GRC INTERNATIONAL, INC.
                       CASH COMPENSATION REPLACEMENT PLAN

1.       PURPOSE

         The loyal and dedicated  service of key  executives is essential to the
growth and progress of any public company.  Accordingly,  the Cash  Compensation
Replacement  Plan (the "Plan") of GRC  International,  Inc. (the  "Company") has
been adopted to better  enable the Company to retain and attract  qualified  key
executives, while reducing the Company's cash outlay for executive compensation.
The Plan is also designed to provide a stronger nexus between the  contributions
made to the Company by its key executives and the value of the compensation they
receive.

2.       ADMINISTRATION

         The Plan will be  administered  on a calendar  quarter basis.  The Plan
will be administered by a committee of three or more persons (the  "Committee").
Such  persons  shall not be eligible  to  participate  in the Plan,  and will be
appointed  by the Board of Directors  of the  Company.  Awards of the  Company's
Common Stock,  par value $.10 per share  ("Stock"),  and options to purchase the
Stock  ("Options"),  and the  amount  and  nature of the Stock  and  Options  so
awarded,  will be  automatic,  as provided in Sections 5 and 6 of the Plan.  All
questions of  interpretation  of the Plan will be determined  by the  Committee.
Such  determinations  will be final  and  binding  upon all  persons  having  an
interest in the Plan.

3.       PARTICIPATION IN THE PLAN

         Employees of the Company (or  subsidiaries  thereof) who are determined
by the Committee to be "key  executives" for the purposes of this Plan,  whether
or not such  employees  are  officers  of the Company or any  subsidiary  of the
Company,  are  eligible  to  participate  in the Plan.  A list of such  eligible
executives will be established by majority vote of the Committee, with such list
to be revised as necessary.  In determining  which executives may participate in
the  Plan,  the  Committee  may take into  account  the  nature of the  services
rendered by such  executives,  their present and potential  contributions to the
Company's  success,  and such other factors as the  Committee in its  discretion
deems  relevant.  Options  available  under  the  Plan  may  be  granted  to key
executives who have received options under other plans and/or may be eligible to
do so in the future.

4.       STOCK SUBJECT TO THE PLAN

         4.1.  Total  Shares  Available.  Up  to  two  hundred  ninety  thousand
(290,000)  shares  (subject to adjustment  under Section 8 of the Plan) of Stock
are authorized  for issuance under the Plan.  Such shares of Stock may be issued
(i) outright,  or (ii) upon the exercise of Options.  The total number of shares
of Stock  awarded  under  (i) and (ii)  shall not  exceed  290,000  (subject  to
adjustment).  The Company may issue authorized but unissued shares of its Stock,
may  repurchase  shares in the open  market or in private  transactions,  or may
otherwise  make a  sufficient  number of shares  available  under the Plan.  The
Company  shall not be required to reserve or otherwise set aside funds or shares
of Stock for the payment of its  obligations  hereunder.  The Company shall make
available as and when  required a  sufficient  number of shares of Stock to meet
the needs of the Plan.

         4.2. Unexercised or Expired Options. Upon the expiration or termination
of any  Option  under  the Plan,  the  Stock  allocable  to the  unexercised  or
surrendered  portion of such

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Option will revert to the Plan's pool of Stock, and shall be available for other
awards of Stock and Options under the Plan.

5.       AWARDS OF STOCK

         5.1. Fair Market Value of Stock. For purposes of determining the number
of shares of Stock to be awarded with respect to any calendar quarter,  the fair
market  value of the Stock  shall be the average of the high and low sale prices
of the  Stock  quoted  on the New  York  Stock  Exchange  Composite  Transaction
Reporting  System  for the  Fridays  of such  quarter  ("Quarterly  Fair  Market
Value").  If such sale prices are not  available  for any such Friday,  then the
average of the high and low sale prices on the next  preceding day on which such
sale prices are available shall be used in lieu thereof.

         5.2. Election.  Quarterly awards of Stock will be made to each eligible
key  executive  who has  submitted to the Committee at least 5 days prior to the
beginning  of the  calendar  quarter in  question a written  election to receive
Stock in lieu of up to twenty five percent (25%) of salary and up to one hundred
percent  (100%) of bonus  payable  during such  quarter.  In the case of a newly
hired officer,  such election may be effective  immediately if received within a
reasonable  time after the  commencement  of the officer's  employment  with the
Company.  Each such election shall be effective until revoked by a later written
election,  but no such later  election  shall become  effective  until the first
calendar  quarter to begin at least 5 days after the later  election is received
by the Company. The amount of salary and bonus to be applied to Stock awards, in
accordance  with  a  key  executive's  election,   shall  be  the  "Stock  Award
Compensation".

