Document:

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                                                                 EXHIBIT 10.3(B)

                              EMPLOYMENT AGREEMENT

                                STEPHEN J. LUCZO

     EMPLOYMENT AGREEMENT (the "Agreement") dated as of February 2, 2001 by and
between Seagate Technology (US) Holdings, Inc., a Delaware corporation (the
"Company"), and Stephen J. Luczo (the "Executive").

     Seagate Technology, Inc. ("Seagate") and Suez Acquisition Company (Cayman)
Limited ("SAC") entered into a Stock Purchase Agreement dated as of March 29,
2000 (as amended, the "Stock Purchase Agreement"), pursuant to which, as of the
Closing which occurred on the Closing Date (each as defined in the Stock
Purchase Agreement), SAC, subject to certain exclusions, acquired all of the
shares of various subsidiaries of Seagate and, indirectly, substantially all of
the operating assets of Seagate;

     Prior to the consummation of the transactions pursuant to the Stock
Purchase Agreement, SAC assigned all of its rights and obligations under the
Stock Purchase Agreement to New SAC, a limited company incorporated in the
Cayman Islands ("New SAC")

     The Company desires to employ Executive and to enter into an agreement
embodying the terms of such employment;

     Executive desires to accept such employment and enter into such an
agreement;

     In consideration of the premises and mutual covenants herein and for other
good and valuable consideration, the parties agree as follows:

     1. Term of Employment. Subject to the provisions of Section 7 of this
Agreement, Executive shall be employed by the Company for a period commencing on
the Closing Date (the "Commencement Date") and ending on the third anniversary
of the Commencement Date (the "Employment Term") on the terms and subject to the
conditions set forth in this Agreement; provided, however, that commencing with
the date following the third anniversary of the Commencement Date, and on each
anniversary thereafter (each an "Extension Date"), the Employment Term shall be
automatically extended for an additional one-year period, unless the Company or
Executive provides the other party hereto 30 days prior written notice before
the next Extension Date that the Employment Term shall not be so extended.

     2. Position.

         a. During the Employment Term, Executive shall serve in the positions
set forth on Exhibit A. In such position, Executive shall have duties and
authority at a level consistent with the duties and authority set forth on
Exhibit A and such other duties and responsibilities as shall be determined from
time to time by the Board of Directors of the Company (the "Board"). If
requested, Executive shall also serve as a member of the Board without
additional compensation.

         b. During the Employment Term, Executive will devote Executive's full
business time and best efforts to the performance of Executive's duties
hereunder and will

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                                                                               2

not engage in any other business, profession or occupation for compensation or
otherwise which would conflict or interfere with the rendition of such services
either directly or indirectly, without the prior written consent of the Board;
provided that Executive may continue to serve as a member of the boards of
directors and trustees listed on Exhibit B hereto ; provided in each case, and
in the aggregate, that such activities do not conflict or interfere with the
performance of Executive's duties hereunder or conflict with Section 8.

     3. Base Salary. During the Employment Term, the Company shall pay Executive
a base salary at the annual rate of $1,000,000, payable in regular installments
in accordance with the Company's usual payment practices. Beginning with the
fiscal year commencing July 1, 2001, Executive's annual base salary shall be
reviewed within 30 days of the start of that fiscal year and will be reviewed
each year thereafter during the Employment Term, and, if appropriate, it shall
be increased from time to time in the sole discretion of the Board. The base
salary specified in this Section 3, together with any increases in such base
salary that the Board may make thereto from time to time, is herein after
referred to as the "Base Salary."

     4. Annual Bonus. With respect to the fiscal year ending June 30, 2001 and
with respect to each full fiscal year thereafter during the Employment Term,
Executive shall be eligible to earn an annual bonus award (an "Annual Bonus") of
up to 125% of Executive's Base Salary (the "Target") based upon the achievement
of annual performance targets established by the Board within the first three
months of each fiscal year during the Employment Term; provided that the annual
performance targets for the fiscal year in which the Closing occurs shall be
established by the Board within 90 days following the Closing. Executive shall,
by prior irrevocable election, have the right to defer the payment of each such
bonus for one or more years, and during the deferral period, Executive shall
have the right to designate, from among a number of investment alternatives, the
investments which shall serve as the measure of the investment return on his or
her deferred compensation. If all or any portion of the Annual Bonus otherwise
payable to Executive for any fiscal year of the Company would not in fact be
deductible for federal income tax purposes by reason of the limitation of
section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"),
then the portion of such Annual Bonus which is not so deductible shall be
deferred and paid to Executive in one lump sum upon the first date on which such
payment may be made without exceeding any applicable limitation on deductibility
under Code section 162(m). During the period in which payment of the Annual
Bonus is deferred, whether in whole or in part, the deferred portion of such
Annual Bonus shall be held in a grantor trust established by the Company for
Executive's benefit, and Executive shall have the right to designate the
investments, from a number of diversified investment alternatives designated by
the Company, which shall serve as the measure of the investment return on such
deferred portion.

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     5. Employee Benefits/Equity Awards.

         a. During the Employment Term, Executive shall be provided health, life
and disability insurance and retirement and fringe benefits that are comparable,
in the aggregate, to those benefits made available to the senior executives of
Seagate immediately prior to the Closing.

         b. Promptly following the date hereof, Executive shall be granted an
option to purchase shares of the Company or an affiliate, the number of shares
and the terms and conditions of the option to be determined by the Board of
Directors of New SAC. Notwithstanding the foregoing, the option agreement
representing the right to purchase such shares shall provide that if the
Executive's employment is terminated by the Company without Cause (as defined
below) or if the Executive resigns for Good Reason (as defined below), the
option shall immediately vest and become exercisable for all the shares at the
time subject to the option.

     6. Business Expenses. During the Employment Term, reasonable business
expenses incurred by Executive in the performance of Executive's duties
hereunder shall be reimbursed by the Company in accordance with Company
policies.

