<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [_]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
GRC INTERNATIONAL, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
CILLUFFO ASSOCIATES, L.P.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
PROXY STATEMENT
OF CILLUFFO ASSOCIATES, L.P.
IN CONNECTION WITH THE
1999 ANNUAL MEETING OF STOCKHOLDERS
OF GRC INTERNATIONAL, INC.
This Proxy Statement is being furnished by Cilluffo Associates, L.P.
("Cilluffo Associates" or "we") to stockholders of GRC International, Inc.
("GRCI" or the "Company") in connection with a solicitation by Cilluffo
Associates, Frank J.A. Cilluffo, Gen. Edward C. Meyer (Ret.) and the other
Participants described below under "Certain Information Concerning
Participants in the Solicitation." As more fully discussed below, Cilluffo
Associates is soliciting proxies in connection with the 1999 Annual Meeting of
stockholders of the Company and any adjournments thereof (the "1999 Annual
Meeting") for the election of Neal B. Freeman and Richard N. Perle as
directors of the Company, to serve until their successors are duly elected and
qualified. Cilluffo Associates is also soliciting proxies for the election of
Guy P. Wyser-Pratte as a director of the Company, which proxy authority could
be used only if the class of directors to be elected at the 1999 Annual
Meeting were expanded to three positions. Mr. Freeman, Mr. Perle and Mr.
Wyser-Pratte are collectively referred to herein as the "Cilluffo Associates
Nominees." Cilluffo Associates believes that it was the largest holder of
shares ("Shares") of the Company's common stock, par value $.10 per share
("Common Stock") prior to the Company's reported issuance of 2,000,000 Shares
in connection with the acquisition of Management Consulting & Research, Inc.
("MCR") on September 2, 1999, and that it is now the Company's second largest
stockholder. Cilluffo Associates owns 13.9% of the Company's outstanding
Shares.
The Company has announced that the 1999 Annual Meeting will be held at the
Company's offices, 1900 Gallows Road, Vienna, Virginia 22182, on Monday,
November 15, 1999, at 1:30 p.m. Only stockholders of record at the close of
business on September 17, 1999 (the "Record Date") will be entitled to notice
of and to vote at the 1999 Annual Meeting.
The enclosed BLUE proxy card may be executed by holders of record as of the
Record Date. You are urged to sign and date the enclosed BLUE proxy card and
return it in the enclosed envelope whether or not you attend the meeting. Any
stockholder who executes and delivers such a proxy will have the right to
revoke it at any time before it is exercised, by filing with Cilluffo
Associates, L.P., c/o MacKenzie Partners, Inc., the firm assisting Cilluffo
Associates in this solicitation, at 156 Fifth Avenue, New York, New York
10010, or with the Secretary of the Company at its principal executive offices
at 1900 Gallows Road, Vienna, Virginia 22182, an instrument revoking it or a
duly executed proxy bearing a later date or by appearing in person and voting
at the 1999 Annual Meeting.
This Proxy Statement and the accompanying BLUE proxy card are first being
sent or given to one or more stockholders on or about October 21, 1999. The
Company has reported in its proxy statement relating to the 1999 Annual
Meeting (the "1999 Proxy Statement") that, as of the Record Date, the
Company's outstanding voting securities consisted of 12,323,626 Shares, which
includes 2,000,000 Shares issued by the Company in connection with the
acquisition of MCR on September 2, 1999. Unless otherwise indicated,
references herein to the percentage of outstanding Shares owned by any person
were computed based upon such 12,323,626 outstanding Shares. Each Share is
entitled to one vote, except that stockholders are entitled to cumulate their
votes in electing directors. Under cumulative voting, each stockholder is
entitled to the number of votes to which such stockholder's Shares would
normally be entitled, multiplied by the number of directors to be elected
(currently two (2)). A stockholder then may cast all of such votes for a
single candidate or may allocate them among as many candidates as the
stockholder may choose.
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PROPOSAL FOR ELECTION OF DIRECTORS
The board of directors of the Company (the "Board") presently consists of 3
classes, with 3 directors in each class. On August 5, 1999, Cilluffo
Associates provided written notice to the Secretary of the Company of its
nomination of the Cilluffo Associates Nominees for election to the Board.
Cilluffo Associates nominated three candidates because, at the time of our
nominations in August 1999, there were three directors in the class to be
elected at the 1999 Annual Meeting. As discussed below, the Board has
subsequently reduced this class to 2 positions, and reduced the size of the
Board from 9 to 8, all effective at the conclusion of the term of the class of
directors whose terms expire at the 1999 Annual Meeting. The proposed election
of the Cilluffo Associates Nominees is referred to herein as the "Proposal."
Such notice was provided pursuant to Section 4 of Article III of the Company's
Bylaws, which sets forth certain requirements for stockholders intending to
nominate candidates for election to the Board, including, in general, the
requirement that a notice containing specified information be submitted to the
Secretary of the Company not less than 10 and not more than 120 days prior to
any meeting of stockholders called for the purpose of electing directors. For
information concerning the Cilluffo Associates Nominees, see "The Cilluffo
Associates Nominees" below.
A Company press release dated April 12, 1999 announced the election by the
Board of a director to a new seat on the Board. According to the 1999 Proxy
Statement, the Board also appointed a director to a new seat on the Board at a
September 23, 1999 Board meeting. At the same meeting, over the objection of
Mr. Cilluffo, the Board reduced the size of the class to be elected by
stockholders at the 1999 Annual Meeting from three (3) to two (2).
Cilluffo Associates is soliciting proxies for the election of Mr. Freeman
and Mr. Perle to the two (2) Board seats that are currently open. We are not
withdrawing our nomination of Mr. Wyser-Pratte because, if the class were
increased again to three (3) before the 1999 Annual Meeting, we want to be
sure that we are not precluded by a technicality from having three nominees.
The proxy authority solicited herein for the election of Mr. Wyser-Pratte
could be used only if the class of directors to be elected at the 1999 Annual
Meeting were increased to three (3) positions.
The Cilluffo Associates Nominees, if elected, would serve for the term
expiring in 2002. If more than three directorships were to be voted upon at
the 1999 Annual Meeting, Cilluffo Associates reserves the right to nominate
additional persons to fill such positions.
