As filed with the Securities and Exchange Commission on July 14, 1997.
Registration No.
- --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
Registration Statement Under The Securities Act of 1933
STORAGE COMPUTER CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 02-0450593
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
11 Riverside Street
Nashua, New Hampshire 03062-1373
(603) 880-3005
(Address, including zip code, of principal executive offices)
Restated and Amended Stock Incentive Plan
(Full titles of the plans)
Theodore J. Goodlander
President and Chief Executive Officer
Storage Computer Corporation
11 Riverside Street
Nashua, New Hampshire 03062-1373
(Name and address of agent for service)
(603) 880-3005
(Telephone number, including area code, of agent for service)
copies to:
Gregory L. White, Esq.
Peabody & Arnold
50 Rowes Wharf
Boston, MA 02110
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed
Proposed maximum Amount
Title of Amount maximum aggregate of
securities to be offering price offering registration
to be registered registered per share price fee
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Restated and Amended
Stock Incentive Plan
Common Stock, 2,500,000 shares(1)(2) $10.875(2) $14,769,473(2) $4,475.60(2)
par value $.001
per share
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The 2,500,000 shares shown are shares issued or issuable upon the
exercise of options granted pursuant to the Company's Restated and
Amended Stock Incentive Plan (the "Plan") and its predecessors.
Pursuant to Rule 416(a) under the Securities Act of 1933, as amended,
there are also registered an undetermined number of additional shares
which may be issued if the antidilution provisions of the Plan becomes
operative.
(2) Includes 1,663,500 shares with respect to which options have been
granted at a weighted average exercise price of $3.41 per share. An
additional 836,500 shares are to be offered at prices not presently
determinable. Pursuant to Rule 457(c) and (h), the offering price for
those additional shares is estimated solely for the purpose of
determining the registration fee and is based on the $10.875 per share
price of the Common Stock as reported by the American Stock Exchange
for trading on July 9, 1997.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by the Company with the Securities
and Exchange Commission are incorporated in this Registration Statement by
reference:
(a) The Company's Annual Report on Form 10-KSB for the fiscal
year ended December 31, 1996, Registration No. 001-13616.
(b) The Company's latest Quarterly Report on Form 10-QSB for
the period ended March 31, 1997.
All documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934,
prior to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold, are incorporated herein by reference and constitute a part
hereof from their respective dates of filing.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The legality of the securities offered hereby will be passed upon
for the Company by Peabody & Arnold, 50 Rowes Wharf, Boston, Massachusetts
02110. Thomas A. Wooters, a partner in Peabody & Arnold is the Secretary of the
Company. On September 1, 1992, the Company issued options to purchase 10,000
shares of the Company's Common Stock to Peabody & Arnold at a price of $.10 per
share.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law ("DGCL")
provides that a corporation may indemnify a director, officer, employee or agent
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement in respect of or in successful defense of any action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful.
As permitted by amendments to the DGCL effective in 1986, the
Registrant has included a provision in its Certificate of Incorporation that,
subject to certain limitations, eliminates the ability of the Registrant and its
stockholders to recover monetary damages from a director of the Registrant for a
breach of fiduciary duty as a director. Pursuant to Article TENTH of the
Registrant's Certificate of Incorporation, a director of the corporation shall
not be personally liable to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, except that Article TENTH
shall not eliminate or limit a director's liability (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders; (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law, or (iv) for any transaction from which the director derived an
improper personal benefit. If the Delaware General Corporation Law is amended
after approval by the stockholders of Article TENTH to authorize corporate
action further eliminating or limiting the personal liability of directors, then
the liability of a director of the corporation shall be eliminated or limited to
the fullest extent permitted by the Delaware General Corporation Law, as so
amended from time to time.
Any repeal or modification of Article TENTH shall not increase the
personal liability of any director of this corporation for any act or occurrence
taking place prior to such repeal or modification, or otherwise adversely affect
any right or protection of a director of the corporation existing at the time of
such repeal or modification.
- 2 -
ITEM 8. EXHIBITS.
Exhibit No. Exhibit
- ----------- -------
*4.1. Restated and Amended Stock Incentive Plan.
*4.2. Form of Restated and Amended Stock Incentive Plan Stock Option
Award.
*5.1. Opinion of Peabody & Arnold regarding legality.
*23.1. Consent of Richard A. Eisner & Company, LLP.
*23.2. Consent of Peabody & Arnold (included in its opinion filed as
Exhibit 5.1).
*24.1. Power of Attorney (contained in signature page).
- ------------------------------
*Filed herewith.
- 3 -
ITEM 9. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of this
Registration Statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in this Registration Statement;
(iii) To include any material information with
respect to the plan of distribution not previously
disclosed in this Registration Statement or any material
change to such information in the Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by the
Registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference
in this Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each post-effective amendment
shall be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each filing of
the Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
- 4 -
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Town of Nashua, State of New Hampshire, on this 14th day of
July, 1997.
