ANALEX CORPORATION
INCENTIVE STOCK OPTION AGREEMENT
This Stock Option Agreement (the "Agreement"), effective as
of September 1, 2005 (the "Date of Grant"), is made by and
between Analex Corporation, a Delaware corporation (the
"Company"), and C. Wayne Grubbs (the "Recipient").
Background
The Company has established the 2002 Stock Option Plan (the
"Plan"). The Company wishes to grant to the Recipient a Stock
Option pursuant to the terms of the Plan.
Therefore, in consideration of the mutual covenants
contained in this Agreement and other good and valuable
consideration, the Company and the Recipient agree as follows:
1. Grant of Option. In consideration of service to the Company
and for other good and valuable consideration, the Company
grants to the Recipient a Stock Option to purchase 32,679
shares of the Company's common stock in accordance with the
terms and conditions of the Plan and this Agreement (the
"Option"). The Company and the Recipient intend the Option
to be an "incentive stock option" as such term is defined
under Section 422 of the Internal Revenue Code of 1986, as
amended.
2. Option Price. The purchase price of the shares of common
stock of the Company covered by the Option (the "Shares")
shall be $3.06 per share, which is the Fair Market Value on
the Date of Grant.
3. Adjustments. If a stock dividend, stock split, share
combination, exchange of shares, recapitalization,
consolidation, spin-off, reorganization, or liquidation of
or by the Company shall occur, the Board shall adjust the
number and class of Shares then subject to the Option and
the price per Share payable upon exercise of the Option to
the extent the Board deems appropriate to reflect the
applicable transaction.
4. Manner of Exercise. The Option, or any portion of the
Option, may be exercised only in accordance with the terms
of the Plan and solely by delivery to the Secretary of the
Company ("Secretary") of all of the following items prior to
the time when the Option or such portion becomes
unexercisable under the terms of the Plan:
(a) Notice in writing signed by the Recipient or the other
person then entitled to exercise the Option or portion
of the Option, stating the intention to exercise the
Option or portion of the Option, such notice complying
with all applicable rules (if any) established by the
Board or the Compensation Committee thereof (the
"Committee");
(b) Full payment (in cash or by cashier's or certified
check, or personal check if such is acceptable to the
Secretary) for the shares with respect to which the
Option or portion thereof is exercised;
(c) Full payment (in cash or by cashier's or certified
check, or personal check if such is acceptable to the
Secretary) upon demand of an amount sufficient to
satisfy any federal (including FICA and FUTA amounts),
state, and/or local withholding tax requirements at the
time the Recipient or his beneficiary recognizes income
for federal, state, and/or local tax purposes as the
result of the receipt of Shares pursuant to the
exercise of the Option or portion of the Option;
(d) A bona fide written representation and agreement, in a
form satisfactory to the Board or the Committee, signed
by the Recipient or other person then entitled to
exercise the Option or portion of the Option,
acknowledging that the Shares issued to the Recipient
pursuant to the Plan shall be subject to any and all
federal and state securities laws, rules and
regulations generally applicable to the common stock of
the Company, including without limitation, any
restrictions on the sale or other transfer of the
Shares as well as the restrictions on transfer of the
shares set forth in this Agreement. Any certificate
representing such Shares shall contain a restrictive
legend evidencing the existence of any such
restrictions, if applicable. The Board or the
Committee may, in its absolute discretion, take
whatever additional actions it deems appropriate to
ensure the observance and performance of such
representations and agreement and to effect compliance
with all federal and state securities laws or
regulations. The Board or the Committee may require an
opinion of counsel acceptable to the Board to the
effect that any subsequent transfer of shares acquired
on an Option exercise does not violate the Act and may
issue stop-transfer orders covering such shares.
5. Conditions to Issuance of Stock Certificates. The shares of
stock deliverable upon the exercise of the Option, or any
portion thereof, may be either previously authorized but
unissued shares or issued shares which have been reacquired
by the Company. Such shares shall be fully paid and
nonassessable.
6. Rights of Shareholders. The Recipient shall not be, nor
have any of the rights or privileges of, a shareholder of
the Company in respect of any shares of Company common stock
purchasable upon the exercise of any part of the Option
unless and until certificates representing such shares shall
have been issued by the Company to the Recipient.
7. Vesting and Restrictions on Transfer of Shares.
(a) Vesting. A Recipient's interest in the Option
shall vest immediately upon Recipient's receipt of an
Agreement executed by the Company. To the extent the
Option is unexercised, the unexercised portion shall
continue to be exercisable until the Option is
exercised, subject to Sections 8 and 9 and the other
provisions of the Agreement.
