Exhibit 2
STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT, dated as of February 14, 2000 (this "Agreement"),
among AT&T Corp., a New York corporation ("Parent"), LMN Corporation, a Delaware
corporation and a wholly owned subsidiary of Parent ("Sub"), and Xxxxxx X.
XxXxxxxxx, an individual ("Stockholder') and a stockholder of GRC International,
Inc., a Delaware corporation (the "Company").
WHEREAS, Parent, Sub and the Company are, concurrently with the execution
hereof, entering into an Agreement and Plan of Merger, dated as of February 14,
2000 (the "Merger Agreement"), pursuant to which, upon the terms and subject to
the conditions set forth in the Merger Agreement, Sub will make an offer (the
"Offer") to acquire all of the issued and outstanding shares of common stock,
par value $0.10 per share, of the Company (the "Company Common Stock"), at a
purchase price of $15.00 per share, net to the seller in cash, the consummation
of which will be followed by the merger of Sub with and into the Company, with
the Company being the surviving corporation (the "Merger");
WHEREAS, Stockholder is the record and/or beneficial owner of 2,001,700
shares of Company Common Stock (collectively, the "Existing Shares") (all such
Existing Shares, together with all other shares of capital stock or other voting
securities of the Company or any of its Subsidiaries with respect to which
Stockholder has beneficial ownership (for purposes of this Agreement,
"beneficial ownership" shall have the meaning set forth in Rule 13d-3 under the
Exchange Act) as of the date of this Agreement, and any shares of capital stock
or other voting securities of the Company or any of its Subsidiaries, beneficial
ownership of which is directly or indirectly acquired after the date hereof,
including, without limitation, shares received pursuant to any stock splits,
stock dividends or distributions, shares acquired by purchase or upon the
exercise, conversion or exchange of any option, warrant or convertible security
or otherwise, and shares or any voting securities of the Company or any of its
Subsidiaries received pursuant to any change in the capital stock of the Company
or such Subsidiary by reason of any recapitalization, merger, reorganization,
consolidation, combination, exchange of shares or the like, are referred to
herein as the "Shares");
WHEREAS, each of the parties hereto desires to enter into this Agreement to
provide for, among other things, (1) the obligation of Stockholder to tender, or
cause the record holder of the Shares to tender, the Shares beneficially owned
by Stockholder (other than Shares subject to unexercised options) (the "Tender
Shares") in the Offer, (2) the obligation of Stockholder to vote, or cause the
record holder of the Shares to vote, the Shares beneficially owned by
Stockholder (other than Shares subject to unexercised options) (the "Voting
Shares") in the manner specified herein and (3) certain restrictions on the sale
or the transfer of the record and beneficial ownership of Shares by Stockholder
(this Agreement and all other agreements, instruments and other documents
executed and delivered by Stockholder in connection with this Agreement are
collectively referred to as the "Support Documents"); and
WHEREAS, Stockholder acknowledges that Parent and Sub are entering into the
Merger Agreement in reliance on the representations, warranties, covenants and
other agreements of Stockholder set forth in this Agreement and would not enter
into the Merger Agreement if Stockholder did not enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein and in
the Merger Agreement, and intending to be legally bound hereby, Parent, Sub and
Stockholder agree as follows:
1. Defined Terms. Terms used herein without definition shall have the
meanings assigned to such terms in the Merger Agreement.
2. Agreement to Tender. Stockholder hereby agrees to validly tender, or
cause the record owner to validly tender, all of the Tender Shares pursuant to
and in accordance with the terms of the Offer within 18 business days of the
commencement thereof, and not to withdraw or permit to be withdrawn any Shares
therefrom.