STORAGE COMPUTER CORPORATION
By: /s/Theodore J. Goodlander
------------------------------
Theodore J. Goodlander
Chief Executive Officer, President
and Director
- 5 -
POWER OF ATTORNEY
The undersigned directors of Storage Computer Corporation hereby
severally constitute and appoint Theodore J. Goodlander our true and lawful
attorney-in-fact and agent with full power of substitution, to execute in our
name and behalf in the capacities indicated below any and all amendments to this
Registration Statement to be filed with the Securities and Exchange Commission
and hereby ratify and confirm all that such attorney-in-fact and agent shall
lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in their
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
/s/Theodore J. Goodlander Chief Executive Officer, President and July 14, 1997
- ------------------------------- Director (Principal Executive Officer)
Theodore J. Goodlander
/s/James C. Louney Chief Financial Officer July 14, 1997
- ------------------------------- Principal Accounting Officer)
James C. Louney
/s/Shigeho Inaoka Director July 14, 1997
- -------------------------------
Shigeho Inaoka
/s/Steven S. Chen Director July 14, 1997
- -------------------------------
Steven S. Chen
</TABLE>
- 6 -
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Exhibit Page No.
- ----------- ------- --------
<S> <C> <C>
4.1 Restated and Amended Stock Incentive Plan. 8
4.2 Form of Restated and Amended Stock Incentive Plan Stock Option Award. 21
5.1 Opinion of Peabody and Arnold regarding legality. 22
23.1 Consent of Richard A. Eisner & Company, LLP. 23
23.2 Consent of Peabody & Arnold (included in its opinion filed as Exhibit 5.1).
24.1 Power of Attorney (contained in signature page).
</TABLE>
- 7 -
EXHIBIT 4.1
STORAGE COMPUTER CORPORATION RESTATED
AND AMENDED STOCK INCENTIVE PLAN
1. PURPOSE OF PLAN
The Restated and Amended Stock Incentive Plan (the "Plan") is intended
to promote the long-term interests of the Company and its shareholders by
providing directors, consultants, officers and other employees of the Company
with an additional incentive arising from capital stock ownership to promote the
financial success of, and to provide future services to, the Company. Those
provisions of the Plan which make reference to Section 422 of the Code (as
defined below) shall apply only to ISOs (as defined below).
2. DEFINITIONS
Unless otherwise required by the context, the following terms when used
in the Plan shall have the meaning set forth in this Section 2:
(a) "Affiliate": Any "parent corporation" or "Subsidiary corporation"
of the Company, as such terms are defined in Sections 424(e) and (f),
respectively, of the Code.
(b) "Agreement": An option agreement evidencing an Award in such form
as adopted by the Committee pursuant to the Plan.
(c) "Award": The grant of an Option under the Plan.
(d) "Board of Directors" or "Board": The Board of Directors of the
Company.
(e) "Change in Control": A "Change in Control" occurs if the Company
(i) ceases operations; (ii) merges or consolidates with another entity and is
not the surviving entity; (iii) sells or otherwise transfers substantially all
of its operating assets; or (iv) if more than fifty percent (50%) of the capital
stock of the Company is transferred in a single transaction or in a series of
related transactions other than a public offering of stock of the Company.
(f) "Code": The Internal Revenue Code of 1986, as amended from time to
time.
(g) "Committee": The Compensation Committee of the Board of Directors
or such other committee appointed by the Board of Directors which meets the
requirements set forth in Section 10(a) hereof.
(h) "Company": Storage Computer Corporation, a Delaware corporation.
(i) "Effective Date": The date on which the Plan shall become effective
as set forth in section 11 hereof.
(j) "Exchange Act": The Securities Exchange Act of 1934, together with
all regulations and rules issued thereunder.
(k) "Exercise Price": In the case of an Option, the price per Share at
which the Shares subject to such Option may be purchased upon exercise of such
Option.
(l) "Fair Market Value": As applied to a specific date, the closing
price, if any, of the Company's Common Stock on such date as reported by the
American Stock Exchange or such other exchange on which the Company's Common
Stock may then be traded, or, if none, the fair market value shall be the
closing price of the Company's Common Stock on the nearest date before the
grant. The Fair Market Value determined by the Committee or the Board in good
faith in such manner shall be final, binding and conclusive on all parties.
(m) "ISO": An Option is intended to qualify as an "incentive stock
option", as defined in Section 422 of the Code or any statutory provision that
may replace such Section.
(n) ""NQSO": An Option not intended to be an ISO and designated to
Nonqualified Stock Option by the Committee.
(o) "Option": Any ISO or NQSO granted under the Plan.
(p) "Original Plan": The 1992 Stock Incentive Plan adopted by the Board
of Directors on September 1, 1992.
(q) "Participant": A non-employee director, officer, consultant or
other key employee of the Company who has been granted an Award under the Plan.
(r) "Plan": This Storage Computer Corporation restated and Amended
Stock Incentive Plan, as the same may be amended from time to time.
(s) "Reporting Person": Such persons as are required to file reports
under Section 16(a) of the Exchange Act.
(t) "SEC": Securities and Exchange Commission.