     7. Termination. The Employment Term and Executive's employment hereunder
may be terminated by either party at any time and for any reason; provided that
Executive will be required to give the Company at least 30 days advance written
notice of any resignation of Executive's employment without Good Reason.
Notwithstanding any other provision of this Agreement, the provisions of this
Section 7 shall exclusively govern Executive's rights upon termination of
employment with the Company and its affiliates; provided that nothing in this
Agreement shall affect or otherwise modify Executive's rights, benefits or
entitlements under (i) the Deferred Compensation Plan into which Executive has
rolled the value of his unvested Seagate options and/or unvested Seagate share
pursuant to his Rollover Agreement with SAC dated November 13, 2000 (the
"Rollover Agreement"), (ii) his Restricted Share Agreement with SAC dated
November 22, 2000, (iii) the Management Retention Agreement between Executive
and Seagate dated as of November 12, 1998 (as amended by the Management
Participation Agreement dated as of March 29, 2000 between Executive and SAC and
the Rollover Agreement) (the "Management Retention Agreement") and (iv) any
stock option agreements or restricted share agreements and the awards subject to
such agreements which may be awarded to Executive from time to time following
the Closing (collectively, the "Collateral Documents").

         a. By the Company For Cause or By Executive Resignation Without Good
Reason.

     (i) The Employment Term and Executive's employment hereunder may be
terminated by the Company for Cause (as defined below) and shall terminate
automatically upon Executive's resignation without Good Reason (as defined in
Section 7(C)); provided that Executive will be required to give the Company at
least 30 days advance written notice of a resignation without Good Reason.

     (ii) For purposes of this Agreement, "Cause" shall mean (A) Executive's
continued failure to substantially perform the material duties of his office
(other than as a result of total or partial incapacity due to physical or mental
illness), (B) embezzlement or theft by

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Executive of the Company's property, (C) the commission of any act or acts on
Executive's part resulting in the conviction of such Executive of a felony under
the laws of the United States or any state, (D) Executive's willful malfeasance
or willful misconduct in connection with Executive's duties to Company or any
other act or omission which is materially injurious to the financial condition
or business reputation of the Company or any of its subsidiaries or affiliates,
or (E) a material breach by Executive of the material terms of this Agreement,
the Management Stockholders Agreement dated as of November 22, 2000, or any
non-compete, non-solicitation or confidentiality provisions to which Executive
is subject. However, no termination shall be deemed for Cause under clause (A),
(D) or (E) unless Executive is first given written notice by the Company of the
specific acts or omissions which the Company deems constitute grounds for a
termination for Cause and is provided with at least 30 days after such notice to
cure the specified deficiency.

         (iii) If Executive's employment is terminated by the Company for Cause,
or if Executive resigns without Good Reason, Executive shall be entitled to
receive:

                    (A)  the Base Salary through the date of termination;

                    (B)  any Annual Bonus earned but unpaid as of the date of
       termination for any previously completed fiscal year;

                    (C)  reimbursement for any unreimbursed business expenses
       properly incurred by Executive in accordance with  Company policy prior
       to the date of Executive's termination; and

                    (D)  such employee benefits, if any, as to which Executive
       may be entitled under the employee benefit plans of the Company (the
       amounts described in clauses (A) through (D) hereof being referred to as
       the "Accrued Rights").

         Following such termination of Executive's employment by the Company for
Cause or resignation by Executive without Good Reason, except as set forth in
this Section 7(a)(iii) or in the Collateral Documents, Executive shall have no
further rights to any compensation or any other benefits under this Agreement.

         b. Disability or Death.

     (i) The Employment Term and Executive's employment hereunder shall
terminate upon Executive's death and may be terminated by the Company upon
fifteen (15) days prior written notice to Executive if Executive becomes
physically or mentally incapacitated and is therefore unable for a period of six
consecutive months or for an aggregate of nine months in any twenty-four
consecutive month period to perform Executive's duties (such incapacity is
hereinafter referred to as "Disability"). Any question as to the existence of
the Disability of Executive as to which Executive and the Company cannot agree
shall be determined in writing by a qualified independent physician mutually
acceptable to Executive and the Company. If Executive and the Company cannot
agree as to a qualified independent physician, each shall appoint such a
physician and those two physicians shall select a third who shall make such
determination in writing. The determination of Disability made in writing to the
Company and Executive shall be final and conclusive for all purposes of the
Agreement.

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         (ii) Subject to reduction by the present value of any other cash
severance or cash termination benefits payable to Executive under any other
plans, programs or arrangements of the Company or its affiliates, including, but
not limited to, the Management Retention Agreement, upon termination of
Executive's employment hereunder for either death or Disability, Executive or
Executive's estate (as the case may be) shall be entitled to receive:

            (A) the Accrued Rights; and

            (B) a pro rata portion of any Annual Bonus, if any, that Executive
     would have been entitled to receive pursuant to Section 4 hereof in such
     year based upon (i) the percentage of the fiscal year that shall have
     elapsed through the date of Executive's termination of employment and (ii)
     to the extent payment of the Annual Bonus is based upon subjective
     individual performance criteria, based upon the actual performance of
     Executive during the portion of such fiscal year that Executive was
     employed by the Company prior to such death or Disability, payable when
     such Annual Bonus would have otherwise been payable had Executive's
     employment not terminated.

     Following Executive's termination of employment due to death or Disability,
except as set forth in this Section 7(b)(ii) or in the Collateral Documents,
Executive shall have no further rights to any compensation or any other benefits
under this Agreement.

         c. By the Company Without Cause or Resignation by Executive for Good
Reason.

         (i) The Employment Term and Executive's employment hereunder may be
terminated by the Company without Cause or by Executive's resignation for Good
Reason.

         (ii) For purposes of this Agreement, "Good Reason" shall mean
Executive's resignation of Executive's employment with the Company as a result
of the following actions, which actions remain uncured for at least 30 days
following written notice from Executive to the Company describing the occurrence
of such events and asserting that such events constitute grounds for a Good
Reason resignation, provided notice of such resignation is given to the Company
within 60 days after the expiration of the cure period: (A) without Executive's
express written consent, any material reduction in the level of Executive's
authority or duties from those set forth on Exhibit A of this Agreement
(including, for these purposes, any authority or duties assigned to Executive
with the consent of Executive and the Board within 90 days following the Closing
Date); provided, however, that, for the avoidance of doubt, the sale by New SAC
of Seagate Removable Storage Solutions Holdings, Seagate Software (Cayman)
Holdings, XIOTECH Corporation or any of their subsidiaries shall not be
considered a material reduction in the level of Executive's authority or duties;
(B) without Executive's express written consent, a reduction of 10% or more in
the level of the base salary, target annual bonus or employee benefits to be
provided to Executive under this Agreement, other than a reduction implemented
with the consent of Executive or a reduction that is equivalent to reduction in
base salaries, bonus opportunities and/or employee benefits, as applicable,
imposed on all other senior executives of the Company at a similar level within
the Company (provided that the use of private aircraft shall not be deemed an
employee benefit for these purposes); or (C) the relocation of Executive to a
principal place of employment more than 50 miles from Executive's current
principal place of employment, without Executive's express written consent.

