell, assign, or in any manner transfer its
            rights, duties or obligations under this Teaming Agreement without
            obtaining prior written consent of the other party, which shall not
            be unreasonably withheld. Notwithstanding the aforesaid RAFAEL shall
            be entitled to assign its obligations to RAFAEL Armament Development
            Ltd.

      9.4   Titles of articles in this Teaming Agreement are for reference only
            and shall not be construed in determining the intent or construction
            of such articles.

      9.5   Any failure of either party to enforce any provision of this
            Agreement shall not constitute a waiver of such provision or
            prejudice the right of that party to enforce said provision at any
            subsequent time.

10.   Complete Agreement

      This Teaming Agreement expresses the complete, final and only agreement of
      the parties as of the date of signature hereof, and hereby supersedes any
      and all previous agreements, undertakings or understandings (whether
      written, oral or implied) between the parties relating to the subject
      matter of this Teaming Agreement. This Agreement may be varied or modified
      only by an instrument in writing of subsequent date hereto duly executed
      by authorized representatives of the parties.

      IN WITNESS WHEREOF THE PARTIES HAVE SET THEIR HANDS:

      The State of Israel/          ECSI International, Inc.
      Ministry of Defense/
      Armament Development
      Authority - RAFAEL
      By                            By /s/ Arthur Birch
      Name                          Name ARTHUR BIRCH
      Title                         Title PRES. + CEO
      Date                          Date 2-3-98

      By
      Name
      Title
      Date

/s/ J.N.

                                       6<PAGE>

                                                                     EXHIBIT 4.1

                1998 NONSTATUTORY STOCK OPTION PLAN, AS AMENDED

     1.   Purposes of the Plan. The purposes of this 1998 Nonstatutory Stock
          --------------------
Option Plan are:

     .         to attract and retain the best available personnel for positions
               of substantial responsibility,
     .         to provide additional incentive to Employees and Directors, and
     .         to promote the success of the Company's business.

               Options granted under the Plan will be nonstatutory stock
               options.

     2.   Definitions. As used herein, the following definitions shall apply:
          -----------

               (a)  "Administrator" means the Board or any of its Committees as
                     -------------
shall be administering the Plan, in accordance with Section 4 of the Plan.

               (b)  "Applicable Laws" means the legal requirements relating to
                     ---------------
the administration of stock option plans under U.S. state corporate, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Shares are listed or quoted and the applicable laws of any
foreign country or jurisdiction where Options are, or will be, granted under the
Plan.

               (c)  "Board" means the Board of Directors of the Company.
                     -----

               (d)  "Code" means the Internal Revenue Code of 1986, as amended.
                     ----

               (e)  "Committee" means a Committee appointed by the Board in
                     ---------
accordance with Section 4 of the Plan.

               (f)  "Common Stock" means the common stock of the Company.
                     ------------

               (g)  "Company" means Seagate Technology, Inc., a Delaware
                     -------
corporation.

               (h)  "Director" means a member of the Board.
                     --------

               (i)  "Disability" means total and permanent disability as defined
                     ----------
in Section 22(e)(3) of the Code.
<PAGE>

               (j)  "Employee" means any person employed by the Company or any
                     --------
parent, subsidiary or affiliate of the Company.

               (k)  "Exchange Act" means the Securities Exchange Act of 1934, as
                     ------------
amended.

