Exhibit D
[EXECUTION COPY]
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OPTION AGREEMENT
BY AND AMONG
XXXXXXX X. XXXXX
AND
XXXXXXXX ASSOCIATES, L.P.
DATED AS OF AUGUST 5, 1999
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OPTION AGREEMENT
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This Option Agreement (this "Agreement") dated as of August 5, 1999,
is between Xxxxxxx X. Xxxxx ("Optionee") and Xxxxxxxx Associates, L.P., a
Delaware limited partnership ("Stockholder").
WHEREAS, Stockholder has direct, beneficial ownership of 1,708,000
shares of common stock, par value $.10 per share ("Common Stock" and each share
thereof a "Share"), of GRC International, Inc., a Delaware corporation (the
"Company");
WHEREAS, concurrently herewith, Stockholder is entering into option
agreements (the "Other Agreements" and, together with this Agreement, the
"Nominee Agreements") with each of Xxxx X. Xxxxxxx and Xxx X. Xxxxx-Xxxxxx
(together, with the Optionee, the "Nominees"). In accordance with the Nominee
Agreements, each of the Nominees has consented to serve as a nominee (a
"Xxxxxxxx Nominee") of Stockholder for election as a member (a "Director") of
the Company's Board of Directors (the "Board") at the Company's 1999 annual
meeting of stockholders (the "Annual Meeting") and has agreed to support
Stockholder's solicitation of proxies (the "Solicitations") in connection
therewith.
WHEREAS, as a condition to the willingness of Optionee to participate
in the Solicitation, Optionee has required that Stockholder agree, and in order
to induce Optionee to participate in the Solicitation, Stockholder has agreed,
among other things, to grant the Optionee an option to purchase the Option
Shares (as defined in Section 1(a) below), in accordance with the terms and
conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein and other good and valuable consideration, the
adequacy of which is hereby acknowledged, and intending to be legally bound
hereby, the parties hereto agree as follows:
GRANT OF OPTION; CLOSING
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Section 1. Grant of Option.
(a) Grant of Option. Stockholder hereby grants and conveys to
Optionee, and Optionee accepts, the option to purchase (the "Option") from
Stockholder thirty-seven thousand (37,000) Shares (the "Option Shares") at
a purchase price per share equal to $8.25 in accordance with the terms and
conditions of this Agreement.
(b) Commencement and Duration of Exercise Period. The Option
shall become exercisable on the date of this Agreement. The Option shall
expire and shall not be exercisable or exercised to any extent after 4 p.m.
Eastern Standard Time ("EST") on December 15, 2000.
(c) Conditions Precedent. The obligations of Stockholder to
deliver the Option Shares and to otherwise consummate the exercise of the
Option is subject to the following conditions: (i) each of the Nominees
shall have executed his respective Nominee Agreement (which shall be in
form and substance satisfactory to Stockholder); (ii) the Optionee shall
have performed his obligations under this Agreement in all material
respects; and (iii) there shall be no preliminary or permanent injunction
or other order by any court of competent jurisdiction restricting,
preventing or prohibiting the delivery of the Option Shares.
(d) Option Nonassignable; Exercisable in Whole. Only Optionee
may exercise the Option. The Option can only be exercised in whole; it may
not be exercised in part.
(e) Manner of Exercise. Optionee may exercise the Option solely
by delivering to Stockholder, on a date to be determined by Optionee (which
date must be prior to 4 p.m. EST on December 15, 2000 and otherwise
reasonably acceptable to Stockholder, the "Closing Date"):
(i) a written notice, signed by Optionee (the "Option
Notice"), stating that the Option is exercised and delivered in
accordance with Section 7(h) hereof; and
(ii) Full cash payment (the "Exercise Amount Payment") made
by wire transfer of immediately available funds to an account
designated by Stockholder, or by other form of payment acceptable to
Stockholder in its discretion, in an amount equal to $305,250.
Subject to receipt of the Option Notice and the Exercise Amount Payment,
Stockholder shall deliver to Optionee on the Closing Date a certificate or
certificates evidencing the Option Shares, each such certificate being duly
endorsed in blank and accompanied by such stock powers and such other
documents as may be reasonably necessary to transfer record ownership of
the Option Shares into Optionee's name on the stock transfer books of the
Company.
(f) Adjustments Upon Changes in Capitalization. In the event of any
change in the number of issued and outstanding shares of Common Stock by reason
of any stock dividend, subdivision, merger, recapitalization, combination,
conversion or exchange of shares, or any other change in the corporate or
capital structure of the company (including, without limitation, the declaration
or payment of an extraordinary dividend of cash or securities) which would have
the effect of diluting or otherwise adversely affecting Optionee's rights and
privileges under this Agreement, the number and kind of the Option Shares and
the consideration payable in respect of the Option Shares shall be appropriately
and equitably adjusted to restore to Optionee his rights and privileges under
this Agreement.