(u) "Shares": Shares of the Company's authorized but unissued or
reacquired $.001 par value Common Stock, or such other class or kind of shares
or other securities as may be applicable pursuant to the provisions of Section
4(b) hereof.
3. PARTICIPANT
The class of persons eligible to receive Awards under the Plan shall be
those officers,
- 2 -
directors, consultants and other employees of the Company as designated by the
Committee from time to time.
4. SHARES SUBJECT TO PLAN
(a) Maximum Shares. Subject to adjustment by the operation of Section
4(b) hereof, the aggregate maximum number of Shares with respect to which
Options may be granted under the Plan and under the Original Plan is 2,500,000
shares. The Shares with respect to which Options may be granted under the Plan
may be either authorized and unissued shares or issued shares heretofore or
hereafter reacquired and held as treasury shares. An award shall not be
considered to have been made under the Plan or under the Original Plan with
respect to an Option to the extent that it terminates without being exercised,
and new Awards may be granted under the Plan with respect to the number of
Shares as to which such termination has occurred.
(b) Adjustment of Shares and Price. In the event that the Shares are
changed into or exchanged for a different kind or number of Shares of stock or
securities of the Company as the result of any stock dividend, stock split,
combination of shares, exchange of shares, merger, consolidation,
reorganization, recapitalization or other change in capital structure, than the
number of Shares subject to this Plan and to Awards granted hereunder and the
purchase or Exercise Price for such Shares shall be equitably adjusted by the
Committee to prevent the dilution or enlargement of Awards, and any new stock or
securities into which the Shares are changed or for which they are exchanged
shall be substituted for the Shares subject to this Plan and to Awards granted
hereunder; provided, however that fractional Shares may be deleted from any such
adjustment or substitution.
5. GENERAL TERMS AND CONDITIONS OF OPTIONS
(a) General Terms. The Committee shall have full and complete authority
and discretion and as otherwise expressly limited by the Plan, to grant Options
and to provide the terms and conditions (which need not be identical) among
Participants thereof. In particular, the Committee shall prescribe the following
terms and conditions with respect to any Options:
(i) the Exercise Price of any Option determined in
accordance with Section 5(b) hereof.
(ii) the number of Shares subject to and the expiration
date of any Option, provided, however that no Option
shall have a term in excess of ten years from the
date of grant of the Option.
(iii) the manner, time and rate (cumulative or otherwise)
of exercise of such Option: provided that no Option
shall be exercisable earlier than one year from the
date of grant.
- 3 -
(iv) the restrictions, if any to be placed upon such
Option or upon Shares which may be issued upon
exercise of such Option. The Committee may as a
condition of granting any Option require that a
Participant agree not to exercise thereafter one or
more Options previously granted to such Participant.
(v) provisions, if any, for automatic vesting of any
Option upon a "Change in Control" of the Company
(b) Exercise Price. The exercise price of any Option shall be
determined by the Committee. With respect to an ISO, the Exercise Price of an
Optional shall not be less than 100% (or with respect to any participant owning
more than 10% of the combined voting power of all classes of the Company's or an
Affiliate's Stock, (110%) of the Fair Market Value per Share on the date of the
grant. If the Company engages in a merger or business combination with another
entity, options may be issued under the Plant at a price lower than Fair Market
Value per share to employees of such other entity who hold employee options to
purchase securities of such entity and who become employees of the Company or of
a subsidiary of the Company, provided that the Exercise Price and number of
shares shall be determined by the Committee generally in accordance with the
principles set forth in Section 4(b) above. To the extent permitted by the Code,
the Committee may designate such options as ISO'S.
Notwithstanding the foregoing, in no event shall the Exercise Price of
an Option be less than the par value per Share.
6. EXERCISE OF OPTIONS
(a) General Exercise Rights. An Option granted under the Plan shall be
exercisable during the lifetime of the Participant to whom such Option was
granted only by such Participant and, except as provided in Section 6(c), no
such Option may be exercised unless at the time such Participant exercises such
Option, such Participant is an employee, director or consultant of, and has
continuously since the grant thereof been an employed, director or consultant of
the Company. A leave of absence by an employee at the request or with the
approval of the Company shall not be deemed an interruption or termination of
employment, so long as the period of such leave does not exceed 180 days, or, if
longer, so long as the Participant's right to re-employment with the Company is
guaranteed by contract, applicable law, a vote of the Board of Directors or the
Company's corporate policy in effect on the date such leave commences. An Option
also shall contain such conditions upon exercise (including, without limitation,
conditions limiting the time of exercise to specified periods) as may be
required to satisfy applicable regulatory requirements, including, without
limitation, Rule 16b-3 (or any successor rule) promulgated by the SEC.
