Document:

Exhibit
10.03

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933  OR ANY STATE SECURITIES
LAWS AND MAY NOT BE SOLD, EXCHANGED, HYPOTHECATED OR TRANSFERRED IN ANY MANNER
EXCEPT PURSUANT TO A REGISTRATION OR AN EXEMPTION FROM SUCH REGISTRATION.

 

PURCHASE WARRANT

 

Issued to:

 

 

Exercisable to Purchase

 

             Shares
of Common Stock

 

of

 

DYNTEK, INC.

 

 

Void after August 11, 2010

 

 

This is to certify that, for the value described
herein and subject to the terms and conditions set forth below, the
Warrantholder is entitled to purchase, and the Company promises and agrees to
sell and issue to the Warrantholder, at any time during the Exercise Period (as
defined in Section 1 hereof), pursuant to Section 2 hereof, up to             shares
of the Company’s Common Stock at the Exercise Price.

 

This Warrant certificate is issued subject to the
following terms and conditions:

 

1.             Definitions of Certain Terms. 
Except as may be otherwise clearly required by the context, the
following terms have the following meanings:

 

(a)           “Adjustment Threshold” shall
initially be $0.52 per share, subject to adjustment from time to time pursuant
to Section 3(c) of this Agreement.

 

(b)           “Closing Date” has the meaning set
forth in the Securities Purchase Agreement.

 

(c)           “Common Shares” means the shares
of Common Stock sold by the Company pursuant to the Securities Purchase
Agreement.

 

(d)           “Common Stock” means the common
stock, $0.0001 par value, of the Company.

 

(e)           “Company” means DynTek, Inc., a
Delaware corporation.

 

(f)             “Exercise Period” means the
period of time commencing on August 11, 2005 and ending at 5 p.m. Pacific Time
on August 11, 2010.

 

(g)           “Exercise Price” means the price
at which the Warrantholder may purchase one Share upon exercise of Warrants as
determined from time to time pursuant to the provisions hereof.  The initial Exercise Price is $0.66 per
Share.

 

(h)           “Securities Act” means the
Securities Act of 1933, as amended.

 

(i)            “Securities Exchange Act” means
the Securities Exchange Act of 1934, as amended.

 

(j)            “Securities Purchase Agreement”
means the Securities Purchase Agreement dated as of February 10, 2005 among the
Company and the Investors referenced therein.

 

(k)           “Share” or “Shares” refers
to one or more shares of Common Stock issuable on exercise of the Warrant.

 

(l)            “Warrant” means the warrant
evidenced by this certificate or any certificate obtained upon transfer or
partial exercise of the Warrant evidenced by any such certificate.

 

2

 

(m)          “Warrants” means the warrants
issued pursuant to the Securities Purchase Agreement.

 

(n)           “Warrantholder” means a record
holder of the Warrant or Shares.  The
initial Warrantholder is set forth on the cover page of this Warrant.

 

2.             Exercise of Warrants. 
All or any part of the Warrant may be exercised during the Exercise
Period by surrendering the Warrant, together with appropriate instructions,
duly executed by the Warrantholder or by its duly authorized attorney, and
delivery of payment in full by the Warrantholder, in lawful money of the United
States, of the Exercise Price payable with respect to the Shares being
purchased at the office of the Company, 18881 Von Karman Ave., Suite 250,
Irvine, California 92512, Attention: Chief Financial Officer, or at such other
office or agency as the Company may designate. 
The date on which such instructions and the Exercise Price are received
by the Company shall be the date of exercise. 
Upon receipt of notice of exercise and the Exercise Price, the Company
shall immediately instruct its transfer agent to prepare certificates for the
Shares to be received by the Warrantholder and shall use commercially
reasonable efforts to cause such certificates to be prepared and delivered to
the Warrantholder in accordance with the Warrantholder’s instructions within
three business days after the date of exercise. 
If the Warrantholder shall provide the Company with an opinion of
counsel to the effect that the legend set forth on the face of this Warrant is
not required, such certificates shall not bear a legend with respect to the
Securities Act.

