Exhibit 10.8
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GRC INTERNATIONAL, INC.
DIRECTORS RETIREMENT PLAN
Article 1. PURPOSE OF PLAN.
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(a) General Purpose. GRC International, Inc. (the "Company"), hereby
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establishes this Directors Retirement Plan (the "Plan") as of the 1st day of
July, 1991 to provide supplementary retirement income for its eligible
Directors. The Company believes that the interests of its shareholders will best
be served by being able to attract and retain well qualified individuals to
serve as Directors and that this Plan is consistent with those objectives.
(b) Nonqualified Plan. It is intended that this Plan be maintained as
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an unfunded, unsecured, nonqualified deferred compensation arrangement, not
subject to the substantive provisions of the Employee Retirement Income Security
Act of 1974 and not eligible for the insurance protection provided by the
Pension Benefit Guaranty Corporation, provided, however, that if a Change of
Control occurs, all benefits payable hereunder will be paid in accordance with
Article 5.
Article 2. DEFINITIONS.
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For purposes of this Plan and any explanatory material associated with
it, the following terms shall have the following meanings unless stated
otherwise:
(a) "Board" means the board of directors of the Company.
(b) "Change of Control" means the occurrence of any one of the
following events without the approval of a majority of the Continuing Directors:
(i) any Person, other than the Company or a Related Party,
acquires directly or indirectly the Beneficial Ownership of any voting security
of the Company and immediately after such acquisition such Person is, directly
or indirectly, the Beneficial Owner of voting securities representing twenty-
five percent (25%) or more of the total voting power of all the then outstanding
voting securities; or
(ii) the Continuing Directors cease for any reason to constitute a
majority of the members of the Board; or
(iii) the shareholders of the Company approve a merger,
consolidation, recapitalization or reorganization of the Company, a reverse
stock split of outstanding voting securities, or an acquisition of voting
securities or assets by the Company, or consummation of any such transaction if
shareholder approval is not obtained, other than (A) any such transaction which
would result in at least eighty percent (80%) of the total voting power
represented by the voting securities of the Company or the voting securities of
such surviving entity outstanding immediately after such transaction being
Beneficially Owned by at least eighty percent (80%) of the holders of
outstanding voting securities of the Company immediately prior to the
transaction, with the voting power of each such continuing holder relative to
other such continuing holders not substantially altered in the transaction, or
(B) any such transaction in which all of the voting securities of the Company or
voting securities of the surviving entity are Beneficially Owned by Related
Parties; or
(iv) the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets other than any such
transaction which would result in Related Parties owning or acquiring more than
fifty percent (50%) of the assets owned by the Company immediately prior to the
transaction.
For purposes of this Article 2(b):
(i) the terms "Person," "Beneficial Owner," "Beneficially Owns,"
and "Beneficial Ownership" shall have the meanings ascribed to such terms for
purposes of Section 13(d) of the Securities Exchange Act of 1934 and the rules
thereunder;
(ii) "Related Party" means (A) a majority-owned subsidiary of the
Company; or (B) an employee or group of employees of the Company or any
majority-owned subsidiary of the Company; or (C) a trustee or other fiduciary
holding securities under an employee benefit plan of the Company or any
majority-owned subsidiary of the Company; or (D) a corporation owned directly or
indirectly by the shareholders of the Company in substantially the same
proportion as their ownership of voting securities; or (E) a Person Beneficially
Owning more than ten percent (10%) of any outstanding class of voting security
of the Company who would be required to report such ownership on a Schedule 13D
or an amendment thereto, if, prior to any acquisition of a voting security which
resulted in such Person Beneficially Owning more than ten percent (10%) of such
class, the Board approved the transaction giving rise to the increase in
Beneficial Ownership, provided that such Person has not, prior to obtaining
Board approval of any such transaction, publicly announced an intention to take
actions which, if consummated or successful (at a time such Person has not been
deemed a "Related Party"), would constitute a Change of Control; and
(iii) "Continuing Directors" means the individuals who constituted
the Board as of July 1, 1991, or who constitute the Board at any time thereafter
if their election or nomination for election to the Board was approved by a vote
of a majority of the Directors then in office who either were Directors as of
July 1, 1991 or whose election or nomination for election was previously so
approved.
(c) "Change of Control Annuity" means the benefit described in
Article 5.
(d) "Committee" means those Directors appointed by the Board to
administer the Plan.
(e) "Death Benefit" means that benefit described in Article 6.
(f) "Designated Beneficiary" means the beneficiary designated in
accordance with Article 6.
(g) "Director" means a member of the Board who occupied such position
on or after the Effective Date.
(h) "Distribution Event" means a Director's termination of service as a
Director for any reason.
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(i) "Effective Date" means July 1, 1991.
(j) "Plan Year" means the "short year" commencing with the Effective
Date of this Plan and ending December 31, 1991 and each subsequent calendar
year.
