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 it  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

                                      -2-






         The class of persons eligible to receive Awards under the Plan shall be
those  officers,  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 maximum  number of Shares with respect to which Options may be
granted  under the 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 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.

                                      -3-






                  (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.

                  (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

                                      -4-






         (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  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 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

                                      -5-






                  (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 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

                                      -6-





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.

         (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 fo 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 uncer 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

                                      -7-






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  exercised,  in
                           accordance with the terms and conditions of Section 6
                           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  perimssible  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;

                                       -8-





                  (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  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 domestice 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

                                       -9-






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  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  olbigation  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

                                      -10-





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 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 incinsistent 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.

                                      -11-




         (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 February 23, 1995, and shall be subject to
shareholder approval within twelve months of the effective date. If the 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 an
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
Rule16b-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 limitng 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  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


                                      -13-






                           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.

                                      -14-