               (l)  "Fair Market Value" means, as of any date, the value of
                     -----------------
Common Stock determined as follows:

                    (i)  If the Common Stock is listed on any established
stock exchange or a national market system, including without limitation the
National Market System of the National Association of Securities Dealers, Inc.
Automated Quotation ("NASDAQ") System, the Fair Market Value of a Share of
Common Stock shall be the closing sales price for such stock (or the closing
bid, if no sales were reported) as quoted on such system or exchange (or the
exchange with the greatest volume of trading in Common Stock) on the last
market trading day prior to the day of determination, as reported in the Wall
Street Journal or such other source as the Administrator deems reliable;

                   (ii)  If the Common Stock is quoted on the NASDAQ System
(but not on the National Market System thereof) or is regularly quoted by a
recognized securities dealer but selling prices are not reported, the Fair
Market Value of a Share of Common Stock shall be the mean between the high bid
and low asked prices for the Common Stock on the last market trading day prior
to the day of determination, as reported in the Wall Street Journal or such
other source as the Administrator deems reliable;

                  (iii)  In the absence of an established market for the
Common Stock, the Fair Market Value shall be determined in good faith by the
Administrator.

               (m)  "Notice of Grant" means a written notice evidencing certain
                     ---------------
terms and conditions of an individual Option grant. The Notice of Grant is part
of the Option Agreement.

               (n)  "Option" means a stock option granted pursuant to the Plan,
                     ------
that is not intended to qualify as an incentive stock option within the meaning
of Section 422 of the Code and the Regulations promulgated thereunder.

               (o)  "Option Agreement" means a written agreement between the
                     ----------------
Company and an Optionee evidencing the terms and conditions of an individual
Option grant. The Option Agreement is subject to the terms and conditions of the
Plan.
<PAGE>

               (p)  "Option Exchange Program" means a program whereby
                     -----------------------
outstanding options are surrendered in exchange for options with a lower
exercise price.

               (q)  "Optioned Stock" means the Shares subject to an Option.
                     --------------

               (r)  "Optionee" means the holder of an outstanding Option granted
                     --------
under the Plan.

               (s)  "Plan" means this 1998 Nonstatutory Stock Option Plan.
                     ----

               (t)  "Retirement" means the Optionee has reached the age of 55
                     ----------
years and has five (5) years of continuous service with the Company or one of
its subsidiaries and the Optionee elects to terminate his/her Continuous Status
as an Employee or Consultant.

               (u)  "Service Provider" means an Employee who is a Vice President
                     ----------------
or more senior employee or a Director.

               (v)  "Share" means a share of the Common Stock, as adjusted in
                     -----
accordance with Section 12 of the Plan.

     3.   Stock Subject to the Plan. Subject to the provisions of Section 12 of
          -------------------------
the Plan, the maximum aggregate number of Shares which may be optioned under the
Plan is 7,000,000. The Shares shall be previously issued and outstanding shares
that are reacquired by the Company, whether under this Plan or otherwise.

     If an Option expires or becomes unexercisable without having been exercised
in full, or is surrendered pursuant to an Option Exchange Program, the
unpurchased Shares which were subject thereto shall become available for future
grant or sale under the Plan (unless the Plan has terminated).

     4.   Administration of the Plan.
          --------------------------

               (a)  Administration. The Plan shall be administered by (i) the
                    --------------
Board or (ii) a Committee, which committee shall be constituted to satisfy
applicable laws.

               (b)  Powers of the Administrator. Subject to the provisions of
                    ---------------------------
the Plan, and in the case of a Committee, subject to the specific duties
delegated by the Board to such Committee, the Administrator shall have the
authority, in its discretion:
<PAGE>

               (i)  to determine the Fair Market Value of the Shares, in
accordance with Section 2(l) of the Plan;

              (ii)  to select Service Providers to whom Options may be granted
hereunder;

             (iii)  to determine whether and to what extent Options are granted
hereunder;

              (iv)  to determine the number of Shares to be covered by each
Option granted hereunder;

               (v)  to approve forms of agreement for use under the Plan;

              (vi)  to determine the terms and conditions, not inconsistent with
the terms of the Plan, of any award granted hereunder. Such terms and conditions
include, but are not limited to, the exercise price, the time or times when
Options may be exercised (which may be based on performance criteria), any
vesting acceleration or waiver of forfeiture restrictions, and any restriction
or limitation regarding any Option or the Shares relating thereto, based in each
case on such factors as the Administrator, in its sole discretion, shall
determine;