(b) Notice of Exercise. An Option may not be exercised with respect to
less than 100 Shares, unless the exercise relates to all Shares covered by the
Options at the date of
- 4 -
exercise. An Option shall be exercised by delivery of written notice to the
Company. Such notice shall state the election to exercise the Option and the
number of whole Shares in respect of which it is being exercised, and shall be
signed by the person or persons so exercising the Option. In the case of an
exercise of an Option such notice shall either: (a) be accompanied by payment of
the full Exercise Price and all applicable withholding taxes, in which event the
Company shall deliver any certificate(s) representing Shares which the
Participant is entitled to receive as a result of the exercise as soon as
practicable after the notice has been received; or (b) fix a date (not less than
5 nor more than 15 business days from the date such notice has been received by
the Company) for the payment of the full Exercise Price and all applicable
withholding taxes, against delivery by the Company of any certificate(s)
representing Shares which the Participant is entitled to receive as a result of
the exercise. Payment of such Exercise Price and withholding taxes shall be made
as provided in Sections 6(d) and 9 hereof, respectively. In the event the Option
be exercised pursuant to Section 6(c)(i) hereof, by any person or persons other
than the Participant, such notice shall be accompanied by appropriate proof of
the right of such person or persons to exercise the Option.
(c) Exercise After Termination of Employment. Subject to Section 6(a)
and except as otherwise determined by the Committee at the date of the grant of
the Option, upon termination of a Participant's employment with the Company,
such Participant (or in the case of death, the persons) to whom the Option is
transferred (by will or the laws of descent and distribution) may exercise such
Option during the following periods of time (but in no event after the normal
expiration date of such Option) to the extent that such Participant was entitled
to exercise such Options at the date of such termination:
(i) in the case of termination as a result of death,
disability or retirement of the Participant, the
Option shall remain exercisable for one year after
the date of termination; for this purpose,
"disability" shall mean such physical or mental
condition affecting the Participant as determined by
the Committee in its sole discretion and "retirement"
shall mean voluntary retirement under a retirement
plan, policy or program of the Company;
(ii) in the case of termination for cause or the
Participant's voluntary resignation, the Option shall
immediately terminate and shall no longer be
exercisable; and
(iii) in the case of termination for any reason other than
those set forth in subparagraphs (i) and (ii) above,
the Option shall remain exercisable for three months
after the date of termination.
TO THE EXTENT THE OPTION IS NOT EXERCISED WITHIN A TIMELY MANNER AS SET FORTH
ABOVE, AND IN THE PROPER MANNER AS PRESCRIBED HEREIN, THE OPTION SHALL
AUTOMATICALLY TERMINATE AT THE END OF THE APPLICABLE PERIOD OF TIME.
Notwithstanding the foregoing provisions, failure
- 5 -
to exercise an ISO within the periods of time prescribed under Sections 421 and
422 of the Code shall cause an ISO to cease to be treated as an "incentive stock
option" for purposes of Section 421 of the Code.
(d) Payment of Option Exercise Price. Upon the exercise of an Option,
payment of the Exercise Price shall be made either (I) in cash (by certified
check, bank draft or money order), (ii) with the consent of the Committee and
subject to Section 6(c) hereof, by delivering the Participant's duly executed
promissory note and related documents, (iii) with the consent of the Committee,
by delivering Shares already owned by the Participant valued at Fair Market
Value; provided that no shares received upon exercise of the Option thereafter
may be exchanged to pay the Option price for additional Shares within the
following six months, or (iv) by a combination of the foregoing forms of
payment.
(e) Payment with Loan. The Committee may in its sole discretion assist
any Participant in the exercise of one or more Options granted to such
Participant in the exercise of one or more Options granted to such Participant
under the Plan by authorizing the extension of a loan to such Participant from
the Company. Except as otherwise provided in this Section 6(e), the terms of any
loan (including the interest rate and terms of repayment) shall be established
by the Committee in its sole discretion. The maximum amount of any loan shall
not exceed 80% of the Exercise Price payable from the Shares being purchased.
Any such loan by the Company shall be with full recourse against the Participant
to whom such loan is granted, shall be secured in whole or in part by the Shares
so purchased, and shall bear interest at a rate not less than the minimum
interest rate required at the time of purchase of the Shares in order to avoid
having imputed interest or original issue discount under Sections 483 or 1202 of
the Code. In addition, any such loan by the Company shall become immediately due
and payable in full at the option of the Company, upon termination of the
Participant's employment with or service to the Company for any reason
whatsoever, or upon a sale of any shares acquired with such loan to the extent
of the cash and fair market value of any property received by the Participants
in such sale. The Committee may make arrangements for the application of payroll
deduction from compensation payable to the Participant to amounts owing to the
Company under any such loan. Until any loan by the Company under this Section
6(e) is fully paid in cash, the Shares shall be pledged to the Company as
security for such loan and the Company shall retain physical possession of the
stock certificates evidencing the Shares so purchased together with a duly
executed stock power for such Shares. No loan shall be made hereunder unless
counsel for the Company shall be satisfied that the loan and the issuance of
Shares funded thereby, will be in compliance with all applicable federal, state
and local laws.
