Document:

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                                                                   EXHIBIT 10.22

                              TRICORD SYSTEMS, INC.

                       2001 NONSTATUTORY STOCK OPTION PLAN

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

            -     to attract and retain the best available personnel for
                  positions of substantial responsibility,

            -     to provide additional incentive to Employees, Directors and
                  Consultants, and

            -     to promote the success of the Company's business.

            All 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 requirements relating to the
administration of stock option plans under U.S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is 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 of Directors 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 Tricord Systems, Inc., a Delaware corporation.

            (h) "Consultant" means any person, including an advisor, engaged by
the Company or a Parent or Subsidiary to render services to such entity.

            (i) "Director" means a member of the Board.

            (j) "Disability" means total and permanent disability as defined in
Section 22(e)(3) of the Code.
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            (k) "Employee" means any person, including Officers, employed by the
Company or any Parent or Subsidiary of the Company. A Service Provider shall not
cease to be an Employee in the case of (i) any leave of absence approved by the
Company or (ii) transfers between locations of the Company or between the
Company, its Parent, any Subsidiary, or any successor. Neither service as a
Director nor payment of a director's fee by the Company shall be sufficient to
constitute "employment" by the Company.

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

            (m) "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 Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the time of determination, as reported in
The Wall Street Journal or such other source as the Administrator deems
reliable;

                  (ii) If the Common Stock 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.

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

            (o) "Officer" means a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.

            (p) "Option" means a nonstatutory 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.

            (q) "Option Agreement" means an 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.

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

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            (s) "Optioned Stock" means the Common Stock subject to an Option.

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

            (u) "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.

            (v) "Plan" means this 2001 Nonstatutory Stock Option Plan.

            (w) "Service Provider" means an Employee including an Officer,
Consultant or Director.

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

            (y) "Subsidiary" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.

      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 and
sold under the Plan is Two Hundred Fifty Thousand (250,000) Shares. The Shares
may be authorized, but unissued, or reacquired Common Stock.

            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:

                  (i) to determine the Fair Market Value of the Common Stock;

                  (ii) to select the 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 of Common Stock to be
covered by each Option granted hereunder;

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                  (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 of Common Stock
relating thereto, based in each case on such factors as the Administrator, in
its sole discretion, shall determine;

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

                  (viii) to institute an Option Exchange Program;

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

                  (x) to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax treatment under
foreign tax laws;

                  (xi) to modify or amend each Option (subject to Section 14(b)
of the Plan), including the discretionary authority to extend the
post-termination exercisability period of Options longer than is otherwise
provided for in 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;

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

                  (xiv) to allow Optionees to satisfy withholding tax
obligations by electing to have the Company withhold from the Shares to be
issued upon exercise of an Option that number of Shares having a Fair Market
Value equal to the amount required to be withheld. The Fair Market Value of the
Shares to be withheld shall be determined on the date that the amount of tax to
be withheld is to be determined. All elections by an Optionee to have Shares
withheld for this purpose shall be made in such form and under such conditions
as the Administrator may deem necessary or advisable; 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.

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      5.    Eligibility. Options may be granted to Service Providers, including
Officers, Consultants and Directors.

      6.    Limitation. 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 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 ten (10) years, unless sooner
terminated under Section 14 of the Plan.

      8.    Term of Option. The term of each Option shall be stated in the
Option Agreement.

      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.

            (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 of:

                  (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) consideration received by the Company under a cashless
exercise program implemented by the Company in connection with the Plan;

                  (vi) a reduction in the amount of any Company liability to the
Optionee, including any liability attributable to the Optionee's participation
in any Company-sponsored deferred compensation program or arrangement;

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

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                  (viii) any combination of the foregoing methods of payment.

      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 or electronic 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 Shares are 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 exercise of the Option.
The Company shall issue (or cause to be issued) such Shares 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 Shares are 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. If an
Optionee ceases to be a Service Provider, other than upon the Optionee's death
or Disability, the Optionee may exercise his or her Option, but only within such
period of time as is specified in the Option Agreement, and only to the extent
that the Option is vested on the date of termination (but in no event later than
the expiration of the term of such Option as set forth in the Option Agreement).
In the absence of a specified time in the Option Agreement, the Option shall
remain exercisable for three (3) months following the Optionee's termination.
If, on the date of termination, the Optionee is not vested as to his or her
entire Option, the Shares covered by the unvested 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. If an Optionee ceases to be a Service
Provider as a result of the Optionee's Disability, the Optionee may exercise his
or her Option within such period of time as is specified in the Option
Agreement, to the extent the Option is vested on the date of termination (but in
no event later than the expiration of the term of such Option as set forth in
the Option Agreement). In the absence of a specified time in the Option
Agreement, the Option shall remain exercisable for twelve (12) months following
the Optionee's termination. If, on the date of