3. Agreement to Vote. Stockholder hereby agrees that, from and after the
date hereof and until the Termination Date (as defined in Section 19), at any
meeting of the stockholders of the Company, however called, or in connection
with any written consent of the stockholders of the Company, Stockholder shall
appear at each such meeting, in person or by proxy, or otherwise cause the
Voting Shares to be counted as present thereat for purposes of establishing a
quorum, and Stockholder shall vote (or cause to be voted) or act by written
consent with respect to all of the Voting Shares that are beneficially owned by
him or as to which he has, directly or indirectly, the right to vote or direct
the voting, (a) in favor of adoption and approval of the Merger Agreement and
the Merger and the approval of the terms thereof and each of the other actions
contemplated by the Merger Agreement and this Agreement, and any other action
reasonably requested by Parent in furtherance thereof; (b) against any action or
agreement that would result in a breach of any covenant, representation or
warranty or any other obligation or agreement of the Company contained in the
Merger Agreement or of Stockholder contained in this Agreement; and (c) against
any Acquisition Proposal made by any person other than Parent or any of its
affiliates. Stockholder hereby agrees that he will not enter into any voting or
other agreement or understanding with any person or entity or grant a proxy or
power of attorney with respect to the Shares prior to the Termination Date
(other than a proxy or power of attorney to an officer of the Company that may
be exercised solely in accordance with this Section 3 and except as provided in
Section 4 below) or vote or give instructions in any manner inconsistent with
clause (a), (b) or (c) of the preceding sentence. Stockholder hereby agrees,
during the period commencing on the date hereof and ending on the Termination
Date, not to, and, if applicable, not to permit any of his affiliates to, vote
or execute any written consent in lieu of a stockholders meeting or vote, if
such consent or vote by the stockholders of the Company would be inconsistent
with or frustrate the purposes of the other covenants of Stockholder pursuant to
this paragraph. As used in this Agreement, "person" shall have the meaning
specified in Sections 3(a)(9) and 13(d)(3) of the Exchange Act.
4. PROXY. SUBJECT TO SECTION 19 HEREOF, STOCKHOLDER HEREBY GRANTS TO, AND
APPOINTS, XXXX XXXX XXXXXXXX, XXXXXXX XXXXXX AND XXXX XXXXXXX, IN THEIR
RESPECTIVE CAPACITIES AS OFFICERS OF PARENT, AND ANY INDIVIDUAL WHO SHALL
HEREAFTER SUCCEED ANY SUCH OFFICER OF PARENT, AND ANY OTHER PERSON DESIGNATED IN
WRITING BY PARENT, EACH OF THEM INDIVIDUALLY, STOCKHOLDER'S PROXY AND
ATTORNEY-IN-FACT (WITH FULL POWER OF SUBSTITUTION) TO VOTE OR ACT BY WRITTEN
CONSENT, TO THE FULLEST EXTENT PERMITTED BY AND SUBJECT TO APPLICABLE LAW, WITH
RESPECT TO THE SHARES IN ACCORDANCE WITH SECTION 3 HEREOF IN RESPECT OF ANY
MATTER SPECIFIED IN CLAUSE (a), (b) or (c) OF SUCH SECTION 3. THIS PROXY IS
COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE.
STOCKHOLDER WILL TAKE SUCH FURTHER ACTION OR EXECUTE SUCH OTHER INSTRUMENTS AS
MAY BE NECESSARY TO EFFECTUATE THE INTENT OF THIS PROXY AND HEREBY REVOKES ANY
PROXY PREVIOUSLY GRANTED BY STOCKHOLDER WITH RESPECT TO THE SHARES.
NOTWITHSTANDING THE FOREGOING, NEITHER PARENT NOR ANY OF THE AFORENAMED PROXIES
SHALL EXERCISE THE POWERS SET FORTH IN THIS SECTION 4 UNLESS AND UNTIL PARENT
SHALL HAVE RECEIVED ALL APPLICABLE REGULATORY APPROVALS REQUIRED UNDER
APPLICABLE LAW FOR SUCH EXERCISE.
5. Representations and Warranties of Parent and Sub. Parent and Sub
represent and warrant to Stockholder as follows:
(a) Each of Parent and Sub is a corporation duly organized, validly
existing and in good standing under the laws of the state of its incorporation.
(b) Each of Parent and Sub has the requisite corporate power and authority
to enter into this Agreement and to carry out its obligations hereunder. The
execution and delivery of this Agreement by Parent and Sub and the consummation
by Parent and Sub of the transactions contemplated hereby have been duly
authorized by the respective Boards of Directors of Parent and Sub and no other
corporate proceedings on the part of Parent or Sub are necessary to authorize
the execution and delivery of this Agreement by Parent and Sub and the
consummation by them of the transactions contemplated hereby. This Agreement has
been duly executed and delivered by Parent and Sub and (assuming the valid
authorization, execution and delivery of this Agreement by Stockholder) is a
valid and binding obligation of each of Parent and Sub, enforceable against each
of Parent and Sub in accordance with its terms, except as such enforceability
may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws affecting creditors' rights generally and
general equitable principles (whether considered in a proceeding in equity or at
law).