(f) Rights as a Shareholder. A Participant shall have no rights as a
shareholder with respect to any Shares issuable or exercise of any Option, until
the date of the issuance of a stock certificate to the Participant for such
Shares. No adjustment shall be made for dividends (ordinary or extraordinary,
whether in cash, securities or other property) or distributions or other rights
for which the record date is prior to the date such stock certificate is issued,
except as provided in Section 4(b) hereof.
- 6 -
(g) Effect of Merger, Etc. In the event of a consolidation or merger or
sale of all or substantially all of the assets of the Company in which
outstanding shares of Common Stock are exchanged for securities, cash or other
property of any other corporation or business entity, or in the event of a
liquidation of the Company, the Board of Directors of the Company or the Board
of Directors of any Corporation assuming the obligations of the Company, may in
its discretion take any one or more of the following actions, as to outstanding
options: (i) provide that such options shall be assumed, or equivalent options
shall be substituted, by the acquiring or succeeding corporation (or an
affiliate thereof), provided that any such options substituted for ISO's shall
meet the requirements of Section 424 of the Code; (ii) upon written notice to
the optionees, provide that all unexercised options will terminate immediately
prior to the consummation of such transaction unless exercised by the optionee
within a specified period following the date of such notice; (iii) in the event
of a merger under the terms of which holders of the Common Stock of the Company
will receive upon consummation thereof, a cash payment for each share
surrendered in the merger (the "Merger Price"), make or provide for a cash
payment to the optionees equal to the difference between (A) the Merger Price
times the number of shares of Common Stock subject to such outstanding options
(to the extent then exercisable at prices not in excess of the Merger Price) and
(B) the aggregate exercise price of all such outstanding options in exchange for
the termination of such options; and (iv) provide that all or any outstanding
options shall become exercisable in full immediately prior to such event;
provided that notwithstanding anything to the contrary in this Section 6(g), any
action taken by the Board of Directors hereunder shall be in compliance with
Rule 16b-3 and the conditions thereof necessary to maintain qualification of the
Plan under Rule 16b-3. In the case of any Option which by the terms of the grant
thereof (or the agreement or instrument governing such grant) or pursuant to a
decision by the Board of Directors under this Section 6(g) provides for such
Option becoming fully exercisable upon a Change In Control or otherwise under
this Section 6, such Option shall be deemed vested on the day immediately prior
to the day on which such Change in Control occurs and Participants holding such
Options shall be given prior written notice of such Change in Control sufficient
to permit them to exercise such Options.
(h) Manner of Exercise. Subject to the conditions set forth in the
Plan, the Participant may exercise the Option(s) with respect to all or any part
of the number of such shares then exercisable. The options evidenced by an
Award, may be exercised subject to the requirements herein set forth by:
(i) giving written notice to exercise the option with
respect to a specified number of full shares;
(ii) exercising as to not less than one hundred (100)
shares at any one time, unless the number of shares
to be purchased upon such exercise is the total
number remaining under such Option granted;
(iii) making full payment to the Company of the amount of
such Option Price for the number of shares with
respect to which the option is then
- 7 -
exercised, in accordance with the terms and
conditions of Section 6(d) herein; and
(iv) executing an undertaking and such other documents as
the Company, in its sole discretion, shall deem
necessary to lawfully effectuate the transfer of
shares, evidencing the exercise of the option and/or
to determine whether registration is then required
under the Securities Act of 1993, or any other laws
then in effect.
(i) Exercise of Option and Termination. The right of exercise is
cumulative so that if the Option is not exercised to the
maximum extent permissible during any exercise period, it is
exercisable, in whole or in part, with respect to all shares
not so purchased, at any time prior to the Expiration Date,
Last Exercise Date or earlier termination of any such Option.
No Option may be exercised at any time on or after the
Expiration Date, for any reason whatsoever. Subject to the
provisions of Section 6 herein, to the extent that any Option,
in whole or in part, is not exercised in a timely manner, the
Option shall terminate and the shares shall automatically
revert to the Plan.
7. SPECIAL PROVISIONS FOR ISOS
Any provision of the Plan to the contrary notwithstanding, the
following special provisions shall apply to all ISOs granted under the Plan:
(i) the Option must be expressly designated as an ISO by
the Committee and in an Award;
(ii) no ISO shall be granted more than ten years from the
effective date of the Original Plan and no ISO shall
be exercisable more than ten years from the date such
ISO is granted;
(iii) the Exercise Price of any ISO shall not be less than
the Fair Market Value per Share on the date such ISO
is granted; provided however, that with respect to an
ISO granted to any individual who, at the time such
ISO is granted, owns stock possessing more than 10%
of the total combined voting power of all classes of
stock of the Company or any Affiliate, the Exercise
Price of such ISO shall be at least 110% of the Fair
Market Value per Share at the date of grant;
(iv) the aggregate Fair Market Value (determined as of the
time any ISO is granted) of any Company stock with
respect to which any ISOs granted to a Participant
are exercisable for the first time by such
Participant during any calendar year (under this Plan
and all other stock option plans of the Company and
any predecessor) shall not exceed $100,000
- 8 -
as required under Section 422 of the Code. (To the
extent $100,000 limit is exceeded, the $100,000 in
Options, measured as described above, granted earlier
in time will be treated as ISOs), and
(v) any other terms and conditions as may be required in
order that the ISO qualifies as an "incentive stock
option" under Section 422 of the Code or successor
provision.