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         (iii) Subject to reduction by the present value of any other cash
severance or cash termination benefits payable to Executive under any other
plans, programs or arrangements of the Company or its affiliates, including, but
not limited to, the Management Retention Agreement, if Executive's employment is
terminated by the Company without Cause (other than by reason of death or
Disability) or if Executive resigns for Good Reason, Executive shall be entitled
to receive:

            (A) the Accrued Rights;

            (B) subject to Executive's continued compliance with the provisions
     of Sections 8 and 9, continued payment of the Base Salary and monthly
     payments of the Executive's Target Annual Bonus divided by twelve for (x)
     36 months if such termination occurs on or prior to the second anniversary
     of the Commencement Date, or (y) 24 months if such termination occurs
     following the second anniversary of the Commencement Date (as applicable,
     the "Severance Period"); and

            (C) subject to Executive's continued compliance with the provisions
     of Sections 8 and 9, continued coverage under the Company's health, dental
     and life insurance programs for the Severance Period on the same basis as
     such coverage is generally provided to active senior executives of the
     Company, such continued coverage shall be without duplication of benefit
     coverage provided under any other plan, program or arrangement of the
     Company or its affiliates (including, without limitation, the Management
     Retention Agreement) and, for the avoidance of doubt, Executive shall be
     entitled to the continued coverage that is most favorable to Executive.

         Following Executive's termination of employment by the Company without
Cause (other than by reason of Executive's death or Disability) or by
Executive's resignation for Good Reason, except as set forth in this Section
7(c)(iii) or in the Collateral Documents, Executive shall have no further rights
to any compensation or any other benefits under this Agreement.

            d. Expiration of Employment Term.

         (i) Election Not to Extend the Employment Term. In the event either
party elects not to extend the Employment Term pursuant to Section 1, unless
Executive's employment is earlier terminated pursuant to paragraphs (a), (b) or
(c) of this Section 7, Executive's termination of employment hereunder (whether
or not Executive continues as an employee of the Company thereafter) shall be
deemed to occur on the close of business on the day immediately preceding the
next scheduled Extension Date and, unless Executive continues as an employee of
the Company, Executive shall be entitled to receive the Accrued Rights.

         Following such termination of Executive's employment hereunder as a
result of either party's election not to extend the Employment Term, except as
set forth in this Section 7(d)(i) or in the Collateral Documents, Executive
shall have no further rights to any compensation or any other benefits under
this Agreement.

         (ii) Continued Employment Beyond the Expiration of the Employment Term.
Unless the parties otherwise agree in writing, continuation of Executive's
employment with the Company beyond the expiration of the Employment Term shall
be deemed an employment at-

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                                                                               7

will and shall not be deemed to extend any of the provisions of this Agreement
and Executive's employment may thereafter be terminated at will by either
Executive or the Company; provided that the provisions of Sections 8, 9 and 10
of this Agreement shall survive any termination of this Agreement or Executive's
termination of employment hereunder.

         e. Notice of Termination. Any purported termination of employment by
the Company or by Executive (other than due to Executive's death) shall be
communicated by written Notice of Termination to the other party hereto in
accordance with Section 11(h) hereof. For purposes of this Agreement, a "Notice
of Termination" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of employment under the provision so indicated.

         f. Board/Committee Resignation. Upon termination of Executive's
employment for any reason, Executive agrees to resign, as of the date of such
termination and to the extent applicable, from the Board (and any committees
thereof) and the Board of Directors (and any committees thereof) of any of the
Company's affiliates.

     8. Non-Competition.

         a. Executive acknowledges and recognizes the highly competitive nature
of the businesses of the Company and its affiliates and accordingly agrees as
follows:

     (1) Except as otherwise expressly provided in Section 8(c), during the
Employment Term and, for a period of 2 years following the date Executive ceases
to be employed by the Company; provided, however, if Executive is terminated
without Cause or resigns for Good Reason on or prior to the second anniversary
of the Commencement Date, for a period of 3 years following the date Executive
ceases to be employed by the Company (the "Restricted Period"), Executive will
not, whether on Executive's own behalf or on behalf of or in conjunction with
any person, company, business entity or other organization whatsoever, directly
or indirectly solicit or assist in soliciting in competition with the Company,
the business of any client or prospective client:

         (i)   with whom Executive had personal contact or dealings on behalf of
               the Company during the one year period preceding Executive's
               termination of employment;

         (ii)  with whom employees reporting to Executive have had personal
               contact or dealings on behalf of the Company during the one year
               immediately preceding the Executive's termination of employment;
               or

         (iii) for whom Executive had direct or indirect responsibility during
               the one year immediately preceding Executive's termination of
               employment.

     (2) Except as otherwise expressly provided in Section 8(c), during the
Restricted Period, Executive will not directly or indirectly:

         (i)   engage in any business that competes with the business of New SAC
               or its subsidiaries (including, without limitation, businesses
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               which New SAC or its subsidiaries have specific plans to conduct
               in the future and as to which Executive is aware of such
               planning) in any geographical area which is within 100 miles of
               any geographical area in which New SAC or its subsidiaries
               conduct such business (a "Competitive Business");

         (ii)  enter the employ of, or render any services to, any person or
               entity (or any division of any person or entity) who or which
               engages in a Competitive Business;

         (iii) acquire a financial interest in, or otherwise become actively
               involved with, any Competitive Business, directly or indirectly,
               as an individual, partner, shareholder, officer, director,
               principal, agent, trustee or consultant; or

         (iv)  interfere with, or attempt to interfere with, business
               relationships (whether formed before, on or after the date of
               this Agreement) between New SAC or any of its subsidiaries and
               customers, clients, suppliers, partners, members or investors of
               New SAC or its subsidiaries.