The Cilluffo Associates Nominees
Each of the Cilluffo Associates Nominees has consented to serve as a
director if elected. On August 5, 1999, Cilluffo Associates entered into an
option agreement (the "Option Agreements") with each of the Cilluffo
Associates Nominees. Pursuant to the Option Agreements, Cilluffo Associates
granted each Cilluffo Associates Nominee an option (an "Option") to purchase
37,000 Shares from Cilluffo Associates for $8.25 per Share in cash beginning
as of the date of the respective Option Agreement. Each Option shall expire on
and shall not be exercisable after December 15, 2000.
Cilluffo Associates granted the Options to the Cilluffo Associates Nominees
in consideration for each such Cilluffo Associates Nominee's participation in,
and support of, Cilluffo Associates' solicitation (the "Solicitation") of
proxies in connection with the election of Directors at the 1999 Annual
Meeting. The Option Agreements also provide that Cilluffo Associates will
indemnify and hold harmless the Cilluffo Associates Nominees from certain
liabilities that could arise out of, or result from, the service by the
respective Cilluffo Associates Nominee as a nominee (including liabilities
under federal securities laws). Except as described in this Proxy Statement,
there are no arrangements or understandings between any such nominee and any
other person pursuant to which he was selected as a Cilluffo Associates
Nominee.
The information below concerning age, principal occupation, directorships
and beneficial ownership of Common Stock has been furnished by the respective
Cilluffo Associates Nominees. Unless otherwise indicated, each person shown as
the beneficial owner of Shares possesses sole voting and dispositive power
with respect to such Shares.
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Cilluffo Associates Nominees for the two (2) director positions currently
to be elected at the 1999 Annual Meeting:
<TABLE>
<CAPTION>
Present Principal
Occupation and
Principal Occupations Number of Shares
Name, Business During Last Five (5) of Common Stock Percent of
Address and Age Years; Directorships Owned Common Stock
--------------- ------------------------ ---------------- ------------
<C> <S> <C> <C>
Neal B. Freeman.......... Chairman and Chief 49,000(1)(2) 0.4%
c/o The Blackwell Executive Officer of The
Corporation Blackwell Corporation, a
P.O. Box 2169 television production
Vienna, VA 22183 and distribution
Age 59 company, since 1981.
Director of COMSAT
Corporation since 1983.
Vice Chairman of The
Ethics and Public Policy
Center and a director of
National Review, Inc.
and Forum Network, Inc.
Richard N. Perle......... Consultant since 1994. 37,200(1)(3) 0.3%
5 Grafton Street Resident Fellow, the
Chevy Chase, MD 20815 American Enterprise
Age 57 Institute's Commission
on Future Defenses,
since 1987. Assistant
Secretary of Defense for
International Security
Policy of the U.S.
Department of Defense
from 1981 until 1987.
Chairman of Hollinger
Digital, Inc. and a
director of Hollinger
International, Inc.,
Jerusalem Post,
Geobiotics, American
Interactive Media, Inc.,
AppNet Systems, Inc.and
Morgan Crucible, PLC.
</TABLE>
Additional Cilluffo Associates Nominee for whose election proxies are being
solicited in the event that the number of directors to be elected at the 1999
Annual Meeting is increased to three (3) positions:
<TABLE>
<CAPTION>
Present Principal
Occupation and
Principal Occupations Number of Shares
Name, Business During Last Five (5) of Common Stock Percent of
Address and Age Years; Directorships Owned Common Stock
--------------- ------------------------ ---------------- ------------
<C> <S> <C> <C>
Guy P. Wyser-Pratte...... President of the 37,000(1) 0.3%
c/o Wyser-Pratte & Co., investment management
Inc. firms Wyser-Pratte &
and Wyser-Pratte Co., Inc. and Wyser-
Management Pratte Management Co.,
Co., Inc. Inc. since 1991.
63 Wall Street Director of COMSAT
New York, New York 10005 Corporation since August
Age 59 1997. Director of The
Eureka (US$) Fund, The
Eureka (DM) Fund and the
International Rescue
Committee, a non-
governmental
international refugee
organization, a member
of the Council on
Foreign Relations and a
trustee of the
U.S.Marine Corps
University Foundation.
</TABLE>
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(1) Includes 37,000 Shares that are subject to the respective Option described
under "The Cilluffo Associates Nominees" above.
(2) Includes 12,000 Shares held directly.
(3) Includes 200 Shares held directly.
All transactions in securities of the Company engaged in by any proposed
Cilluffo Associates Nominee herein during the past two years are summarized in
Appendix A.
Reasons for Nomination of the Cilluffo Associates Nominees
Cilluffo Associates is and has been for many years a long-term and major
stockholder of the Company. We began purchasing shares of the Company's Common
Stock in 1989. One of our Managing Partners, General
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<PAGE>
Meyer, served on the Board from 1992 to 1998. Mr. Cilluffo, our other Managing
Partner, has been a member of the Board since 1996. We believe that our
ownership of 1,708,000 Shares made us the Company's largest stockholder prior
to the Company's issuance of 2,000,000 Shares in connection with the
acquisition of MCR on September 2, 1999, and that it now make us the Company's
second largest stockholder.
We believe, and have believed for many years, that there is great value in
the Company, its technologies and its employees. However, we have been
disappointed in the performance of the Company's stock. A $100 investment made
on June 30, 1994 in the S&P 500 Index and the S&P Technology--500 grew to $309
and $635, respectively, by June 30, 1999. IN CONTRAST, A $100 INVESTMENT IN
THE COMPANY MADE ON JUNE 30, 1994 ACTUALLY DECLINED TO $71 BY JUNE 30, 1999.
Among other factors, a company's stock price can be related to a company's
earnings, balance sheet and business outlook, as well as investor confidence.
Cilluffo Associates believes that the Company's stockholders will vote for the
slate of nominees in which they have the most confidence.
Cilluffo Associates has nominated additional candidates to the Board in
order to obtain a better understanding of the problems and opportunities
facing our Company and, most importantly, to have a more influential voice in
addressing them. Cilluffo Associates is nominating these individuals because
of their backgrounds and relevant business experience. In the opinion of
Cilluffo Associates, each of the nominees would bring a wealth of relevant
knowledge and experience to bear upon the management of the Company based upon
their respective business, government and investment backgrounds.