 

If fewer than all the Shares
purchasable under the Warrant are purchased, the Company will, upon such
partial exercise, execute and deliver to the Warrantholder a new Warrant
certificate (dated the date hereof), in form and tenor similar to this Warrant
certificate, evidencing that portion of the Warrant not exercised.  The Shares to be obtained on exercise of the
Warrant will be deemed to have been issued, and any person exercising the
Warrants will be deemed to have become a holder of record of those Shares, as
of the date of the payment of the Exercise Price.

 

3.             Adjustments in Certain Events. 
The number, class, and price of the Shares for which this Warrant is
exercisable are subject to adjustment from time to time upon the happening of
certain events as follows:

 

(a)           If the outstanding shares of the Company’s
Common Stock are divided into a greater number of shares or a dividend in stock
is paid on the Common Stock, the number of Shares for which the Warrant is then
exercisable will be proportionately increased and the Exercise Price will be
proportionately reduced; and, conversely, if the outstanding shares of Common
Stock are combined into a smaller number of shares of Common Stock, the number
of Shares for which the Warrant is then exercisable will be proportionately
reduced and the Exercise Price will be proportionately increased.  The increases and reductions provided for in
this subsection 3(a) will be made with the intent and, as nearly as
practicable, the effect that neither the percentage of the total equity of the
Company obtainable on exercise of the Warrants nor the price payable for such
percentage upon such exercise will be affected by any event described in this
subsection 3(a).

 

3

 

(b)           In case of any change in the Common Stock
through merger, consolidation, reclassification, reorganization, partial or
complete liquidation, purchase of substantially all the assets of the Company,
or other change in the capital structure of the Company, then, as a condition
of such change, lawful and adequate provision will be made so that the holder
of this Warrant will have the right thereafter to receive upon the exercise of
the Warrant the kind and amount of shares of stock or other securities or
property to which he would have been entitled if, immediately prior to such
event, he had held the number of Shares obtainable upon the exercise of the
Warrant.  In any such case, appropriate
adjustment will be made in the application of the provisions set forth herein
with respect to the rights and interest thereafter of the Warrantholder, to the
end that the provisions set forth herein will thereafter be applicable, as
nearly as reasonably may be, in relation to any shares of stock or other
property thereafter deliverable upon the exercise of the Warrant.  The Company will not permit any change in its
capital structure to occur unless the issuer of the shares of stock or other
securities to be received by the holder of this Warrant, if not the Company,
agrees to be bound by and comply with the provisions of this Warrant.

 

(c)           In case the Company shall sell or issue
shares of Common Stock (other than Excluded Stock, as defined hereinafter) for
a consideration per share less than the Adjustment Threshold, then, upon such
sale or issuance, the Exercise Price shall be adjusted so that the Exercise
Price shall equal the price determined by dividing the aggregate amount of consideration,
if any, received, or to be received, by the Company upon such issuance or sale
by the number of shares sold, issued or issuable.  Upon any adjustment of the Exercise Price
pursuant to this Section 3(c), the adjusted Exercise Price shall be the Adjustment
Threshold with respect to future issuances by the Company after any such
adjustment.

 

(i)            For purposes of this Section 3(c), the
sale or issuance by the Company of rights, warrants or options to purchase
Common Stock or securities convertible into Common Stock shall be deemed to be
the sale or issuance of shares of Common Stock (in which event the subsequent
exercise thereof shall not be deemed to be a separate sale or issuance for
purposes of this Section 3(c)), and the consideration therefor shall consist of
the consideration received by the Company upon issuance of such rights,
warrants, options or convertible securities plus any consideration to be
received upon the exercise or conversion thereof.

 

(ii)           For purposes of this Section 3(c), the consideration
received by the Company for the issue of any shares of Common Stock shall be
computed as follows:

 

(A)          insofar as it consists of cash, be
computed at the aggregate amount of cash received by the Company before
deducting any reasonable discounts, commissions or other expenses allowed, paid
or incurred by the Company for any underwriting or otherwise in connection with
such issuance;

 

(B)           insofar as it consists of property other
than cash, be computed at the fair market value thereof at the time of such
issue, as determined in good faith by the Company’s Board of Directors; and

 

(C)           in the
event that it consists of consideration covering both cash and property, be the
proportion of such consideration so received, computed as provided in clauses
(A) and (B) above, as reasonably determined in good faith by the Company’s
Board of Directors.

