GRC INTERNATIONAL, INC.
DIRECTORS RETIREMENT PLAN
DEFERRED STOCK UNITS AGREEMENT
AND ELECTION
This Agreement dated as of May 1, 1999, by and between the GRC
International, Inc. ("Company") and ------------- ("Director").
Background
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The Board of Directors of the Company (the "Board") amended and
restated the Directors Retirement Plan (the "Plan") to provide that Participants
may elect to receive Deferred Stock Units in lieu of other benefits under the
Plan. Director is entitled to receive ----- Deferred Stock Units having an
aggregate fair market value, at May 1, 1999, equal to $-----------, the present
value of Director's total accrued benefit under the Plan in such exchange. The
aggregate fair market value of Deferred Stock Units is based on the fair market
value per share of the Company's Common Stock at May 1, 1999, which was
$7.59375. Fractional Deferred Stock Unit amounts have been rounded to the
nearest whole number.
1. Grant of Deferred Stock Units in Exchange for Other Rights Under the
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Plan.
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(a) Terms of Grant. Director hereby irrevocably elects to receive
the grant of -------- Deferred Stock Units ("DSUs") under the Plan in exchange
for all of Director's rights to other benefits payable or potentially payable
under the Plan, and surrenders all such rights to benefits other than DSUs under
the Plan. The Company hereby confirms the grant of the DSUs pursuant to Article
5(a) of the Plan, to Director as of May 1, 1999 (the "Date of Grant"). The DSUs
are subject to all of the terms and conditions set forth in this Deferred Stock
Units Agreement and Election ("Agreement"). The Company shall maintain a
bookkeeping account for Director ("Account") reflecting the number of DSUs then
credited to Director hereunder as a result of such grant of DSUs and any
crediting of additional DSUs to Director pursuant to dividend equivalents under
Section 4 ("Dividend Equivalents").
(b) Acknowledgment of Director. Director acknowledges receipt of a
copy of the Plan, and Director hereby agrees to be bound by this Agreement and
by all decisions and determinations of the Board of Directors and any Plan
Administrator or other person to whom the Board may delegate authority with
respect to the DSUs and this Agreement.
2. Nontransferability. DSUs and rights relating thereto shall not be
transferable other than by will or by the laws of descent and distribution in
the event of Director's death, and no such transfer shall be effective to bind
the Company unless the Company shall have been furnished with a copy of such
will or such other evidence as the Company may deem necessary to establish the
validity of the transfer.
3. Settlement.
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(a) Settlement. DSUs granted hereunder, together with DSUs credited
as a result of Dividend Equivalents, shall be settled by delivery of one share
of the Company's
Common Stock for each DSU being settled. Settlement of each DSU shall occur at
January 1 of the year following my termination of service as a Director.
(b) Source of Shares. Shares of the Company's Common Stock issued or
delivered in settlement of DSUs may be authorized but unissued shares or
treasury shares.
4. Dividend Equivalents and Adjustments.
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(a) Dividend Equivalents. Dividend Equivalents shall be paid or
credited on DSUs (other than DSUs that, at the relevant record date, previously
have been settled or forfeited) as follows:
(i) Cash Dividends. If the Company declares and pays a
dividend or distribution on Common Stock in the form of
cash, then a number of additional DSUs shall be credited
to Director's Account as of the payment date for such
dividend or distribution equal to the number of DSUs
credited to the Account as of the record date for such
dividend or distribution multiplied by the amount of cash
actually paid as a dividend or distribution on each
outstanding share of Common Stock at such payment date,
divided by the Fair Market Value of a share of Common
Stock at such payment date.
(ii) Non-Common Stock Dividends. If the Company declares and
pays a dividend or distribution on Common Stock in the
form of property other than shares of Common Stock, then a
number of additional DSUs shall be credited to Director's
Account as of the payment date for such dividend or
distribution equal to the number of DSUs credited to the
Account as of the record date for such dividend or
distribution multiplied by the Fair Market Value of such
property actually paid as a dividend or distribution on
each outstanding share of Common Stock at such payment
date, divided by the Fair Market Value of a share of
Common Stock at such payment date.
(iii)Common Stock Dividends and Splits. If the Company declares
and pays a dividend or distribution on Common Stock in the
form of additional shares of Common Stock, or there occurs
a forward split of Common Stock, then a number of
additional DSUs shall be credited to Director's Account as
of the payment date for such dividend or distribution or
forward split equal to the number of DSUs credited to the
Account as of the record date for such dividend or
distribution or split multiplied by the number of
additional shares of Common Stock actually paid as a
dividend or distribution or issued in such split in
respect of each outstanding share of Common Stock.
(b) Adjustments to DSUs. The number of DSUs credited to
Director's Account shall be appropriately adjusted, in order to prevent dilution
or enlargement of Director's rights with respect to DSUs, to reflect any changes
in the number of outstanding shares of Common Stock resulting from any
recapitalization, forward or reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase, share exchange, liquidation,
dissolution or other similar corporate transaction, or any large, special and
non-recurring dividend or other distribution. Such adjustment shall be made by
the Board (or its delegate), taking into account any DSUs credited to Director
in connection with such event under Section 4(a) hereof.
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5. Hardship. Upon receipt of a written request from Director, the Board
of Directors, in its sole discretion, may determine that acceleration of
settlement of the DSUs is necessary on account of a severe financial hardship to
Director. In such case, the Board may accelerate such settlement as necessary to
relieve the hardship. The Board shall determine the existence of a severe
financial hardship in a manner consistent with Internal Revenue Service rules
and regulations pertaining to the avoidance of constructive receipt of income.
6. Miscellaneous.
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(a) Binding Agreement. This Agreement shall be legally binding when
executed by both the Company and Director. This Agreement shall be binding upon
the heirs, executors, administrators and successors of the parties. This
Agreement constitutes the entire agreement between the parties with respect to
the DSUs, and supersedes any prior agreements or documents with respect to the
DSUs. No amendment, alteration, suspension, discontinuation or termination of
this Agreement, and no oral statement outside of this agreement, which may
purport to impose any additional obligation upon the Company or impair the
rights of Director with respect to the DSUs shall be valid unless in each
instance such amendment, alteration, suspension, discontinuation or termination
is expressed in a written instrument duly executed in the name and on behalf of
the Company and by Director.
(b) Rights Under DSUs Those of Unsecured Creditor. Any provision for
distribution in settlement of Director's Account hereunder shall be by means of
bookkeeping entries on the books of the Company and shall not create in Director
any right to, or claim against any, specific assets of the Company, nor result
in the creation of any trust or escrow account for Director. Director shall be a
general creditor of the Company. DSUs shall confer no rights of a shareholder at
any time prior to the issuance and delivery of shares in settlement of such
DSUs.
(c) Notices. Any notice hereunder to the Company shall be in writing
and addressed to it at its principal executive offices, Attn: General Counsel,
and any notice to Director shall be in writing and addressed to him or her at
the most recent address furnished in writing by Director to the Company.
IN WITNESS WHEREOF, the Company and Director have caused this
Agreement to be executed as of the day and year first above written.
GRC INTERNATIONAL, INC.
- ----------------------------- By:
Director ---------------------------
Name:
Title:
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