8. RESTRICTIONS ON TRANSFERS; GOVERNMENT REGULATIONS
(a) Awards not Transferable. No Option nor any interest of a
Participant under the Plan in any instrument evidencing any Option under the
Plan may be assigned, encumbered or transferred, except, in the event of the
death of a Participant, by will or the laws of descent and distribution or, in
the case of NQSOs, pursuant to a qualified domestic relations order as defined
by the Code or Title 1 of the Employee Retirement Income Security Act or rules
thereunder.
(b) Government Regulations. This Plan, the granting of Awards under
this Plan and the issuance or transfer of Shares (and/or payments of money)
pursuant thereto, are subject to all applicable Federal and state laws, rules
and regulations and to such approvals by any regulatory or governmental agency
(including without limitation "no action" positions of the Securities and
Exchange Commission) which may, in the opinion of counsel to the Company, be
necessary or advisable in connection therewith.
Without limiting the generality of the foregoing, no Awards may be
granted under this Plan, and no Shares shall be issued by the Company, nor cash
payments by the Company, pursuant to or in connection with any such Award,
unless and until, in each such case, all legal requirements applicable to the
issuance or payment, which, in the opinion of counsel to the Company, have been
complied with in all respects. In connection with any stock issuance or
transfer, the person acquiring the Shares shall, if requested by the Company,
give assurances satisfactory to counsel to the Company, in respect of such
matters as the Company may deem desirable to assure compliance with all
applicable legal requirements. The Company shall not be required to deliver any
Shares under the Plan prior to (I) the admission of such Shares to listing or
for quotation on any stock exchange, or automated quotation system on which such
Shares may then be listed or quoted, and (ii) the completion and effectiveness
of such registration or other qualification of such Shares under state or
federal law, rule or regulation, as the Committee shall determine to be
necessary or advisable.
9. TAX WITHHOLDING
The Company shall have the right to withhold from amounts due
Participants, or to collect from Participants directly, the amount which the
Company deems necessary to satisfy any taxes required by law to be withheld at
any time by reason or participation in the Plan, and the obligations of the
Company under the Plan shall be conditional on payment of such
- 9 -
taxes. The Participant may, prior to the due date of any taxes, pay such amounts
to the Company, in cash, or with the consent of the Committee, in Shares (which
shall be valued at their Fair Market Value on the date of payment); provided
however, that not notwithstanding the foregoing, in the case of a Reporting
Person, no election to use Shares for the payment of withholding taxes shall be
effective unless made in compliance with any applicable requirements of Rule
16b-3 under the Exchange Act. There is no obligation under this Plan that any
Participant be advised of the existence of the tax or the amount required to be
withheld. Without limiting the generality of the foregoing, in any case where it
determines that a tax is or will be required to be withheld in connection with
the issuance or transfer of Shares under this Plan, the Company may, pursuant to
such rules as a Committee may establish, reduce the number of such Shares so
issued or transferred by such number of Shares as the Company may deem
appropriate, in its sole discretion, to accomplish such withholding, or make
such other arrangements as it deems satisfactory. Notwithstanding any other
provisions of this Plan, the Committee may impose such conditions on the payment
of any withholding obligation as may be required to satisfy applicable
regulatory requirements including, without limitation, Rule 16b-3 (or any
successor provision) promulgated by the Securities and Exchange Commission.
The Company makes no representation or warranty to the Participants,
their successors and/or assigns, regarding the possible tax treatment or effect
to be given to the transaction and events contemplated by an Award and the Plan,
including, but not limited to, registration of an Award, Option(s) and/or
transfers of stock certificates, and the Company hereby advises and directs the
Participants to seek their own individual counsel and advice concerning these
matters. The Participants agree that they will not rely upon the advice of any
person or persons associated with the Company, including, but not limited to;
possible adverse tax consequences of this transaction, Option(s) the Plan, or
the exercise of any Option(s); and will waive any claim, that the Participants,
or their successors and assigns, may have against the Company, and will agree to
hold harmless, and will indemnify the Company against any such claim(s) and/or
liability.
10. ADMINISTRATION OF THE PLAN
(a) The Committee. Except as otherwise provided by the Board, the Plan
shall be administered by the Committee, which shall be comprised of two or more
members of the Board of Directors, each of whom shall be a "disinterested
person" as defined in Rule 16b-3 (or successor provision) promulgated by the
Securities and Exchange Commission. In the absence of specific designation by
the Board of Directors, the Committee shall consist of those members of the
Board of Directors who, from time to time, shall be "disinterested persons" as
so defined.
