X0202 4 2006-10-30 0 0000901696 MTI TECHNOLOGY CORP MTIC 0001379805 KERLEY WILLIAM J C/O MTI TECHNOLOGY CORPORATION 17595 CARTWRIGHT ROAD IRVINE CA 92614 0 1 0 0 COO Services Division Common Stock (restricted shares) 2006-10-30 4 A 0 150000 0.01 A 160000 D Common Stock (restricted shares) 2006-10-30 4 A 0 115588 0.01 A 275588 D Stock Options (right to purchase) 0.85 2006-10-30 4 A 0 310486 0.00 A 2016-10-30 Common Stock 310486 310486 D Pursuant to reporting person?s Employment Agreement dated 7-5-06 with MTI, the restricted stock awarded was issued under the MTI 2006 Stock Incentive Plan (CT) (the "2006 Plan"). The 2006 Plan was approved by MTI?s stockholders on 10-30-06. Vesting Commencement Date: 7-5-06. Grant Date: 10-30-06. Vesting Schedule: 36-month (12-month Cliff & Monthly Thereafter): 1/3 of the shares shall vest 12 months after the Vesting Commencement Date. 1/24th of the remaining unvested shares shall vest at the end of the 13th month & each month thereafter; therefore, shares will be 100% vested after 36 months of continuous services from Vesting Commencement Date. If the reporting person is terminated "without cause" or resigns for "good reason" (each as defined in the Employment Agreement), the restricted stock shall immediately vest with respect to the greater of (x) the number of shares, if any, that would have vested if the reporting person continued service to MTI for 1 year after termination of employment, or (y) two thirds of the aggregate number of shares. Pursuant to the Asset Purchase Agreement dated June 6, 2006, as amended June 28, 2006 and July 5, 2006, by and between MTI Technology Corporation and Collective Technologies LLC, the reporting person was awarded shares of restricted stock under the MTI 2006 Stock Incentive Plan (CT) (the "2006 Plan"). The 2006 Plan was approved by MTI?s stockholders on 10-30-06. Vesting Commencement Date: 7-5-06. Grant Date: 10-30-06. Vesting Schedule: All of the shares subject to the restricted stock shall vest six (6) months after the closing date (July 5, 2006) of MTI?s acquisition of Collective Technologies LLC. If the reporting person?s employment is terminated without cause prior to the date that is six (6) months after the closing date, then such restricted stock shall vest in full on the date of termination of employment. Pursuant to the Asset Purchase Agreement dated June 6, 2006, as amended June 28, 2006 and July 5, 2006, by and between MTI Technology Corporation and Collective Technologies LLC, the reporting person was granted stock options under the MTI 2006 Stock Incentive Plan (CT) (the "2006 Plan"). The 2006 Plan was approved by MTI?s stockholders on 10-30-06. Vesting Commencement Date: July 5, 2006. Grant Date: October 30, 2006. Vesting Schedule: 36-month (3 year) Vesting with 6-month Cliff and Monthly Thereafter. Six-thirty-sixths (6/36th) of the shares subject to the option shall vest six (6) months after the Vesting Commencement Date. One-thirtieth (1/30th) of the remaining unvested shares subject to the option shall vest at the end of the 7th month and each month thereafter, such that the option will be one hundred percent (100%) vested after thirty-six (36) months of Continuous Services from the Vesting Commencement Date. Unvested options shall be cancelled upon termination of employment. WILLIAM J. KERLEY 2006-11-01