(c) The execution and delivery of this Agreement by Parent and Sub do not,
and the performance of this Agreement by Parent and Sub will not, (i) conflict
with or violate the certificate of incorporation or by-laws of Parent or Sub,
(ii) conflict with or violate any law, rule, regulation or order applicable to
Parent or Sub or by which any of their respective properties is bound, or (iii)
conflict with, result in any breach of or constitute a default (or an event that
with notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of, or
require payment under, or result in the creation of any lien on the properties
or assets of Parent or Sub pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which Parent or Sub is a party or by which Parent or Sub or any of
their respective properties is bound, except for any thereof that would
materially impair the ability of Parent or Sub to perform its obligations
hereunder or to consummate the transactions contemplated hereby on a timely
basis.
(d) The execution and delivery of this Agreement by Parent and Sub do not,
and the performance by Parent and Sub of their obligations hereunder will not,
require Parent or Sub to obtain any consent, approval, authorization or permit
of, or to make any filing with or notification to, any Governmental Entity,
other than as set forth in Section 3.3 of the Merger Agreement.
(e) There is no suit, action, investigation or proceeding pending or, to
the knowledge of Parent or Sub, threatened against Parent or Sub at law or in
equity before or by any Governmental Entity that could reasonably be expected to
materially impair the ability of Parent
or Sub to perform their obligations hereunder on a timely basis, and there is no
agreement, commitment or law to which Parent or Sub is subject that could
reasonably be expected to materially impair the ability of Parent or Sub to
perform their obligations hereunder on a timely basis.
6. Representations and Warranties of Stockholder. Stockholder represents
and warrants to Parent and Sub as follows:
(a) This Agreement has been duly executed and delivered by Stockholder and
(assuming the valid authorization, execution and delivery of this Agreement by
Parent and Sub) is a valid and binding obligation of Stockholder, enforceable
against Stockholder in accordance with its terms, except as such enforceability
may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws affecting creditors' rights generally and
general equitable principles (whether considered in a proceeding in equity or at
law).
(b) The execution and delivery of this Agreement by Stockholder do not, and
the performance of this Agreement by Stockholder will not, (i) conflict with or
violate any law, rule, regulation or order applicable to Stockholder or by which
any of Stockholder's properties is bound or (ii) conflict with, result in any
breach of or constitute a default (or an event that with notice or lapse of time
or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or require payment
under, or result in the creation of any lien on the properties or assets of
Stockholder pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which Stockholder is a party or by which Stockholder or any of his properties
is bound, except for any thereof that would not result in the imposition of a
lien on the Shares or materially impair the ability of Stockholder to perform
his obligations hereunder or to consummate the transactions contemplated hereby
on a timely basis.
(c) The execution and delivery of this Agreement by Stockholder do not, and
the performance by Stockholder of his obligations hereunder will not, require
Stockholder to obtain any consent, approval, authorization or permit of, or to
make any filing with or notification to, any Governmental Entity, except for an
amendment to the Statement on Schedule 13D filed by Stockholder with respect to
the Company.
(d) There is no suit, action, investigation or proceeding pending or, to
the knowledge of Stockholder, threatened against Stockholder at law or in equity
before or by any Governmental Entity that could reasonably be expected to
materially impair the ability of Stockholder to perform his obligations
hereunder on a timely basis, and there is no agreement, commitment or law to
which Stockholder is subject that could reasonably be expected to materially
impair the ability of Stockholder to perform his obligations hereunder on a
timely basis.
(e) Except as set forth on Schedule I hereto, (i) the Existing Shares are
owned beneficially and of record by Stockholder; (ii) Stockholder has not
appointed or granted any proxy which is still effective with respect to any
Shares other than as provided in this Agreement; and (iii) Stockholder has sole
voting power and sole power of disposition with respect to all of the Existing
Shares, with no restrictions on Stockholder's rights of disposition pertaining
thereto. The Existing Shares constitute all of the shares of Company Common
Stock owned of record or beneficially by Stockholder. All of the Existing Shares
are issued and outstanding and, except for the Rights associated with such
Existing Shares, Stockholder does not own, of record or beneficially, any
warrants, options, convertible securities or other rights to acquire any shares
of Company Common Stock.