             (vii)  to determine whether, to what extent and under what
circumstances and other amounts payable with respect to an award under this Plan
shall be deferred either automatically or at the election of the participant
(including providing for and determining the amount (if any) of any deemed
earnings on any deferred amount during any deferral period);

            (viii)  to reduce the exercise price of any Option to the then
current Fair Market Value if the Fair Market Value of the Shares covered by such
Option shall have declined since the date the Option was granted;

              (ix)  to construe and interpret the terms of the Plan;

               (x)  to prescribe, amend and rescind rules and regulations
relating to the Plan;

              (xi)  to modify or amend each Option (subject to Section 14 of the
Plan);

             (xii)  to authorize any person to execute on behalf of the Company
any instrument required to effect the grant of an Option previously granted by
the Administrator;
<PAGE>

                 (xiii)  to institute an Option Exchange Program;

                  (xiv)  to determine the terms and restrictions applicable to
Options; and

                   (xv)  to make all other determinations deemed necessary or
advisable for administering the Plan.

               (c)  Effect of Administrator's Decision. The Administrator's
                    ----------------------------------
decisions, determinations and interpretations shall be final and binding on all
Optionees and any other holders of Options.

     5.   Eligibility. Options may be granted to Service Providers. If otherwise
          -----------
eligible, a Service Provider who has been granted an Option may be granted
additional Options.

     6.   Limitations. Neither the Plan nor any Option shall confer upon an
          -----------
Optionee any right with respect to continuing the Optionee's relationship as a
Service Provider with the Company, nor shall they interfere in any way with the
Optionee's right or the Company's right to terminate such employment or
consulting relationship at any time, with or without cause.

     7.   Term of Plan. The Plan shall become effective upon its adoption by the
          ------------
Board. It shall continue in effect for a term of ten (10) years unless
terminated earlier under Section 14 of the Plan.

     8.   Term of Option. The term of each Option shall be stated in the Notice
          --------------
of Grant.

     9.   Option Exercise Price and Consideration.
          ---------------------------------------

               (a)  Exercise Price. The per Share exercise price for the Shares
                    --------------
to be issued pursuant to exercise of an Option shall be determined by the
Administrator.

               (b)  Waiting Period and Exercise Dates. At the time an Option is
                    ---------------------------------
granted, the Administrator shall fix the period within which the Option may be
exercised and shall determine any conditions which must be satisfied before the
Option may be exercised. In so doing, the Administrator may specify that an
Option may not be exercised until the completion of a service period.

               (c)  Form of Consideration. The Administrator shall determine the
                    ---------------------
acceptable form of consideration for exercising an Option, including the method
of payment. Such consideration may consist entirely of:
<PAGE>

               (i)  cash;

              (ii)  check;

             (iii)  promissory note;

              (iv)  other Shares which (A) in the case of Shares acquired upon
exercise of an option, have been owned by the Optionee for more than six months
on the date of surrender, and (B) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised;

               (v)  delivery of a properly executed exercise notice together
with such other documentation as the Administrator and the Optionee's broker, if
applicable, shall require to effect an exercise of the Option and delivery to
the Company of the sale or loan proceeds required to pay the exercise price;

              (vi)  any combination of the foregoing methods of payment; or

             (vii)  such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable Laws.

     10.  Exercise of Option.
          ------------------

          (a)  Procedure for Exercise; Rights as a Shareholder. Any Option
               -----------------------------------------------
granted hereunder shall be exercisable according to the terms of the Plan and at
such times and under such conditions as determined by the Administrator and set
forth in the Option Agreement.

     An Option may not be exercised for a fraction of a Share.

