GRC INTERNATIONAL, INC.
                                1998 OPTION PLAN

1.       PURPOSE

         The purpose of the 1998 Option Plan is to enable the Company to attract
and retain key  employees  who are  expected  to  materially  contribute  to the
prosperity  of the Company and its  affiliates,  by enabling  such  employees to
acquire a proprietary  interest (or increase their proprietary  interest) in the
Company in accordance with the terms and conditions of this Plan.

2.       DEFINITIONS

          2.1. "Board " means the Board of Directors of the Company.

          2.2.  "Cause",  in the context of termination of employment,  shall be
defined in the context of executive  employment  and shall  include,  but not be
limited to, any  material  violation  by an  Optionee of any written  employment
agreement,  any act of  dishonesty  with  respect  to the  Company  or a Related
Corporation thereof, or the commission of any act reflecting  unfavorably on the
Company or a Related Corporation thereof.

          2.3.  "Code" means the Internal  Revenue Code of 1986, as amended from
time to time.

          2.4.  "Committee" means the Committee of the Board appointed  pursuant
to Section 4.3 hereof, except as otherwise provided in Section 4.1 hereof.

          2.5. "Company" means GRC International,  Inc., a Delaware corporation,
or any successor thereto by merger, consolidation or otherwise.

          2.6. "Director" means a director of the Company.

          2.7.  "Disability"  means the  inability to engage in any  substantial
gainful  activity  by reason of any  medically  determinable  physical or mental
impairment  which can be  expected to result in death or which has lasted or can
be expected to last for a continuous  period of not less than twelve months,  as
determined by the Committee.

          2.8. "Effective Date" means July 23, 1998.

          2.9.  "Exchange  Act" means the  Securities  Exchange Act of 1934,  as
amended from time to time.

          2.10.  "Fair Market  Value" means the average of the high and low sale
prices of the Stock quoted on the New York Stock Exchange Composite  Transaction
Reporting  System (or on the exchange or system  where the Stock is  principally
traded)  on the date for which  Fair  Market  Value is to be  determined  (or if
unavailable  on such date,  on the next  preceding  trading  date).  If the Fair
Market Value is not available on such date,  the Committee  shall  determine the
Fair Market Value.

<PAGE>

          2.11.  "Grant Date" means the date as of which an Option is granted by
the Committee pursuant to the Plan.

          2.12.  "Key  Employee"  means any employee of the Company or a Related
Corporation who has or is expected to materially contribute to the prosperity of
the Company.  The term "Key Employee" shall also include officers (as defined in
the bylaws of the applicable corporation), including the present Chairman of the
Board or any future  Chairman of the Board  ("Chairman")  and the  present  Vice
Chairman  of the  Board  and  any  future  Vice  Chairman  of the  Board  ("Vice
Chairman"), but shall exclude other non-employee Directors.

          2.13. "Option" means any stock option granted pursuant to the terms of
the Plan.

          2.14.  "Option  Agreement"  means the agreement  executed  between the
Company and the Optionee relating to the Option.

          2.15.  "Option  Price"  means  the  purchase  price of shares of Stock
subject to an Option.

          2.16.  "Option Term" means the period  beginning on the Grant Date and
ending on the day an Option  expires under the terms of the Option  Agreement or
the Plan.

          2.17.  "Optionee"  means any Key  Employee  who is  granted  an Option
pursuant to the Plan.

          2.18. "Plan" means the GRC International, Inc. 1998 Option Plan.

          2.19.   "Related   Corporation"   means  any   parent  or   subsidiary
corporation, as defined in Section 424 of the Code.

          2.20.  "Section  16  Optionee"  means 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.

          2.21.  "Stock"  means shares of the  Company's  $0.10 par value common
stock.

