EMPLOYMENT AND NON-SOLICITATION AGREEMENT

1.

This Agreement is entered into in connection with and is ancillary to an Agreement and Plan of Merger (“Merger Agreement”) dated on or about February 25, 2004 by and between 3Ware, Inc. (“3Ware”) and Employer.

2.

Pursuant to the Merger Agreement, 3Ware will become a wholly-owned subsidiary of Employer (the “Merger”). The date upon which the Merger is consummated, and upon which this Agreement becomes effective, is the “Effective Date”.

3.

Employee has been employed at 3Ware as its President and Chief Executive Officer in accordance with an employment agreement dated on or about August 20, 2002 (“Employment Agreement”). While so employed, Employer was granted stock options pursuant to 3Ware’s stock option plan and applicable agreement (the “Stock Options”).

4.

Employer intends to terminate the Employment Agreement and to continue to employ Employee, and Employee intends to continue employment with Employer, as set forth herein after the Merger occurs.

1.

TERM Subject to the occurrence of the Effective Date, Employer will employ Employee, and Employee accepts employment with Employer, on an “at will” basis, meaning that either Employer or Employee may terminate Employee’s employment with Employer at any time and for any or no reason as provided below. The period commencing with the Effective Date and terminating upon the date of termination of employment is hereby referred to as the Term.

2.

TITLE Employee shall initially have the title of Employer’s Senior Vice President of Storage.

3.

DUTIES. Employee will work exclusively for Employer and shall initially report to Brent Little. Employee shall perform faithfully and to the best of her ability the duties assigned by Employer.

4.

FULL TIME EMPLOYMENT. Employee’s employment will be on a full-time basis, in accordance with Employer’s standard employment policies as they may be amended from time to time. Employee will not engage in other business or render any services, directly or indirectly, to any other person or organization, whether for compensation or otherwise, provided that Employee may (i) provide incidental assistance to family members on matters of family business; and (ii) sit on the boards of charitable and nonprofit organizations which do not, at the time of Employee’s appointment or election, to Employee’s knowledge, compete with Employer or its affiliates; provided in each case that such activities do not conflict with or interfere with Employee’s obligations to Employer.

5.

LOYALTY AND NON-COMPETITION For so long as Employee is employed by Employer, Employee will not engage in any employment, business, or activity that is in any way competitive with the business or proposed business of Employer or its affiliates and will not assist any other person or organization in competing with Employer or its affiliates or in preparing to engage in competition with the business or proposed business of Employer or its affiliates. The provisions of this paragraph shall apply both during normal working hours and at all other times, including without limitation nights, weekends and vacation time, while the Employee is employed by Employer.

6.

COMPENSATION Employee shall receive a base salary of $252,000 per year (“Base Salary”) payable on Employer’s regular payroll dates, less applicable withholdings.

7.

BENEFITS Employee will be entitled to insurance, vacation and other benefits commensurate with Employee’s position in accordance with Employer’s standard employment policies, as may be amended from time to time. The foregoing notwithstanding, Employee shall be entitled to vacation accrual of three weeks per year. Employee will also be eligible for stock refreshes on the same schedule as similarly situated executives, in accordance with the Employer’s applicable plans, agreements and policies.

8.

TERMINATION

a.

Termination Without Cause or Resignation for Good Reason If Employer terminates Employee without Cause (as defined below), or Employee resigns for Good Reason (as defined below), Employee will receive (1) a severance payment equal to twelve (12) months’ Base Salary, payable in a lump sum within 30 days of such termination without Cause or resignation for Good Reason; (2) reimbursement of health care premiums for the Employee and her dependants under COBRA, which coverage shall be to the same extent as for active employees, for a period of twelve (12) months; and (3) credit for an additional twenty-four (24) months of service for purposes of vesting with respect to the Stock Options. For the avoidance of doubt, nothing herein modifies the terms of any stock options granted Employee after the Effective Date.

b.

Termination for Cause or resignation without Good Reason If the Employee’s employment shall be terminated by Employer for Cause or by Employee without Good Reason, the Company shall pay Employee her earned salary and unused vacation benefits at the rate in effect at the time of the notice of termination to Employee, and the Company shall thereafter have no further obligations to the Employee.

c.

Termination For Disability Employer may terminate Employee’s employment at any time on account of Disability. “Disability” means a physical or mental illness, injury, or condition that prevents Employee from performing substantially all duties under this Agreement for at least 90 consecutive calendar days or for at least 120 calendar days, whether or not consecutive, in any 365 calendar day period, or is likely to do so, as certified by a physician selected by the Employer or its Board of Directors. In the event of such termination, Employer’s sole obligation shall be as provided by applicable law and its then-current applicable disability benefits, except that the vested percentage of the Stock Options shall be determined by adding 12 months to Employee’s actual service.

d.

