<PAGE> 1
As filed with the Securities and Exchange Commission on March 31, 1998.
Registration No. 333-_________
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)
Storage Computer 401(k) Savings Plan
(Full title of the plan)
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:
Thomas A. Wooters, Esq.
Gregory L. White, Esq.
Peabody & Arnold LLP
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 (1) registered (2) per share (3) price fee
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 75,000 shares $6.8125 $510,938 $151.00
par value $.001
per share
- ---------------------------------------------------------------------------------------------
</TABLE>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
this registration statement ("Registration Statement") also covers an
indeterminate amount of interests to be offered or sold pursuant to the
Storage Computer 401(k) Savings Plan (the "Plan").
(2) The amount of shares registered hereunder is based upon an estimate of
the number of shares of common stock, $.001 par value per share
("Common Stock"), to be issued pursuant to the Plan. In addition,
pursuant to Rule 416, there are also being registered such additional
shares of Common Stock as may become issuable pursuant to stock splits,
stock dividends or similar transactions.
(3) Estimated solely for the purpose of computing the registration fee,
pursuant to Rule 457(c) and (h), on the basis of the average of the
high and low prices of the Common Stock, approximately $7.00 and
$6.625, respectively, as reported on the American Stock Exchange on
March 27, 1998.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by Storage Computer Corporation (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, 1997; and
(b) The description of the Company's Common Stock, $.001
par value per share, contained in the Company's
Registration Statement on Form 8-A, including any amendment
or report filed for the purpose of updating such
description.
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 4. DESCRIPTION OF SECURITIES.
Not applicable.
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 LLP, 50 Rowes Wharf, Boston, Massachusetts
02110. Thomas A. Wooters, a partner in Peabody & Arnold LLP, 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 LLP at a price of $.10
per share.
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<PAGE> 3
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
Company has included a provision in its Certificate of Incorporation that,
subject to certain limitations, eliminates the ability of the Company and its
stockholders to recover monetary damages from a director of the Company for a
breach of fiduciary duty as a director. Pursuant to Article TENTH of the
Company's Certificate of Incorporation, a director of the Company shall not be
personally liable to the Company 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 Company 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 DGCL, or (iv) for any transaction from
which the director derived an improper personal benefit. If the DGCL 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 Company shall be eliminated or limited to the
fullest extent permitted by the DGCL, as so amended from time to time.
Any repeal or modification of Article TENTH shall not increase the
personal liability of any director of the Company 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 Company existing at the time of
such repeal or modification.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
EXHIBIT NO. EXHIBIT
*4.1. Storage Computer 401(k) Savings Plan Summary Plan Description.
*5.1. Opinion of Peabody & Arnold LLP regarding legality.
*23.1. Consent of Richard A. Eisner & Company, LLP.
*23.2. Consent of Peabody & Arnold LLP (included in its opinion filed as
Exhibit 5.1).
*24.1. Power of Attorney (contained in signature page).
- ------------------------------
*Filed herewith.
The Company has submitted or will submit the Plan and any amendment
thereto to the Internal Revenue Service ("IRS") in a timely manner and has made
or will make all changes required by the IRS in order to qualify the Plan.
-3-
<PAGE> 4
ITEM 9. UNDERTAKINGS
(a) The Company 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 Securities and Exchange Commission by the Company 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 Company hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of the Company'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 this 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 Company pursuant to the foregoing provisions, or otherwise, the
Company 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 Company of expenses
incurred or paid by a director, officer or controlling person of the Company 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 Company 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-
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Company 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 31st day of
March, 1998.
STORAGE COMPUTER CORPORATION
By: /S/ THEODORE J. GOODLANDER
-------------------------------
Theodore J. Goodlander
Chief Executive Officer, President and Director
Pursuant to the requirements of the Securities Act of 1933, the
trustees of the Plan have 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 31st day of March, 1998.