Cilluffo Associates believes that the Company should identify methods to
enhance the Company's return on sales and operating margins and otherwise to
enhance stockholder value. Cilluffo Associates does not have a specific
current plan or proposal to enhance the return on sales and operating margins
and otherwise to enhance stockholder value. Cilluffo Associates believes that
a review of operations directed under the influence of its nominees, if
elected, may offer such opportunities. While recognizing that MCR's business
may not be comparable to GRCI's, we note that in an investors' conference call
on August 11, 1999, the Chairman of GRCI stated that the margins of MCR are in
excess of 10 percent; GRCI's margins in the last fiscal year were 5.6 percent
and in the previous fiscal year were 4.1 percent.
The Board and management have stated on several occasions that they are
seeking acquisitions. Cilluffo Associates is concerned that there could be
substantial business risks involved in acquisitions. First, there is the risk
of a failure to understand or evaluate fully all material aspects of an
acquisition. Second, there are significant business risks and uncertainties
associated with the merging and absorption of an acquisition into the existing
business of GRCI. The integration of personnel, cultures and product and
service offerings can present complicated challenges for management. To
Cilluffo Associates' knowledge, the Company's current CEO does not have
experience managing the integration of successful mergers or acquisitions.
(Cilluffo Associates cannot assess the results of the recent acquisition of
MCR, as it is too early to determine the ultimate impact of this acquisition
on GRCI's stockholders.) Consequently, Cilluffo Associates believes that it is
important for the Board to make decisions about proposed material acquisitions
with an understanding of the stockholders' desires with respect thereto.
Accordingly, Cilluffo Associates believes that the Board should have a non-
binding policy that material proposed acquisitions should normally be
submitted to stockholders for a non-binding vote unless the Board believes, in
its absolute discretion, that any such submission would be inadvisable. For
this purpose, Cilluffo Associates would define "material" as 5 percent or more
of the average market value of GRCI's equity for the three months prior to the
signing of a proposed acquisition agreement (for example, an acquisition of
approximately $4.6 million or more would have been a material acquisition as
of September 24, 1999). Under the Company's Bylaws, to call a special
stockholders' meeting, the Board would have to establish a record date of
stockholders entitled to notice of such meeting, and the Company would be
required to give the stockholders not less than ten days prior written notice
of the special meeting. Cilluffo Associates would support special stockholder
meetings for non-binding votes, or other less formal means of determining
stockholder opinion, regarding any such proposed acquisitions.
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Cilluffo Associates is not proposing at this time that the Certificate of
Incorporation or Bylaws of the Company be amended with respect to restrictions
in connection with acquisitions and mergers. However, we reserve the right to
do so in the event that future circumstances make any such proposal advisable
in the judgment of Cilluffo Associates.
At the annual stockholder meeting of November 5, 1998, two non-binding
stockholder proposals affecting important corporate governance matters were
submitted and approved by stockholders which held greater than a majority of
the Shares that were voted. The two proposals were (1) termination of the
shareholder rights plan ("poison pill") (submitted by David and Joyce
Corcoran) and (2) declassification of the Board (submitted by Leonard and
Diane DeFrancisci). The Board subsequently voted to terminate the poison pill
as of August 31, 2000, but reserved the right to implement a new poison pill
without shareholder approval. Thus, the Board deferred the termination of the
existing poison pill and, directly contrary to the shareholder proposal,
reserved the right to implement a new poison pill without shareholder
approval. Cilluffo Associates believes that the Board should make the
effective date of the termination immediate, and should not implement a new
poison pill without giving the stockholders an absolute right to terminate it.
According to the 1999 Proxy Statement, David and Joyce Corcoran have
resubmitted their proposal (the "Poison Pill Termination Proposal") that the
Company terminate the Shareholder Rights Plan and refrain from adopting any
similar plan unless the plan is approved by the affirmative vote of a majority
of outstanding shares entitled to vote at a meeting of shareholders that is
held as soon as practicable. Cilluffo Associates intends to vote for this
proposal.
The Board flatly rejected the proposal to declassify the Board, asserting
in a May 20, 1999, press release a belief that a classified structure is
important to its U.S. government customers. Cilluffo Associates is unaware of
any such U.S. government policy regarding this issue.
In addition, the Company stated in the press release of May 20, 1999, that
it had been "advised that the classified board would be extremely difficult to
eliminate due to the eighty-percent supermajority voting requirement contained
in the company's charter." While Cilluffo Associates acknowledges that
attaining the eighty-percent requirement might be difficult, Cilluffo
Associates believes that the vote by the stockholders at the last annual
stockholders meeting deserves to be respected. Accordingly, Cilluffo
Associates believes that the Board should submit to a stockholders' vote an
amendment to the Certificate of Incorporation declassifying the Board. In
order to improve the Board's accountability and responsiveness to
stockholders, Cilluffo Associates also believes the Board should recommend its
approval.
BY RUNNING OUR OWN SLATE OF NOMINEES, WE BELIEVE WE ARE GIVING STOCKHOLDERS
A CHOICE. IF YOU--LIKE US--ARE NOT SATISFIED AND BELIEVE THAT THE COMPANY
WOULD BENEFIT BY HAVING NOMINEES SELECTED BY THE COMPANY'S SECOND LARGEST
STOCKHOLDER SERVE ON THE BOARD, WE URGE YOU TO SUPPORT OUR NOMINEES.
QUORUM AND VOTING
The 1999 Proxy Statement is required to provide information about the
number of Shares outstanding and entitled to vote on the Record Date, and
reference is made thereto for such information.
The presence in person or by proxy of the holders of a majority of the
Shares entitled to vote thereat are necessary to constitute a quorum at the
1999 Annual Meeting. If a quorum is not present or represented by proxy, the
stockholders entitled to vote, present or represented by proxy, have the power
to adjourn the 1999 Annual Meeting from time to time without notice other than
an announcement at the meeting at which such adjournment is taken (unless such
meeting adjourned for 30 days or more) until the requisite amount of Shares
shall be present.
5
<PAGE>
Each holder of a Share is entitled to one vote for each Share held, except
that cumulative voting will apply in the election of directors. In the
election of directors under cumulative voting, each stockholder is entitled to
the number of votes to which such stockholder's Shares would normally be
entitled, multiplied by the number of directors to be elected (currently two
(2)). A stockholder may then cast all of such votes for a single candidate or
may allocate them among as many candidates as the stockholder may choose.
Directors will be elected by a plurality of the votes cast by stockholders at
the 1999 Annual Meeting. Votes not cast at the 1999 Annual Meeting because
authority to vote for nominees is withheld and as a result of broker non-votes
will not affect the outcome of the election of directors.