 

4

 

(iii)          For purposes of this Section 3(c), “Excluded
Stock” shall mean (A) all shares issuable upon the exercise or conversion of
currently outstanding warrants, options, other rights to purchase Common Stock
and convertible securities outstanding as of the Closing Date, (B) all shares
issued or issuable pursuant to any incentive plan or arrangement approved by
the Board of Directors for the benefit of the Company’s employees, officers,
directors or consultants or others with important business relationships with
the Company; provided
that the number of shares issued or issuable to officers and directors of the
Company who are reporting persons under Section 16 of the Securities Exchange
Act under this subsection (B) after the date of issuance of this Warrant shall
not exceed the number of shares equal to five percent (5%) of the fully diluted
outstanding shares of Common Stock of the Company, calculated using the
treasury stock method immediately prior to the issuance of such shares of
Common Stock, in the aggregate, subject to adjustment for subdivisions and
combinations and net of any repurchases of such shares or cancellations or
expirations of rights to purchase, and; provided further, that said limitation
shall not apply if the transaction is unanimously approved by the Board of
Directors of the Company if a member of the Board of Directors has been
nominated by SACC Partners LP or any of its affiliates, (C) all
shares issued or issuable as a dividend or other distribution or pursuant to
any event for which an adjustment is made pursuant to Section 3(a) for
subdivisions or combinations of the Company’s capital stock and pursuant to
Section 3(b) for any reclassification, exchange or substitution of the Company’s
capital stock, (iv) all shares issued or issuable pursuant to the acquisition
of another corporation by the Company by merger, purchase of substantially all
of the assets or other reorganization or to a joint venture agreement, (v) all
shares issued or issuable to banks, equipment lessors or other financial
institutions pursuant to a debt financing or commercial leasing transaction,
other than a convertible debt financing; provided that no party receiving such
shares is an affiliate or immediate family, as defined in Item 404 of
Regulation S-K promulgated under the Securities Act, of an affiliate of the
Company and the Board of Directors shall have reasonably determined in good
faith that the terms of the issuance are arms-length, and (vi) all shares
issued or issuable in connection with strategic partnerships or to others with
important business relationships with the Company; provided that no party
receiving such shares is an affiliate or immediate family, as defined in Item
404 of Regulation S-K promulgated under the Securities Act, of an affiliate of
the Company and the Board of Directors shall have reasonably determined in good
faith that the terms of the issuance are arms-length.

 

(iv)          In the event of any change in the
Exercise Price as a result of the issuance of such rights, warrants or options
or such convertible securities, the Exercise Price shall be recomputed to
reflect such change, but no further adjustment shall be made for the actual
issuance of Common Stock or any payment of such consideration upon the exercise
of any such rights, warrants or options or the conversion of such securities.

 

(v)           Upon the
expiration of any such rights, warrants or options or the termination of any
such rights or convertible securities, the Exercise Price, to the extent in any
way affected by or computed using such rights, warrants or options or
convertible securities, shall be recomputed to reflect the issuance of only the
number of shares of Common Stock actually issued upon the exercise of such
rights, warrants or options or upon the conversion of such securities.

 

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(d)           When any adjustment is required to be
made in the number of Shares or other securities or property purchasable upon
exercise of the Warrant, the Company will promptly determine the new number of
such Shares or other securities or property purchasable upon exercise of the
Warrant and (i) prepare and retain on file a statement describing in reasonable
detail the method used in arriving at the new number of such Shares or other
securities or property purchasable upon exercise of the Warrant and (ii) cause
a copy of such statement to be mailed to the Warrantholder within thirty (30)
days after the date of the event giving rise to the adjustment.