(b) Committee Action. A majority of the members of the Committee at the
time in office, shall constitute a quorum for the transaction of business and
any determination or action may be taken at the meeting of a majority vote or
may be taken without a meeting by a written resolution signed by all members of
the Committee. All decisions and
- 10 -
determinations of the Committee shall be final, conclusive and binding upon all
Participants and upon all persons claiming any rights under the Plan with
respect to any Options. Members of the Board of Directors and members of the
Committee acting under the Plan shall be fully protected in relying in good
faith upon the advice of counsel and shall incur no liability except for willful
misconduct in the performance of their duties.
(c) Committee Authority. In amplification of the Committee's power and
duties, but not by way of limitation, the Committee shall have full authority
and power to:
(I) construe and interpret the provisions of the Plan and
make rules and regulations for the administration of
the Plan not inconsistent with the Plan;
(ii) decide all questions of eligibility for Plan
participation and for the grant of Awards;
(iii) adopt forms of Awards and other documents consistent
with the Plan;
(iv) engage agents to perform legal, accounting and other
such professional services as it may deem proper for
administering the Plan; and
(v) take such other actions as may be reasonable,
required or appropriate to administer the Plan or to
carry out the Committee activities contemplated by
other sections of this Plan.
(d) Indemnification. In addition to such other rights of
indemnifications as they may have as directors or as members of the Committee,
the Board of Directors and the members of the Committee shall be indemnified by
the Company against the reasonable expenses, including court costs and
reasonable attorney's fees actually incurred in connection with the defense of
any action, suit or proceeding, or in connection with any appeal therein, to
which they or any of them may be a party by reason of any action taken or
failure to act under or in connection with the Plan or any Award granted
hereunder, and against all amounts paid by them in settlement thereof, or paid
by them in satisfaction of a judgment in any such action, suit or proceeding,
except where such indemnification is expressly prohibited by applicable law.
11. EFFECTIVE DATE
The effective date of the Original Plan shall be September 1, 1992 (the
date it was approved by the Board of Directors). The Effective Date of the
Storage Computer Corporation Amended and Restated Plan shall be October 24, 1994
(the date it was approved by the Board of Directors, subsequently ratified by
the shareholders' approval of the Plan). The effective date of this second
Amended and Restated Plan, shall be April 23, 1995, and shall be subject to
shareholder approval within twelve months of the effective date. If the
- 11 -
proposal is not subsequently approved by the shareholders within twelve months
of the effective date, the Storage Computer Corporation Amended and Restated
Plan, as previously adopted, will remain in full force and effect. Nothing
contained in this Plan shall be deemed to limit or adversely amend or modify the
terms of, or rights of Participants under, Options granted prior to the
Effective Date in any manner which derogates from or otherwise diminishes the
terms of, or rights under, such Options.
12. AMENDMENT AND TERMINATION
(a) The Plan. (i) Amendment. The Board of Directors may amend the Plan
from time to time in its sole discretion; provided however, that no such
amendment shall, without the approval of the shareholders of the Company in
accordance with the laws of the State of Delaware, Section 422 of the Code and
Rule 16b-3 under the Exchange Act: (A) change the class of persons eligible to
receive Awards or otherwise materially modify the requirement as to eligibility
for participation in the Plan; (B) increase the aggregate number of Shares with
respect to which Awards may be made under the Plan; (C) materially increase the
benefits accruing the Participants under the Plan; or (D) remove the
administration of the Plan from the Committee or render any member of the
Committee eligible to receive an Award under the Plan while serving thereon. Any
purported amendment in violation of these restrictions shall be void and of no
effect. Furthermore, no amendment shall impair the rights of any Participant
under any Award theretofore made under the Plan, without the Participant's
consent.
(ii) Termination. The Board of Directors may suspend or
terminate the Plan at any time. Upon termination of
the Plan, no additional Awards shall be granted under
the Plan; provided however, that the terms of the
Plan shall continue in full force and effect with
respect to outstanding and unexercised Options
granted under the Plan and Shares issued under the
Plan.
(b) Awards. Subject to the terms and conditions and the limitations of
the Plan, the Committee may, in the exercise of its sole discretion, modify,
extend or renew the terms of outstanding Awards granted under the Plan, or
accept the surrender of outstanding Awards (to the extent not theretofore
exercised). Without limiting the generality of the foregoing, the Committee may
in its discretion at any time accelerate the time in which any Option is
exercisable, subject to compliance with the requirements of Rule 16b-3 (or
successor provision) promulgated by the Securities and Exchange Commission.
Notwithstanding the foregoing, however, no modifications of an Award shall,
without the consent of the Participant, impair any rights or obligations under
any Awards theretofore granted under the Plan.
13. MISCELLANEOUS
(a) Employment. Neither the establishment of the Plan nor any
amendments
- 12 -
thereto, nor the granting of any Award under the Plan, shall be construed as in
any way modifying or affecting or evidencing any intention or understanding with
respect to, the terms of the employment of or service of any Participant with,
or the nomination of any Participant to stand for election as a director, by the
Company. No person shall have a right to be granted Awards or having been
selected as a Participant for one Award, to be so selected again.
(b) Multiple Awards. Subject to the terms and restrictions set forth in
the Plan, a Participant may hold more than one Award.