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termination, the Optionee is not vested as to his or her entire Option, the
Shares covered by the unvested 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 an Optionee dies while a Service Provider,
the Option may be exercised within such period of time as is specified in the
Option Agreement (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
person who acquires the right to exercise the Option by bequest or inheritance,
but only to the extent that the Option is vested on the date of death. In the
absence of a specified time in the Option Agreement, the Option shall remain
exercisable for twelve (12) months following the Optionee's termination. If, at
the time of death, the Optionee is not vested as to his or her entire Option,
the Shares covered by the unvested portion of the Option shall immediately
revert to the Plan. The Option may be exercised by the executor or administrator
of the Optionee's estate or, if none, by the person(s) entitled to exercise the
Option under the Optionee's will or the laws of descent or distribution. If the
Option is not so exercised within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.

            (e) Buyout Provisions. The Administrator may at any time offer to
buy out for a payment in cash or Shares, an Option previously granted based on
such terms and conditions as the Administrator shall establish and communicate
to the Optionee at the time that such offer is made.

      11.   Non-Transferability of Options. 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 or 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.

      12.   Adjustments Upon Changes in Capitalization, Dissolution, Merger or
Asset Sale.

            (a) Changes in Capitalization. Subject to any required action by the
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option, and the number of shares of Common Stock which have
been authorized for issuance under the Plan but as to which no Options have yet
been granted or which have been returned to the Plan upon cancellation or
expiration of an Option, as well as the price per share of Common Stock covered
by each such outstanding Option, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the
number of issued shares of 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

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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
of Common Stock subject to an Option.

            (b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option until ten (10) days prior to such
transaction as to all of the Optioned Stock covered thereby, including Shares as
to which the Option would not otherwise be exercisable. In addition, the
Administrator may provide that any Company repurchase option applicable to any
Shares purchased upon exercise of an Option shall lapse as to all such Shares,
provided the proposed dissolution or liquidation takes place at the time and in
the manner contemplated. To the extent it has not been previously exercised, an
Option will terminate immediately prior to the consummation of such proposed
action.

            (c) Merger or Asset Sale. 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
or right substituted by the successor corporation or a Parent or Subsidiary of
the successor corporation. In the event that the successor corporation refuses
to assume or substitute for the Option, the Optionee shall fully vest in and
have the right to exercise the Option as to all of the Optioned Stock, including
Shares as to which it would not otherwise be vested or exercisable. If an Option
becomes fully vested and exercisable in lieu of assumption or substitution in
the event of a merger or sale of assets, the Administrator shall notify the
Optionee in writing or electronically that the Option shall be fully vested and
exercisable for a period of fifteen (15) days from the date of such notice, and
the Option shall 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 or right confers the right to purchase or
receive, for each Share of Optioned Stock, 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 Common Stock
for each Share 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 is not solely common
stock of the successor corporation or its Parent, the Administrator may, with
the consent of the successor corporation, provide for the consideration to be
received upon the exercise of the Option, for each Share of Optioned Stock to be
solely common stock of the successor corporation or its Parent equal in fair
market value to the per share consideration received by holders of Common Stock
in the merger or sale of assets.

      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.

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            (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.   Inability to Obtain Authority. 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 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.

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                                    [FORM OF]

                              TRICORD SYSTEMS, INC.

                       2001 NONSTATUTORY STOCK OPTION PLAN

                             STOCK OPTION AGREEMENT

      Unless otherwise defined herein, the terms defined in the Plan shall have
the same defined meanings in this Option Agreement.

I.    NOTICE OF STOCK OPTION GRANT

      [OPTIONEE'S NAME AND ADDRESS]

      You have been granted an option to purchase Common Stock of the Company,
subject to the terms and conditions of the Plan and this 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:                      Nonstatutory Stock Option

      Term/Expiration Date:
                                           --------------------------------

      Vesting Schedule:

      Subject to the Optionee continuing to be a Service Provider on such dates,
this Option shall vest and become exercisable in accordance with the following
schedule:

      [25% OF THE SHARES SUBJECT TO THE OPTION SHALL VEST TWELVE MONTHS AFTER
THE VESTING COMMENCEMENT DATE, AND 1/48TH OF THE SHARES SUBJECT TO THE OPTION
SHALL VEST UPON THE LAST DAY OF EACH MONTH THEREAFTER.]
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      Termination Period:

      This Option may be exercised for 90 days after Optionee ceases to be a
Service Provider. Upon the death or Disability of the Optionee, this Option may
be exercised for such longer period as provided in the Plan. In no event shall
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 the 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(b) 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 completed
by the Optionee and delivered to the Chief Financial Officer 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 with 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.