     (3) Notwithstanding anything to the contrary in this Agreement, Executive
may, directly or indirectly own, solely as an investment, securities of any
person engaged in the business of New SAC or its subsidiaries which are publicly
traded on a national or regional stock exchange or on the over-the-counter
market if Executive (i) is not a controlling person of, or a member of a group
which controls, such person and (ii) does not, directly or indirectly, own 5% or
more of any class of securities of such person.

     (4) During the Restricted Period, Executive will not, whether on
Executive's own behalf or on behalf of or in conjunction with any person,
company, business entity or other organization whatsoever, directly or
indirectly:

         (i)   solicit or encourage any employee of New SAC or its subsidiaries
               to leave the employment of New SAC or its subsidiaries; or

         (ii)  hire any such employee who was employed by New SAC or its
               subsidiaries as of the date of Executive's termination of
               employment with the Company or who left the employment of New SAC
               or its subsidiaries coincident with, or within one year prior to
               or after, the termination of Executive's employment with the
               Company.

     (5) During the Restricted Period, Executive will not, directly or
indirectly, solicit or encourage to cease to work with New SAC or its
subsidiaries any consultant then under contract with New SAC or its
subsidiaries.

         b. It is expressly understood and agreed that although Executive and
the Company consider the restrictions contained in this Section 8 to be
reasonable, if a final judicial determination is made by a court of competent
jurisdiction that the time or territory or any other restriction contained in
this Agreement is an unenforceable restriction against

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                                                                               9

Executive, the provisions of this Agreement shall not be rendered void but shall
be deemed amended to apply as to such maximum time and territory and to such
maximum extent as such court may judicially determine or indicate to be
enforceable. Alternatively, if any court of competent jurisdiction finds that
any restriction contained in this Agreement is unenforceable, and such
restriction cannot be amended so as to make it enforceable, such finding shall
not affect the enforceability of any of the other restrictions contained herein.

         c. Notwithstanding the foregoing, the restrictions on soliciting
clients or prospective clients set forth in Section 8(a)(1) and on engaging in
Competitive Businesses set forth in Section 8(a)(2) shall not apply to Executive
following the expiration of the Employment Term if the Employment Term is
terminated due to the Company's election not to extend the Employment Term
pursuant to Section 1, unless the Company elects in writing, in its sole
discretion, to pay Executive, following Executive's termination of employment
with the Company, the amounts set forth in Section 7(c)(iii) that would have
been payable to Executive in the event Executive's termination had been
terminated by the Company immediately prior to the expiration of the Employment
Term without Cause, in which case the provisions of Sections 8(a)(1) and 8(a)(2)
shall continue to apply.

     9. Confidentiality; Inventions. Executive agrees to sign, and abide by the
terms of, the Company's standard At-Will Employment, Confidential Information
and Invention Assignment Agreement (the "Standard Agreement"), a copy of which
is attached hereto as Exhibit C and the terms of which are hereby incorporated
herein by reference and made a part of this Agreement; provided that (i) the
Company acknowledges that the provisions of the Standard Agreement regarding "at
will" employment shall not affect Executive's rights under this Agreement and
(ii) Executive acknowledges and agrees that to the extent any original works of
authorship which are made by Executive (solely or jointly with others) within
the scope of and during the period of Executive's employment with the Company
are deemed not to be "works made for hire," Executive hereby assigns the
copyright and all other intellectual property rights in such works to the
Company; provided further that the foregoing assignment shall not apply to
inventions, the assignment of which is prohibited by California Labor Code
Section 2870.

     10. Specific Performance. Executive acknowledges and agrees that the
Company's remedies at law for a breach or threatened breach of any of the
provisions of Section 8 or Section 9 would be inadequate and the Company would
suffer irreparable damages ads a result of any such breach or threatened breach.
In recognition of this fact, Executive agrees that, in the event of such a
breach or threatened breach, in addition to any remedies at law, the Company,
without posting any bond, shall be entitled to obtain equitable relief in the
form of specific performance, temporary restraining order, temporary or
permanent injunction or any other equitable remedy which may then be available
entitled and, in the case of any material breach of such provisions, to cease
making any payments or providing any benefit otherwise required by this
Agreement.

     11. Miscellaneous.

         a. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.

         b. Entire Agreement/Amendments.

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                                                                              10

         (i) Except as otherwise provided in Section 11(b)(ii) below, this
Agreement contains the entire understanding of the parties with respect to the
employment of Executive by the Company, and this Agreement supercedes all prior
agreements and understandings (including verbal agreements) between Executive
and the Company and/or its affiliates regarding the terms and conditions of
Executive's employment with the Company and/or its affiliates. There are no
restrictions, agreements, promises, warranties, covenants or undertakings
between the parties with respect to the subject matter herein other than those
expressly set forth herein. This Agreement may not be altered, modified, or
amended except by written instrument signed by the parties hereto.

         (ii) Nothing in this Agreement shall affect or in any manner otherwise
modify Executive's rights, benefits and entitlements under the Collateral
Documents; provided that this Agreement does supercede the provisions of the
Management Agreement dated as of March 29, 2000 among SAC and Executive which
described the material terms of an employment agreement to be entered into
between SAC and Executive (the "Management Agreement") and the provisions of the
Management Agreement referred to, or otherwise incorporated into, any of the
Collateral Documents.

         c. No Waiver. The failure of a party to insist upon strict adherence to
any term of this Agreement on any occasion shall not be considered a waiver of
such party's rights or deprive such party of the right thereafter to insist upon
strict adherence to that term or any other term of this Agreement.

         d. Severability. In the event that any one or more of the provisions of
this Agreement shall be or become invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
of this Agreement shall not be affected thereby.