STORAGE COMPUTER 401(K) SAVINGS PLAN
By: /S/ THEODORE J. GOODLANDER
-------------------------------
Theodore J. Goodlander, Trustee of the Plan
-5-
<PAGE> 6
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 March 31, 1998
-------------------------- Director (Principal Executive Officer)
Theodore J. Goodlander
/S/ JAMES C. LOUNEY Chief Financial Officer March 31, 1998
- ------------------- (Principal Accounting Officer)
James C. Louney
/S/ SHIGEHO INAOKA Director March 31, 1998
Shigeho Inaoka
/S/ STEVEN S. CHEN Director March 31, 1998
- ------------------
Steven S. Chen
</TABLE>
-6-
<PAGE> 7
INDEX TO EXHIBITS
EXHIBIT NO. EXHIBIT
4.1 Storage Computer 401(k) Savings Plan Summary Plan Description.
5.1 Opinion of Peabody & Arnold LLP regarding legality.
23.1 Consent of Richard A. Eisner & Company, LLP.
23.2 Consent of Peabody & Arnold LLP (included in its opinion filed
as Exhibit 5.1).
24.1 Power of Attorney (contained in signature page).
-7-
<PAGE> 1
- --------------------------------------------------------------------------------
Storage Computer
401(k) Savings Plan
Summary Plan Description
- --------------------------------------------------------------------------------
version 1/98
TABLE OF CONTENTS
INTRODUCTION TO YOUR PLAN 3
- -------------------------------------------------------------------------------
GENERAL INFORMATION ABOUT YOUR PLAN 4
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ELIGIBILITY AND PARTICIPATION 5
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ELIGIBILITY 5
PARTICIPATION REQUIREMENTS 5
ENTRY DATE 5
YOUR CONTRIBUTIONS TO THE PLAN 5
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COMPENSATION 5
ELECTIVE DEFERRALS 6
YOUR EMPLOYER'S CONTRIBUTIONS TO THE PLAN 6
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EMPLOYER MATCHING CONTRIBUTIONS 6
BENEFITS UNDER YOUR PLAN 7
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NORMAL RETIREMENT AGE 7
DISABILITY 7
IN-SERVICE DISTRIBUTIONS 7
HARDSHIP WITHDRAWALS 7
LOAN AVAILABILITY 8
STATEMENT OF ERISA RIGHTS 11
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CLAIMS PROCEDURES 12
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PENSION BENEFIT GUARANTY CORPORATION: 13
- -------------------------------------------------------------------------------
2
<PAGE> 2
INTRODUCTION TO YOUR PLAN
Your Employer has instituted this Plan to reward efforts made by Employees who
contribute to the overall success of the Company. The Plan is exclusively for
the benefit of Participants and their Beneficiaries. The purpose of the Plan is
to help you build financial security for your retirement and to help protect you
and your Beneficiaries in the event of your death or Disability.
This Plan is a 401(k) plan. It offers you a built in savings system through
pre-tax payroll deductions. It also offers attractive tax advantages, the
freedom to choose investments according to your needs, the flexibility to change
your investments as your needs change, and a way to build capital for a secure
retirement.
Under the terms of this Plan, you may choose to defer a portion of your current
salary, which your Employer then contributes to the plan on a pre-tax basis.
Contributions are not subject to Federal income tax, and in most cases are also
exempt from state or local income taxes. Since your contributions are not
subject to Federal income tax, your taxable income is reduced.
The laws governing plans like this one contain many provisions that may affect
your retirement. You should contact your Plan Administrator with any questions
about the Plan before you make any decisions related to your retirement. For
specific tax advice, you should contact your tax advisor.
This Summary Plan Description (SPD) summarizes the key features of your Plan,
and your rights, obligations and benefits under the Plan. Some of the statements
made in this SPD are dependent upon this Plan being "qualified," or approved by
the Internal Revenue Service. Please contact your Plan Administrator with any
questions you may have after you have read this summary.
Every effort has been made to make this description as accurate as possible.
However, this booklet is not a Plan document. This SPD is not meant to
interpret, extend, or change the provisions of the Plan in any way. The terms of
the Plan are stated in and will be governed in every respect by the Plan
document. Your right to any benefit depends on the actual facts and the terms
and conditions of the Plan document, and no rights accrue by reason of any
statement in this summary. A copy of the Plan document is available at the
principal office of your Employer for inspection. You, your Beneficiaries, or
your legal representatives may request to inspect the Plan Document at any
reasonable time.