     An Option shall be deemed exercised when the Company receives: (i) written
notice of exercise (in accordance with the Option Agreement) from the person
entitled to exercise the Option, and (ii) full payment for the Shares with
respect to which the Option is exercised. Full payment may consist of any
consideration and method of payment authorized by the Administrator and
permitted by the Option Agreement and the Plan. Shares issued upon exercise of
an Option shall be issued in the name of the Optionee or, if requested by the
Optionee, in the name of the Optionee and his or her spouse. Until the stock
certificate evidencing such Shares is issued (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of the
Company), no right to vote or receive dividends or any other rights as a
shareholder shall exist with respect to the Optioned Stock, notwithstanding the
<PAGE>

exercise of the Option. The Company shall issue (or cause to be issued) such
stock certificate promptly after the Option is exercised. No adjustment will be
made for a dividend or other right for which the record date is prior to the
date the stock certificate is issued, except as provided in Section 12 of the
Plan.

     Exercising an Option in any manner shall decrease the number of Shares
thereafter available, both for purposes of the Plan and for sale under the
Option, by the number of Shares as to which the Option is exercised.

          (b)  Termination of Relationship as a Service Provider. In the event
               -------------------------------------------------
that an Optionee's relationship as a Service Provider terminates (other than
upon the Optionee's death, Retirement or Disability), the Optionee may exercise
his or her Option, but only within such period of time as is determined by the
Administrator, and only to the extent that the Optionee was entitled to exercise
it at the date of termination (but in no event later than the expiration of the
term of such Option as set forth in the Notice of Grant). If, at the date of
termination, the Optionee is not entitled to exercise his or her entire Option,
the Shares covered by the unexercisable portion of the Option shall revert to
the Plan. If, after termination, the Optionee does not exercise his or her
Option within the time specified by the Administrator, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.

          (c)  Disability of Optionee. In the event that an Optionee's
               ----------------------
relationship as a Service Provider terminates as a result of the Optionee's
Disability, the Optionee may exercise his or her Option at any time within six
(6) months from the date of such termination, but only to the extent that the
Optionee was entitled to exercise it at the date of such termination (but in no
event later than the expiration of the term of such Option as set forth in the
Notice of Grant). If, at the date of termination, the Optionee is not entitled
to exercise his or her entire Option, the Shares covered by the unexercisable
portion of the Option shall revert to the Plan. If, after termination, the
Optionee does not exercise his or her Option within the time specified herein,
the Option shall terminate, and the Shares covered by such Option shall revert
to the Plan.

          (d)  Death of Optionee. If the Optionee dies while a Service Provider,
               -----------------
the Option may be exercised at any time within six (6) months following the date
of death (but in no event later than the expiration of the term of such Option
as set forth in the Notice of Grant), by the Optionee's estate or by a
<PAGE>

person who acquired the right to exercise the Option by bequest or inheritance,
but only to the extent that the Optionee was entitled to exercise the Option at
the date of death. If, at the time of death, the Optionee was not entitled to
exercise his or her entire Option, the Shares covered by the unexercisable
portion of the Option shall immediately revert to the Plan. If, after death, the
Optionee's estate or a person who acquired the right to exercise the Option by
bequest or inheritance does not exercise the Option within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.

          (e)  Retirement of Optionee: In the event of an Optionee's Retirement,
               ----------------------
the Optionee may exercise his or her Option (if such Option was granted on or
after August 27, 1998) at any time within three (3) years from the date of such
Retirement, but only to the extent that the Optionee was entitled to exercise it
at the date of such Retirement (but in no event later than the expiration of the
term of such Option as set forth in the Notice of Grant).

     11.  Transferability of Options.
          --------------------------

     (a)  Unless determined otherwise by the Administrator, an Option may not be
sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner
other than by will or by the laws of descent and distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee. If the
Administrator makes an Option transferable, such Option shall contain such
additional terms and conditions as the Administrator deems appropriate.

     (b)  An Optionee may file a written designation of a beneficiary who is to
receive any options that remain unexercised in the event of the Optionee's
death. If a participant is married and the designated beneficiary is not the
spouse, spousal consent shall be required for such designation to be effective.