         e. Assignment. This Agreement shall not be assignable by Executive.
This Agreement may be assigned by the Company to a person or entity which is an
affiliate or a successor in interest to substantially all of the business
operations of the Company. Upon such assignment, the rights and obligations of
the Company hereunder shall become the rights and obligations of such affiliate
or successor person or entity. The failure of any such affiliate or successor
person or entity to accept the assignment of the Company's obligations under
this Agreement (other than an assignment which occurs by operation of law) shall
constitute additional grounds for a resignation for Good Reason by Executive
under Section 7(c) of this Agreement.

         f. Set Off The Company's obligation to pay Executive the amounts
provided and to make the arrangements provided hereunder shall be subject to
set-off, counterclaim or recoupment of amounts owed by Executive to the Company
or its affiliates

         g. Successors; Binding Agreement. This Agreement shall inure to the
benefit of and be binding upon personal or legal representatives, executors,
administrators, successors, heirs, distributes, devises and legatees.

         h. Notice. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered by hand or overnight courier or
three days after it has been mailed by United States registered mail, return
receipt requested, postage prepaid, addressed to

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                                                                              11

the respective addresses set forth below Agreement, or to such other address as
either party may have furnished to the other in writing in accordance herewith,
except that notice of change of address shall be effective only upon receipt.

            If to the Company:

            Seagate Technology (US) Holdings, Inc.
            920 Disc Drive
            Scotts Valley, CA  95066
            Attention:  General Counsel

            If to Executive:

            To the most recent address of Executive set forth in the personnel
            records of the Company.

         i. Executive Representation. Executive hereby represents to the Company
that the execution and delivery of this Agreement by Executive and the Company
and the performance by Executive of Executive's duties hereunder shall not
constitute a breach of, or otherwise contravene, the terms of any employment
agreement or other agreement or policy to which Executive is a party or
otherwise bound.

         j. Cooperation. Executive shall provide his reasonable cooperation in
connection with any action or proceeding (or any appeal from any action or
proceeding) which relates to events occurring during Executive's employment
hereunder. This provision shall survive any termination of this Agreement.

         k. Withholding Taxes. The Company may withhold from any amounts payable
under this Agreement such Federal, state and local taxes as may be required to
be withheld pursuant to any applicable law or regulation.

         l. Counterparts. This Agreement may be signed in counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.

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     IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.

                                      SEAGATE TECHNOLOGY (US) HOLDINGS, INC.

                                      /s/ William L. Hudson
                                      ----------------------------------------
                                      By: William L. Hudson
                                      Title: Secretary, General Counsel and
                                             Senior Vice President

                                      EXECUTIVE

                                      /s/ Stephen J. Luczo
                                      ----------------------------------------

<PAGE>

                                    EXHIBIT A
                             (DUTIES AND AUTHORITY)

Chief Executive Officer of New SAC, Seagate Technology Holdings and Seagate
Removable Storage Solutions Holdings and Chief Executive Officer, President and
Chief Operating Officer of Seagate Software (Cayman) Holdings with primary
responsibility for the management and oversight of the aforementioned entities
as well as the oversight of the investment activity of Seagate Technology
Investment Holdings LLC.

<PAGE>

                                    EXHIBIT B
                       (CURRENT BOARD/TRUSTEE MEMBERSHIPS)

Seagate Technology

Seagate Software

Veritas Software

e2open

Stanford Graduate School of Business Advisory Board

Shark Foundation Board

Board of Trustees for the Boys and Girls Club of America

<PAGE>

                                    EXHIBIT C
           (STANDARD AT-WILL EMPLOYMENT, CONFIDENTIAL INFORMATION AND
                        INVENTION ASSIGNMENT AGREEMENT)<PAGE>

                                                                    EXHIBIT 10.4

                       SEPARATION AGREEMENT AND RELEASE

     This Separation Agreement and Release ("Agreement") is made by and between
Seagate Technology, Inc. (the "Company") and Al Shugart ("Employee").

                                    RECITALS
                                    --------

     1.   Employee was employed by the Company as its Chief Executive Officer
and Chairman of its Board of Directors, and was a member of the Board of
Directors of the Company and an officer and/or director of certain of the
Company's subsidiaries.

     2.   The Company and Employee (collectively referred to as "the Parties")
wish to document the severance and other benefits the Company has agreed to pay
Employee in connection with (i) Employee's termination as Chief Executive
Officer and Chairman of the Board of Directors of the Company and for his
resignation as a member of the Company's Board of Directors and of each of its
subsidiaries and other related companies upon which he serves as a director
and/or officer and (ii) the consulting arrangement and restrictive covenants
that will be in effect for Employee following such termination.

     NOW THEREFORE, in connection with the promises made herein, the Company and
Employee hereby agree as follows:

     1.   Termination Date.  Employee's termination as Chief Executive Officer
          ----------------
and Chairman of the Board of Directors of the Company, and as an employee of the
Company and of each of its subsidiaries upon which he serves as a director
and/or officer is effective as of July 19, 1998 (the "Termination Date").

     2.   Payment of Salary; Benefits.  Employee will receive his normal salary
          ---------------------------
through the Termination Date and all regular and mandatory payroll deductions
will be taken from Employee's final paycheck.  Employee's participation in the
Company's employee benefit programs shall cease as of the Termination Date,
except to the limited extent provided in Sections 5 and 6 below.

     3.   Severance Payments.  Employee will receive $750,000 per annum over the
          ------------------
three-year period beginning July 20, 1998 and ending July 19, 2001.  These
payments will be made in equal installments at monthly intervals over the three-
year period, with the first payment to be made as of August 31, 1998.  All
payments will be subject to the Company's collection of applicable withholding
taxes.  However, all such payments will immediately terminate in the event of a
material breach of any of Employee's covenants under Section 9 of this
Agreement.

     4.   Restricted Stock.  In November 1995, Employee received a restricted
          ----------------
stock award for a total of 300,000 shares of the Company's common stock.  As of
the Termination Date, 145,000 of those shares were unvested.  All of Employee's
unvested shares shall vest (the Company's repurchase right shall lapse) on the
Effective Date of this Agreement (as defined in Section 28 below).  At the time
of

<PAGE>

such vesting, Employee will recognize immediate taxable income equal to the fair
market value of those previously unvested shares, less the issue price Employee
paid for such shares, and Employee agrees to satisfy the applicable withholding
taxes on that income before the certificates for the shares will be released.
Employee may satisfy the withholding tax obligation by directing the Company to

withhold from the vested shares that number of shares having a fair market value
equal to the amount required to be withheld, subject to such other limitations
and conditions as the Company may impose in connection with applicable legal and
accounting considerations.