 

(e)           No fractional shares of Common Stock or
other securities will be issued in connection with the exercise of the Warrant,
but the Company will pay, in lieu of fractional shares, a cash payment therefor
on the basis of the mean between the bid and asked prices of the Common Stock
in the over-the-counter market or the closing price on a national
securities exchange or Nasdaq on the day immediately prior to exercise.

 

(f)            If securities of the Company or
securities of any subsidiary of the Company are distributed pro rata to holders
of Common Stock, such number of such securities will be distributed to the
Warrantholder or his assignee upon exercise of this Warrant as the Warrantholder
or assignee would have been entitled to if the portion of the Warrant evidenced
by this Warrant certificate had been exercised prior to the record date for
such distribution.  The provisions with
respect to adjustment of the Common Stock provided in this Section 3 will also
apply to the securities to which the Warrantholder or his assignee is entitled
under this subsection 3(f).

 

(g)           In the event (i) the Company establishes
a record date to determine the holders of any class of securities who are
entitled to receive any dividend or other distribution or (ii) there occurs any
change in the Common Stock through merger, consolidation, reclassification,
reorganization, partial or complete liquidation, purchase of substantially all
of the assets of the Company or other change in the capital structure of the
Company, the Company shall give to the holder hereof a notice specifying (a)
the date of such record date for the purpose of such dividend or distribution
and a description of such dividend or distribution, (b) the date on which any
such merger, consolidation, reclassification, reorganization, sale, liquidation
or other change in the capital structure of the Company is expected to become
effective, and (c) the time, if any, that is to be fixed, as to when the
holders of record of Common Stock (or other securities) shall be entitled to
exchange their shares of Common Stock (or other securities) for securities or
other property deliverable upon such merger, consolidation, reclassification,
reorganization, sale, liquidation or other change in the capital structure of
the Company.  Such written notice shall
be given to the holder of this Warrant at least ten (10) days prior to the date
specified in such notice on which any such action is to be taken.

 

4.             Reservation of Shares. 
The Company agrees that the number of shares of Common Stock or other
securities sufficient to provide for the exercise of the Warrant upon the basis
set forth above will at all times during the term of the Warrant be reserved
for exercise.  If at any time the Company
does not have a sufficient number of shares of

 

6

 

Common Stock or other securities authorized to provide for the exercise
of the Warrant, the Company shall take such actions as may be reasonably
necessary to increase the number of authorized shares of Common Stock or other
securities to provide for exercise of the Warrant.

 

5.             Validity of Shares. 
All Shares or other securities delivered upon the exercise of the
Warrant will be duly and validly issued in accordance with their terms, and, in
the case of capital stock, will, when issued and delivered in accordance with
their terms against payment therefor as provided in the Warrant, be fully paid
and nonassessable, and the Company will pay all documentary and transfer taxes,
if any, in respect of the original issuance thereof upon exercise of the
Warrant.

 

6.             Restrictions on Transfer. This Warrant may not be sold,
transferred, assigned or hypothecated except as permitted pursuant to Section
2.6 of the Securities Purchase Agreement. 
The Warrant may be divided or combined, upon request to the Company by
the Warrantholder, into a certificate or certificates evidencing the same
aggregate number of Warrants.

 

7.             No Rights as a Stockholder. 
Except as otherwise provided herein, the Warrantholder will not, by
virtue of ownership of the Warrant, be entitled to any rights of a stockholder
of the Company but will, upon written request to the Company, be entitled to
receive such quarterly or annual reports as the Company distributes to its
stockholders.

 

8.             Notice.  Any notices
required or permitted to be given under the terms of this Warrant must be sent
by certified or registered mail (return receipt requested) or delivered
personally or by courier (including a recognized overnight delivery service) or
by facsimile and will be effective five (5) days after being placed in the
mail, if mailed by regular U.S. mail, or upon receipt, if delivered personally,
by courier (including a recognized overnight delivery service) or by facsimile,
in each case addressed to a party.  The
addresses for such communications are:

 

If to the Company:

 

Chief Financial Officer

DynTek, Inc.

18881 Von Karman Ave., Suite
250

Irvine, California 92512

fax           (949) 955-0086

 

If to a Warrantholder:  to the address set forth immediately below
the Warrantholder’s name on the signature pages hereto.