Cilluffo Associates intends to vote all of its Shares, and those for which
the Cilluffo Associates proxy holders (the "Cilluffo Proxy Holders") are given
proxies, FOR the election of the Cilluffo Associates Nominees. Cilluffo
Associates intends to cumulate its votes, and those for which the Cilluffo
Proxy Holders are given proxies, in such a manner as to obtain the maximum
representation on the Board.
Cilluffo Associates will allocate its votes, and those for which the
Cilluffo Proxy Holders are given proxies, to Mr. Freeman and/or to Mr. Perle
for the two (2) directorships currently open. If the Board were to expand the
class of directors to be elected at the 1999 Annual Meeting to three
positions, then Cilluffo Associates would allocate its votes, and those for
which the Cilluffo Proxy Holders are given proxies, to Mr. Freeman and/or Mr.
Perle and/or Mr. Wyser-Pratte.
Unless otherwise indicated by a stockholder, the granting of a proxy to the
Cilluffo Proxy Holders will give the Cilluffo Proxy Holders discretionary
authority to cumulate all votes to which the stockholder is entitled and to
allocate them in favor of any or all of the Cilluffo Associates Nominees as
Cilluffo Associates may determine (provided that such votes may be allocated
to Mr. Wyser-Pratte only if the number of directors to be elected is increased
to three). The effect of cumulation and voting in accordance with that
discretionary authority may be to offset the effect of a stockholder's having
withheld authority to vote for one of the Cilluffo Associates Nominees because
the Cilluffo Proxy Holders will be able to allocate votes of stockholders who
have not withheld authority to vote in any manner they determine among such
nominees (provided that such votes may be allocated to Mr. Wyser-Pratte only
if the number of directors to be elected is increased to three). If a
stockholder desires specifically to allocate votes among the Cilluffo
Associates Nominees, the stockholder should so specify on the enclosed BLUE
proxy card (sometimes referred to herein as the "Cilluffo Proxy Card")
(provided that such votes may be allocated to Mr. Wyser-Pratte only if the
number of directors to be elected is increased to three).
OTHER MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING
According to the 1999 Proxy Statement, in addition to the election of
directors, the 1999 Annual Meeting has the following purposes: (i) to consider
and act upon a shareholder proposal to terminate the Shareholder Rights Plan
(the Poison Pill Termination Proposal), (ii) to ratify the selection of
Deloitte & Touche as independent public accountants for the fiscal year ending
June 30, 2000, and (iii) to consider and act upon any other matters which may
properly come before the meeting, or any adjournment or postponement thereof.
Cilluffo Associates intends to vote its Shares, and those for which the
Cilluffo Proxy Holders are given proxies, in favor of the ratification of
Deloitte & Touche and in favor of the Poison Pill Termination Proposal.
If any other matter properly comes before the 1999 Annual Meeting, the
Cilluffo Proxy Holders will have discretionary authority to vote all Shares
covered by such proxies in accordance with their best judgment with respect to
such matter, unless they are directed by a proxy to do otherwise.
PROXY PROCEDURES
The Shares represented by each Cilluffo Proxy Card which is properly
executed and returned in time to be filed with the Secretary of the Company
will be voted at the 1999 Annual Meeting in accordance with the
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<PAGE>
instructions marked thereon. Executed but unmarked Cilluffo Proxy Cards will
be voted FOR the election of the Cilluffo Associates Nominees as directors.
In order for your views on the above described Proposal to be represented
at the 1999 Annual Meeting, when you receive the Cilluffo Proxy Card, please
mark, sign and date it and return it to Cilluffo Associates, L.P., c/o
MacKenzie Partners, Inc, at 156 Fifth Avenue, New York, New York 10010, in the
envelope with which it will be enclosed, in time to be voted at the 1999
Annual Meeting. Execution of the Cilluffo Proxy Card will not affect your
right to attend the 1999 Annual Meeting and to vote in person. Any proxy
(including a proxy given to GRCI) may be revoked at any time before it is
voted by (a) submitting a duly executed new proxy bearing a later date, (b)
attending and voting in person at the particular meeting or (c) at any time
before a previously executed proxy is voted, giving written notice of
revocation to either (i) Cilluffo Associates, L.P., c/o MacKenzie Partners,
Inc, at 156 Fifth Avenue, New York, New York 10010, or (ii) the Secretary of
the Company at 1900 Gallows Road, Vienna, Virginia 22182. Cilluffo Associates
requests that a copy of any revocation sent to GRCI also be sent to Cilluffo
Associates, L.P., c/o MacKenzie Partners at the above address. Merely
attending the 1999 Annual Meeting will not revoke any previous proxy which has
been duly executed by you. The Cilluffo Proxy Card that is being furnished to
you by Cilluffo Associates, if properly executed and delivered, will revoke
all prior proxies. ONLY YOUR LATEST DATED PROXY FOR THE 1999 ANNUAL MEETING
WILL COUNT.
Only holders of record as of the close of business on the Record Date will
be entitled to vote. If you are a stockholder of record on the Record Date,
you retain your voting rights for the 1999 Annual Meeting, even if you sell or
otherwise transfer your Shares after the Record Date. Accordingly, it is
important that you vote the Shares held by you on the Record Date, or grant a
proxy to vote such Shares on the Cilluffo Proxy Card, even if you have sold
such Shares after the Record Date.
IF ANY OF YOUR SHARES ARE HELD IN THE NAME OF A BROKERAGE FIRM, BANK, BANK
NOMINEE OR OTHER INSTITUTION ON THE RECORD DATE, ONLY IT CAN VOTE SUCH SHARES
AND ONLY UPON RECEIPT OF YOUR SPECIFIC INSTRUCTIONS. ACCORDINGLY, PLEASE
CONTACT THE PERSON RESPONSIBLE FOR YOUR ACCOUNT AND INSTRUCT THAT PERSON TO
EXECUTE ON YOUR BEHALF THE CILLUFFO PROXY CARD.
Cilluffo Associates URGES YOU TO MARK, SIGN, DATE AND RETURN THE CILLUFFO
PROXY CARD enclosed herewith. No postage will be required for mailing within
the United States.
CERTAIN INFORMATION CONCERNING PARTICIPANTS IN THE SOLICITATION
Information concerning Cilluffo Associates, Frank J. A. Cilluffo, Neal B.
Freeman, Marvin E. Lesser (a consultant to Cilluffo Associates), General
Edward C. Meyer (Ret.), Richard N. Perle and Guy P. Wyser-Pratte
(collectively, the "Participants"), who each could be deemed to be
"participants in the solicitation" as defined in the proxy rules promulgated
by the Securities and Exchange Commission under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and their affiliates and associates, is
set forth on Appendix A hereto.