     5.   Stock Options.
          -------------

          (a) Employee currently holds outstanding stock options for 1,060,000
shares of the Company's common stock ("Company Options") and for 100,000 shares
of the common stock of Seagate Software ("Seagate Software Options").  As of the
Termination Date, the Company Options were exercisable for a total of 440,000
shares, and the Seagate Software Options were exercisable for a total of 12,000
shares.  The specific breakdown of Employee's vested and unvested stock options
as of the Termination Date is also included in attached Schedule A.  Subject to
Section 5(b) below, Employee's Company Options, to the extent vested and
exercisable as of the Termination Date, shall remain exercisable and may be
exercised at any time during the Consultancy Period (as defined in Section 8
below) and for the ninety (90)-day period thereafter, subject to the original
term of such Company Options.  To the extent Employee's Company Options are
unvested as of the Termination Date, the Company Options shall continue to vest
and may be exercised (to the extent vested) during the Consultancy Period (as
defined in Section 8 below) and for the ninety (90)-day period thereafter,
subject to the original term of such Company Option.  To the extent Employee's
Seagate Software Options were vested immediately prior to the Termination Date,
Employee agrees to exercise such vested Seagate Software Options on or before
August 18, 1998; to the extent such vested Seagate Software Options are not
exercised on or before August 18, 1998, they shall be cancelled without
consideration to Employee. To the extent Employee's Seagate Software Options
were unvested immediately prior to the Termination Date, such unvested Seagate
Software Options shall become fully vested and exercisable as of the Effective
Date and may be exercised at any time during the Consultancy Period and for the
thirty (30)-day period thereafter, subject to the original term of such Seagate
Software Options. Employee's Company Options and Seagate Software Options may be
exercised by Employee consistent with the procedures available to him prior to
the Termination Date.  To the extent Employee's options are non-qualified
options under the federal income tax laws, Employee will recognize compensation
income in connection with his exercise of those options, and agrees to satisfy
all applicable withholding taxes associated with each such exercise.

          (b) The Company previously established a deferred bonus amount with
respect to certain of Employee's Company Options.  Such bonus amounts are
reflected in the attached Schedule A. In consideration of Employee's agreement
to exercise certain vested Company Options as provided herein, deferred bonus
amounts attributable to Employee's Company Options that were unvested
immediately prior to the Termination Date shall be available to reduce the
exercise price of such unvested Company Options to the extent such Options vest
and are exercised in accordance with Section 5(a) above.  In consideration of
Employee's eligibility to receive deferred bonus amounts pursuant to the
preceding sentence, Employee agrees to exercise on or before October 17, 1998,
all of his Company Options that (i) were vested immediately prior to the
Termination Date, and (ii) have a per

                                      -2-

<PAGE>

share exercise price at or below $17.00; to the extent such Options are not
exercised on or before October 17, 1998, they shall be cancelled without
consideration to Employee.

     6.   Benefits.
          --------

          (a) The Company shall continue to provide Employee, for thirty-six
(36) months after the Termination Date, medical and group insurance benefits or
such comparable alternative medical and insurance benefits as the Company may,
in its discretion, determine to be sufficient to satisfy its obligations to
Employee under this Agreement, which are at least as favorable as the most
favorable medical and group insurance benefits available to the Company's senior
executives as of the Termination Date.  Notwithstanding the foregoing, if
Employee is covered under any medical or group insurance plan(s) provided by a
subsequent employer, then the amount of coverage required to be provided by the
Company hereunder shall be reduced by the amount of coverage provided by the
subsequent employer's medical or group insurance plan(s).

          (b) Following Employee's request on or after the Effective Date, the
Company shall furnish Employee during the Consultancy Period (as defined in
Section 8) with an automobile of Employee's choosing, provided that the retail
value of such automobile shall not exceed $50,000.  The Company shall remain the
legal owner of the automobile and will be responsible for license, insurance and
registration thereof.  All other costs and expenses relating to the use and
maintenance of such automobile shall be the sole responsibility of Employee.
Employee agrees to return the automobile to the Company's corporate headquarters
in Scotts Valley, California, or such other place as the Parties may mutually
agree, on or before the end of the Consultancy Period.

     7.   Indemnification.  Employee shall be entitled to indemnification, in
          ---------------
accordance with the applicable provisions of the Company's articles of
incorporation and bylaws, against all expense, liability and loss (including
attorneys' fees and settlement payments) that Employee may incur by reason of
any action, suit or proceeding arising from or relating to the performance of
Employee's duties as an officer or director of the Company or any of its
subsidiaries.  The Company agrees to maintain directors and officers coverage
for Employee's benefit during the Consultancy Period (as defined in Section 8
below).

     8.   Consulting.  As a condition to, and in consideration for, the
          ----------
severance benefits Employee is to receive herein, Employee agrees to make
himself available to perform consulting services reasonably requested of him
during the three (3)-year period beginning July 20, 1998 and ending July 19,
2001 (the "Consultancy Period").  Employee agrees to make himself reasonably
available to render up to 30 hours of consulting services per each of the
Company's fiscal quarters during the Consultancy Period, provided that such
consulting services do not materially conflict with Employee's then-existing
activities or commitments.  All assignments will come from the Chief Executive
Officer of the Company, and Employee will report directly to such person with
respect to each assignment.  Should Employee be requested to render more than
the required 30 hours of consulting services per fiscal quarter, then Employee
will be compensated for those additional hours at an hourly rate to be agreed
upon by Employee and the Chief Executive Officer of the Company at the time such
consulting services are to be rendered.  Employee will be reimbursed for all
reasonable out-of-pocket expenses incurred in rendering such consulting services
upon Employee's submission of appropriate documentation for those expenses.
During the Consultancy Period, Employee will not make any representations to any
third party

                                      -3-

<PAGE>

that he is an officer or employee of the Company and, following his resignation
as a member of the Company's Board of Directors, a director of the Company. Any
proprietary information or other confidential information of the Company to
which he may have access in the performance of his consulting services will be
held in confidence and will not be disclosed to any third party otherwise
directly or indirectly used by Employee, except to the extent necessary to
perform his consulting services.