Section 2. Representations and Warranties of Stockholder. Stockholder
hereby represents and warrants to Optionee as follows:
(a) Title to the Option Shares. Stockholder is the owner (both
beneficially and of record) of the Option Shares. Subject to a margin
agreement with Xxxxxx Xxxxxxx & Company Incorporated, Stockholder's
agreement of limited partnership and applicable securities laws,
Stockholder owns all of the Option Shares free and clear of all security
interests, liens, claims, pledges, options, rights of first refusal,
agreements, limitations on Stockholder's voting rights, charges and other
encumbrances of any nature whatsoever, and, except as provided in this
Agreement, Stockholder has not appointed or granted any proxy, which
appointment or grant is still effective, with respect to any of the Option
Shares. Upon the delivery to Optionee by Stockholder of a certificate or
certificates evidencing the Option Shares, but subject to applicable
securities laws, Optionee will receive valid and marketable title to the
Option Shares, free and clear of all security interests, liens, claims,
pledges, options, rights of first refusal, agreements, limitations on
Optionee's voting rights (except as set forth in this Agreement), charges
and other encumbrances of any nature whatsoever.
(b) Authority Relative To This Agreement. Stockholder has all
necessary power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the transactions
contemplated hereby. This agreement has been duly and validly executed and
delivered by Stockholder and, assuming the due authorization, execution and
delivery by Optionee, constitutes a legal, valid and binding obligation of
Stockholder, enforceable against Stockholder in accordance with its terms,
except that such enforceability (i) may be limited by bankruptcy,
insolvency, moratorium or other similar laws affecting or relating to the
enforcement of creditors' rights generally and (ii) is subject to general
principles of equity.
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(c) No Conflict. The execution and delivery of this Agreement by
Stockholder does not, and the performance under this Agreement by
Stockholder will not, (i) except for any filings required under U.S.
federal and state securities laws, require any consent, approval,
authorization or permit of, or filing with or notification to, any
governmental or regulatory authority of the United States or any political
subdivision thereof, (ii) conflict with or violate the limited partnership
agreement of Stockholder, or (iii) conflict with, violate or result in any
breach of or constitute a default under (or an event which with notice or
lapse of time or both would become a default under) any agreement,
judgment, injunction, order, law, rule, regulation, decree or arrangement
to which Stockholder is a party or is bound, other than, in the case of
clause (iii), any such conflicts, violations, breaches or defaults that,
individually or in the aggregate, would not materially impair the ability
of Stockholder to perform its obligations hereunder.
(d) Brokers. No broker, finder or investment banker is entitled
to any brokerage, finder's or other fee or commission in connection with
the transactions contemplated hereby based upon arrangements made by or on
behalf of Stockholder; provided that this representation does not apply to
the use of such parties in connection with the Solicitation or other
activities with respect to the Company.
Section 3. Representations and Warranties of Optionee. Optionee
hereby represents and warrants to Stockholder as follows:
(a) Authority Relative to This Agreement. Optionee has all
necessary power and authority to execute and deliver this Agreement, to
perform his obligations hereunder and to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by Optionee and, assuming the due authorization, execution and
delivery by Stockholder, constitutes a legal, valid and binding obligation
of Optionee, enforceable against Optionee in accordance with his terms,
except that such enforceability (i) may be limited by bankruptcy,
insolvency, moratorium and other similar laws affecting or relating to the
enforcement of creditors' rights generally and (ii) is subject to general
principles of equity.
(b) No Conflict. The execution and delivery of this Agreement by
Optionee does not, and the performance of this Agreement by Optionee will
not, (i) except for any filings required under federal and state securities
laws, require any consent, approval, authorization or permit of, or filing
with or notification to, any governmental or regulatory authority, domestic
or foreign, or (ii) conflict with, violate or result in any breach of or
constitute a default under (or an event which with notice or lapse of time
or both would become a default under) any agreement, judgment, injunction,
order, law, rule, regulation, decree or arrangement applicable to Optionee
or by which any property or asset of Optionee is bound or affected, other
than, in the case of clause (ii), any such conflicts, violations, breaches
or defaults that, individually or in the aggregate, would not materially
impair the ability of Optionee to perform his obligations hereunder.