In connection with requests by certain partners of Cilluffo Associates to
withdraw all or a portion of such partners' capital investment in Cilluffo
Associates, in accordance with the terms of its partnership agreement,
Cilluffo Associates designated the Shares as a security subject to withholding
by Cilluffo Associates. As a result of such designation, under the terms of
the partnership agreement, Cilluffo Associates is generally not required to
distribute the underlying Shares or any cash or other capital with respect
thereto prior to December 31, 2000. However, such distribution could occur
earlier in the event that the business of Cilluffo Associates is earlier
terminated, the ownership of the Shares is no longer reportable on Schedule
13D, or the Managing Partners otherwise determine.
7
<PAGE>
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS, DIRECTORS AND MANAGEMENT
The following table presents, based solely (except as otherwise described
herein) on information contained in the 1999 Proxy Statement, the Shares
beneficially owned by the Company's principal stockholders, directors,
nominees, highest paid executive officers, and by all directors and executive
officers as a group, as of September 3, 1999. The information regarding Shares
beneficially owned by Cilluffo Associates, Mr. Cilluffo and General Meyer has
been provided by such party. As described in the first page of this Proxy
Statement, the percentages of Shares is based on 12,323,626 Shares
outstanding. Unless otherwise indicated, each person shown as the beneficial
owner of Shares possesses sole voting and dispositive power with respect to
such Shares.
<TABLE>
<CAPTION>
Number of Shares % of Class
---------------- ----------
<S> <C> <C>
Frank J. A. Cilluffo....................... 1,748,787(1)(2) 14.2%
Edward C. Meyer............................ 1,734,966(1) 14.1%
Cilluffo Associates, L.P................... 1,708,000(3)(1) 13.9%
Gary L. Denman............................. 230,869(4) 1.9%
Joseph R. Wright, Jr....................... 213,809(5) 1.7%
Peter A. Cohen............................. 139,937(6) 1.1%
Thomas E. McCabe........................... 64,106(7) 0.5%
James L. Selsor............................ 32,421(8) 0.3%
James P. Allen............................. 23,291(9) 0.2%
Leslie B. Disharoon........................ 22,846(10) 0.2%
H. Furlong Baldwin......................... 19,417(11) 0.2%
Charles H.P. Duell......................... 17,882(12) 0.1%
Michael G. Stolarik........................ 15,786 0.1%
Leon E. Salomon............................ 288(13) 0.0%
Gerald R. McNichols........................ 2,001,700 16.3%
All Directors & Executive Officers (13
persons).................................. 4,531,139 36.8%
</TABLE>
- --------
(1) Includes 1,708,000 Shares owned by Cilluffo Associates, L.P., of which
General Meyer is a managing general partner. General Meyer shares voting
and dispositive power as to these Shares with Cilluffo Associates and its
other managing general partner. Also includes 26,966 Shares, which may be
acquired by General Meyer in his own right upon exercise of options
exercisable within 60 days. As described in "The Cilluffo Associates
Nominees" above, Cilluffo Associates has granted Options with respect to
an aggregate of 111,000 Shares to the Cilluffo Associates Nominees.
General Meyer retired from the Board on November 5, 1998.
(2) Includes 1,708,000 Shares owned by Cilluffo Associates, L.P., of which Mr.
Cilluffo is a managing general partner. Mr. Cilluffo shares voting and
dispositive power as to these Shares with Cilluffo Associates and its
other managing general partner. Also includes 12,787 Shares owned by Mr.
Cilluffo individually and 28,000 Shares owned by Four Seas Partners, a
partnership in which Mr. Cilluffo is a general partner.
(3) Shares beneficially owned by Cilluffo Associates, L.P. and its managing
general partners, Frank J. A. Cilluffo and General Meyer. See note (1)
above.
(4) Includes 195,617 shares subject to options exercisable within 60 days,
7,498 shares in the Company's Employee Stock Purchase Plan and 174 units
in the GRCI Stock Fund held in the Company's Deferred Income Plan.
(5) Includes 183,807 shares subject to options exercisable within 60 days and
1,000 shares owned by Mr. Wright's wife. Also includes 4,002 Deferred
Stock Units to be settled in common stock after termination of his service
as a director.
(6) Includes 75,000 shares subject to options exercisable within 60 days. Also
includes 39,000 shares held by family members not in Mr. Cohen's
household, for which shares Mr. Cohen has investment discretion. Also
includes 706 Deferred Stock Units to be settled in common stock after
termination of his service as a director.
8
<PAGE>
(7) Includes 18,191 units in the GRCI Stock Fund held in the Company's
Deferred Income Plan. Also includes 43,488 shares subject to options
exercisable within 60 days and 1 share in the Company's Employee Stock
Purchase Plan. Includes 2,578 shares with shared voting and dispositive
power.
(8) Includes 23,238 shares subject to options exercisable within 60 days. Also
includes 254 shares in the Company's Deferred Income Plan and 196 shares
in the Company's Employee Stock Purchase Plan.
(9) Includes 20,000 shares with shared voting and dispositive power, and 3,292
shares subject to options exercisable within 60 days.
(10) Includes 7,846 Deferred Stock Units to be settled in common stock after
termination of his service as a director.
(11) Includes 13,417 Deferred Stock Units to be settled in common stock after
termination of his service as a director.
(12) Includes 3,000 shares owned by a general partnership. Mr. Duell disclaims
beneficial ownership of such shares except to the extent of his pecuniary
interest therein. Also includes 5,058 Deferred Stock Units to be settled
in common stock after termination of his service as a director.
(13) Gen. Salomon shares voting and dispositive power as to these shares.
CERTAIN OTHER INFORMATION
Information concerning the Company's management, the procedures for
submitting proposals for consideration at the 2000 Annual Meeting of
Stockholders of the Company and certain other matters concerning the Company
and the 1999 Annual Meeting is contained in the 1999 Proxy Statement and is
incorporated herein by reference.
Certain information in this Proxy Statement is taken from the 1999 Proxy
Statement, from other documents filed with the Securities and Exchange
Commission and from Company press releases. Cilluffo Associates assumes no
responsibility for the accuracy or completeness of such information.