     9.   Employee Covenants.  As a condition to, and a consideration for, the
          ------------------
severance and other benefits Employee is to receive herein, Employee agrees
that:

          (a) he will not, at any time during the three (3)-year period
     beginning July 20, 1998 and ending July 19, 2001, directly or indirectly,
     whether for his own account or as an employee, director, consultant or
     advisor, provide services to any business enterprise that is at the time in
     competition with any of the Company's or any of its subsidiaries' existing
     product lines or business activities as of the Effective Date and that is
     located geographically in an area where the Company or any of its
     subsidiaries maintains substantial business activities, unless Employee
     obtains the prior written consent of the Company's Chief Executive Officer,
     or

          (b) he will not, at any time during the three (3)-year period
     beginning July 20, 1998 and ending July 19, 2001, directly or indirectly
     solicit any individuals to leave the Company's (or any of its
     subsidiaries') employ for any reason or interfere in any other manner with
     the employment relationships at the time existing between the Company (or
     any of its subsidiaries) and its current or prospective employees;
     provided, however, that Employee shall not be considered to have interfered
     with existing employment relationships in the event he responds to good
     faith inquiries initiated other than by Employee, or

          (c) he will not, at any time during the three (3)-year period
     beginning July 20, 1998 and ending July 19, 2001, induce or attempt to
     induce any customer, supplier, distributor, licensor, licensee or other
     business relation of the Company (or any of its subsidiaries) to cease
     doing business with the Company (or any of its subsidiaries) or in any way
     interfere with the existing business relationship between any such
     customer, supplier, distributor, licensor, licensee or other business
     relation and the Company (or any of its subsidiaries), or

          (d) he will not, at any time during the four and one-half (4 1/2)-year
     period beginning July 20, 1998 and ending January 19, 2002, disparage,
     defame or slander the Company (or any of its subsidiaries) or any of their
     (i) officers (within the meaning of Rule 16a-1(f) under the Securities
     Exchange Act of 1934, as amended, hereinafter "Officers") or directors as
     of the Termination Date, (ii) then-existing directors, or (iii) any of its
     products or services, to any one, including but not limited to any past,
     present or prospective customers.  The foregoing sentence is not applicable
     to comments Employee makes to his immediate family.  For such four and one-
     half (4 1/2) year-period the Company's Board of Directors and its current
     Officers shall refrain from disparagement, defamation or slander of
     Employee.

          (e) he will resign as a member of the boards of the Company's
     subsidiaries (as applicable) on or before delivery of a fully executed copy
     of this Agreement and will transfer to

                                      -4-

<PAGE>

     the Company (or its designee) any and all shares he currently owns or holds
     in the Company's foreign subsidiaries (such transfer to occur within
     fifteen (15) days of the Effective Date). Employee shall resign as a member
     of the Company's Board of Directors as of the Effective Date.

     Employee acknowledges that monetary damages may not be sufficient to
compensate the Company for any economic loss that may be incurred by reason of
Employee's breach of the foregoing restrictive covenants.  Accordingly, in the
event of any such breach, the Company will, in addition to the cessation of the
severance benefits provided Employee under this Agreement and any remedies
available to the Company at law, be entitled to obtain equitable relief in the
form of an injunction precluding Employee from continuing to engage in such
breach.

     In the event of any material breach by the Company of  its obligation to
Employee under Section 9(d) above, the Company shall pay Employee liquidated
damages in the amount of $100,000 for each such breach.

     10.  Confidential Information.  Employee shall continue to maintain the
          ------------------------
confidentiality of all confidential and proprietary information of the Company.

     11.  Payment of Salary.  The Company represents and Employee acknowledges
          -----------------
and represents that the Company has paid (or will pay pursuant to the terms of
the applicable plan or program) all salary, wages, bonuses, commissions and any
and all other benefits due to Employee through the Employee's Termination Date.

     12.  Release of Claims.  Employee agrees that the foregoing consideration
          -----------------
represents settlement in full of all outstanding obligations owed to Employee by
the Company or any subsidiary of the Company.  Employee and the Company, on
behalf of themselves and their respective heirs, agents, representatives,
immediate family members, executors, successors, and assigns, hereby fully and
forever release each other and their respective heirs, agents, directors,
employees, attorneys, investors, shareholders, administrators, affiliates,
divisions, subsidiaries, parents, predecessor and successor corporations, and
assigns, and agree not to sue or otherwise institute or cause to be instituted
any legal or administrative proceedings 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 either of them may possess against
the other 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
relationship with the Company or any subsidiary of 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 or any
subsidiary 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;

                                      -5-

<PAGE>

          (c)  any and all claims for wrongful discharge of employment;
termination in violation of public policy; discrimination; breach of contract,
both express and implied; breach of a covenant of good faith and fair dealing,
both express and implied; promissory estoppel; negligent or intentional
infliction of emotional distress; negligent or intentional misrepresentation;
negligent or intentional interference with contract or prospective economic
advantage; unfair business practices; defamation; libel; slander; negligence;
personal injury; invasion of privacy; false imprisonment; and conversion;

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

          (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;  and

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

Each of the Parties agrees 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.  Each of the Parties acknowledges and agrees that any
breach of this Section shall construe a material breach of the Agreement and in
the case of a breach by Employee, shall entitle the Company immediately to
recover the monetary consideration discussed in Section 3 above.  If any legal
action or other legal proceeding relating to the enforcement of any provision of
this Agreement is brought by either Party hereto, the prevailing Party shall be
entitled to recover reasonable attorneys' fees, costs and disbursements (in
addition to any other relief to which the prevailing Party may be entitled).