     (c)  Such designation of beneficiary may be changed by the Optionee at any
time by written notice, subject to the above spousal consent conditions. In the
event of the death of the Optionee and in the absence of a beneficiary validly
designated under the Plan who is living at the time of such Optionee's, the
Company shall deliver such options to the executor or administrator of the
estate of the Optionee, or if no such executor or administrator has been
appointed (to the knowledge of the Company), the Company, in its discretion, may
deliver
<PAGE>

such options to the spouse or to any one or more dependents or relatives of the
participant, or if no spouse, dependent or relative is known to the Company,
then to such other person as the Company may designate.

     12.  Adjustments Upon Changes in Capitalization, Dissolution, Merger, Asset
          ----------------------------------------------------------------------
Sale or Change of Control.
-------------------------

          (a)  Changes in Capitalization.  Subject to any required action by the
               -------------------------
shareholders of the Company, the number of Shares covered by each outstanding
Option, and the number of Shares that have been authorized for issuance under
the Plan but as to which no Options have yet been granted or that have been
returned to the Plan upon cancellation or expiration of an Option, as well as
the price per Share covered by each such outstanding Option, shall be
proportionately adjusted for any increase or decrease in the number of issued
Shares resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Company's common stock, or any other
increase or decrease in the number of issued shares of the Company's common
stock effected without receipt of consideration by the Company; provided,
however, that conversion of any convertible securities of the Company shall not
be deemed to have been "effected without receipt of consideration." Such
adjustment shall be made by the Board, whose determination in that respect shall
be final, binding and conclusive. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of Shares
subject to an Option.

          (b)  Dissolution or Liquidation. In the event of the proposed
               --------------------------
dissolution or liquidation of the Company, to the extent that an Option has not
been previously exercised, it will terminate immediately prior to the
consummation of such proposed action. The Board may, in the exercise of its sole
discretion in such instances, declare that any Option shall terminate as of a
date fixed by the Board and give each Optionee the right to exercise his or her
Option as to all or any part of the Optioned Stock, including Shares as to which
the Option would not otherwise be exercisable.

          (c)  Merger or Asset Sale. Subject to the provisions of paragraph (d)
               --------------------
hereof, in the event of a merger of the Company with or into another
corporation, or the sale of substantially all of the assets of the Company, each
outstanding Option shall be assumed or an equivalent option shall be substituted
by the successor corporation or a parent or subsidiary of the successor
<PAGE>

corporation. In the event that the successor corporation does not agree to
assume the Option or to substitute an equivalent option, the Administrator
shall, in lieu of such assumption or substitution, provide for the Optionee to
have the right to exercise the Option as to all or a portion of the Optioned
Stock, including Shares as to which it would not otherwise be exercisable. If
the Administrator makes an Option fully exercisable in lieu of assumption or
substitution in the event of a merger or sale of assets, the Administrator shall
notify the Optionee that the Option shall be fully exercisable for a period of
fifteen (15) days from the date of such notice, and the Option will terminate
upon the expiration of such period. For the purposes of this paragraph, the
Option shall be considered assumed if, following the merger or sale of assets,
the option confers the right to purchase, for each Share subject to the Option
immediately prior to the merger or sale of assets, the consideration (whether
stock, cash, or other securities or property) received in the merger or sale of
assets by holders of Shares held on the effective date of the transaction (and
if holders were offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding Shares); provided,
however, that if such consideration received in the merger or sale of assets was
not solely stock of the successor corporation or its parent, the Administrator
may, with the consent of the successor corporation and the participant, provide
for the consideration to be received upon the exercise of the Option, for each
Share of Optioned Stock subject to the Option, to be solely stock of the
successor corporation or its parent equal in Fair Market Value to the per share
consideration received by holders of Stock in the merger or sale of assets.