3
<PAGE> 3
GENERAL INFORMATION ABOUT YOUR PLAN
EMPLOYER/PLAN SPONSOR Storage Computer
AND PLAN ADMINISTRATOR 11 Riverside Street
Nashua, NH 03062-1373
(603) 880-3005
EMPLOYER'S TAX ID NUMBER: 02-0450593
PLAN TRUSTEE(S): James C. Louney
Theodore J. Goodlander
11 Riverside Street
Nashua, NH 03062-1373
PLAN NAME: Storage Computer 401(k) Savings Plan
PLAN NUMBER: 001
PLAN EFFECTIVE/RESTATEMENT DATE: February 1, 1998 [401(k)]
ORIGINAL EFFECTIVE DATE: N/A
EMPLOYER'S TAXABLE YEAR: January 1st through December 31st
PLAN YEAR END: December 31st
TYPE OF RECORDKEEPING: Contract Administration
TYPE OF PLAN: 401(k).
The Plan Administrator keeps the records for the Plan, and is responsible for
the interpretation and administration of the Plan. All Plan Records will be kept
on the basis of the Plan Year. The Plan Administrator may hire a third party
record keeper to perform the administrative functions of the Plan. If you have
question about the Plan you should write to the Plan Administrator. THE PLAN
ADMINISTRATOR AND THE TRUSTEES ARE DESIGNATED AS THE AGENTS FOR SERVICE OF LEGAL
PROCESS.
4
<PAGE> 4
ELIGIBILITY AND PARTICIPATION
ELIGIBILITY: All Employees of the Employer are
eligible to participate in this
Plan.
PARTICIPATING AFFILIATES: Vermont Research Products,
PARTICIPATION REQUIREMENTS: If you were an eligible Employee
on 2/1/98, you will become
eligible to participate in the
Plan as of that date. If you were
employed after 2/1/98, you will
become eligible to participate in
the Plan upon attaining age 18
and completing 1/4 Year of
Service.
Since the service requirement is
less than one year, you are not
required to complete a specific
number of Hours of Service during
the service period. Instead, your
service will be measured by the
length of time you are employed.
You will become eligible to
participate in the Plan on your 3
month anniversary of your date of
hire. For example: If your Date
of Hire is 1/1/97, you will
become eligible to participate in
the Plan on 4/1/97.
If you do not meet the
eligibility requirements, you
will not be eligible to
participate in the Plan
ENTRY DATE: You will become a Participant in
the Plan on the Entry Date
coincident with or next following
the date you meet the
participation requirements. The
Entry Dates for this Plan are the
first day of the first, fourth,
seventh and tenth month of the
Plan Year.
YOUR CONTRIBUTIONS TO THE PLAN
COMPENSATION: Compensation means the total
salary or wages paid to you as
shown on your W-2, excluding
bonuses and commissions.
Compensation is limited to a
maximum of $160,000*
For the first year you
participate in the Plan, only
Compensation earned after your
Entry Date will be used to
determine your share of your
Employer's Contribution.
5
<PAGE> 5
ELECTIVE DEFERRALS: 15% of Annual Compensation, to a
maximum of $9,500* for 1997. The
Elective Deferral limit for 1998
is $10,000*.
* Adjusted periodically for cost
of living by the IRS.
This limitation is an aggregate
limit that applies to all
deferrals you make to this Plan
and to any other Elective
Deferral plan, including tax
sheltered annuity contracts,
simplified pension plans, or
other 401(k) Plans.
MAKING AND MODIFYING 401(K) You may discontinue deferrals at
ELECTIONS: any time, upon written notice to
the Plan Administrator. Your
instructions to cease Elective
Deferrals will be implemented as
of the first payroll period
following the date you notified
your Plan Administrator.
To resume your Elective Deferral
Contribution, you must provide
written notice to your Plan
Administrator, and wait until the
next semi-annual interval.
You may increase or decrease your
Elective Deferral Contribution
Percentage at semi-annual
intervals throughout the Plan
Year.
INVESTMENT OF CONTRIBUTIONS: As a Participant in this Plan,
you direct the investment of your
account(s). Your Plan provides a
menu of investment options from
which you may select your
investments. You may modify your
investment elections, transfer
existing account balances, and
obtain information regarding your
investments on a daily basis.