PROXY SOLICITATION; EXPENSES
Proxies may be solicited by Cilluffo Associates, partners and employees of
Cilluffo Associates, and by the other Participants by mail and other courier
services, telephone, telecopier, the Internet and personal solicitation.
Regular employees of Cilluffo Associates and its affiliates may be used to
solicit proxies and, if used, will not receive additional compensation for
such efforts. Banks, brokerage houses and other custodians, nominees and
fiduciaries will be requested to forward the solicitation material of Cilluffo
Associates to their customers for whom they hold Shares, and Cilluffo
Associates will reimburse them for their reasonable out-of-pocket expenses.
Cilluffo Associates has retained MacKenzie Partners, Inc. ("MacKenzie
Partners") for solicitation and advisory services in connection with the
solicitation. For the successful completion of the Solicitation, MacKenzie
Partners is to receive a fee estimated not to exceed $50,000 plus out-of-
pocket expenses estimated not to exceed $25,000. Cilluffo Associates has also
agreed to indemnify MacKenzie Partners against certain liabilities and
expenses, including liabilities and expenses under the federal securities
laws. MacKenzie Partners will solicit proxies for the 1999 Annual Meeting from
individuals, brokers, banks, bank nominees and other institutional holders. It
is anticipated that MacKenzie Partners will employ approximately 35 persons to
solicit votes from stockholders for the 1999 Annual Meeting. An officer of
MacKenzie Partners, Stanley J. Kay, will act as a Cilluffo Proxy Holder.
9
<PAGE>
The entire expense of preparing, assembling, printing and mailing this
Proxy Statement and related materials, and the cost of soliciting proxies for
the Proposal, will be borne by Cilluffo Associates. Cilluffo Associates
estimates such expenses to be $225,000 (including professional fees and
expenses, but excluding any costs represented by salaries and wages of regular
employees of Cilluffo Associates and its affiliates, the costs to Cilluffo
Associates of granting the Options and the amount to be mutually agreed upon
between Cilluffo Associates and Mr. Lesser with respect to Mr. Lesser's
consulting services as described in Appendix A). The total expenditures to
date have been approximately $16,000, paid by Cilluffo Associates. Cilluffo
Associates does not intend to seek reimbursement from the Company for Cilluffo
Associates' expenses.
Sincerely,
Your Fellow Stockholder,
CILLUFFO ASSOCIATES, L.P.
Dated: October 21, 1999
10
<PAGE>
APPENDIX A
Information is being given herein for (i) Cilluffo Associates, L.P.
("Cilluffo Associates"), (ii) Neal B. Freeman ("Mr. Freeman"), a natural
person and nominee for the Board, (iii) Richard N. Perle ("Mr. Perle"), a
natural person and nominee for the Board, (iv) Guy P. Wyser-Pratte ("Mr.
Wyser-Pratte"), a natural person and nominee for the Board, (v) Frank J. A.
Cilluffo ("Mr. Cilluffo"), a natural person, a managing general partner of
Cilluffo Associates and a director of the Company, (vi) General Edward C.
Meyer (Ret.) ("General Meyer"), a natural person and a managing general
partner of Cilluffo Associates, (vii) Marvin E. Lesser ("Mr. Lesser"), a
natural person and a consultant to Cilluffo Associates, and (viii) the
associates and affiliates of each of the foregoing.
Cilluffo Associates is a Delaware limited partnership. Its principal
business is investing in securities for its own account. Its address is 160
Broadway, East Building, New York, New York 10038. The Shares owned by
Cilluffo Associates were purchased in accounts which hold other securities and
may have been subject to ordinary course margin indebtedness from time-to-
time. There is no margin indebtedness attributable to the Shares as of the
date of this Proxy Statement. The partnership agreement of Cilluffo Associates
contains provisions whereby Mr. Cilluffo and General Meyer, as its general
partners, may receive a general partner's allocation of profits, if any,
derived from the partnership's investments.
The present principal occupation of Mr. Cilluffo is participating in the
management of Cilluffo Associates as a managing partner. Mr. Cilluffo's
business address is 181 Pleasant Street, Portsmouth, NH 03801.
General Meyer serves as Chairman of Mitretek Systems, an information
technology company. Mitretek Systems' address, and General Meyer's business
address, is 7525 Colshire Dr., McLean, Virginia 22102. General Meyer is also a
managing partner of Cilluffo Associates.
Mr. Lesser is a consultant to Cilluffo Associates with respect to the
Solicitation. The services potentially to be provided by Mr. Lesser to
Cilluffo Associates include financial, tactical, corporate governance and
other consulting services, including proxy solicitation services. Cilluffo
Associates has agreed to pay Mr. Lesser for such services an amount to be
mutually agreed upon after completion of the Solicitation and to reimburse Mr.
Lesser for certain out-of-pocket costs. Cilluffo Associates has also agreed to
indemnify and hold harmless Mr. Lesser and his affiliates from certain
liabilities and expenses that might arise out of, or result from, the
provision of such services by Mr. Lesser (including liabilities and expenses
under securities laws).
Mr. Lesser is an independent consultant. His business address is 501
Islington Street, Third Floor, Portsmouth, NH 03801. Mr. Lesser is also the
managing partner of Sigma Partners, L.P., an investment partnership, whose
address is 888 Seventh Avenue, 46th Floor, New York, NY 10106. Mr. Lesser owns
2,000 Shares directly. Mr. Lesser and Sigma Partners, L.P. are limited
partners of Cilluffo Associates.
The Participants' beneficial ownership is set forth in this Appendix A and
under "The Cilluffo Associates Nominees" and "Security Ownership of Directors
and Management." Christian V. Cilluffo, the son of Mr. Cilluffo, owns 10,000
Shares. His address is 179 Pleasant Street, Portsmouth, NH 03801. Four Seas
Partners, a partnership in which Mr. Cilluffo is a general partner, owns
28,000 Shares. Its address is 181 Pleasant Street, Portsmouth, NH 03801. While
Christian V. Cilluffo and Four Seas Partners are associates of Mr. Cilluffo,
neither is a Participant. Except as otherwise set forth herein, Participants'
associates (other than associates who are themselves Participants) do not own
Shares.
Although each of Cilluffo Associates, Mr. Cilluffo, General Meyer, Mr.
Freeman, Mr. Perle and Mr. Wyser-Pratte could be deemed, by virtue of Rule
13d-5(b)(1) under the Exchange Act, to be the beneficial owner of the Shares
owned by each other, each such party disclaims such beneficial ownership,
except to the extent of their pecuniary interest therein.