 

Each
party will provide written notice to the other parties of any change in its
address.

 

9.             Governing Law; Jurisdiction; Jury Trial
Waiver.  This Warrant will be governed by and
interpreted in accordance with the laws of the State of California without
regard to the principles of conflict of laws. 
The parties hereto hereby submit to the exclusive jurisdiction of the
United States federal and state courts located in the County of Orange,

 

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State of California with respect to any dispute arising under this
Warrant. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT THAT IT MAY HAVE TO,
AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR IN CONNECTION HEREWITH.

 

10.           Entire Agreement. 
This Warrant, the exhibits and schedules hereto, and the documents
referred to herein, constitute the entire agreement and understanding of the
parties hereto with respect to the subject matter hereof, and supersede all
prior and contemporaneous agreements and understandings, whether oral or
written, between the parties hereto with respect to the subject matter hereof.

 

11.           Waiver; Consent. 
This Warrant may not be changed, amended, terminated, augmented,
rescinded or discharged (other than by performance), in whole or in part,
except by a writing executed by the parties hereto, and no waiver of any of the
provisions or conditions of this Warrant or any of the rights of a party hereto
shall be effective or binding unless such waiver shall be in writing and signed
by the party claimed to have consented thereto. 
Any amendment or waiver signed by Warrantholders holding Warrants to
purchase a majority of all of the Shares issuable upon exercise of the Warrants
then outstanding shall be binding upon all Warrantholders.

 

12.           No Impairment. 
The Company will not, by amendment of its Certificate of Incorporation, or
through reorganization, consolidation, merger, dissolution, issue or sale of
securities, sale of assets or any other voluntary action, avoid
or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Warrantholder of this Warrant
against dilution
or other impairment.

 

13.           Remedies.  The Company
stipulates that the remedies at law of the Warrantholder of this Warrant in the
event of any default or threatened default by the Company in the performance of
or compliance with any of the terms of this Warrant are not adequate and may be
enforced by a decree for the specific performance of any agreement contained
herein or by an injunction against a violation of any of the terms hereof or
otherwise.

 

14.           Severability. 
If one or more provisions of this Warrant are held to be unenforceable
under applicable law, such provision shall be excluded from this Warrant and
the balance of the Warrant shall be interpreted as if such provision were so
excluded and the balance shall be enforceable in accordance with its terms.

 

[SIGNATURES ON FOLLOWING
PAGE]

 

8

 

[SIGNATURE PAGE TO PURCHASE
WARRANT]

 

IN WITNESS WHEREOF, the
parties hereto have executed this Warrant effective as of the date set forth
below.

 

	
  Dated
  as of February 10, 2005

  
	
   

  
	
  DYNTEK,
  INC.

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Its:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Agreed
  and Accepted as of February      , 2005

  
	
   

  	
   

  
	
  [WARRANTHOLDER]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Its:

  	
   

  	
   

  

 

 

NOTICE
OF EXERCISE

 

To:          DYNTEK,
INC.

 

The undersigned hereby elects to purchase                 shares
of Common Stock (the “Shares”) of DynTek, Inc., a Delaware corporation
(the “Company”) pursuant to the terms of the attached Warrant, and
tenders herewith payment of the purchase price pursuant to the terms of the
Warrant.

 

Please issue certificates representing the Common
Stock purchased hereunder in the names and in the denominations indicated
below.

 

Please issue a new Warrant for the unexercised portion
of the attached Warrant, if any, in the name of the undersigned.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  No. Warrant Shares:

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
  Print Name of

  	
   

  	
   

  
	
  Stockholder:

  	
   

  	
   

  	
  Title:EXHIBIT 10.1

 

WASHINGTON
GROUP INTERNATIONAL, INC.

2004
EQUITY INCENTIVE PLAN

 

OPTION RIGHTS AGREEMENT

 

THIS AGREEMENT (the “Agreement”),
dated as of                     ,
is made by and between Washington Group International, Inc., a Delaware
corporation hereinafter referred to as “Corporation”, and                                     ,
an employee of the Corporation or Subsidiary of the Corporation, hereinafter
referred to as “Optionee.”