        5.3.  Stock Awards and Formula.  Shortly  after the end of each calendar
quarter,  there  shall be  awarded  to each  key  executive  who has  previously
submitted an  appropriate  election in  accordance  with Section 5.2 above,  the
nearest whole number of shares of Stock which most closely  approximates the key
executive's  Stock Award  Compensation  for the quarter in  accordance  with the
following formula:

[1.25] X [Key Executive's Stock Award  Compensation for the Quarter] = Number of
-------------------------------------------------------------------
                  Quarterly Fair Market Value                    Shares of Stock

         5.4. Payment of Tax Withholding Obligations.  The amount required to be
withheld under applicable  income tax laws in connection with any award of Stock
under the Plan  shall be paid by the  Company's  retention  of  shares  from the
shares of Stock to be awarded. Shares of Stock used to make such tax withholding
payments  shall be valued at the  average of the high and low sale prices of the
Stock  quoted on the New York Stock  Exchange  Composite  Transaction  Reporting
System  on the  date of  award  (or if  unavailable  on such  date,  on the next
preceding  trading  date),  and the number of shares to be required for payments
shall be rounded up or down to the nearest  whole share so that no cash  payment
to the Company shall be required by reason of any fractional amount.

6.       AWARDS OF OPTIONS

         All Options awarded under the Plan will be "non-statutory options," and
therefore  are not entitled to special tax  treatment  under  Section 422 of the
Internal  Revenue  Code of 1986,  as it may be  amended  from  time to time (the
"Code").  Each  Option  awarded  under the Plan will be  evidenced  by a written
agreement  in such  form  as the  Committee  may  from  time  to  time  approve,
consistent with and subject to the following terms and conditions:

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         6.1.  Exercise  Price of Options.  The exercise  price of Options to be
awarded with respect to any calendar  quarter shall be twenty five percent (25%)
of the Quarterly Fair Market Value for such quarter.

         6.2.  Election.  Quarterly  awards  of  Options  will  be  made to each
eligible key  executive who has submitted to the Committee at least 5 days prior
to the  beginning  of the  calendar  quarter in  question a written  election to
receive  Options in lieu of up to twenty five percent  (25%) of salary and up to
one hundred percent (100%) of bonus payable during such quarter.  In the case of
a newly hired  officer,  such election may be effective  immediately if received
within a reasonable time after the commencement of the officer's employment with
the Company.  Each such  election  shall be effective  until  revoked by a later
written  election,  but no such later election shall become  effective until the
first  calendar  quarter  to begin at least 5 days after the later  election  is
received by the Company.  The amount of salary and bonus to be applied to Option
awards,  in accordance  with a key  executive's  election,  shall be the "Option
Award Compensation".

         6.3. Option Awards and Formula. As of the end of each calendar quarter,
there shall be awarded to each key  executive  who has  previously  submitted an
appropriate  election in  accordance  with Section 6.2 above,  the nearest whole
number of Options which most closely  approximates  the key  executive's  Option
Award Compensation for the quarter in accordance with the following formula:

[1.25] X [Key Executive's Option Award Compensation for the Quarter]   =  Number
-------------------------------------------------------------------
  (Quarterly Fair Market Value) Minus (Exercise Price of Options)     of Options

         6.4.   Period  of  Option.   Options  awarded  under  the  Plan  become
exercisable  in  increments.  Eighty percent (80%) of each Option is exercisable
immediately;  ten percent  (10%) of each Option shall become  exercisable  on or
after the second  anniversary of the date on which it was awarded;  five percent
(5%) of each Option shall become  exercisable on or after the third  anniversary
of such date;  and five percent (5%) of each Option shall become  exercisable on
or after the fourth anniversary of such date; provided, however, that any Option
awarded  pursuant to the Plan will become  exercisable in full upon the death or
disability of the key executive.

        6.5.     Exercise of Options.

                 (a) To exercise an Option in whole or in part, the holder of an
Option ("Optionee") shall give written notice of exercise to the Company's Stock
Option  Administrator  specifying the number of shares as to which the Option is
being  exercised,  accompanied  by payment in full of the Option  Price for such
shares  either  in  cash or in  such  other  consideration  as  approved  by the
Committee in its sole  discretion  including,  but not limited to, (i) shares of
previously owned Common Stock which, if acquired by exercise of an option,  have
been held by the Optionee  for at least six (6) months,  or (ii) in the event of
hardship and with the advance approval of the Committee, the Company's retention
of shares of Common  Stock  otherwise  issuable to the Optionee  upon  exercise.
Shares of Stock used to make payments  under (i) and (ii) shall be valued at the
average  of the high and low sale  prices  of the  Stock  quoted on the New York
Stock Exchange Composite Transaction Reporting System on the date such notice is
received by the Stock Option  Administrator  (or if unavailable on such date, on
the next preceding  trading  date),  and the number of shares to be required for
payments under (I) or (ii)

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shall be rounded up or down to the nearest  whole share so that no cash  payment
shall be required by reason of any fractional amount.