You should be aware that your investment decisions will ultimately affect the
retirement benefits to which you will become entitled. Your Employer and the
Plan Trustee(s) cannot provide you with investment advice, nor are they
obligated to reimburse any participant for any investment loss that may occur as
a result of his or her investment decisions. There is no guarantee that any of
the investment options available in this Plan will retain their value or
appreciate.
YOUR EMPLOYER'S CONTRIBUTIONS TO THE PLAN
EMPLOYER MATCHING CONTRIBUTIONS: Your Employer may make a
contribution to the Plan known as
a 401(k) Matching Contribution.
Your Employer's 401(k) Matching
Contribution, if any, will be an
amount not to exceed 50% of the
first 5% of your Compensation
contributed as an Elective
Deferral. This match will be made
in company stock.
ELIGIBILITY FOR EMPLOYER MATCHING Any Participant who makes an
CONTRIBUTIONS: Elective Deferral Contribution
will be eligible to receive an
Employer Matching Contribution.
VESTING: Vesting means that for each Year
of Service you complete, you
become entitled to all or a
portion of your Employer
Contributions Account(s). For
purposes of determining your
vested account balance, all of
your Years of Service, beginning
on your date of hire, will be
counted.
6
<PAGE> 6
VESTING OF ELECTIVE DEFERRALS: You are always 100% vested in
your Elective Deferrals.
If this is an amended or restated Plan, your vested percentage cannot be less
than your vested percentage prior to the amendment or restatement of this Plan.
BENEFITS UNDER YOUR PLAN
NORMAL RETIREMENT AGE: Your Normal Retirement Age is age
65.
You are 100% vested in your
Employer Contribution Account(s)
upon your Normal Retirement Date.
EARLY RETIREMENT AGE: Your Early Retirement Age is the
attainment of age 59 1/2.
You are 100% vested in your
Employer Contribution Account(s)
upon your Early Retirement Date.
DISABILITY: You will be considered to be
disabled if you qualify for your
Employer's long-term Disability
plan. Benefit payments will begin
as soon as feasible after your
Disability Retirement Date.
You are 100% vested in your
Employer Contribution Account(s)
if you are deemed disabled.
IN-SERVICE Distributions: As an active
Participant in the Plan, you may,
upon attaining age 59 1/2, submit
a written application to the Plan
Administrator to withdraw all or
a portion of your vested account
balance.
HARDSHIP WITHDRAWALS As an active Participant in the
Plan, you may submit a written
application to the Plan
Administrator for a hardship
withdrawal, if you are
experiencing an immediate and
heavy financial need.
EVENTS WHICH QUALIFY FOR A HARDSHIP 1. To cover medical expenses
DISTRIBUTION: incurred by you, your spouse or
your dependents;
2. For the purchase of a
principal residence (excluding
mortgage payments);
3. For the payment of
post-secondary education tuition
expenses;
4. For the payment of amounts
necessary to prevent eviction
from or foreclosure on your
principal residence.
All other forms of financial
assistance must be explored and
exhausted before a Hardship
If you take a hardship withdrawal, your Elective Deferral Contributions will be
suspended for a period of twelve months following the date of the withdrawal.
7
<PAGE> 7
TAX CONSEQUENCES FOR RECEIVING A Distribution or withdrawal of
DISTRIBUTION OR WITHDRAWAL: your pre-tax contributions or
earnings on your pre-tax
contributions may be subject to
ordinary income taxes or early
distribution penalties. Please
consult your tax advisor prior to
taking any distribution or
withdrawal.
LOAN AVAILABILITY FOR 401(K): An active Participant in the Plan
may request a loan from the Plan.
A loan allows you to borrow money
from your account without
incurring a penalty. You must
repay the loan with interest, on
an after tax basis, usually
through payroll deduction.
Once you request a loan, your
Employer is required to approve
the loan. After approval, you
will receive a check with an
attached promissory note. By
endorsing the check, you agree to
the terms and repayment
conditions in the promissory
note.
As an active Participant in the
Plan, you may request a loan from
the Plan. The Loan amount is
available by calling the 888#
LOAN REQUIREMENTS: 1. Loans are available to all
participants in the Plan on a
uniform and nondiscriminatory
basis.
2. Loans must bear a reasonable
rate of interest.