7. Agreements of Stockholder.
(a) Stockholder hereby agrees, while this Agreement is in effect, and
except as expressly contemplated hereby, not to (i) sell, transfer, pledge,
encumber, grant, assign or otherwise dispose of, enforce any redemption
agreement with the Company or enter into any contract, option or other
arrangement or understanding with respect to or consent to the offer for sale,
sale, transfer, pledge, encumbrance, grant, assignment or other disposition of,
record or beneficial ownership of any of the Shares (whether acquired heretofore
or hereafter) or any interest in any of the foregoing, except to Parent or Sub,
(ii) grant any proxies or powers of attorney, deposit any Shares into a voting
trust or enter into a voting agreement with respect to any Shares, or any
interest in any of the Shares, except to Parent or Sub or (iii) take any action
that would make any representation or warranty of Stockholder contained herein
untrue or incorrect or have the effect of preventing or disabling Stockholder
from performing his obligations under this Agreement.
(b) Stockholder hereby agrees, while this Agreement is in effect, except
with respect to Parent and its affiliates, that he shall not, and shall not
permit any affiliates or, if applicable, any director, officer, employee
consultant, agent, advisor or representative of Stockholder or any of his
affiliates (collectively, the "Representatives") to (i) initiate, solicit or
encourage, directly or indirectly, any inquiries or the making of any proposal
with respect to any matter described in Section 7(a) hereof or any Acquisition
Proposal or (ii) participate in any negotiations concerning, or provide to any
other person any information or data relating to the Company or any of its
Subsidiaries for the purpose of, or have any discussions with any person
relating to, or cooperate with or assist or participate in, or facilitate, any
inquiries or the making of any proposal which constitutes, or would reasonably
be expected to lead to, any effort or attempt by any other person to seek to
effect any matter described in Section 7(a) hereof or any Acquisition Proposal,
or agree to or endorse any Acquisition Proposal, or otherwise facilitate any
effort or attempt to make or implement such an Acquisition Proposal. Stockholder
agrees immediately to cease and cause to be terminated any existing activities,
discussions or negotiations with any persons conducted heretofore by Stockholder
with respect to any possible Acquisition Proposal, or any matter described in
Section 7(a) hereof, and will take the necessary steps to inform Stockholder's
Representatives of the obligations undertaken by Stockholder with respect to
Stockholder's Representatives in this Section 7; provided, that nothing in this
Agreement shall restrict Stockholder in the exercise of his fiduciary duties to
the stockholders of the Company, in his capacity as a director of the Company,
under applicable law or otherwise prohibit him from taking such actions, in his
capacity as a director of the Company, as may be permitted (under the
circumstances therein specified) pursuant to Section 5.2 of the Merger
Agreement.
(c) Stockholder hereby agrees, while this Agreement is in effect, to notify
Parent promptly of the number of any additional shares of Company Common Stock
and the number and type of any other Shares acquired by Stockholder, if any,
after the date hereof.
8. Further Assurances. From time to time, at the other party's request and
without further consideration, each party hereto shall execute and deliver such
additional documents and take all such further action as may be necessary or
desirable to consummate and make effective, in the most expeditious manner
practicable, the transactions contemplated by this Agreement. Without limiting
the generality of the foregoing, none of the parties hereto shall enter into an
agreement or arrangement (or alter, amend or terminate any existing agreement or
arrangement) if such action would materially impair the ability of such party to
effectuate, carry out or comply with all the terms of this Agreement.
9. Survival. None of the representations, warranties, covenants and
agreements of the parties herein shall survive beyond the Termination Date.
10. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed duly given if given in the manner set forth in
Section 9.2 of the Merger Agreement. All notices hereunder shall be given to
Stockholder at his address stated on the signature pages of this Agreement or to
Parent or Sub at Parent's address set forth in Section 9.2 of the Merger
Agreement or at any other address as the party may specify for this purpose by
notice to the other parties pursuant to this Section 10.
11. No Waivers. No failure or delay by Parent or Sub in exercising any
right, power or privilege under any Support Document shall operate as a waiver
of that right, power or privilege. A single or partial exercise of any right,
power or privilege shall not preclude any other or further exercise of that
right, power or privilege or the exercise of any other right, power or
privilege. The rights and remedies provided in the Support Documents shall be
cumulative and not exclusive of any rights or remedies provided by law.
12. Amendments, Etc. No amendment, modification, termination or waiver of
any provision of any Support Document, and no consent to any departure by
Stockholder or Parent or Sub from any provision of any Support Document, shall
be effective unless it shall be in writing and signed and delivered by each
party hereto, and then it shall be effective only in the specific instance and
for the specific purpose for which it is given.