          (d)  Change in Control. In the event of a "Change in Control" of the
               -----------------
Company, as defined in paragraph (e) below, then the following acceleration and
valuation provisions shall apply:

     (i)  Except as otherwise determined by the Board, in its discretion, prior
to the occurrence of a Change in Control, any Options outstanding on the date
such Change in Control is determined to have occurred that are not yet
exercisable and vested on such date shall become fully exercisable and vested;

     (ii) Except as otherwise determined by the Board, in its discretion, prior
to the occurrence of a Change in Control, all outstanding Options, to the extent
they are exercisable and vested (including Options that shall become exercisable
and vested pursuant to subparagraph (i) above), shall be terminated in exchange
for a cash payment equal to the Change in Control Price (reduced by the exercise
price applicable to such
<PAGE>

Options). These cash proceeds shall be paid to the Optionee or, in the event of
death of an Optionee prior to payment, to the estate of the Optionee or to a
person who acquired the right to exercise the Option by bequest or inheritance.

           (e)  Definition of "Change in Control". For purposes of this Section
                ---------------------------------
12, a "Change in Control" means the happening of any of the following:

     (i)   When any "person," as such term is used in Sections 13(d) and 14(d)
of the Exchange Act (other than the Company, a subsidiary or a Company employee
benefit plan, including any trustee of such plan acting as trustee) is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing fifty
percent (50%) or more of the combined voting power of the Company's then
outstanding securities entitled to vote generally in the election of directors;
or

     (ii)  The shareholders of the Company approve a merger or consolidation of
the Company with any other corporation, other than a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) at least fifty percent (50%) of the total voting power represented by
the voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or the shareholders of the
Company approve an agreement for the sale or disposition by the Company of all
or substantially all the Company's assets; or

     (iii) A change in the composition of the Board of Directors of the Company,
as a result of which fewer than a majority of the directors are Incumbent
Directors.  "Incumbent Directors" shall mean directors who either (A) are
directors of the Company as of the date the Plan is approved by the
shareholders, or (B) are elected, or nominated for election, to the Board of
Directors of the Company with the affirmative votes of at least a majority of
the Incumbent Directors at the time of such election or nomination (but shall
not include an individual whose election or nomination is in connection with an
actual or threatened proxy contest relating to the election of directors to the
Company).

           (f)  Change in Control Price. For purposes of this Section 12,
                -----------------------
"Change in Control Price" shall be, as determined by the Board, (i) the highest
Fair Market Value of a Share within the 60 day period immediately preceding the
date of
<PAGE>

determination of the Change in Control Price by the Board (the "60-Day Period"),
or (ii) the highest price paid or offered per Share, as determined by the Board,
in any bona fide transaction or bona fide offer related to the Change in Control
of the Company, at any time within the 60-Day Period, or (iii) some lower price
as the Board, in its discretion, determines to be a reasonable estimate of the
fair market value of a Share .

     13.  Date of Grant. The date of grant of an Option shall be, for all
          -------------
purposes, the date on which the Administrator makes the determination granting
such Option, or such other later date as is determined by the Administrator.
Notice of the determination shall be provided to each Optionee within a
reasonable time after the date of such grant.

     14.  Amendment and Termination of the Plan.
          -------------------------------------

          (a)  Amendment and Termination. The Board may at any time amend,
               -------------------------
alter, suspend or terminate the Plan.

          (b)  Effect of Amendment or Termination. No amendment, alteration,
               ----------------------------------
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
Termination of the Plan shall not affect the Administrator's ability to exercise
the powers granted to it hereunder with respect to options granted under the
Plan prior to the date of such termination.

     15.  Conditions Upon Issuance of Shares.
          ----------------------------------

          (a)  Legal Compliance. Shares shall not be issued pursuant to the
               ----------------
exercise of an Option unless the exercise of such Option and the issuance and
delivery of such Shares shall comply with Applicable Laws, and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.