3.       STOCK SUBJECT TO PLAN

         The Stock subject to Options to be granted under the Plan may be shares
of the Company's authorized but unissued Stock, or shares of Stock reacquired by
the Company and held as treasury stock. The aggregate number of shares which may
be issued  under  Options  under this Plan shall not  exceed  500,000  shares of
Stock,  unless  such  number of shares is adjusted as provided in Section 10. In
the event that any  outstanding  Option under the Plan expires or terminates for
any reason without having been exercised in full, the shares of Stock  allocable
to the  unexercised  portion of such Option  shall  become  available  for other
Options under the Plan. In the event that the exercise price of an Option or any
taxes in connection  therewith are paid by (i) shares of previously owned Stock,
or (ii) the  Company's  retention of shares of Stock  otherwise  issuable to the
Optionee  upon  exercise,  then only the net amount of shares of Stock  actually
issued to the Optionee shall be counted  against the aggregate  number of shares
which  may be  issued  under the  Plan,  and any  shares of Stock  which are not
actually  issued to the Optionee shall become  available for other Options under
the Plan.

<PAGE>

4.       ADMINISTRATION OF PLAN

          4.1.  Administration  by Committee.  The Plan shall be administered by
the Committee which shall be appointed pursuant to Section 4.3 hereof; provided,
however,  that the Board may perform any  function  of the  Committee  under the
Plan, including without limitation for the purpose of ensuring that transactions
under the Plan by any Section 16 Optionee  are exempt  under Rule 16b-3.  In any
case in which the Board is  performing  a function  of the  Committee  under the
Plan,  each  reference to the  Committee  herein shall be deemed to refer to the
Board.

          4.2.  Powers of Committee.  The Committee has full and final authority
in its sole discretion to:

               (i) grant Options from time to time to Officers;

               (ii) determine the duration,  terms and provisions of the Options
and of Option Agreements, including but not limited to, any vesting provisions;

               (iii) condition the exercise of any Options granted  hereunder on
the attainment of certain  specified goals by the Officer or by the Company or a
Related Corporation thereof;

               (iv) restrict the sale or otherwise provide for the repurchase of
shares acquired pursuant to the terms of an Option;

               (vi)  determine  the  time or times  at  which  Options  shall be
granted;

               (vii)  determine  the  number  of shares  to be  covered  by each
Option;

               (viii) determine the Fair Market Value and the Option Price;

               (ix) interpret the Plan;

               (x) prescribe,  amend and rescind rules and regulations  relating
to the Plan; and

               (xi)  make  all  other   determinations,   orders  and  decisions
necessary  or  advisable  for  the   administration   of  the  Plan.   All  such
determinations  and actions shall be conclusive and binding for all purposes and
upon all persons.

         4.3.     Committee.

                  4.3.1. The Plan shall be administered by a Committee appointed
or designated by the Board.

                  4.3.2. The Board may from time to time remove members from, or
add members to, the Committee. Vacancies on the Committee, however caused, shall
be filled by the Board.

<PAGE>

                  4.3.3 The  interpretation and construction by the Committee of
any provision of the Plan, or of any Option granted under it, shall be final.

5.       EXERCISE OF OPTIONS

         5.1. Time of Exercise.  Each Option shall be  exercisable in accordance
with the terms of the  applicable  Option  Agreement,  except that Options shall
become   immediately   exercisable   in  full,   notwithstanding   any   delayed
exercisability  provisions in the Option Agreement, upon the death or Disability
of the Optionee.

         5.2. Manner of Exercise.  To exercise an Option in whole or in part, an
Optionee shall give written  notice of exercise to the Committee  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 Stock (held by the
Optionee  for at least 6 months if acquired  by exercise of option),  or (ii) in
the event of  hardship  and with the  advance  approval  of the  Committee,  the
Company's  retention of shares of Stock otherwise  issuable to the Optionee upon
exercise.  Shares of Stock  used to make  payments  under (i) and (ii)  shall be
valued at Fair Market Value on the date such notice is received by the Company's
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) shall be rounded to the  nearest  whole  share so that no cash
payment shall be required by reason of any fractional  amount.  Not less than 10
shares may be purchased at any one time unless the number purchased is the total
number  purchasable under the Option.  The exercise of each Option shall also be
subject to any other  restrictions,  terms or conditions  contained in the rules
and regulations of the Committee or in the Option Agreement.