(c) Brokers. No broker, finder or investment banker is entitled
to any brokerage, finder's or other fee or commission in connection with
the transactions contemplated hereby based upon arrangements made by or on
behalf of Optionee; provided that this representation does not apply to the
use of such parties in connection with the Solicitation or other activities
with respect to the Company.
(d) Investment Intent. Optionee hereby represents that any
securities he purchases pursuant to this Agreement are being purchased for
his own account for purposes of investment and not with a view to, or for
sale in connection with, any public distribution thereof in violation of
applicable securities laws. In addition, Optionee acknowledges that any
sale of the Option Shares pursuant to this Agreement has not been and will
not be registered under the Securities Act of 1933, as amended (the
"Securities Act"), and such Option Shares may not be resold without
registration under such act or unless
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an exception therefrom is available. Optionee understands that Stockholder
may be deemed an affiliate of the Company under applicable securities law,
which, among other consequences, may result in the Option Shares being
restricted securities under federal securities laws. Optionee agrees that
he will sell the Option Shares only in accordance with Rule 144 under the
Securities Act.
(e) Directorship. Optionee has consented to his nomination by
Stockholder for election as a Director of the Company. If elected, Optionee
represents that he will serve as a Director of the Company.
Section 4. Covenants of Optionee.
(a) The Solicitation. Optionee shall use his reasonable best
efforts to support the Solicitation and shall take all action as
Stockholder may reasonably request in furtherance of a successful
Solicitation; provided that all costs and expenses (i) actually and
reasonably incurred or (ii) actually incurred at the request of
Stockholder, in each case by Optionee in connection with the Solicitation,
shall be paid by Stockholder.
(b) Compliance of Stockholder with This Agreement. Optionee
shall take all actions and forbear from all actions, in each case,
necessary in order that (a) all of Optionee's representations and
warranties hereunder are true and correct and (b) Optionee fulfills all of
his obligations hereunder.
Section 5. Indemnification.
(a) Indemnification Rights. Stockholder agrees to indemnify
Optionee and hold Optionee harmless from and against all expenses,
liabilities and losses (including attorneys' fees, judgments, fines and
amounts paid or to be paid in any settlement) actually incurred or suffered
by Optionee in connection with any present or future threatened, pending or
contemplated investigation, claim, action, suit or proceeding, whether
civil, criminal, administrative or investigative, to which Optionee is made
a party or threatened to be made a party by reason of any action or
inaction taken or omitted in connection with Optionee's service as a
Xxxxxxxx Nominee, the solicitation of proxies in respect of the Xxxxxxxx
Nominees in connection with the Annual Meeting and any communication to the
Company's stockholders or filings with the Securities and Exchange
Commission relating thereto (including, without limitation, proxy
statements, solicitation materials and statements on Schedule 13D).
Notwithstanding anything to the contrary contained herein, Stockholder
shall not have any obligation to indemnify or hold Optionee harmless from
any such expense, liability or loss arising out of Optionee's fraud,
willful misconduct or gross negligence.
(b) Indemnification Procedure. Upon receipt by Optionee of
actual notice of the commencement of an action or proceeding against
Optionee in respect of which indemnity may be sought hereunder, Optionee
shall promptly notify Stockholder with respect thereto (provided that
failure to so notify Stockholder shall not relieve Stockholder from any
liability which Stockholder may have on account of this Agreement, except
to the extent Stockholder shall have been actually and materially
prejudiced by such failure) and Stockholder may elect to assume the defense
thereof, including the employment of counsel reasonably satisfactory to
Optionee, and shall have the right to settle such action or proceeding
(providing that such settlement provides for an unconditional release of
Optionee from any liabilities in respect thereof). Optionee shall have the
right to employ separate counsel in any such action and to participate in
the defense thereof, but the fees and expenses of such counsel shall be at
Optionee's expense unless (a) Stockholder has agreed to pay the fees and
expenses of such counsel, (b) Stockholder shall have failed promptly (after
notice thereof from Optionee) to assume the defense of such action or
proceeding and employed counsel reasonably satisfactory to Optionee in any
such action or proceeding, or
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(c) the named parties to any such action or proceedings include Optionee
and Stockholder and Optionee shall have been advised by counsel that there
are one or more legal defenses available to Stockholder which are different
from or additional to those available to Optionee which, if Stockholder and
Optionee were to be represented by the same counsel, would constitute a
conflict of interest for such counsel or prejudice the prosecution of
defenses available to Optionee in which case, if Optionee notifies
Stockholder in writing that Optionee elects to employ separate counsel at
Stockholder's expense, Stockholder shall not have the right to assume the
defense of such action or proceeding on Optionee's behalf (it being
understood, however, that Stockholder shall not, in connection with any
such action or proceeding or separate but substantially similar or related
actions or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses or more than one separate firm of attorneys (together with
appropriate local counsel) at any time for Optionee and Optionee shall
instruct each separate counsel to reasonably cooperate with Stockholder in
order to reduce fees and expenses for which Stockholder is liable).