          (b)  Investment Representations. As a condition to the exercise of an
               --------------------------
Option, the Company may require the person exercising such Option to represent
and warrant at the time of any such exercise that the Shares are being purchased
only for investment and without any present intention to sell or distribute such
Shares if, in the opinion of counsel for the Company, such a representation is
required.

     16.  Liability of Company. The inability of the Company to obtain authority
          --------------------
from any regulatory body having jurisdiction, which authority is deemed by the
Company's counsel to be
<PAGE>

necessary to the lawful issuance and sale of any Shares hereunder, shall relieve
the Company of any liability in respect of the failure to issue or sell such
Shares as to which such requisite authority shall not have been obtained.

     17.  Reservation of Shares. The Company, during the term of this Plan, will
          ---------------------
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
<PAGE>

                      1998 NONSTATUTORY STOCK OPTION PLAN

                             STOCK OPTION AGREEMENT

     Unless otherwise defined herein, the terms defined in the 1998 Nonstatutory
Stock Option Plan (the "Plan") shall have the same defined meanings in this
Option Agreement.

I.   NOTICE OF STOCK OPTION GRANT
     ----------------------------

     Employee Name

     You have been granted an option to purchase Shares of common stock of the
Company, subject to the terms and conditions of the Plan and this Stock Option
Agreement, as follows:

     Grant Number                      _______________

     Date of Grant                     _______________

     Vesting Commencement Date         _______________

     Exercise Price per Share          _______________

     Total Number of Shares Granted    _______________

     Total Exercise Price              _______________

     Type of Option:                   ___ Incentive Stock Option
                                       XX Nonstatutory Stock Option
                                       --

     Term/Expiration Date:      _______________

        Vesting Schedule:  This Option may be exercised, in whole or in part, in
        ----------------
accordance with the following schedule:

        On or after __________,  **       ** shares;
                                 ------------
        On or after __________,  **        ** shares;
                                 ------------
        On or after __________,  **        ** shares;
                                 ------------
        On or after __________,  **        ** shares;
                                 ------------

     Termination Period:
     ------------------

     This Option may be exercised, to the extent vested pursuant to the Vesting
Schedule set forth above, for (i) ninety (90) days after termination of
Optionee's Continuous Status as an Employee or Consultant other than as a result
of death, Disability or Retirement,
<PAGE>

(ii) six (6) months after termination as a result of death or Disability, and
(iii) three (3) years after Retirement; provided, however, that in no event may
this Option be exercised later than the Term/Expiration Date as provided above.

     II.  AGREEMENT
          ---------

     1.   Grant of Option. The Plan Administrator of the Company hereby grants
          ---------------
to the Optionee named in the Notice of Grant attached as Part I of this
Agreement (the "Optionee"), an option (the "Option") to purchase a number of
Shares, as set forth in the Notice of Grant, at the exercise price per share set
forth in the Notice of Grant (the "Exercise Price"), subject to the terms and
conditions of the Plan, which is incorporated herein by reference. Subject to
Section 14 of the Plan, in the event of a conflict between the terms and
conditions of the Plan and the terms and conditions of this Option Agreement,
the terms and conditions of the Plan shall prevail.

     2.   Exercise of Option.
          ------------------

          (a)  Right to Exercise.  This Option is exercisable during its term in
               -----------------
accordance with the Vesting Schedule set out in the Notice of Grant and the
applicable provisions of the Plan and this Option Agreement.

          (b)  Method of Exercise. This Option is exercisable by delivery of an
               ------------------
exercise notice, in the form attached as Exhibit A (the "Exercise Notice"),
which shall state the election to exercise the Option, the number of Shares in
respect of which the Option is being exercised (the "Exercised Shares"), and
such other representations and agreements as may be required by the Company
pursuant to the provisions of the Plan. The Exercise Notice shall be signed by
the Optionee and shall be delivered in person or by certified mail to the
Secretary of the Company. The Exercise Notice shall be accompanied by payment of
the aggregate Exercise Price as to all Exercised Shares. This Option shall be
deemed to be exercised upon receipt by the Company of such fully executed
Exercise Notice accompanied by such aggregate Exercise Price.