(k) "Retirement Benefit" means either the "Standard Retirement Benefit"
or the "Alternate Retirement Benefit". "Standard Retirement Benefit" means a
monthly benefit payable in accordance with the applicable terms of Article 4.
"Alternate Retirement Benefit" shall mean the alternate form of Retirement
Benefit described in Article 4(d).
(l) "Service" means service performed on behalf of the Company as a
Director.
(m) "Year of Service" means the twelve (12) month period commencing
with the date on which the individual became a Director, and each such 12 month
period thereafter; provided, however, that a Director will not be given credit
for a Year of Service for any such 12 month period in which the Director's fees,
wages, salary or bonuses paid to him by the Company exceed $150,000 in the
aggregate.
Article 3. ELIGIBILITY.
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(a) Each Director who has completed five (5) or more Years of Service
shall be eligible to receive a Retirement Benefit. If a Change of Control
occurs, however, a Director shall be entitled to a Change of Control Annuity
without regard to whether he has completed five (5) Years of Service.
(b) Notwithstanding any provision of this Plan to the contrary, if any
Director, while still serving on the Board, engages in any conduct specifically
intended by such Director to cause significant harm or damage to the Company
(excluding any conduct required to comply with a legal obligation), then such
Director shall forfeit any Retirement Benefit (and the corresponding Death
Benefit) otherwise payable hereunder; provided, however, that in the event of a
Change of Control while such Director is still serving on the Board, such
conduct shall not result in the forfeiture of such Director's Change of Control
Annuity (nor of the corresponding death benefit).
Article 4. RETIREMENT BENEFIT.
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(a) Grant. Upon a Director's Distribution Event, such Director shall
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become entitled to an irrevocable Standard Retirement Benefit as hereinafter
provided, unless the Director requests and the Board approves an Alternate
Retirement Benefit pursuant to Article 4(d).
(b) Amount and Service Requirement. No Director with less than five (5)
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Years of Service shall be eligible for any Retirement Benefit, provided,
however, that such Director shall nevertheless be entitled to a Change of
Control Annuity under the circumstances described in Article 5. Any Director who
has completed more than five (5) Years of Service shall receive a Standard
Retirement Benefit consisting of monthly payments equal to one-twelfth (1/12) of
the Director's annual retainer in effect at the time of such Director's
Distribution Event multiplied by the applicable percentage set forth in the
following table:
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Years of Service Applicable
As a Director Percentage
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Less than 5 0%
5 50%
6 60%
7 70%
8 80%
9 90%
10 or more 100%
It is recognized and acknowledged that the following named Directors have
completed ten (10) or more Years of Service and are eligible for a Standard
Retirement Benefit calculated using a 100% applicable percentage under the
foregoing table: H. Furlong Baldwin and . It is further recognized and
acknowledged that as of November 7, 1996, (i) Director Herbert Rabin has
completed eight (8) Years of Service.
(c) Form and Duration of Standard Retirement Benefit. The Standard
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Retirement Benefit shall be payable to the Director monthly (commencing with the
first business day of the Plan Year following the Director's Distribution Event)
for a period of (i) 180 months, or (ii) the Director's life, whichever period is
shorter.
(d) Alternate Retirement Benefit. At the written request of the
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Director, the Board may, in its absolute discretion, approve or disapprove any
Alternate Retirement Benefit, including but not limited to a lump sum, provided,
however, that such Alternate Retirement Benefit is the actuarial equivalent (as
determined by the Board) of the Standard Retirement Benefit, and provided,
further, that such Alternate Retirement Benefit shall be payable on or
commencing with the first business day of the Plan Year following the Director's
Distribution Event. Any Director requesting an Alternate Retirement Benefit
shall do so at the time and in the manner prescribed by the Board.
Article 5. CHANGE OF CONTROL ANNUITY.
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(a) Notwithstanding any other provision of this Plan to the contrary,
upon the occurrence of a Change of Control, each serving Director and each
former Director (who has received or is receiving a Retirement Benefit) shall
become fully vested in and entitled to an irrevocable Change of Control Annuity
instead of a Retirement Benefit.
(b) In the event of a Change of Control, the Company shall purchase a
Change of Control Annuity for each Director from an insurance company with a
Best's rating of at least "AAA". Each Change of Control Annuity shall provide
for a monthly payment equal to one-twelfth (1/12) of (i) the then current annual
Director retainer fee, or (ii) the annual Director retainer fee in effect just
prior to the Change of Control, whichever amount is higher. With respect to a
serving Director, such monthly payment shall commence on the first business day
of the month following the Director's Distribution Event and continue for a
period of (i) 180 months, or (ii) the Director's life, whichever is shorter.