3. The loan must be adequately
secured.
LOAN LIMITATIONS: You may borrow any amount up to
50% of your vested account
balance. However, your loan can
be no more than $50,000 minus
your highest outstanding loan
amount during the prior 12
months.
LOAN REPAYMENTS: Repayment of a loan must be made
at least quarterly, on an
after-tax basis, in level
payments of principal and
interest, and repaid within five
years, except for the purchase of
a primary residence.
TAX CONSEQUENCES OF PLAN LOANS: If you fail to make loan
repayments when they are due, you
may be considered to have
defaulted on the loan. Defaulting
on a loan may be considered a
distribution to you from the
Plan, resulting in taxable income
to you and may ultimately reduce
your benefit from the Plan.
DEATH BENEFITS: Your Employer Contribution
Account(s) become 100% vested
upon your death.
Your Beneficiary will be entitled
to receive your account balance.
If you are married at the time of
your death, your surviving spouse
is your Beneficiary unless:
8
<PAGE> 8
o You elect otherwise in writing
(with the consent of your
spouse);
o You establish to the
satisfaction of the Plan
Administrator that your spouse
cannot be located.
If you want to designate a
Beneficiary other than your
spouse, (an "alternate
Beneficiary") you must do so on a
form provided by the Plan
Administrator. You may revoke or
change this designation at any
time by filing written notice
with the Plan Administrator,
however, your spouse must
consent, in writing, to any
alternate Beneficiary. A Notary
Public or Plan Official must
witness your spouse's consent.
It is important that you notify
the Plan Administrator of any
change in your marital status.
DISTRIBUTIONS UPON DEATH: If death occurs before Retirement
Benefits begin, your Beneficiary
may choose to defer payment, or
to receive payment based on the
following general guidelines:
o Payment may be made in the
form of a life annuity for
Participants who transferred
money from a prior plan where
this option was available,
o Payment may be made in
installments payable in cash
or in kind, or part in cash
and part in kind over a period
not to exceed your lifetime,
or the joint lifetime of you
and your spouse,
o The entire sum must be
distributed no later than the
last day of the year of the
fifth anniversary of your
death, if your Beneficiary is
not your surviving spouse,
o If your Beneficiary is your
spouse, payment may be
postponed until December 31st
of the calendar year in which
you would have attained age
65,
o Payment may be made in
installments, as described
above, beginning on or before
the December 31st following
the year in which you die.
If death occurs after Retirement Benefits begin, but before your entire
Retirement Benefit has been paid, the remaining portion of your Retirement
Benefit will continue in the same form and for the same period as you originally
elected. In any case, payments will continue to be made at least as rapidly as
such payments were being made prior to your death.
If you fail to designate an
alternate Beneficiary, or your
alternate Beneficiary does not
survive you, the benefit payable
from this Plan as a result of
your death will be payable to
your Surviving Spouse. If you
have no Surviving Spouse, the
death benefit will be paid to
your estate.
9
<PAGE> 9
If the value of your account is
$3,500* or less, death benefits
will be distributed to your
Beneficiary without your
Beneficiary's consent as soon as
feasible following your death.
*EFFECTIVE THE FIRST DAY OF THE
PLAN YEAR AFTER AUGUST 5, 1997,
THE $3,500 ACCOUNT BALANCE AMOUNT
INCREASES TO $5,000. IF YOUR
ACCOUNT BALANCE IS LESS THAN
$5,000, YOU WILL RECEIVE A LUMP
SUM DISTRIBUTION AS SOON AS
FEASIBLE FOLLOWING THE DATE THIS
LAW IS IN EFFECT OR THE DATE YOU
TERMINATED EMPLOYMENT.
FORMS OF BENEFIT: The normal form of payment with
respect to your vested account
balance under this Plan is a lump
sum. If your account balance is
$3,500* or less, you will receive
a lump sum distribution as soon
as feasible following the date
you terminated employment. If
your account balance is greater
than $3,500*, you (and your
spouse, if applicable) must give
written consent before the
distribution can be made.