     13.  Acknowledgment of Waiver of Claims under ADEA.  Employee acknowledges
          ---------------------------------------------
that he is waiving and releasing any rights he 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
the ADEA after the Effective Date of this Agreement.  Employee acknowledges that
the consideration given for this waiver and release Agreement is in addition to
anything of value to which Employee was already entitled.  Employee further
acknowledges that he has been advised by this writing that (a) he should consult
with an attorney prior to executing this Agreement; (b) he has at least twenty-
                 -----
one (21) days within which to consider this Agreement; (c) he has seven (7) days
following the execution of this Agreement by the Parties to revoke the
Agreement; and (d) this Agreement shall not be effective until the revocation
period has expired.  Any revocation should be in writing and delivered to Tom
Mulvaney, Senior Vice President and General Counsel, Seagate Technology, Inc.,
920 Disc Drive, Scotts Valley, CA  95066, by close of business on the seventh
day from the date that Employee signs this Agreement.

                                      -6-

<PAGE>

     14.  Civil Code Section 1542.  Employee and the Company each represent that
          -----------------------
neither is aware of any claim other than the claims that are released by this
Agreement.  Employee and the Company each acknowledge that they have been
advised by legal counsel and are familiar with the provisions of California
Civil Code Section 1542, which provides as follows:

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

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

     15.  No Pending or Future Lawsuits.  Each Party represents to the other
          -----------------------------
that he or it has no lawsuits, claims, or actions pending in his or its name, or
on behalf of any other person or entity, against the other or any other person
or entity referred to herein.  Each Party also represents to the other that as
of the Effective Date, he or it does not have any basis for, and does not intend
to bring any claims on his or its own behalf or on behalf of any other person or
entity against the other or any other person or entity referred to herein.

     16.  Application for Employment.  Employee understands and agrees that, as
          --------------------------
a condition of this Agreement, he shall not be entitled to any employment with
the Company, its parents, its subsidiaries, or any successor, and he hereby
waives any right, or alleged right, of employment or re-employment with the
Company, its parents, its subsidiaries and any successor.  Subject to the terms
of this Agreement, Employee also waives any right to work as an independent
contractor for the Company, its subsidiaries, its parents and any successor.
Employee further agrees that he will not apply for employment with the Company,
its subsidiaries, its parents, or related companies, or any successor and will
not apply to work as an independent contractor for the Company, its parents, its
subsidiaries or any successor.

     17.  Confidentiality.  The Parties agree to maintain in complete confidence
          ---------------
the contents and terms of this Agreement, and the consideration for this
Agreement.  The Parties may disclose Employee's status as a consultant to the
Company and  agree to disclose the contents and terms of this Agreement only to
Employee's immediate family and to those attorneys, accountants, tribunals and
governmental entities who have a reasonable need to know (or as required by
applicable law or governmental agency or tribunal) the contents and terms of
this Agreement to prevent disclosure of the contents and terms of this Agreement
to other third parties.

     18.  No Cooperation.  Employee and the Company agree that he or it will not
          --------------
counsel or assist any attorneys or their clients in the presentation or
prosecution of any lawsuits, disputes, claims, charges, or complaints by any
third party against the other (including in the case of the Company any
subsidiary of the Company, and/or any officer, director, employee, agent,
representative, shareholder or attorney of the Company or any subsidiary in his,
her or its capacity as such on behalf of the Company or any

                                      -7-

<PAGE>

subsidiary) unless under a subpoena, court order or otherwise required by law to
do so. Nothing in this Section 18 shall preclude Employee from exercising his
rights as a stockholder of the Company.

     19.  Tax Consequences.  The Company makes no representations or warranties
          ----------------
with respect to the tax consequences of the payment of any sums to Employee
under the terms of this Agreement. Employee agrees and understands that he is
responsible for payment, if any, of local, state and/or federal taxes on the
sums paid hereunder by the Company and any penalties or assessments thereon.

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

     21.  Non-Binding Mediation.  The Parties shall make a good faith attempt to
          ---------------------
resolve any dispute or claim arising out of or related to this Agreement through
negotiation.  In the event that any dispute or claim arising out of or related
to this Agreement is not settled by the Parties, the Parties will attempt in
good faith to resolve such dispute or claim by non-binding mediation in Santa
Cruz, California to be conducted by JAMS-Endispute or such other mediator as the
parties shall mutually agree.  The mediation shall be held within thirty (30)
days of the request therefor.  The costs of mediation shall be shared equally by
the Parties to the mediation.

     22.  Authority.  The Company represents and warrants that the undersigned
          ---------
has the authority to act on behalf of the Company and to bind the Company and
all who may claim through it to the terms and conditions of this Agreement.
Employee represents and warrants that he has the capacity to act on his own
behalf and on behalf of all who might claim through him 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.

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

     24.  Severability.  In the event that any provision hereof becomes or is
          ------------
declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Agreement shall continue in full force and effect without said
provision.

     25.  Entire Agreement.  This Agreement represent the entire agreement and
          ----------------
understanding between the Company and Employee concerning the subject matter
herein, and supersede and replace any and all prior agreements and
understandings.

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

     27.  Governing Law.  This Agreement shall be governed by the internal
          -------------
substantive laws, but not the choice of law rules, of the State of California.

                                      -8-

<PAGE>

     28.  Effective Date.  This Agreement is effective eight days after it has
          --------------
been signed by both Parties (the "Effective Date").

     29.  Office Space.  Employee agrees that he will vacate his current office
          ------------
at the Company's corporate headquarters in Scotts Valley, California by August
15, 1998.

     30.  Paintings.  Employee hereby conveys, without consideration to
          ---------
Employee, all right, title and interest in all paintings previously provided to
the Company and its subsidiaries by Rita Shugart.

     31.  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.

     32.  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;

          (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.

                                       SEAGATE TECHNOLOGY, INC.

Dated: 7/29/98                         By  /s/ Stephen J. Luezo
      ________________                    __________________________________

                                       AL SHUGART, an individual

Dated: 7/29/98                          /s/ Al Shugart
      ________________                 _____________________________________
                                       Al Shugart

                                      -9-

<PAGE>
                                                                              34

Accepted:

CHASE SECURITIES INC.,

by /s/ Sean Holland
   ---------------------------------------------------
   Authorized Signatory

GOLDMAN, SACHS & CO.,

by /s/ Goldman, Sachs & Co.
   ---------------------------------------------------
   Authorized Signatory

MERRILL LYNCH, PIERCE,
  FENNER & SMITH
  INCORPORATED,

by /s/ Michael Senft
   ----------------------------------------------------
    Authorized Signatory

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