                  (b)  Notwithstanding  any other  provision in this Plan to the
contrary, no Option may be exercised at a time or in a manner which could result
in the loss of any tax deduction  for the Company  under  Section  162(m) of the
Code.
         6.6.  Elections to Pay Withholding Taxes. Any key executive may pay the
amount of any  federal,  state or local taxes  required by law to be withheld in
connection  with the exercise of an Option,  as well as any additional  taxes on
the exercise up to the key executive's  marginal rate, either in cash or in such
other  consideration  as  approved  by  the  Committee  in its  sole  discretion
including,  but not limited to (i) shares of previously owned Stock, or (ii) the
Company's  retention of shares of Stock otherwise  issuable to the key executive
upon exercise; provided that only the amount of taxes required to be withheld by
law may be paid pursuant to (ii).  Shares of Stock used to make  payments  under
(i) and (ii) shall be valued at the  average of the high and low sale  prices of
the Stock quoted on the New York Stock Exchange Composite  Transaction Reporting
System on the date the exercise notice is received by the Company's Stock Option
Administrator, and the number of shares to be required for payments under (i) or
(ii)  shall be  rounded up or down to the  nearest  whole  share so that no cash
payment shall be required by reason of any fractional amount.

         6.7.     Termination of Options.
                  ----------------------

                  (a) Options awarded  pursuant to the Plan may not be exercised
after the third anniversary of a key executive's  termination as an employee for
any reason,  including,  but not limited to, such key executive's resignation or
voluntary departure from the Company,  involuntary termination by the Company of
such key  executive's  employment,  or  termination  of  employment by reason of
death, disability or retirement. Any Options which have not been exercised on or
before such third  anniversary  shall  thereupon  expire,  except as provided in
subsection (b) below.

                  (b) Any  Option  granted  a key  executive  under the Plan and
unexercised,  in whole or in part,  on the date of his death may be exercised by
the personal  representative  of the deceased key executive's  estate, or by any
heir,  devisee,  or other taker who, by will or operation of law, is entitled to
said Option or any portion  thereof.  In each such case,  such  Option(s) may be
exercised at any time on or before the third  anniversary  of the earlier of the
key  executive's  termination of employment or death,  as provided in subsection
(a) above.
                  (c) Options awarded  pursuant to the Plan shall have no stated
or other expiration date except as provide in this Section 6.7. Such Options are
not forfeitable in the event of termination of employment or otherwise.

         6.8. No Shareholder  Rights By Reason of Options. A key executive shall
not have any rights  whatsoever as a shareholder with respect to any unexercised
Option  until  the  Option  has  been  duly  exercised  in  accordance  with the
procedures  approved from time to time by the Committee.  No adjustment  will be
made for  dividends or other rights with respect to which the record date occurs
prior to the date the Option has been duly exercised.

         6.9. Options Not Assignable Or Transferable.  Options awarded under the
Plan are not  assignable  or  transferable  other than by will or by the laws of
intestate  succession.  During the lifetime of a key executive,  Options awarded
under the Plan will be exercisable only by that key executive.

7.       LIMITATION OF RIGHTS

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         7.1.  No Right to  Continue  as an  Employee.  Neither  the  Plan,  the
awarding of any Stock or Option, nor any other action taken pursuant to the Plan
constitutes  or is  evidence  of any  agreement  or  understanding,  express  or
implied,  that the Company will retain a key executive for any period of time or
at any particular rate of compensation.

         7.2. No Rights to Receive Stock or Options After Eligibility  Ceases. A
key executive has no rights to receive Stock or Options under the Plan, and will
not receive any Stock or Options,  with respect to any calendar quarter, or part
thereof,  in which he or she is no longer  considered  by the  Committee to be a
"key executive".