To the knowledge of the Participants, none of the Participants is, or has
been within the past year, a party to any contract, arrangement or
understanding with any person with respect to any securities of the Company,
11
<PAGE>
including but not limited to joint ventures, loan or option arrangements, puts
or calls, guarantees against loss or guarantees of profits, division of losses
or profits, or the giving or withholding of proxies, except as set forth in
the Proxy Statement (which term includes this Appendix A).
All securities of the Company owned of record by any Participant or
associate are also owned beneficially by the respective Participant or
associate.
It is anticipated that each Cilluffo Associates Nominee, upon election,
will receive director's fees, consistent with the Company's past practice, for
services as a director of the Company. According to the Company's 1999 Proxy
Statement, non-employee directors are paid an annual retainer of $15,000 and
an additional $1,000 for each Board meeting they attend, and $500 for each
committee meeting they attend. Committee Chairmen are paid $800 for each
committee meeting they attend. The Chairman of the Board has received a
$100,000 bonus, and a $25,000 per quarter Chairman's fee in lieu of meeting
fees. The Company also provides each director a $50,000 term life insurance
policy. Non-employee directors may elect to forego their cash compensation in
exchange for Shares, phantom Share units having the same value as Shares, or
Share options. The exercise price of the options is equal to 25% of the
average fair market value of the Share during the quarter in which the cash
compensation would have been received. The number of options granted is
determined by dividing the foregone compensation by the option "spread" at
grant, which is the difference between (i) the average fair market value of
the Share during the quarter, and (ii) the exercise price of the option. The
"spread" is less than the "grant date value" of the option under the Black-
Scholes option pricing model. The options are immediately exercisable. They
expire 3 years after a director leaves the Board, and otherwise have no fixed
expiration date. The Company had a retirement plan for non-employee directors,
which Cilluffo Associates believes has been terminated.
None of the Participants and none of their associates has any arrangement
or understanding with any person with respect to (i) any future employment
with the Company or (ii) any future transactions to which the Company or any
of its affiliates may be a party.
The following is a summary of all transactions in Company securities by the
Participants, Christian V. Cilluffo and Four Seas Partners over the last two
years.
Frank J. A. Cilluffo
<TABLE>
<CAPTION>
Number
Date of of
Transaction Type of Transaction Shares
----------- ------------------- ------
<S> <C> <C>
10/2/97 Stock Award (1) 407
1/6/98 Stock Award (1) 351
4/2/98 Stock Award (1) 558
7/1/98 Stock Award (1) 283
10/1/98 Stock Award (1) 283
11/13/98 Purchase 4,000
11/13/98 Purchase 4,000
1/4/99 Stock Award (1) 370
4/1/99 Stock Award (1) 343
5/1/99 Director Stock Option Grant (3) 3,000
5/1/99 Unit Acquisition (2) 1,618
7/1/99 Stock Award (1) 330
</TABLE>
- --------
(1) Shares awarded in lieu of directors fees under the Company's Directors Fee
Replacement Plan.
(2) Deferred Stock Units to be settled in Common Stock after termination of
Mr. Cilluffo's service as a director. Acquired in connection with the
termination of the Company's Directors Retirement Plan.
(3) 50% exercisable 2 years after grant; 75% exercisable 3 years after grant;
and 100% exercisable 4 years after grant.
12
<PAGE>
Neal B. Freeman
<TABLE>
<CAPTION>
Number
Date of of
Transaction Type of Transaction Shares
----------- ------------------- ------
<S> <C> <C>
6/25/98 Sale 2,000
9/15/98 Purchase 3,000
2/24/99 Purchase 3,000
5/27/99 Purchase 3,000
6/8/99 Purchase 3,000
</TABLE>
General Edward C. Meyer (Ret.)(1)
<TABLE>
<CAPTION>
Number
Date of of
Transaction Type of Transaction Shares
----------- ------------------- ------
<S> <C> <C>
9/30/97 Option Grant 1,301
12/31/97 Option Grant 1,040
3/31/98 Option Grant 1,699
6/30/98 Option Grant 587
9/30/98 Option Grant 942
12/31/98 Option Grant 695
</TABLE>
- --------
(1) Each of General Meyer's Option Grants set forth herein were Directors Fee
Replacement Options. General Meyer retired as a director of the Company
effective November 5, 1998.
Richard N. Perle
<TABLE>
<CAPTION>
Number
Date of of
Transaction Type of Transaction Shares
----------- ------------------- ------
<S> <C> <C>
11/25/98 Purchase 2,000
12/31/98 Sale 2,000
01/04/99 Purchase 200
</TABLE>
Christian V. Cilluffo
<TABLE>
<CAPTION>
Number
Date of of
Transaction Type of Transaction Shares
----------- ------------------- ------
<S> <C> <C>
05/10/99 Purchase 1,000
06/01/99 Purchase 500
06/07/99 Purchase 400
06/07/99 Purchase 1,000
06/08/99 Purchase 100
06/09/99 Purchase 300
06/15/99 Purchase 200
06/16/99 Purchase 800
06/17/99 Purchase 1,000
07/02/99 Purchase 600
07/06/99 Purchase 200
07/06/99 Purchase 300
07/07/99 Purchase 1,500
07/16/99 Purchase 1,100
07/28/99 Purchase 1,000
</TABLE>
13
<PAGE>
Four Seas Partners
<TABLE>
<CAPTION>
Number
Date of of
Transaction Type of Transaction Shares
----------- ------------------- ------
<S> <C> <C>
12/18/98 Purchase 1,600
12/18/98 Purchase 400
12/21/98 Purchase 1,500
12/30/98 Purchase 300
04/05/99 Purchase 800
05/04/99 Purchase 1,000
05/17/99 Purchase 3,000
05/18/99 Purchase 1,500
05/20/99 Purchase 1,100
05/20/99 Purchase 1,100
05/21/99 Purchase 1,200
05/21/99 Purchase 2,600
05/26/99 Purchase 900
06/14/99 Purchase 1,000
06/15/99 Purchase 2,500
06/16/99 Purchase 200
06/16/99 Purchase 500
06/17/99 Purchase 500
06/18/99 Purchase 3,000
06/22/99 Purchase 900
06/22/99 Purchase 400
06/23/99 Purchase 700
07/09/99 Purchase 400
08/03/99 Purchase 900
</TABLE>
14
<PAGE>
IMPORTANT
Your vote is important. No matter how many or how few GRC International,
Inc. Shares you own, please give Cilluffo Associates your proxy FOR the
election of the Cilluffo Associates Nominees by:
MARKING the enclosed BLUE proxy card,
SIGNING the enclosed BLUE proxy card,
DATING the enclosed BLUE proxy card, and
MAILING the enclosed BLUE proxy card TODAY in the envelope provided (no
postage is required if mailed in the United States).
