SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
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GRC INTERNATIONAL, INC.
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(Name of Registrant as Specified In Its Charter)
GRC INTERNATIONAL, INC.
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<PAGE>
FROM: Gary Denman, President and CEO, GRC International
TO: All GRC International Employees
DATE: Oct. 16, 1998
On September 30, thanks to all your excellent and hard work, GRCI completed one
of the most successful quarters we have had in a long time. Revenues were up 35
percent, earnings before taxes and interest rose 50 percent, earnings after
interest doubled, and net income doubled. This news was so compelling that the
Dow Jones Newswire interviewed me yesterday on the details of our operational
and financial performance. These interviews are rare and most companies never
have the opportunity to do even one interview. Because of your remarkable
accomplishments over the past year, we have had two of these interviews within
six months. This speaks very highly of GRCI. Congratulations.
The result of this interview was a news story that was distributed yesterday to
newspapers and investors across the nation and includes details on quarterly
financial results. Because the story was so positive, we have obtained
permission from Dow Jones to share it with GRCI employees and it is available
(to employees only) on the GRCInet at:
http://grcinet.grci.com/inet/interest/dj1015.shtml
(Please note that Dow Jones' permission to use this article is restricted to
internal distribution only and should not be reproduced in any way.)
As many of you are fellow GRCI shareholders, I also wanted to talk with you
about the recent distribution of our new annual report and proxy, copies of
which you have probably already received in the mail. In my letter to
shareholders, I state the company's long-term objectives and what benchmarks we
have identified to track our progress. This all focuses on my vision of the
company, which is to continue building GRC International as a strong,
preeminent, independent professional and technical services company.
If you have not read the 1998 GRC International Annual Report, I urge you to do
so. It sets forth the objectives that all our efforts should be directed
towards.
As you read through the proxy, you will see several items that are new. First,
you will see that the board of directors is reducing its own membership from 12
directors to seven. We are doing this because we want the Board to be as
flexible and responsive as the company we oversee. I applaud this move and look
forward to working with this new, tight-knit group in the coming years.
Second, at the end of the proxy, there are also two proposals submitted by two
individual shareholders. One proposal seeks elimination of provisions that
provide for the election of our board on a staggered-year basis. In other words,
they want the entire board to be up for election annually. The second proposal
seeks the elimination of the Shareholder Rights Plan.
The board and I believe that electing directors by classes ensures continuity
and stability in the management of the company. The company will benefit from
the directors' solid knowledge of GRCI's business strategies, their informed
oversight, and their long-term strategic commitment to enhancing shareholder
value.
The Board and I feel equally as strong in our opposition to the elimination of
the Shareholder Rights Plan. It is a fundamental negotiating tool that most
companies have. It inhibits abusive conduct and is designed to protect against
practices that do not treat all shareholders equally. GRCI's board believes the
Shareholder Rights Plan strengthens the company's negotiating power, and
positions the board to negotiate in the shareholders' best interest.
Above all, continuing both the shareholder rights plan and staggered board are
essential to assure our key customers who are very sensitive to national
security issues that the management of GRCI is stable and free from conflict on
security matters.
GRCI management and the overwhelming majority of the board are opposed to these
proposals. I urge you to read these proposals for yourself, then read the
response of the board and support their opposition by voting AGAINST the
proposals, which are items 3 and 4 our your proxy card.
Thank you again for making GRC International successful. I look forward to many
more good results to come.