 

WHEREAS, the Corporation
wishes to afford the Optionee the opportunity to purchase shares of its $.01
par value common stock; and

 

WHEREAS, the Corporation
wishes to carry out the Plan (as hereinafter defined), the terms of which are
hereby incorporated herein by reference and made a part hereof; and

 

WHEREAS, the execution of
an Option Rights Agreement in the form hereof has been duly authorized by a
resolution of the Board duly adopted on                     ,
and incorporated herein by reference; and

 

WHEREAS, this Option
Right is intended to be a nonqualified stock option and shall not be treated as
an “incentive stock option” within the meaning of that term under Section 422
of the Code;

 

NOW, THEREFORE, in
consideration of the mutual covenants herein contained and other good and
valuable consideration, receipt of which is hereby acknowledged, the parties
hereto do hereby agree as follows:

 

ARTICLE I

DEFINITIONS

 

Wherever the following
terms are used in this Agreement with initial capital letters, they shall have
the meanings specified in the Plan unless the context clearly indicates
otherwise.

 

Section 1.1 – Board

Section 1.2 – Change
in Control

Section 1.3 - Code

Section 1.4 - Common
Shares

Section 1.5 –
Corporation

Section 1.6 - Date
of Grant

Section 1.7 -
Exchange Act

Section 1.8 –
Securities Act

Section 1.9 - Subsidiary

Section 1.10 – Year
of Service

 

1

 

Wherever the following
terms are used in this Agreement with initial capital letters, they shall have
the meanings specified below unless the context clearly indicates otherwise.  The masculine pronoun shall include the
feminine and neuter, and the singular the plural, where the context so
indicates.

 

Section 1.11
– Beneficiary

 

“Beneficiary” means the
person or persons properly designated by the Optionee to exercise the Optionee’s
rights under the Plan and this Agreement in the event of the Optionee’s death,
or if the Optionee has not designated such person or persons, or such person or
persons shall all have pre-deceased the Optionee, the executor, administrator
or personal representative of the Optionee’s estate.  Designation, revocation and redesignation of
Beneficiaries must be made in writing in accordance with rules established by
the Corporation and shall be effective upon delivery to the Corporation.

 

Section 1.12
– Employee

 

“Employee” means any
officer or other employee of the Corporation or any Subsidiary.

 

Section 1.13
– Fair Market Value

 

“Fair Market Value” means
either (a) the closing price of the Common Shares on the date in question (or
if there was no sale on the date in question, the closing price of the Common
Shares on the most recent date on which there was a sale) on the NASDAQ
National Market (or other national stock exchange) as published in The Wall Street Journal, or (b) if there
is no trading of Common Shares on the NASDAQ National Market (or other national
stock exchange), the fair market value of the Common Shares as determined by
the Board from time to time.

 

Section 1.14
- Optionee

 

“Optionee” means the
Employee named above to whom Option Rights are awarded under this Agreement and
the Plan.

 

Section 1.15
– Option Right

 

“Option Right” means the
right to purchase Common Shares evidenced by this Agreement.

 

Section 1.16
- Plan

 

“Plan” means the
Washington Group International, Inc. 2004 Equity Incentive Plan, as the same
may be amended or restated from time to time.

 

Section 1.17
- Secretary

 

“Secretary” means the
Secretary of the Corporation.

 

2

 

Section 1.18
– Termination of Employment

 

“Termination of
Employment” means the time when the employer-employee relationship between the
Corporation or a Subsidiary and the Optionee is terminated for any reason,
including (without limitation) a termination by resignation, discharge, death,
permanent and total disability or retirement, but excluding (a) terminations
where there is a simultaneous reemployment or continuing employment of the
Optionee by the Corporation or a Subsidiary and (b) in the discretion of the
Board, terminations that result in a temporary severance of the
employer-employee relationship that does not exceed one year.  The Board shall determine the effect of all
matters and questions relating to Termination of Employment, including (without
limitation) the question of whether a Termination of Employment resulted from a
discharge for good cause, and all questions of whether particular leaves of
absence constitute Termination of Employment.