     No Shares shall be issued pursuant to the exercise of this Option unless
such issuance and exercise complies Applicable Laws.  Assuming such compliance,
for income tax purposes the Exercised Shares shall be considered transferred to
the Optionee on the date the Option is exercised with respect to such Exercised
Shares.

     3.   Method of Payment. Payment of the aggregate Exercise Price shall be by
          -----------------
any of the following, or a combination thereof, at the election of the Optionee:

          (a)  cash; or

          (b)  check; or

          (c)  delivery of a properly executed exercise notice together with
such other documentation as the Administrator and the

                                      -2-
<PAGE>

Optionee's broker, if applicable, shall require to effect an exercise of the
Option and delivery to the Company of the sale or loan proceeds required to pay
the exercise price; or

         (d)  surrender of other Shares which (i) in the case of Shares acquired
upon exercise of an option, have been owned by the Optionee for more than six
(6) months on the date of surrender, and (ii) have a Fair Market Value on the
date of surrender equal to the aggregate Exercise Price of the Exercised Shares.

     4.  Transferability of Option. This Option may not be transferred in any
         -------------------------
manner otherwise than by will or by the laws of descent and distribution and may
be exercised during the lifetime of Optionee only by the Optionee. The terms of
the Plan and this Option Agreement shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.

     5.  Term of Option. This Option may be exercised only within the term set
         --------------
out in the Notice of Grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Option Agreement.

     6.  Tax Consequences. Some of the federal tax consequences relating to this
         ----------------
Option, as of the date of this Option, are set forth below. THIS SUMMARY IS
NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.
THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR
DISPOSING OF THE SHARES.

         (a)  Exercising the Option. The Optionee may incur regular federal
              ---------------------
income tax liability upon exercise of an NSO. The Optionee will be treated as
having received compensation income (taxable at ordinary income tax rates) equal
to the excess, if any, of the fair market value of the Exercised Shares on the
date of exercise over their aggregate Exercise Price. If the Optionee is an
Employee or former Employee, the Company will be required to withhold from his
or her compensation or collect from Optionee and pay to the applicable taxing
authorities an amount equal to a percentage of this compensation income at the
time of exercise, and may refuse to honor the exercise and refuse to deliver
Shares if such withholding amounts are not delivered at the time of exercise.

         (b)  Disposition of Shares. If the Optionee holds NSO Shares for at
              ---------------------
least one year, any gain realized on disposition of the Shares will be treated
as long-term capital gain for federal income tax purposes.

     By your signature and the signature of the Company's representative below,
you and the Company agree that this Option is granted under and governed by the
terms and conditions of the Plan and this Option Agreement.  Optionee has
reviewed the Plan and this Option Agreement in their entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Option
Agreement and fully understands all provisions of the Plan and Option Agreement.
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Administrator upon any questions relating to the Plan
and Option Agreement.

                                      -3-
<PAGE>

DATE OF GRANT: _______________

                           DESIGNATION OF BENEFICIARY
                           --------------------------

     In the event of my death, I hereby designate the following as my
beneficiary(ies) to receive all of my options that are unexercised at that time.

NAME:  (Please print)        _______________________________
                               (First)(Middle)(Last)

                     Address:_______________________________

_____________                _______________________________

Relationship                 _______________________________

OPTIONEE:                          SEAGATE TECHNOLOGY, INC.

_____________________________      By:____________________________

(Signature)                        Title: Corporate Secretary

_____________________________

(Print Name)                       HOME ADDRESS (Please Print)

_____________________________      ________________________________

(Employee Number)                  ________________________________

_____________________________      ________________________________

(Work Phone Number)

Dated: ______________

                                     -4-

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