EXHIBIT 10.6

NONEMPLOYEE DIRECTOR STOCK OPTION AGREEMENT

                                                              AGREEMENT made as
of the          day of                     ,             , between MATRIX
SERVICE COMPANY, a Delaware corporation (the “Company”), and (“Director”).

To carry out the purposes of the MATRIX SERVICE COMPANY 1995 NONEMPLOYEE
DIRECTORS’ STOCK OPTION PLAN (the “Plan”), by affording Director the opportunity
to purchase shares of common stock of the Company (“Stock”), and in
consideration of the mutual agreements and other matters set forth herein and in
the Plan, the Company and Director hereby agree as follows:

1. Grant of Option. The Company hereby irrevocably grants the Director the right
and option (“Option”) to purchase all or any part of an aggregate of shares of
Stock, on the terms and conditions set forth herein and in the Plan, which Plan
is incorporated herein by reference as a part of this Agreement. This Option
shall not be treated as an incentive stock option within the meaning of section
422(b) of the Internal Revenue Code of 1986, as amended (the “Code”).

2. Purchase Price. The purchase price of Stock purchased pursuant to the
exercise of this Option shall be $             per share, which has been
determined to be not less than the fair market value of the Stock at the date of
grant of this Option. For all purposes of this Agreement, fair market value of
Stock shall be determined in accordance with the provisions of the Plan.

3. Exercise of Option. Subject to the earlier expiration of this Option as
herein provided, this Option may be exercised, by written notice to the Company
at its principal executive offices addressed to the attention of Chief Executive
Officer, at any time and from time to time after the date of grant hereof, but,
except as otherwise provided below, this Option shall not be exercisable for
more than a percentage of the aggregate number of shares offered by this Option
determined by the number of full calendar months from the first day of the
calendar month coincident with or next following the date of grant hereof to the
date of such exercise, in accordance with the following schedule:

 

Number of Full Calendar Months

  

Percentage of Shares

That May Be Purchased

 

Less than 12 months

   0.00 %

12 months but less than 24 months

   50.0 %

24 months or more

   100.0 %

Notwithstanding the foregoing, if (i) the Company shall not be the surviving
entity in any merger, consolidation or other reorganization (or survives only as
a subsidiary of an entity other than a previously wholly-owned subsidiary of the
Company (ii) the Company sells, leases or exchange or agrees to sell, lease or
exchange all or substantially all of its assets to any other person or entity
(other than a wholly-owned subsidiary of the Company), (iii) the Company is to
be dissolved and liquidated, (iv) any person or entity, including a “group” as
contemplated by Section 13(d)(3) of the Securities Exchange Act of 1934,
acquires or gains ownership or control (including, without limitation, power to
vote) of more than 50% of the outstanding shares of the Company’s voting stock
(based upon voting power), or (v) as a result of or in connection with a
contested election of directors, the persons who were directors of the Company
before such election shall cease to constitute a majority of the Board of
Directors of the Company (each such event is referred to herein as a “Corporate
Change”), then effective as of the earlier (1) the date of approval by the
stockholders of the Company of such merger, consolidation, reorganization, sale,
lease or exchange of assets or dissolution or such election of directors or
(2) the date of such Corporate Change, this Option shall be exercisable in full.

This Option and all rights granted hereunder are not transferrable by Director
other than by will or the laws of descent and distribution or pursuant to a
qualified domestic relations order as defined by the Code or Title 1 of the
Employee Retirement Income Security Act of 1974, as amended, or the rules
thereunder, and may be exercised during Director’s lifetime only by Director or
Director’s guardian or legal representative. This Option may be exercised only
while Director remains a member of the Board of Directors of the

 

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Company (the “Board”) and will terminate and cease to be exercisable upon
Director’s termination of membership on the Board, except that:

(a) If Director’s membership on the Board terminates by reason of disability,
this Option may be exercised in full by Director (or Director’s estate or the
person who acquires this Option by will or the laws of descent and distribution
or otherwise by reason of the death of Director, may exercise this Option in
full at any time during the period of 90 days following termination.