            (c) Method of Payment. Payment of the aggregate Exercise Price shall
be by cash (including check, bank draft or money order); provided, however, that
the Administrator may allow such payments to made, in whole or in part and upon
such terms and conditions as may be established by the Administrator, by tender
of a broker exercise notice, previously acquired shares, a promissory note (on
terms and conditions acceptable to the Administrator) or by a combination of
such methods.

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      3.    Non-Transferability of Option. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or 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.

      4.    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.

      5.    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 a 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 in cash 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.

      6.    Entire Agreement; Governing Law. The Plan is incorporated herein by
reference. The Plan and this Option Agreement constitute the entire agreement of
the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee's interest except by means of a writing signed by the Company and
Optionee. This agreement is governed by the internal substantive laws, but not
the choice of law rules, of Delaware.

      7.    NO GUARANTEE OF CONTINUED SERVICE. OPTIONEE ACKNOWLEDGES AND AGREES
THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED
ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (AND NOT
THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN OPTION OR PURCHASING SHARES
HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE
TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO
NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A
SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL,

                                       -3-
<PAGE>
AND SHALL NOT INTERFERE WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO
TERMINATE OPTIONEE'S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR
WITHOUT CAUSE.

      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. Optionee further agrees to notify the Company upon any
change in the residence address indicated below.

OPTIONEE                                     Tricord Systems, Inc.

------------------------------------         -----------------------------------
Signature                                    By

------------------------------------         -----------------------------------
Print Name                                   Title

------------------------------------
Residence Address

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

                                      -4-
<PAGE>
                                    EXHIBIT A

                              TRICORD SYSTEMS, INC.

                       2001 NONSTATUTORY STOCK OPTION PLAN

                                 EXERCISE NOTICE

Tricord Systems, Inc.
2905 Northwest Boulevard, Suite 20
Plymouth, MN 55441

Attention:  CFO

      1.    Exercise of Option. Effective as of today, ________________, _____,
the undersigned ("Purchaser") hereby elects to purchase ______________ shares
(the "Shares") of the Common Stock of Tricord Systems, Inc. (the "Company")
under and pursuant to the 2001 Nonstatutory Stock Option Plan (the "Plan") and
the Stock Option Agreement dated, _________, ___ (the "Option Agreement"). The
purchase price for the Shares shall be $_____, as required by the Option
Agreement.

      2.    Delivery of Payment. Purchaser herewith delivers to the Company the
full purchase price for the Shares.

      3.    Representations of Purchaser. Purchaser acknowledges that Purchaser
has received, read and understood the Plan and the Option Agreement and agrees
to abide by and be bound by their terms and conditions.

      4.    Rights as Shareholder. Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the Shares, no right to vote or receive dividends or
any other rights as a shareholder shall exist with respect to the Optioned
Stock, notwithstanding the exercise of the Option. The Shares so acquired shall
be issued to the Optionee as soon as practicable after exercise of the Option.
No adjustment will be made for a dividend or other right for which the record
date is prior to the date of issuance, except as provided in Section 12 of the
Plan.

      5.    Tax Consultation. Purchaser understands that Purchaser may suffer
adverse tax consequences as a result of Purchaser's purchase or disposition of
the Shares. Purchaser represents that Purchaser has consulted with any tax
consultants Purchaser deems advisable in connection with the purchase or
disposition of the Shares and that Purchaser is not relying on the Company for
any tax advice.
<PAGE>
      6.    Entire Agreement; Governing Law. The Plan and Option Agreement are
incorporated herein by reference. This Agreement, the Plan and the Option
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Purchaser with respect to the subject matter
hereof, and may not be modified adversely to the Purchaser's interest except by
means of a writing signed by the Company and Purchaser. This agreement is
governed by the internal substantive laws, but not the choice of law rules, of
Delaware.

Submitted by:                           Accepted by:

PURCHASER                               Tricord Systems, Inc.