 

ARTICLE II

AWARD OF
OPTION RIGHT

 

Section 2.1
- Grant of Award

 

In consideration of the
Optionee’s execution of this Agreement and for other good and valuable
consideration, on the date hereof the Corporation irrevocably awards to the
Optionee the option to purchase any part or all of an aggregate of                     
shares of its Common Shares upon the terms and subject to the conditions set
forth in the Plan and in this Agreement.

 

Section 2.2
- Purchase Price

 

The purchase price of the
shares of stock covered by the Option Right shall be $          
per share without commission or other charge.

 

Section 2.3
- Adjustments in Option Right

 

The Board may make or
provide for such adjustments in the (a) number of Common Shares covered by
outstanding Option Rights awarded hereunder, (b) prices per share applicable to
such Option Rights, and (c) kind of shares (including shares of another issuer)
covered thereby, as the Board in its sole discretion may in good faith
determine to be equitably required in order to prevent dilution or enlargement
of the rights of Optionees, that otherwise would result from (x) any stock
dividend, stock split, combination of shares, recapitalization or other change
in the capital structure of the Corporation, (y) any merger, consolidation,
spin-off, split-off, split-up, reorganization, partial or complete liquidation
or other distribution of assets, issuance of rights or warrants to purchase
securities or (z) any other corporate transaction or event having an effect
similar to any of the foregoing.  In the
event of any such transaction or event, the Board may provide in substitution
for any or all outstanding awards under this Agreement such alternative
consideration as it may in good faith determine to be equitable under the
circumstances and may require in connection therewith the surrender of all
awards so replaced.

 

3

 

ARTICLE III

PERIOD OF
EXERCISABILITY

 

Section 3.1
- Commencement of Exercisability

 

(a)                                  This
Option Right shall become exercisable in three (3) cumulative installments as
follows:

 

(i)            The
first installment shall consist of one-third (1/3) of the shares covered by the
Option Right and shall become exercisable on the first anniversary of the Date
of Grant.

 

(ii)           The
second installment shall consist of one-third (1/3) of the shares covered by
the Option Right and shall become exercisable on the second anniversary of the
Date of Grant.

 

(iii)          The
third installment shall consist of one-third (1/3) of the shares covered by the
Option Right and shall become exercisable on the third anniversary of the Date
of Grant.

 

(b)                                 Any
portion of the Option Right that has not yet become exercisable pursuant to
3.1(a) shall become exercisable in full immediately in the event of a Change in
Control.

 

(c)                                  No
portion of the Option Right which is unexercisable at Termination of Employment
shall thereafter become exercisable.

 

Section 3.2
- Duration of Exercisability

 

The installments provided
for in Section 3.1 are cumulative. 
Each such installment which becomes exercisable pursuant to Section 3.1
shall remain exercisable until it becomes unexercisable under Section 3.3.

 

Section 3.3
- Expiration of Option Right

 

The Option Right may not
be exercised to any extent by anyone after the first to occur of the following
events:

 

(a)           The
expiration of ten (10) years from the date the Option Right was awarded; or

 

(b)           Except
as set forth in 3.3(c) and (d), the expiration of three (3) months after the
Optionee’s Termination of Employment; or

 

(c)           The
expiration of twelve (12) months from the date of the Optionee’s Termination of
Employment by reason of permanent and total disability (within the meaning of Section 22(e)(3)
of the Code) or by reason of retirement at or after the attainment of (a) age
65, (b) age 55 with at least 10 Years of Service, or (c) 30 Years of Service;
or

 

4

 

(d)                                 If
the Optionee dies while the Option Right is exercisable, the expiration of
twelve (12) months from the date of the Optionee’s death.

 

ARTICLE IV

EXERCISE
OF OPTION RIGHT

 

Section 4.1
- Person Eligible to Exercise

 

During the lifetime of
the Optionee, only he or his guardian or legal representative may exercise the
Option Right or any portion thereof. 
After the death of the Optionee, any exercisable portion of the Option
Right may, prior to the time when the Option Right becomes unexercisable under Section 3.3,
be exercised by his personal representative or by any person empowered to do so
under the Optionee’s will or under the then applicable laws of descent and
distribution.