         5.3. No Rights of  Stockholder.  The holder of an Option shall not have
any of the rights of a  stockholder  with  respect to the shares  covered by his
Option until the Option is duly exercised.

         5.4.  Additional  Restrictions on Exercise.  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, provided,  however,  that if an Option expires
within 12 months  after an Optionee  has  properly  completed  and  delivered an
exercise notice to the Company with respect to such Option and such exercise has
been rejected by the Company  pursuant to this  provision,  then the  expiration
date of such  Option  shall be  extended  until July 31 of the  Company's  first
fiscal year thereafter in which such exercise no longer could result in the loss
of any tax deduction to the Company under Section 162(m).

6.       OPTION AGREEMENT

         Promptly  after the grant of an Option  under the Plan,  and before the
exercise of any part  thereof,  the Company and the  Optionee  shall  execute an
Option Agreement  incorporating the terms of this Plan and specifying the Option
Price,  the  number of  shares of Stock  subject  to the  Option,  the terms and
conditions of the Option,  and such other matters,  as the Committee in its sole
discretion  may  determine.  The Option  Agreement  may also  contain  any other
provision  restricting  exercise  or  otherwise  as  the  Committee  shall  deem
appropriate.

<PAGE>

7.       TERMINATION OF EMPLOYMENT

          7.1. Termination For Any Reason Other Than Death, Disability or Cause.

                  7.1.1. If an Optionee's employment ceases for any reason other
than death or Disability or termination  for Cause,  his or her Option(s)  shall
remain  in  effect  until  the  earlier  of the  end of the  Option  Term or the
expiration of 3 months after the Optionee's termination.

                  7.1.1.  If any Related  Corporation or division of the Company
is sold or any other  transaction  occurs as a result of which an Optionee is no
longer an employee  of the  Company or an employee of an entity  which is then a
Related Corporation  thereof,  such Optionee's  Option(s) shall remain in effect
until the  earlier of the end of the Option Term or the  expiration  of 3 months
after such sale or other transaction.

          7.2. Termination For Cause. If an Optionee's  employment is terminated
for Cause, his or her Options shall lapse forthwith.

         7.3. Disability.  If an Optionee's  employment ceases by reason of such
Optionee's  Disability,  his or her  Options  shall  remain in effect  until the
earlier  of the end of the  Option  Term or the  expiration  of 1 year after the
Optionee's termination.

         7.4. Death. If an Optionee's  employment ceases by reason of Optionee's
death, his or her Options shall remain in effect until the earlier of the end of
the Option Term or the expiration of 1 year after the Optionee's  death, and may
be  exercised by the person to whom the Option has been  transferred  by will or
the laws of the descent and distribution.

         7.5. Committee's  Discretion.  Notwithstanding the foregoing provisions
of this  Section  7, the  Committee  may,  in its sole  discretion,  extend  the
privilege to exercise all or any part of the Option in accordance with its terms
for any period of time within the Option  Term.  In the event the  Optionee is a
Chairman or Vice Chairman,  the Committee may make appropriate provisions in the
applicable Option Agreement.

8.       NO GUARANTEE OF EMPLOYMENT

         Nothing  in the  Plan or in any  Option  Agreement,  and no grant of an
Option  pursuant  to the Plan shall be  construed  as a contract  of  employment
between  the  Company  or a  Related  Corporation  and  the  Optionee,  or  as a
contractual  right  to  continue  in the  employ  of the  Company  or a  Related
Corporation  or as a  limitation  of the  right  of  the  Company  or a  Related
Corporation to discharge the Optionee at any time.