If you have already submitted a proxy to GRC International, Inc. for the
1999 Annual Meeting, you may change your vote to a vote FOR the election of
the Cilluffo Associates Nominees by marking, signing, dating and returning the
enclosed BLUE proxy card for the 1999 Annual Meeting, which must be dated
after any proxy you may have submitted to GRC International, Inc. ONLY YOUR
LATEST DATED PROXY FOR THE 1999 ANNUAL MEETING WILL COUNT AT SUCH MEETING.
If you have any questions or require any additional information concerning
this Proxy Statement or the Cilluffo Associates Nominees, please contact
MacKenzie Partners, Inc. at the address set forth below. If any of your shares
are held in the name of a brokerage firm, bank, bank nominee or other
institution, only it can vote such shares and only upon receipt of your
specific instructions. Accordingly, please contact the person responsible for
your account and instruct that person to execute the BLUE proxy card.
If you have questions or need assistance in voting your shares please
contact:
MacKenzie Partners, Inc.
156 Fifth Avenue
New York, New York 10010
Banks and Brokers Call Collect: (212) 929-5500
All Others Call Toll-Free: (800) 322-2885
15
<PAGE>
CILLUFFO ASSOCIATES, L.P.
THIS PROXY IS SOLICITED BY CILLUFFO ASSOCIATES, L.P. ("CILLUFFO ASSOCIATES")
FOR THE 1999 ANNUAL MEETING OF STOCKHOLDERS OF GRC INTERNATIONAL, INC.
The undersigned hereby appoints Frank J.A. Cilluffo and Stanley J. Kay, and
each of them, the proxy or proxies of the undersigned, with full power of
substitution, to vote all shares of Common Stock, par value $.10 per share, of
GRC International, Inc. (the "Company") which the undersigned would be entitled
to vote if personally present at the 1999 Annual Meeting of Stockholders of the
Company and at any and all adjournments, postponements, reschedulings or
continuations thereof.
CILLUFFO ASSOCIATES RECOMMENDS A VOTE FOR PROPOSALS 1, 2 AND 3 BELOW.
1.ELECTION OF DIRECTORS (check one box only)
[_] FOR all nominees listed below
[_] WITHHOLD AUTHORITY to vote
(except as specified to the contrary below)
for all nominees listed below:
Nominees for the two (2) seats currently up for election: NEAL B. FREEMAN
RICHARD N. PERLE
Additional nominee if the class is expanded to three seats: GUY P.
WYSER-PRATTE
(TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, CHECK THE "FOR"
BOX ABOVE AND WRITE THAT NOMINEE'S NAME ON THE LINE PROVIDED BELOW).
------------------------------------------------------------------------------
2.SHAREHOLDER PROPOSAL TO TERMINATE THE SHAREHOLDER RIGHTS PLAN
[_] FOR[_] AGAINST[_] ABSTAIN
3.RATIFICATION OF DELOITTE & TOUCHE AS INDEPENDENT PUBLIC ACCOUNTANTS
[_] FOR[_] AGAINST[_] ABSTAIN
THE PROXIES ARE HEREBY AUTHORIZED TO VOTE IN THEIR DISCRETION UPON ALL OTHER
MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENTS,
POSTPONEMENTS, RESCHEDULINGS OR CONTINUATIONS THEREOF.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO DIRECTION IS INDICATED, IT
WILL BE VOTED FOR THE ELECTION OF THE NOMINEES AS LISTED IN PROPOSAL 1, FOR THE
SHAREHOLDER PROPOSAL DESCRIBED IN PRPOSAL 2, FOR THE RATIFICATION OF DELOITTE &
TOUCHE DESCRIBED IN PROPOSAL 3 AND, IN THE DISCRETION OF THE PROXIES, ON SUCH
OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENTS,
POSTPONEMENTS, RESCHEDULINGS OR CONTINUATIONS THEREOF. UNLESS OTHERWISE INDI-
CATED BY THE STOCKHOLDER, A VOTE FOR THE NOMINEES LISTED IN PROPOSAL 1 WILL
GIVE THE PROXIES DISCRETIONARY AUTHORITY TO CUMULATE ALL VOTES TO WHICH THE UN-
DERSIGNED IS ENTITLED AND TO ALLOCATE SUCH VOTES IN FAVOR OF ONE OR MORE OF
SUCH NOMINEES, AS THE PROXIES MAY DETERMINE (PROVIDED THAT SUCH VOTES MAY BE
ALLOCATED IN FAVOR OF MR. WYSER-PRATTE ONLY IF THE NUMBER OF DIRECTORS TO BE
ELECTED IS INCREASED TO THREE). IF YOU WITHHOLD YOUR VOTE FOR A NOMINEE, ALL OF
YOUR CUMULATIVE VOTES WILL BE DISTRIBUTED TO THE REMAINING NOMINEES, AS THE
PROXIES MAY DETERMINE (PROVIDED THAT SUCH VOTES MAY BE ALLOCATED IN FAVOR OF
MR. WYSER-PRATTE ONLY IF THE NUMBER OF DIRECTORS TO BE ELECTED IS INCREASED TO
THREE).
CILLUFFO ASSOCIATES RECOMMENDS THAT YOU VOTE FOR ALL OF THE NOMINEES NAMED IN
PROPOSAL 1.
The undersigned hereby acknowledges receipt of the Proxy Statement of
Cilluffo Associates dated October 21, 1999.
DATED: ____________________ , 1999
-----------------------------------
Signature
-----------------------------------
Signature, if held jointly
-----------------------------------
Title or Authority
PLEASE SIGN EXACTLY AS YOUR NAME
APPEARS ON THIS PROXY. WHEN SIGN-
ING
AS ATTORNEY, EXECUTOR, ADMINISTRA-
TOR, TRUSTEE, GUARDIAN OR OTHER
REPRESENTATIVE, PLEASE INCLUDE
YOUR FULL TITLE. CORPORATE PROXIES
SHOULD BE SIGNED BY AN AUTHORIZED
OFFICER
PLEASE SIGN, DATE AND RETURN THIS CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