(c) Written Notice. As used herein, any notices required hereunder
shall be in writing and shall be given in the forms, if any, provided or
specified by the Committee. Written notice shall be effective upon actual
receipt by the person to whom such notice is to be given, provided however, that
in the case of notices to Participants and their heirs, legatees, and legal
representatives, notice shall be effective upon delivery, if delivered
personally or three business days after mailing, registered first class postage
prepaid to the last known address to whom notice is given. Written notice shall
be given to the Committee and the Company at the following address, or such
other address as may be specified from time to time.
Storage Computer Corporation
11 Riverside Street
Nashua, New Hampshire 03062
Attn: Compensation Committee
(d) Applicable Law; Severability. The Plan shall be governed by and
construed in all respect in accordance with the laws of the State of Delaware.
If any provisions of the Plan shall be held by a court of competent jurisdiction
to be invalid or unenforceable, the remaining provisions hereof shall continue
to be fully effective.
(e) Compliance with SEC Regulations. It is the Company's intent that
the Plan comply in all respects with Rule 16b-3 under the Exchange Act and any
successor rule pursuant thereto. If any provision of this Plan is later found
not to be in compliance with Rule 16b-3, the provision shall be deemed void. All
Option grants to, and all exercises of Options by, Participants and Reporting
Persons under this Plan, shall be executed in accordance with the requirements
of Section 16 of the Exchange Act.
(f) Participant Warranty. The Participant represents and warrants to
the Company, its successors and assigns, the Committee and all other interested
persons, that he/she is of full age and that any stock purchased by him/her
hereunder, and his/her successors and/or assigns, under any Option(s), is to be,
and is being purchased for investment and not with a view to the distribution
thereof.
- 13 -
Exhibit 4.2
PLAN: INCENTIVE STOCK OPTION_______ NON-QUALIFIED STOCK OPTION ______
STOCK OPTION AWARD
The Stock Option Award is made and entered into this _______day of
___________________, 199__, by and between Storage Computer Corporation, a
Delaware Corporation, whose address is 11 Riverside Street, Nashua, New
Hampshire, and _____________________________________________ whose address is
______________________________________________________________________.
A copy of Storage Computer Corporation's Restated and Amended Stock Incentive
Plan is attached hereto.
Subject to the limitations provided in the Plan, the Award of the stated Options
vests during the respective periods as herein stated.
Number of Shares: ______________ Price Per Share: ______________
Exercise Period No. of Shares Exercisable
--------------- -------------------------
On or after, but not
prior to:
On or after:
On or after:
On or after:
Last Exercise Date due to Option expiration: ___________________
IN WITNESS WHEREOF, Storage Computer Corporation has caused this Award
to be signed by its duly authorized representative, and the Optionee has duly
signed this Award as indication of his acceptance of the Award.
STORAGE COMPUTER CORPORATION ACCEPTED:
By: _______________________________
_____________________________________
Date:_______________________________ Date:
____________________________________
PEABODY & ARNOLD
COUNSELLORS AT LAW
50 ROWES WHARF
BOSTON, MASSACHUSETTS 02110-3342
TELEPHONE (617) 951-2100
FAX (617) 951-2125
July 14, 1997
Storage Computer Corporation
11 Riverside Street
Nashua, NH 03062
Re: Registration Statement on Form S-8 Relating to the
Restated and Amended Stock Incentive Plan (the "Plan")
of Storage Computer Corporation (the "Company")
-----------------------------------------------
Dear Sir or Madam:
Reference is made to the above-captioned Registration Statement on Form
S-8 (the "Registration Statement") filed by the Company on or about July 14,
1997 with the Securities and Exchange Commission under the Securities Act of
1933, as amended, relating to an aggregate of 2,500,000 shares of Common Stock,
$.001 par value per share, of the Company issuable pursuant to the Plan.
We have examined, are familiar with, and have relied as to factual
matters solely upon, copies of the Plan, the Amended and Restated Certificate of
Incorporation and the Amended and Restated By-Laws of the Company, the minute
books and stock records of the Company and originals of such other documents,
certificates and proceedings as we have deemed necessary for the purpose of
rendering this opinion.
Based on the foregoing, we are of the opinion that the Shares have been
duly authorized and, when issued and paid for in accordance with the terms of
the Plan and according to the terms of any option or purchase right granted
thereunder and duly authorized by the Company's Board of Directors or
Compensation Committee and/or any related agreements with the Company, the
Shares will be validly issued, fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement, and further consent to the use of our name wherever appearing in the
Registration Statement and any amendments thereto.
Very truly yours,
/s/Peabody & Arnold
------------------------
Peabody & Arnold
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration Statement on
Form S-8 of Storage Computer Corporation (the "Company") of our report dated
January 31, 1997 on the consolidated financial statements of the Company and
subsidiaries for each of the years in the three-year period ended December 31,
1996 appearing in the Company's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1996.
Richard A. Eisner & Company, LLP
/s/ Richard A. Eisner & Company, LLP
Cambridge, Massachusetts
July 11, 1997