9.       NON-TRANSFERABILITY OF OPTIONS

         Except as may be expressly  permitted by the  Committee,  Options shall
not  be  transferable  otherwise  than  by  will  or the  laws  of  descent  and
distribution  and,  during  the  lifetime  of the  Optionee,  an  Option  may be
exercised only by him or her.

<PAGE>

10.      STOCK ADJUSTMENT

         10.1. Changes in Capital  Structure.  In the event that the outstanding
shares of Stock of the Company are  hereafter  increased or decreased or changed
into or exchanged for a different  number or kind of shares or other  securities
of the Company or of another corporation or otherwise  substantially affected by
reason   of    reorganization,    merger,    consolidation,    recapitalization,
reclassification,  forward  or  reverse  stock  split,  combination  of  shares,
dividend  payable in capital  stock or other  special,  large and  non-recurring
dividend,  appropriate  adjustment  shall be made by the Committee in the number
and kind of shares for the  purchase of which  Options may be granted  under the
Plan. In addition, the Committee shall make appropriate adjustment in the number
and kind of shares as to which  outstanding  Options,  or portions  thereof then
unexercised,  shall be  exercisable,  and in other Option terms, to the end that
the  Optionee's  proportionate  interest and value shall be maintained as before
the  occurrence of the event.  Any  adjustment  made by the  Committee  shall be
conclusive.

         10.2.  Liquidation  or  Dissolution.   If  the  Company  dissolves  and
liquidates,  then notwithstanding any restrictions on exercise set forth in this
Plan or any Option, each Optionee shall have the right to exercise his Option at
any  time on or  before  the  tenth  day  prior  to the  effective  date of such
liquidation and dissolution.  The Committee may establish a different period for
exercise by notice to the Optionee, and it may establish limitations on exercise
to avoid  subjecting  the  Optionee  to  liability  under  Section  16(b) of the
Exchange  Act. Any Option not so exercised  shall  terminate on the last day for
exercise prior to such effective date.

         10.3. Limitation on Rights of Optionee. Except as expressly provided in
Section 10.1 or 10.2 hereof,  an Optionee  shall have no rights by reason of the
issuance  of (i) shares of Stock of the  Company  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 Option Price.

         10.4.  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 engage in
corporate transactions, including, but not limited to, issuing additional shares
of stock; making adjustments,  reclassifications,  reorganizations or changes in
its capital or business structure;  participating in mergers,  consolidations or
share exchanges with one or more other corporations or entities;  or dissolving,
liquidating  or  selling  or  transferring  all or any part of its  business  or
assets.

11.      LEGAL RESTRICTIONS

         The Company will not be  obligated to issue or deliver  shares of Stock
upon  exercise  of an Option 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  securities  exchange or system upon
which the Stock is then listed or quoted.  In connection with any stock issuance
or delivery, the person acquiring the shares shall, if requested by the Company,
give assurances satisfactory to counsel by the Company regarding such matters as
the Company may deem desirable,  and other restrictions may apply to the shares,
to assure compliance with all legal requirements.  The Company shall in no event
be obligated to take any action in order to cause the exercise of any Option.

<PAGE>

12.      TERM OF PLAN

         Options  may be granted  pursuant  to the Plan from time to time at any
time after the Effective Date.

13.      AMENDMENT OF THE PLAN

         The  Board  may at any  time  terminate,  suspend  or amend  the  Plan,
provided that no such amendment  shall be made without  shareholder  approval if
such shareholder  approval is required by any federal or state law or regulation
or the  rules of any  stock  exchange  or  system on which the Stock may then be
listed or quoted, and provided, further, that no such amendment shall materially
adversely  affect the rights of an Optionee  without the express written consent
of the Optionee (or the person otherwise entitled to exercise the Option) unless
permitted by the terms of the Option Agreement.