13. Successors and Assigns; Third Party Beneficiaries. (a) No party shall
assign any of such party's rights or remedies or delegate any of such party's
obligations or liabilities, in whole or in part, under any Support Document,
except that Parent or Sub may assign all or any of its rights hereunder to any
affiliate of Parent or Sub. Any assignment or delegation in contravention of
this Section 13 shall be void ab initio and shall not relieve the assigning or
delegating party of any obligation under any Support Document. (b) The
provisions of each Support Document shall be binding upon and inure solely to
the benefit of the parties hereto and their respective permitted heirs,
executors, legal representatives, successors and assigns, and no other person.
14. Governing Law; Submission to Jurisdiction. This Agreement and each
other Support Document and all rights, remedies, liabilities, powers and duties
of the parties hereto and thereto, 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 entirely within that State. Parent, Sub and each
Stockholder hereby (w) submit to the jurisdiction of any State and Federal
courts sitting in Delaware with respect to matters arising out of or relating
hereto, (x) agree that all claims with respect to such matters may be heard and
determined in an action or proceeding in such Delaware State or Federal court,
and (y) agree that a final judgment in any such action or proceeding will be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law.
15. Severability of Provisions. If any term or other provision of any
Support Document is invalid, illegal or incapable of being enforced by any law
or public policy, all other terms and provisions of such Support Document shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties shall
negotiate in good faith to modify such Support Document so as to effect the
original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby are consummated as originally contemplated to the greatest extent
possible.
16. Headings and References. Article and Section headings in any Support
Document are included for convenience of reference only and do not constitute a
part of the Support Document for any other purpose. References to Articles and
Sections in any Support Document are references to the Articles and Sections of
the Support Document unless the context shall require otherwise. Any of the
terms defined in this Agreement may, unless the context otherwise requires, be
used in the singular or the plural, depending on the reference. The use in this
Agreement of the word "include" or "including," when following any general
statement, term or matter, shall not be construed to limit such statement, term
or matter to the specific items or matters set forth immediately following such
word or to similar items or matters, whether or not nonlimiting language (such
as "without limitation" or "but not limited to" or words of similar import) is
used with reference thereto, but rather shall be deemed to refer to all other
items or matters that fall within the broadest possible scope of such general
statement, term or matter.
17. Entire Agreement. The Support Documents and the Merger Agreement embody
the entire agreement and understanding of each of the parties hereto, and
supersede all other written or oral prior agreements or understandings, with
respect to the subject matter of the Support Documents.
18. Enforcement. The parties agree that irreparable damage would occur in
the event that any of the provisions of any Support Document were not performed
in accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of the Support Documents and to enforce
specifically the terms and provisions of any Support Document in any Federal
court sitting in the State of Delaware or State of Delaware court, this being in
addition to any other remedy to which they are entitled at law or in equity.
19. Termination. This Agreement and the proxy set forth in Section 4 shall
terminate upon the earliest of the following dates (such date is referred to
herein as the "Termination Date"): (i) the date on which the Merger Agreement is
terminated in accordance with Article VIII thereof; (ii) the date on which
Parent terminates this Agreement upon written notice to Stockholder (Parent may
so terminate this Agreement and the proxy set forth herein at any time); (iii)
the Effective Time; and (iv) June 30, 2000.
20. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if all
signatures were on the same instrument.
21. WAIVER OF JURY TRIAL. EACH PARTY TO THIS AGREEMENT, AS A CONDITION OF
SUCH PARTY'S RIGHT TO ENFORCE OR DEFEND ANY RIGHT UNDER OR IN CONNECTION WITH
THIS AGREEMENT OR ANY OTHER SUPPORT DOCUMENT, WAIVES ANY RIGHT TO A TRIAL BY
JURY IN ANY ACTION TO ENFORCE OR DEFEND ANY RIGHT UNDER THIS AGREEMENT OR ANY
OTHER SUPPORT DOCUMENT AND AGREES THAT ANY ACTION SHALL BE TRIED BEFORE A COURT
AND NOT BEFORE A JURY.
IN WITNESS WHEREOF, Parent, Sub and the undersigned Stockholder have caused
this Agreement to be duly executed as of the day and year first above written.
AT&T CORP.
By: /s/ Xxxx Xxxx XxXxxxxx
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Name: Xxxx Xxxx XxXxxxxx
Title: Vice President
LMN CORPORATION
By: /s/ Xxxx Xxxx XxXxxxxx
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Name: Xxxx Xxxx XxXxxxxx
Title
/s/ Xxxxxx X. XxXxxxxxx
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Xxxxxx X. XxXxxxxxx