Conditions of Receiving Severance Benefits The severance package provided in Section (a) above will be paid provided Employee meets the following conditions: (1) Employee complies with all surviving provisions of confidentiality agreements signed by Employee and (2) Employee executes a full general release, in form acceptable to Employer, releasing all claims, known or unknown, that Employee may have against Employer and its affiliates, provided that Employee shall not be required to release any claims for indemnification under state law, Employer’s charter documents or any indemnification agreement between Employer and Employee.

f.

Death If Employee dies during or after the Term, the Company shall pay Employee’s estate Employee’s earned salary and unused vacation benefits at the rate in effect at the time of death, and the vested percentage of the Stock Options shall be determined by adding 12 months to Employee’s actual service. Company shall thereafter have no further obligations to the Employee or her estate.

g.

“Cause” as defined herein means termination for the following reasons: (i) theft, dishonesty or falsification of records of Employer or its affiliates; (ii) improper disclosure of Employer or its affiliates’ confidential information; (iii) Employee’s failure or inability to perform any reasonable assigned duties after written notice from Employer of, and a reasonable opportunity to cure, such failure or inability; or (iv) Employee’s conviction of any criminal act which impairs her ability to perform her duties as an Employee of Employer (v) Employee’s violation of Employer’s rules and policies of employment after written notice from Employer of, and a reasonable opportunity to cure, such violation, or (vi) Employee’s repeated failure to follow Employer’s directions.

h.

“Good Reason” as defined herein means (i) a material reduction in Employee’s Base Salary, or (ii) relocation of Employee’s principal place of work to a location more than 25 miles from Employer’s current location, without Employee’s prior approval, or (iii) Employee’s Senior Vice President title is taken away by the Employer, or (iv) Employer materially and drastically changes the Employees’ duties and responsibilities so that such duties and responsibilities, as changed, are both 1) materially different in nature from duties and responsibilities of other similarly situated Employees of Employer, and 2) materially different from Employee’s duties and responsibilities promptly after the Effective Date. Employee shall provide Employer with written notice detailing the occurrence and nature of an event providing Employee with Good Reason to resign and a 15 day opportunity to cure such event prior to resigning for Good Reason.

i.

Exclusive Severance Benefits Employee acknowledges that the benefits provided hereunder are in lieu of any other benefits to which Employee may be eligible under any other agreements, severance plans or practices of Employer or its affiliates, including, without limitation, any benefits or rights conferred upon Employee pursuant to the Employment Agreement, which is hereby terminated and which shall be of no force and effect after the Effective Date.

9.

CONFIDENTIALITY AND INVENTION ASSIGNMENT Concurrently herewith, Employee is executing the attached Employee Proprietary Information and Inventions Agreement. Employee acknowledges that the obligations thereunder are in addition to, and not in lieu of, any confidentiality and invention assignment obligations previously agreed to by Employee.

11.

NON SOLICITATION Employee acknowledges that solicitation of the Employer or its affiliates’ customers, suppliers or employees under certain circumstances would necessarily involve the use or disclosure of Employer’s or its affiliates confidential or proprietary information. Accordingly, while employed by Employer and thereafter for the greater of a) eighteen (18) months after the Effective date, or b) twelve (12) months after termination of Employee’s employment (whether by Employee or Employer, whether with Cause Good Reason or otherwise), Employee shall not, directly or indirectly, for the benefit of the Employee or any third party, (i) call on or solicit any past, present or prospective customer or supplier of the Employer or its affiliates, (ii) interfere with Employer or its affiliates’ relationship with any past, present or prospective customer or supplier or (iii) solicit the employment or engagement of any person employed by or otherwise providing services to the Employer or its affiliates.

12.

ARBITRATION Unless otherwise required by applicable law, any dispute arising out of or relating to the employment relationship, termination thereof, or this Agreement shall be resolved by binding arbitration before an arbitrator experienced in employment law. Said arbitration will be conducted in accordance with the rules applicable to employment disputes of Judicial Arbitration and Mediation Services, and the law of California. Employer shall pay any filing fee and the fees and costs of the arbitrator, unless Employee initiates the claim, in which case Employee will contribute an amount equal to the filing fee for a claim initiated in a court of general jurisdiction in California. Arbitration as provided in this Section shall be the exclusive and binding remedy for any such dispute and will be used instead of any court action, which is hereby expressly waived, except for any request by either of us for temporary or preliminary injunctive relief pending arbitration in accordance with applicable law.

13.

INTERPRETATION AND EXCLUSIVE FORUM The validity, interpretation, construction, and performance of this Agreement shall be governed by the laws of the State of California (excluding any that mandate the use of another jurisdiction’s laws).

14.

ASSIGNMENT This Agreement may not be assigned by Employee. This Agreement may be assigned by Employer to its affiliates or as part of the sale of all or substantially all of its assets or business, after which any reference to “Employer” in this Agreement shall be deemed to be a reference to the affiliate or successor, and the company thereafter shall have no further primary, secondary or other responsibilities or liabilities under this Agreement of any kind. Employer may change its legal name, and a name change shall have no impact on this Agreement.

15.

VALIDITY. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

16.

COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute the same instrument.

17.