(b) If Director dies while a member of the Board, Director’s estate, or the
person who acquires this Option by will or the laws of descent and distribution
or otherwise by reason of the death of Director, may exercise this Option in
full at any time during the period of 90 days following the date of Director’s
death.

(c) If Director’s membership on the Board terminates for any reason other than
as described in (a) or (b) above, this Option may be exercised by Director at
any time during the period of 30 days following such termination, or by
Director’s estate (or the person who acquires this Option by will or the laws of
descent and distribution or otherwise by reason of the death of Director) during
such period if Director dies during such 30 day period, but in each case only as
to the number of shares Director was entitled to purchase hereunder upon
exercise of this Option as of the date Director’s membership on the Board so
terminates.

This Option shall not be exercisable in any event after the expiration of ten
years from the date of grant hereof. The purchase price of shares as to which
this Option is exercised shall be paid in full at the time of exercise in cash
(including check, bank draft or money order payable to the order of the
Company). No fraction of a share of Stock shall be issued by the Company upon
exercise of an Option or accepted by the Company in payment of the purchase
price thereof, rather, Director provide a cash payment for such amount as is
necessary to effect the issuance and acceptance of only whole shares of Stock.
Unless and until a certificate or certificates representing such shares shall
have been issued by the Company to Director, Director (or the person permitted
to exercise this Option in the event of Director’s death) shall not be or have
any of the rights or privileges of a stockholder of the Company with respect to
shares acquirable upon an exercise of this Option.

4. Withholding of Tax. To the extent that the exercise of this Option or the
disposition of shares of Stock acquired by exercise of this Option results in
compensation income to Director for federal or state income tax purposes,
Director shall deliver to the Company at the time of such exercise or
disposition such amount of money or shares of Stock as the Company may require
to meet its obligation under applicable tax laws or regulations, and if Director
fails to do so, the Company is authorized to withhold from any cash or Stock
renumeration then or thereafter payable to Director any tax required to be
withheld by reason of such resulting compensation income. Upon an exercise of
this Option, the Company is further authorized in its discretion to satisfy any
such withholding requirement out of any cash or shares of Stock distributable to
Director upon such exercise.

5. Status of Stock. The Company intends to register for issuance under the
Securities Act of 1933, as amended (the “Act”), the shares of Stock acquirable
upon exercise of this Option, and to keep such registration effective throughout
the period this Option is exercisable. In the absence of such effective
registration or an available exemption from registration under the Act, issuance
of share of Stock acquirable upon exercise of this Option will be delayed until
registration of such shares is effective or an exemption from registration under
the Act is available. The Company intends to use its best efforts to ensure that
no such delay will occur. In the event exemption from registration under the Act
is available upon exercise of this Option, Director (or the person permitted to
exercise this Option in the event of Director’s death or incapability), if
requested by the Company to do so, will execute and deliver to the Company in
writing an agreement containing such provisions as the Company may require to
assure compliance with applicable securities laws.

Director agrees that the shares of Stock which Director may acquire by
exercising this Option will not be sold or otherwise disposed of in any manner
which would constitute a violation of any applicable federal or state securities
laws. Director also agrees (i) that the certificates representing the shares of
Stock purchased under this Option may bear such legend or legends as the Company
deems appropriate in order to assure compliance with applicable securities laws,
(ii) that the Company may refuse to register the transfer of the shares of Stock
purchased under this Option on the stock transfer records of the Company if such
proposed

 

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transfer would in the opinion of counsel satisfactory to the Company constitute
a violation of any applicable securities laws and (iii) that the Company may
give related instructions to its transfer agent, if any, to stock registration
of the transfer of the shares of Stock purchased under this Option.

6. Binding Effect. This Agreement shall be binding and inure to the benefit of
any successors to the Company and all persons lawfully claiming under Director.

7. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware.

IN WITNESS WHEREOF, the Company has caused this agreement to be duly executed by
its officer thereunto duly authorized, and Director has executed this Agreement,
all as of the day and year first above written.

 

MATRIX SERVICE COMPANY By:  

 

  DIRECTOR

 

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