(b) Restrictions on Transfer of Shares. Recipient agrees
that Recipient will not sell, assign, convey, pledge,
encumber, or otherwise transfer, for consideration or
otherwise, whether voluntarily, involuntarily, or by
operation of law, any Shares obtained through the
exercise of the Option or any interest therein, in
whole or part, until (i) September 1, 2006 or later
with respect to one-third of the Shares, (ii) September
1, 2007 or later with respect to one-third of the
Shares, and (iii) September 1, 2008 or later with
respect to the remaining one-third of the Shares.
Recipient also agrees that (i) Recipient will enter
into any written agreement that the Board or the
Committee determines, in its absolute discretion,
necessary or appropriate to carry out the intent of
this Section 7(b) in connection with the exercise of
all or any portion of the Option, (ii) any certificate
representing Shares obtained through the exercise of
the Option may contain a restrictive legend evidencing
the existence of the restrictions imposed by this
Section 7(b), and (iii) the Board or the Committee may,
in its absolute discretion, take whatever additional
actions it deems appropriate to ensure the enforcement
of the restrictions imposed by this Section 7(b).
8. Divestiture of Shares. In the event of a Material Violation
after the exercise of any or all of the Recipient's Options,
then this Section shall apply. If a Material Violation
occurs and the Recipient then owns all or any portion of the
Shares obtained through the exercise of the Option, then the
Company shall have the right, but not the obligation, to
repurchase such Shares from the Recipient for an amount per
Share equal to the Exercise Price plus any related income
taxes and FICA paid or payable by the Recipient as a result
of the exercise of the Option with respect to those
repurchased Shares.
If a Material Violation occurs and the Recipient has sold or
otherwise transferred all or any portion of the Shares
obtained through the exercise of the Option, then the
Recipient shall pay to the Company any "gain realized" on
such sale or other transfers of the Shares. For purposes of
this paragraph, the "gain realized" shall equal the "net
sales price" (i.e., net of reasonable commissions and
transaction costs of the sale) of the Shares sold or
transferred, minus the Exercise Price for such Shares, and
minus any income and/or capital gains taxes and FICA paid or
payable by the Recipient that are a direct result of the
exercise of the Option (with respect to such sold or
transferred Shares) and/or the direct result of the sale or
other transfer of the Shares. In the event the sale or
other transfer was to a related party at less than fair
market value (e. g., a gift or bargain sale), the "net sales
price" shall be deemed to equal the fair market value of the
Shares at the time of such sale or other transfer. Such
fair market value shall be determined by the Company, in its
sole but reasonable discretion.
9. Duration of Option. Except as specified below, the Option
shall expire on the tenth anniversary of the Date of Grant.
Notwithstanding the foregoing, the Option may expire prior
to the tenth anniversary of the Date of Grant, in the
following circumstances:
(a) If the Recipient dies, the Option shall expire on the
one-year anniversary of the date of the Recipient's
death. During the one-year period following the
Recipient's death, the Option may be exercised by the
beneficiary or the estate of the Recipient, and the
beneficiary and the estate of the Recipient shall be
subject to the restrictions set forth in Section 7 of
this Agreement.
(b) If the Recipient terminates employment with the Company
because of his Disability, the Option shall expire on
the one-year anniversary of the Recipient's last day of
employment with the Company.
(c) If the Recipient terminates employment with the Company
by reason of normal retirement under the Company's
retirement policies, the Option shall expire 90 days
after the Recipient's last day of employment with the
Company.
(d) If the Recipient's employment with the Company terminates
for any reason other than death, Disability or retirement, the
Option shall expire 30 days after the Recipient's last day of
employment with the Company.
(e) Notwithstanding any provisions set forth above in this
Section 9, if the Recipient shall (i) commit any act of
malfeasance or wrongdoing affecting the Company or its
affiliates, (ii) breach any covenant not to compete or
employment agreement with the Company or any affiliate,
(iii) engage in conduct that would warrant the
Recipient's discharge for cause, or (iv) materially
violate any non-disclosure obligations of the Recipient
to the Company, including, but not limited to,
obligations with respect to insider trading under
applicable securities laws, any unexercised part of the
Option shall expire immediately upon the earlier of the
occurrence of such event or the last day the Recipient
is employed by the Company.