With respect to a former Director, such monthly payment shall commence on the
first business day of the month following the Change of Control and continue for
a period of (i) 180 months (less the number of whole months elapsed since the
first business day of the Plan Year following the Director's Distribution
Event), or (ii) the Director's life, whichever is shorter. Each Change of
Control Annuity shall also
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include a death benefit comparable to the Death Benefit provided under Article
6. Each Change of Control Annuity shall also include a cash surrender feature
entitling the recipient to redeem the contract for its present value, based on
the actuarial life expectancy of the Director at the time of the Company's
purchase of the Change of Control Annuity without regard to the health, medical
condition or other circumstances of the Director. In addition, such Change in
Control Annuity shall be actuarially adjusted, if and to the extent appropriate,
to reflect any prior payment to a Director in the form of an Alternate
Retirement Benefit. As an example of such actuarial adjustment, if a Director
retires at a time when the annual retainer is $12,000, and the Director receives
a lump sum settlement as an Alternate Retirement Benefit rather than the
Standard Retirement Benefit, and subsequently a Change of Control occurs when
the annual retainer is $18,000, then such Director's Change of Control Annuity
shall be a monthly payment equal to $500, or $6,000 per year, which is the
amount by which the retainer was increased.
(c) If a Change of Control has occurred or appears to be imminent, the
Board or the Committee shall take any steps that may be necessary to implement
the provisions of this Plan, including the purchase of Change of Control
Annuities in accordance with this Article 5.
Article 6. DEATH BENEFIT.
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(a) Death While Serving as a Director. If a Director should die while
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serving as a Director, and such Director has not requested an Alternate
Retirement Benefit, then, the monthly amount that would have been payable to the
Director as his Standard Retirement Benefit shall be paid to the Designated
Beneficiary commencing with the first business day of the month following the
Director's death and continuing through the month which includes the first
anniversary of the Director's death.
(b) Death After Distribution Event. If a Director should die after his
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Distribution Event, and such Director has not requested an Alternate Retirement
Benefit, then the monthly amount that would have been payable to the Director as
his Standard Retirement Benefit for the next six (6) months or, if longer, until
the next anniversary of the commencement of the Director's Standard Retirement
Benefit, shall be paid to the Designated Beneficiary.
(c) Inapplicable to Alternate Retirement Benefit. The Death Benefit
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shall be payable only with respect to the Standard Retirement Benefit. No Death
Benefit shall be payable with respect to any Alternate Retirement Benefit.
(d) Beneficiary Designation. A Director shall make a beneficiary
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designation in writing on a form filed with the Committee and may change such
beneficiary designation at any time by written notice to the Committee. If no
beneficiary designation has been filed or if the Designated Beneficiary
predeceased the Director, any Death Benefit hereunder shall be paid to the
Director's estate.
Article 7. HARDSHIP.
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Upon receipt of a written request from a Director (or, if applicable, the
Designated Beneficiary), the Committee, in its sole discretion, may determine
that acceleration of any payments hereunder is necessary on account of a severe
financial hardship to the Director or Designated Beneficiary. In such case, the
Committee may accelerate payments as necessary to relieve the hardship. If the
Director dies after receiving a hardship distribution, the Death
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Benefit payable pursuant to Article 6 shall be reduced by the amount of any
monthly payments which were previously accelerated and which relate to the
relevant period for which Death Benefits would otherwise be payable. 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.
Article 8. MISCELLANEOUS.
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(a) No person shall be entitled to anticipate any payment hereunder by
assignment, alienation, sale, pledge, encumbrance or transfer of such payments
in any form or manner prior to actual or constructive receipt thereof.
(b) Subject to the provisions of Article 5 regarding the Change of
Control Annuity, the Company's obligations hereunder shall be entirely unfunded
and unsecured, and upon the nonpayment of any obligation hereunder, a Director
or his Designated Beneficiary shall have the right only of an unsecured creditor
of the Company.
(c) The Board, either acting directly or through the Committee, shall
interpret the Plan and make all determinations necessary or desirable to
implement the Plan. The determination of either the Board or the Committee shall
be final and conclusive. The Board or the Committee may obtain such advice or
assistance as it deems appropriate from persons not serving on the Board of
Directors or the Committee.
(d) Any payment due hereunder shall be made on the first business day
of the applicable month.
(e) Whenever the Board or Committee exercises any discretion under this
Plan with respect to a Director, that Director shall not participate in the
voting on such matters.
(f) This Plan shall be subject to and governed by the laws of the
Commonwealth of Virginia without regard to the conflict of laws and principles
thereof.
(g) The Board may amend or terminate this Plan at any time and for any
reason, provided, however, that no such amendment or termination shall reduce or
impair the rights of any Director accrued prior to such action, and provided,
further, that this Plan shall not be amended or terminated following a Change of
Control without the consent of a majority of the Continuing Directors.
(as amended, May 22, 1997)
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