Stockholder shall not be liable for any settlement of any litigation or
proceeding effected without Stockholder's written consent (which consent
shall not be unreasonably withheld), but, if settled with such consent,
Stockholder agrees to indemnify Optionee from and against any loss or
liability by reason of such settlement.
Section 6. Termination. This Agreement, except for the provisions of
Section 5 above, shall terminate automatically at 4 p.m. EST on December 15,
2000 (the "Termination Date"); provided that any claim arising out of a breach
of this Agreement prior to the Termination Date shall not be affected by the
termination of this Agreement and shall be enforceable.
Section 7. Miscellaneous.
(a) Expenses. All costs and expenses incurred in connection with
the transactions contemplated by this Agreement shall be paid by
Stockholder.
(b) Further Assurances. Stockholder and Optionee shall execute
and deliver all such further documents and instruments and take all such
further action as may be reasonably necessary in order to consummate the
transactions contemplated hereby.
(c) Entire Agreement. This Agreement constitutes the entire
agreement between Optionee and Stockholder with respect to the subject
matter hereof and supersedes all prior agreements and understandings, both
written and oral, between Optionee and Stockholder with respect to the
subject matter hereof.
(d) Assignment. This Agreement and all rights hereunder shall
not be assigned by operation of law or otherwise.
(e) Parties in Interest. This Agreement shall be binding upon,
inure solely to the benefit of, and be enforceable by, the parties hereto.
Nothing in this Agreement, express or implied, is intended to or shall
confer upon any other person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement.
(f) Amendment; Waiver. This Agreement may not be amended except
by an instrument in writing signed by the parties hereto. Any party hereto
may (a) extend the time for the performance of any obligation or other act
of any other party hereto, (b) waive any inaccuracy in the representations
and warranties contained herein or in any document delivered pursuant
hereto and (c) waive compliance with any agreement or condition contained
herein. Any such extension or waiver shall be valid if set forth in an
instrument in writing signed by the party or parties to be bound thereby.
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(g) Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of
law, or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of this Agreement is not affected in any manner
materially adverse to any party.
(h) Notices. Except as otherwise provided herein, all notices,
requests, claims, demands and other communications hereunder shall be in
writing and shall be given (and shall be deemed to have been duly given
upon receipt) by delivery in person, by cable, facsimile transmission,
telegram or telex or by registered or certified mail (postage prepaid,
return receipt requested) to the respective parties at the following
addresses (or at such other address for a party as shall be specified in a
notice given in accordance with this Section 7(h):
if to Optionee:
if to Stockholder: Xxxxxxxx Associates, L.P.
c/o Xxxxx X. X. Xxxxxxxx
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Facsimile: 603/433-1979
Telephone: 603/000-0000
With a copy to: Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
(i) Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware applicable
to contracts executed in and to be performed in Delaware without regard to
any principles of choice of law or conflicts of law of such State. All
actions and proceedings arising out of or relating to this Agreement shall
be heard and determined in any state or federal court sitting in Delaware.
Each of the parties hereto (i) consents to submit such party to the
personal jurisdiction of any Federal court located in the State of Delaware
or any Delaware state court in the event any dispute arises out of this
Agreement or any of the transactions contemplated hereby, (ii) agrees that
such party will not attempt to deny or defeat such personal jurisdiction by
motion or other request for leave from any such court, (iii) agrees that
such party will not bring any action relating to this Agreement or the
transactions contemplated hereby in any court other than a Federal court
sitting in the state of Delaware or a Delaware state court and (iv) waives
any right to trial by jury with respect to any claim or proceeding related
to or arising out of this Agreement or any of the transactions contemplated
hereby.
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(j) Headings. The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not
affect in any way the meaning or interpretation of this Agreement.
(k) Counterparts. This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, and by
the different parties hereto in separate counterparts, each of which when
so executed and delivered shall be deemed to be an original but all of
which taken together shall constitute one and the same agreement.
* * * * *
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IN WITNESS each of the parties hereto has caused this Agreement to be
duly executed and delivered as of the date first written above.
XXXXXXXX ASSOCIATES, L.P.
By: /s/ Xxxxx X.X. Xxxxxxxx
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Title: Managing General Partner
OPTIONEE
By: /s/ Xxxxxxx Xxxxx
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Xxxxxxx X. Xxxxx
[Signature Page to Option Agreement]