10. Administration. The Board or the Committee shall have the
power to interpret this Agreement and to adopt such rules
for the administration, interpretation and application of
the Agreement as are consistent herewith and to interpret or
revoke any such rules. All actions taken and all
interpretations and determinations made by the Board or the
Committee in good faith shall be final and binding upon the
Recipient, the Company and all other interested persons. No
member of the Board or the Committee shall be personally
liable for any action, determination or interpretation made
in good faith with respect to this Agreement or any similar
agreement to which the Company is a party.
11. Options Not Transferable. Neither the Option nor any
interest or right therein or part thereof shall be subject
to disposition by transfer, alienation, anticipation,
pledge, encumbrance, assignment or any other means whether
such disposition is voluntary or involuntary or by operation
of law, by judgment, levy, attachment, garnishment or any
other legal or equitable proceedings (including bankruptcy)
and any attempted disposition thereof shall be null and void
and of no effect; provided, however, that this Section 11
shall not prevent transfers by will or by the applicable
laws of descent and distribution.
12. Change of Control. If a Change of Control occurs, as
defined in the Plan, any unvested and/or unexercisable
portion of the Option shall become fully vested and
exercisable as of the date of the Change of Control. Upon a
Change of Control, the Committee may, in its discretion,
take one or more of the following actions: (i) provide for
payment to the Recipient of cash or other property with a
Fair Market Value equal to the amount that would have been
received upon the exercise of the Option had the Option been
exercised or paid upon the Change of Control, (ii) adjust
the terms of the Option in a manner determined by the
Committee to reflect the Change of Control, (iii) cause the
Option to be assumed, or new rights substituted therefor, by
another entity, (iv) make such other provision as the
Committee may consider equitable to the Recipient and in the
best interests of the Company, or (v) designate a date when
the Option, if not exercised, shall terminate; provided
however, that such a date shall not be so designated unless
the Committee provides at least 30 days advance written
notice of the date of termination to the Recipient. In such
any event, all other provisions, terms and conditions of
this Agreement and the Plan shall remain in full force and
effect and the Committee is expressly authorized to take the
action described in the preceding sentence and to amend this
Agreement or the Plan or take such other actions as may be
necessary, appropriate or incidental to the actions
described above.
13. Shares to be Reserved. The Company shall at all times
during the term of the Option reserve and keep available
such number of shares of stock as will be sufficient to
satisfy the requirements of this Agreement.
14. Notices. Any notice to be given under the terms of this
Agreement to the Company shall be addressed to the Company
in care of its Secretary and any notice to be given to the
Recipient shall be addressed to him at the address given
beneath his signature below. By a notice given pursuant to
this Section 14, either party may hereafter designate a
different address for notices to be given to him. Any
notice which is required to be given to the Recipient shall,
if the Recipient is then deceased, be given to the
Recipient's personal representative if such representative
has previously informed the Company of his status and
address by written notice under this Section 14. Any notice
shall have been deemed duly given when enclosed in a
properly sealed envelope addressed as aforesaid, deposited
(with postage prepaid) in a United States postal receptacle.
15. Titles. Titles are provided herein for convenience only and
are not to serve as a basis for interpretation or
construction of this Agreement.
16. Incorporation of Plan by Reference. The Option is granted
in accordance with the terms and conditions of the Plan, the
terms of which are incorporated herein by reference, and the
Agreement shall in all respects be interpreted in accordance with
the Plan. Any term (including capitalized words) used in the
Agreement that is not otherwise defined in the Agreement shall
have the meaning ascribed to such term or word to it by the Plan.
The Recipient acknowledges the receipt of a copy of the Plan, and
agrees to be bound by the terms of the Plan, the terms and
conditions of which are incorporated herein by reference.
17. Right to Terminate Relationship. Nothing in the Plan or
this Agreement, or in any agreement entered into pursuant to
the Plan, shall confer upon the Recipient the right to
continue in the employment of the Company or effect any
right which the Company may have to terminate the employment
of the Recipient regardless of the effect of such
termination of employment on the rights of the Recipient
under the Plan or this Agreement.
The Company and the Recipient have executed this Agreement
effective as of the date first written above.
ANALEX CORPORATION
By: /S/ STERLING E. PHILLIPS, JR.
---------------------------------
Sterling E. Phillips, Jr.
President and Chief Executive Officer
/S/ C. WAYNE GRUBBS
---------------------------------
C. Wayne Grubbs
ADDRESS OF RECORD:
11813 Triple Crown Road
Reston, VA 20191