14.      MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS

         Subject  to the  terms  and  conditions  of the  Plan  and  any  Option
Agreement, the Committee may modify, extend or renew outstanding Options granted
under the Plan, or accept the surrender of  outstanding  Options,  to the extent
not  previously  exercised,  and  authorize  the  granting  of  new  Options  in
substitution  therefor.  The Committee may not change the terms or conditions of
any outstanding  Option in a manner that would  materially  adversely affect the
rights of the Optionee  without the express  written consent of the Optionee (or
the person  otherwise  entitled to exercise the Option) unless  permitted by the
terms of the Option Agreement.

15.      APPLICATION OF FUNDS

         The proceeds received by the Company from the sale of Stock pursuant to
the exercise of the Option shall be used for its general corporate purposes.

16.      WITHHOLDING TAXES

         16.1.  Elections  to Pay  Withholding  Taxes.  Any Optionee 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  Optionee'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 (held by the Optionee for
at least 6 months if  acquired  by  exercise  of option)  (valued at Fair Market
Value), or (ii) the Company's retention of shares of Stock otherwise issuable to
the Optionee upon exercise  (valued at Fair Market Value).  Shares of Stock used
to make payments under (i) and (ii) shall be valued as of the exercise date, and
the  number of shares to be  required  for  payments  under (i) or (ii) shall be
rounded to the nearest  whole share so that no cash payment shall be required by
reason of any fractional amount.

         16.2. Compulsory Payment of Tax Withholding  Obligations.  In the event
an Optionee does not satisfy his tax withholding obligations pursuant to Section
16.1, the Company or a Related  Corporation  shall have the right to deduct from
any compensation or any other


<PAGE>

payment of any kind due Optionee the amount of any federal, state or local taxes
required by law to be withheld  as the result of the  exercise of an Option.  In
lieu of such  deduction,  the Company  may  require the  Optionee to make a cash
payment to the  Company  or a Related  Corporation  thereof  equal to the amount
required to be withheld.  In the event the  Optionee  does not make such payment
when requested,  the Company may refuse to issue any stock certificate  pursuant
to the exercise of any Option until  arrangements  satisfactory to the Committee
for such payment have been made.

17.      RULE 16b-3 COMPLIANCE

         17.1.  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.

         17.2.  Other  Compliance  Provisions.  With  respect  to 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.

18.      MISCELLANEOUS

         18.1.  Exclusion from  Retirement and Fringe Benefit  Computation.  The
award and  exercise  of  Options  pursuant  to the Plan  shall not be taken into
account as  "wages,"  "salary" or  "compensation"  in  determining  eligibility,
benefits or otherwise under (i) any pension, retirement, profit-sharing or other
qualified or non-qualified plan or deferred compensation plan; (ii) any employee
welfare or fringe  benefit  plan  including,  but not limited to,  group life or
disability insurance; or (iii) any form of extraordinary pay including,  but not
limited to, bonuses, sick pay and vacation pay.

         18.2.  Gender.  As used herein the  masculine  gender shall include the
feminine as the identity of an Optionee may require.

         18.3. Governing Law. The validity, interpretation and administration of
the  Plan  and of any  rules,  regulations,  determinations  or  decisions  made
thereunder, and the rights of any and all persons having or claiming to have any
interest  therein or thereunder,  shall be determined  exclusively in accordance
with  the  laws of the  State of  Delaware,  without  regard  to  principles  of
conflicts of law, and applicable federal law. Without limiting the generality of
the  foregoing,  the period within which any action in connection  with the Plan
must be commenced shall be governed by the laws of the State of Delaware without
regard to the place where the act or


<PAGE>

omission  complained of took place, the residence of any party to such action or
the place where the action may be brought.

         18.4.  Headings.  The headings in this Plan are for reference  purposes
only and shall not affect the meaning or interpretation of the Plan.

         18.5.  Notices.  All  notice  and  other  communications  made or given
pursuant  to this Plan shall be in  writing  and shall be  sufficiently  made or
given if hand delivered or mailed by certified  mail,  addressed to the Optionee
at the address contained in the records of the Company, or to the Company at its
principal office.