*EFFECTIVE THE FIRST DAY OF THE
PLAN YEAR AFTER AUGUST 5, 1997,
THE $3,500 ACCOUNT BALANCE AMOUNT
INCREASES TO $5,000. IF YOUR
ACCOUNT BALANCE IS LESS THAN
$5,000, YOU WILL RECEIVE A LUMP
SUM DISTRIBUTION AS SOON AS
FEASIBLE FOLLOWING THE DATE THIS
LAW IS IN EFFECT OR THE DATE YOU
TERMINATED EMPLOYMENT.
An optional form of payment with
respect to your vested account
balance is installments payable
in cash or in kind, or part in
cash and part in kind over a
period not to exceed your
lifetime, or the joint lifetime
of you and your spouse.
If you transferred money from a
prior plan, another form of
benefit may be available. You
should consult with your tax
advisor regarding those options.
You may request that all or part of any taxable distribution you receive from
the Plan, other than an annuity, installments paid over 10 or more years, or
required distributions after age 70 1/2 be rolled over directly from the
Trustees to the trustee or custodian of an eligible retirement plan. For this
purpose, an "eligible retirement plan" includes an individual retirement
account, an annuity, or your new employer's qualified plan, if the plan accepts
rollovers. The Plan Administrator will notify you if any amount to be
distributed to you is an eligible rollover distribution. Special tax withholding
rules apply to any portion of the eligible rollover distribution that is not
rolled over directly to an eligible retirement plan.
TOP-HEAVY DEFINED: A plan becomes Top-Heavy when 60%
or more of the Plan's assets are
allocated to Key Employees. Key
Employees are certain owners or
officers of your Employer. If the
Plan becomes Top-Heavy certain
rules apply.
TOP HEAVY RULES: A minimum contribution will be
required to Non-Key employees.
This contribution is the lesser
of:
o three percent (3%) of
Compensation; or
o the largest percentage of
Compensation contributed by
the Employer on behalf of Key
Employees.
10
<PAGE> 10
o If you are a Participant in
more than one Plan maintained
by your Employer, you may not
be entitled to minimum
benefits in more than one
plan.
VESTING SCHEDULE FOR TOP-HEAVY:
ROLLOVERS OR TRANSFERS: o You must submit a written
request to your Plan
Administrator, who will
determine whether a rollover
or transfer is acceptable;
o You may make such a
contribution to this Plan
prior to being eligible for
the Plan;
o Any amount rolled over or
transferred to this Plan
cannot include personal IRA
contributions;
o Prior to making a rollover or
transfer, you should consult
with your tax advisor.
QUALIFIED DOMESTIC RELATIONS ORDERS: As a general rule, your account
balance, may not be assigned.
This means that your accounts
cannot be sold, used as
collateral for a loan, given
away, or otherwise transferred.
In addition, your creditors may
not attach, garnish or otherwise
interfere with your account.
An exception to this general rule
is a "qualified domestic
relations order" or QDRO. A QDRO
is a court order that can require
the plan administrator to pay a
portion of your account balance
to your former spouse, child or
other dependent.
PLAN AMENDMENT OR TERMINATION: Your Employer reserves the right
to amend the Plan at any time.
However, no amendment can deprive
you of any vested benefits.
Your Employer also reserves the
right to terminate the Plan. If
the Plan is terminated, you will
be 100% vested in your total
account balance under the Plan.
STATEMENT OF ERISA RIGHTS
As a Participant in the Plan, you are entitled to certain rights and protection
under the Employee Retirement Income Security Act of 1974 (ERISA). Your Employer
may not fire you or discriminate against you to prevent you from obtaining a
benefit from the Plan or exercising your rights under ERISA.
ERISA provides that all Plan Participants shall be entitled to:
o Examine, without charge, at your Plan Administrator's office, all Plan
documents, insurance contracts, if any, and copies of all documents filed
by your Plan with the U. S. Department of Labor, such as annual reports and
Plan descriptions.
o Obtain copies of all Plan documents and other Plan information upon written
request to your Plan Administrator. Your Plan Administrator may impose a
reasonable charge for the copies.