------------------------------------    ----------------------------------------
Signature                               By

------------------------------------    ----------------------------------------
Print Name                              Title

                                        ----------------------------------------
                                        Date Received

Address:                                Address:  2905 Northwest Blvd., Suite 20
        ----------------------------              ------------------------------
                                                  Plymouth, MN 55441
        ----------------------------              ------------------------------

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

                                      -2-<PAGE>
                                                                   EXHIBIT 10.23

                        SEPARATION AGREEMENT AND RELEASE

                                    RECITALS

     This Separation Agreement and Release ("Agreement") is made by and between
Joan M. Wrabetz ("Employee") and Tricord Systems, Inc. ("Company") (jointly
referred to as the "Parties"):

     WHEREAS, Employee was employed by the Company;

     WHEREAS, the Company and Employee entered into an employment agreement
dated March 1, 2000 (the "Employment Agreement");

     WHEREAS, the Company and Employee entered into an indemnification
agreement dated November 8, 2000 (the "Indemnification Agreement");

     WHEREAS, the Employee resigned from employment at the Company effective
January 28, 2002 (the "Resignation Date");

     WHEREAS, the Parties wish to resolve any and all disputes, claims,
complaints, grievances, charges, actions, petitions and demands that the
Employee may have against the Company, 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.   Stock Grant. The Company hereby agrees to grant 60,000 shares of
restricted Common Stock (the "Shares") pursuant to its 1998 Stock Plan. The
Shares will contain a restriction whereby the stock cannot be sold, assigned,
pledged or otherwise transferred by the recipient during the first six months
after the date of grant. The Company confirms that it will pay the federal
withholding taxes (at the bonus rate, i.e., 28%) based on the value of the
Shares on the date of grant (January 24, 2002). Employee confirms that Employee
will file an 83(b) election under the Internal Revenue Code with respect to such
shares. Tricord will grant the shares of restricted Common Stock, which will
contain a right of repurchase that will lapse on the sixteenth (16th) day after
signing this Agreement if this Agreement has not been canceled during the
fifteen (15) day period after signing. The shares will be held in escrow by the
Company and will be repurchased for no consideration by the Company in the event
that Employee fails to sign this Agreement within 21 days of January 24, 2002 or
Employee cancels this Agreement within fifteen (15) days after Employee has
signed this Agreement. All Shares shall continue to be subject to the terms of
the Company's 1998 Stock Plan.

     2.   Benefits. Employee's health insurance benefits will cease on January
31, 2002, subject to Employee's right to continue her health insurance under
COBRA. Employee's

<PAGE>
participation in all other benefits and incidents of employment will cease on
the Resignation Date. Employee will cease accruing employee benefits, including,
but not limited to, vacation time and paid time off, as of the Resignation Date.

     3.   Confidential Information. Employee shall continue to maintain the
confidentiality of all confidential and proprietary information of the Company.
Employee shall return all of the Company's property and confidential and
proprietary information in her possession to the Company. Employee specifically
acknowledges that she remains bound by her promise to assign intellectual
property rights in her inventions to the Company and promises not to divulge or
use any trade secrets, confidential information, or other proprietary
information of the Company which she obtained, or to which she had access during
her employment with the Company. By signing this Agreement, Employee represents
and declares under penalty of perjury under the laws of the State of Minnesota
that she has returned all Company property.

     4.   Payment of Salary. Employee acknowledges and represents that the
Company has, to date, paid all salary, wages, bonuses, commissions and any and
all other benefits (other than accrued vacation) due to Employee.

     5.   Release of Claims. Employee agrees that the foregoing consideration
represents settlement in full of all outstanding obligations owed to Employee
by the Company and its officers, managers, supervisors, agents and employees.
Employee, on her own behalf, and on behalf of her respective heirs, family
members, executors, agents, and assigns, hereby fully and forever releases the
Company and its officers, directors, employees, agents, investors,
shareholders, administrators, affiliates, divisions, subsidiaries, predecessor
and successor corporations, and assigns ("the Releasees"), 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; fraud; fraudulent inducement;
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;

                                                                             -2-
<PAGE>
               (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, the Older Workers Benefit Protection
Act; the Minnesota Human Rights Act, the Colorado Anti-Discrimination Act, and
the Minnesota Statutes Section 181 et seq., all as amended;

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

               (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.

          6.   Acknowledgement of Waiver of Claims Under ADEA. Employee
               ----------------------------------------------
acknowledges that she is waiving and releasing any rights 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 she has been advised by this writing that: (a) she should
consult with an attorney prior to executing this Agreement; (b) she has up to
twenty-one (21) days within which to consider this Agreement; (c) she has
fifteen (15) days following her execution of this Agreement to revoke the
Agreement; (d) this Agreement shall not be effective until the revocation
period has expired; and (e) 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 from doing so, unless specifically authorized by
federal law.