        7.3.  Limitation on Rights of Optionee.  Except as expressly provided in
Section 8, an  Optionee  shall have no rights by reason of the  issuance  by the
Company to any other person of (i) shares of Stock  pursuant to this Plan,  (ii)
additional  shares of Stock,  (iii) any other security or debenture  convertible
into Stock, (iv) or any other equity security,  including issuance pursuant to a
plan of merger, consolidation, or statutory share exchange, and no adjustment by
reason  thereof  shall be made  with  respect  to the  number of shares of Stock
subject to an Option or the exercise price.

         7.4. Rights of the Company. The grant of an Option pursuant to the Plan
shall  not  affect  in any way the  right  or  power  of the  Company  to  issue
additional   shares  of  Stock  or  other   securities;   to  make  adjustments,
reclassifications,  reorganizations  or  changes  in  its  capital  or  business
structure;  to  participate in a merger,  consolidation,  or share exchange with
another corporation;  or to dissolve,  liquidate, or sell or transfer all or any
part of its business or assets.

8.       ADJUSTMENTS

         In the  event any  change  is made to the  Stock by  reason of  merger,
consolidation,  reorganization,  recapitalization,  stock dividend, stock split,
combination  of shares,  exchange of shares,  change in  corporate  structure or
otherwise,  including  but not  limited  to any  change  whereby  the  Stock  is
converted  into or  exchanged  for another  class of shares or shares of another
entity,  appropriate and comparable  adjustments  will be made to the number and
kind of shares  subject  to the Plan,  and to the  number and kind of shares and
price per share of Stock subject to outstanding  Options issued  pursuant to the
Plan, and to the prices of Stock used in  calculating  the Quarterly Fair Market
Value of the Stock. All such adjustments will be made in such a manner as avoids
dilution or enlargement of the rights of key executives under the Plan.

9.       AMENDMENT OF THE PLAN

         The Board of Directors of the Company may suspend or terminate the Plan
or revise or amend it in any respect whatsoever; provided that, without approval
of the  shareholders  of the Company,  no revision or  amendment  may change the
number of shares  subject to the Plan  (except as  provided  in Section 8 of the
Plan) or materially  increase the benefits  accruing to  participants  under the
Plan, and provided  further that no revision or amendment or termination  shall,
without the consent of the affected key  executive(s),  impair the rights of any
key executive under any Option previously awarded.

10.      LEGAL RESTRICTIONS

         The Company  will not be  obligated to issue shares of Stock if counsel
to the Company determines that such issuance would violate any law or regulation
of any  governmental  authority  or any  agreement  between  the Company and any
national  securities exchange upon which the Stock is listed. In connection with
any stock  issuance or  transfer,  the person  acquiring  the shares  shall,  if
requested by the Company, give assurances satisfactory to counsel to the Company
regarding such matters as the Company may deem desirable to

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assure compliance with all legal requirements.  The Company shall in no event be
obliged to take any action in order to cause the exercise of any Option.

11.      RULE  16b-3 COMPLIANCE

         11.1.  Six-Month  Holding  Period.  Unless an Optionee could  otherwise
dispose of equity securities,  including derivative  securities,  acquired under
the Plan without  incurring  liability  under Section 16(b) of the Exchange Act,
equity  securities  acquired  under  the Plan  must be held for a period  of six
months  following the date of such  acquisition,  provided  that this  condition
shall be satisfied with respect to a derivative  security if at least six months
elapse from the date of acquisition  of the  derivative  security to the date of
disposition of the derivative  security (other than upon exercise or conversion)
or its underlying equity security.

         11.2. Other Compliance Provisions. With respect to an Optionee who is a
director, officer or ten percent beneficial owner of the Company, as those terms
are used in Section 16 of the Exchange Act. (such person is hereinafter referred
to as a "Section 16 Optionee"), the Committee shall implement transactions under
the Plan  and  administer  the  Plan in a manner  that  will  ensure  that  each
transaction by such Optionee is exempt from liability  under Rule 16b-3,  except
that such Optionee may be permitted to engage in a non-exempt  transaction under
the  Plan if  written  notice  has  been  given to the  Optionee  regarding  the
non-exempt nature of the transaction. The Committee may authorize the Company to
repurchase  any  Option or shares of Stock  acquired  under the Plan in order to
prevent a Section 16 Optionee from  incurring  liability  under  Section  16(b).
Unless  otherwise  specified  by  the  Optionee,  equity  securities,  including
derivative  securities,  acquired  under the Plan  which are  disposed  of by an
Optionee  shall  be  deemed  to be  disposed  of in the  order  acquired  by the
Optionee.

12.      GOVERNING LAW

         The Plan will be governed, and its provisions construed,  in accordance
with the laws of the State of  Delaware  and  applicable  federal  law,  without
regard to conflicts of law.