11
<PAGE> 11
o Receive a summary of the Plan's annual financial report. Your Plan
Administrator is required by law to provide each Participant with a copy of
the Plan's Summary Annual Report.
o Obtain an annual statement telling you whether you have a right to receive
a benefit under the Plan, and if so, what your benefits would be if you
stop working for your Employer now. If you do not have a right to a benefit
under the Plan, the statement must tell you how many years you have to work
to get a benefit under the Plan. The Plan may require a written request for
this statement, but it must be provided free of charge.
o File suit in Federal court if any materials requested are not received
within 30 days of your request unless the materials were not sent because
of matters beyond the control of your Plan Administrator. The court may
require your Plan Administrator to pay you up to $100 per day for each
day's delay until the materials are received by you.
In addition to creating rights for Plan participants, ERISA imposes obligations
upon the persons who are responsible for the operation of the Plan. These
persons are referred to as "fiduciaries". Fiduciaries must act solely in the
interest of Plan participants and must exercise prudence in the performance of
their plan duties. Fiduciaries who do not comply with ERISA may be removed and
required to make good any losses they have caused the Plan.
If Plan fiduciaries are misusing the Plan's assets, as a Participant in the
Plan, you have the right to file suit in a Federal court or to request
assistance from the U.S. Department of Labor. If you are successful in your
lawsuit, the court may require the other party to pay your legal costs,
including attorney's fees. If you are unsuccessful in your lawsuit, or the court
finds your action frivolous, the court may order you to pay these costs and
fees.
CLAIMS PROCEDURES
When you terminate employment, you must complete a form that notifies the Plan
Administrator that you are making a claim for benefits. Your Employer has a
supply of these forms. Ideally this form should be completed on or before your
final day of work. This way, your Employer can send your claim for benefits
right away for processing.
If, after your claim for benefits is processed, you have questions or disagree
with the calculation of your benefit, you must notify the Plan Administrator in
writing. The Plan Administrator will, within 90 days (or within 180 days if
special circumstances exist) notify you in writing of its decision. That
notification will include:
1. How your benefit was calculated,
2. The specific reason that your claim is denied (in whole or in part) if it is
denied
3. Specific reference to Plan provisions on which the denial is based
4. A description of any additional material or information necessary for you to
perfect your claim and an explanation of why such information is necessary
5. An explanation of the Plan's claim review procedure.
Within 60 days after you receive notice of the denial of part or all of your
claim for benefits, you may file a written appeal with the Plan Administrator.
You may seek representation by an attorney or other representation of your
choosing. You may submit written and oral evidence and arguments in support of
your claim. You may review all relevant documents. The Plan Administrator
generally makes a final decision within 60 days of your appeal. The Plan
Administrator decision will include the specific reasons for its decision and
specific reference to Plan provisions on which the decision is based.
12
<PAGE> 12
PENSION BENEFIT GUARANTY CORPORATION:
The type of Plan your Employer has adopted is a defined contribution plan.
Therefore, the Plan is not subject to or insured by the Pension Benefit Guaranty
Corporation (PBGC).
13
<PAGE> 1
EXHIBIT 5.1
March 30, 1998
Storage Computer Corporation
11 Riverside Street
Nashua, NH 03062
Re: Registration Statement on Form S-8 Relating to the
401(k) Savings Plan (the "Plan")
OF STORAGE COMPUTER CORPORATION (THE "COMPANY")
Ladies and Gentlemen:
Reference is made to the above-captioned Registration Statement on Form
S-8 (the "Registration Statement") filed by the Company on or about March 30,
1998 with the Securities and Exchange Commission under the Securities Act of
1933, as amended, relating to an aggregate of 75,000 shares of Common Stock,
$.001 par value per share, of the Company issuable pursuant to the Plan (the
"Shares").
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 in accordance with the terms of the Plan and
duly authorized by the Company's Board of Directors or Compensation Committee,
the Shares will be validly issued, fully paid and nonassessable.
<PAGE> 2
Storage Computer Corporation
March 30, 1998
Page 2
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 LLP
Peabody & Arnold LLP
<PAGE> 1
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
February 25, 1998 on the financial statements of the Company as at December 31,
1997 and December 31, 1996 and for each of the years in the three year period
ended December 31, 1997 appearing in the Company's Annual Report on Form 10-KSB
for the fiscal year ended December 31, 1997.
Richard A. Eisner & Company, LLP
/s/ Richard A. Eisner & Company, LLP
Cambridge, Massachusetts
March 27, 1997