          7.   Release of Known and Unknown Claims. 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 acknowledges that she has been advised
by legal counsel and is aware of the following:

                                                                             -3-
<PAGE>

          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, being aware of this provision, agrees to expressly waive any rights
she may have thereunder, as well as under any other statute or common law
principles of similar effect.

     8.   Right to Rescind and/or Revoke. Employee understands that she may
cancel this Agreement at any time on or before the fifteenth (15th) day
following the date on which she signs this Agreement. Employee acknowledges and
understands that if she cancels this Agreement, the Agreement shall not become
effective or enforceable and she further understands that the Company shall not
provide her with the Shares set forth in Paragraph 1 of this Agreement. To be
effective, the decision to cancel must be in writing and delivered to the
Company personally or by certified mail, to the attention of:

          Tricord Systems, Inc.
          Attn: Manager of Human Resources
          2905 Northwest Boulevard
          Suite 20, Plymouth, MN 55441

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

    10.   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 her best efforts to maintain in confidence the existence
of this Agreement, the contents and terms of this Agreement, and the
consideration for 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.

     11.  No Cooperation. Employee agrees she will not act in any manner that
might damage the business of the Company. Employee agrees that he will not
encourage, 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 any of the Releasees, unless under a
subpoena or other court order to do so. Employee shall inform the Company in
writing within three (3) days of receiving any such subpoena or other court
order.

                                                                             -4-

<PAGE>
     12.  Non-Disparagement. Employee agrees to refrain from any defamation,
libel or slander of the Releases, and any tortious interference with the
contracts, relationships and prospective economic advantage of the Releasees.
Employee agrees that she shall direct all inquiries by potential future
employers to Human Resources.

     13.  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 or consultants to leave their employment, or
attempt to do so, either for herself or any other person or entity.

     14.  Breach. Employee acknowledges and agrees that any breach of any
provision of this Agreement, except as permitted by paragraph 6(e), shall
constitute a material breach of this Agreement and shall entitle the Company
immediately to recover and/or cease the severance benefits provided to Employee
under this Agreement. Employee shall also be responsible to the Company for all
costs, attorney's 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.

     15.  No Admission of Liability. The Parties understand and acknowledge
that this Agreement constitutes a compromise and settlement of actual or
potential 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 made or any
potential claims;

or

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

     16.  Costs. The Parties shall each bear their own costs, expert fees,
attorney's fees and other fees incurred in connection with this Agreement,
except as provided herein.

     17.  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 Hennepin County,
Minnesota before the American Arbitration Association under its National Rules
for the Resolution of Employment Disputes, supplemented to the extent necessary
by the Minnesota Code of Civil Procedure. 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
attorney's 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 JURY.
This paragraph 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 Employment Agreement.

                                                                             -5-
<PAGE>
     18.  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 she has the capacity to act on her own
behalf and on behalf of all who might claim through 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.

     19.  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. In entering into 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.

     20.  Severability.  In the event that any provision, or any portion
thereof, 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 or portion of said provision.

     21.  Entire Agreement. This Agreement represents the entire agreement and
understanding between the Company and Employee concerning the subject matter of
this Agreement and Employee's relationship with the Company, and supersedes and
replaces any and all prior agreements and understandings between the Parties
concerning the subject matter of this Agreement and Employee's relationship
with the Company, with the exception of the stock option agreements, the
Company's 1998 Stock Plan and the Indemnification Agreement.

     22.  No Waiver.  The failure of the Company 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.

     23.  No Oral Modification. This Agreement may only be amended in a writing
signed by Employee and the Chief Executive Officer of the Company.

     24.  Governing Law. This Agreement shall be construed, interpreted,
governed, and enforced in accordance with the laws of the State of Minnesota,
without regard to choice-of-law provisions. Employee hereby consents to
personal and exclusive jurisdiction and venue in the State of Minnesota.

     25.  Effective Date. This Agreement is effective after it has been signed
by both parties and after sixteen (16) days have passed since Employee has
signed the Agreement.

     26.  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.

                                                                             -6-

<PAGE>
     27.       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.

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

                                             TRICORD SYSTEMS, INC.

Dated: January 24, 2002                      By: /s/ Steven E. Opdahl
      -------------------------------           --------------------------------
                                             Its: Secretary
                                                 -------------------------------

                                             JOAN M. WRABETZ, an individual

Dated: January 24, 2002                         /s/ Joan M. Wrabetz
      -------------------------------           --------------------------------
                                                Joan M. Wrabetz

                                                                             -7-

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