 

Section 4.2
- Partial Exercise

 

Any exercisable portion
of the Option Right or the entire Option Right, if then wholly exercisable, may
be exercised in whole or in part at any time prior to the time when the Option
Right or portion thereof becomes unexercisable under Section 3.3;
provided, however, that each partial exercise shall be for not less than one
hundred (100) shares and shall be for whole shares only.

 

Section 4.3
- Manner of Exercise

 

The Option Right or any
exercisable portion thereof, may be exercised solely by delivery to the
Secretary or his office of all of the following prior to the time when the
Option Right or such portion becomes unexercisable under Section 3.3:

 

(a)                                  Notice
in writing signed by the Optionee or the other person then entitled to exercise
the Option Right or portion, stating that the Option Right or portion is
thereby exercised, such notice complying with all applicable rules established
by the Board; and

 

(b)                                 Full
payment for the shares with respect to which such Option Right or portion is
exercised, which payment shall be (i) in cash or by check acceptable to the
Corporation; (ii) through the delivery of Common Shares owned by the Optionee
for at least twelve months, duly endorsed for transfer to the Corporation with
a Fair Market Value on the date of delivery equal to the aggregate exercise
price of the Option Right or exercised portion thereof; (iii) through an
arrangement with a bank or broker for payment from the proceeds of sale through
the bank or broker of some or all of the Common Shares to which the exercise
relates; or (iv) through any combination of the consideration provided in the
foregoing subparagraphs (i), (ii) or (iii); and

 

(c)                                  Such
representations and documents as the Board deems necessary or advisable to
effect compliance with all applicable provisions of the Exchange Act, the
Securities Act and any 

 

5

 

other federal or state
securities laws or regulations.  The
Board may also take whatever additional actions it deems appropriate to effect
such compliance including (without limitation) placing legends on share
certificates and issuing stop-transfer notices to agents and registrars;

 

(d)                                 Full
payment to the Corporation (or other employer corporation) of all amounts which
under federal, state or local tax law, it is required to withhold upon exercise
of the Option Right; provided, however, the Corporation may permit the
Optionee, upon delivery of a written election to the Secretary of the
Corporation (or to such other person who may be designated by the Board) to
elect payment of this tax obligation from the proceeds of sale through a bank
or broker of some or all of the Common Shares to which the exercise relates;
and

 

(e)                                  In
the event the Option Right or portion shall be exercised pursuant to Section 4.1
by any person or persons other than the Optionee, appropriate proof of the
right of such person or persons to exercise the Option Right.

 

Section 4.4
- Conditions to Issuance of Stock Certificates

 

The Common Shares
deliverable upon the exercise of the Option Right, or any portion thereof, may
be either previously authorized but unissued shares or issued shares which have
then been repurchased by the Corporation. 
Such shares shall be fully paid and non-assessable.  The Corporation shall not be required to
issue or deliver any certificate or certificates for shares of stock purchased
upon the exercise of the Option Right or portion thereof prior to fulfillment
of all of the following conditions:

 

(a)           The
admission of such shares to listing on all stock exchanges on which such class
of stock is then listed; and

 

(b)           The
completion of any registration or other qualification of such shares under any
state or federal law or under rulings or regulations of the Securities and
Exchange Commission or of any other governmental regulatory body, which the
Board shall deem necessary or advisable; and

 

(c)           The
obtaining of any approval or other clearance from any state or federal
governmental agency which the Board shall determine to be necessary or
advisable; and

 

(d)           The
payment to the Corporation (or other employer corporation) of all amounts
which, under federal, state or local tax law, it is required to withhold upon
exercise of the Option Right; and

 

(e)           The
lapse of such reasonable period of time following the exercise of the Option
Right as the Board may from time to time establish for reasons of
administrative convenience.

 

6

 

Section 4.5
- Rights as Shareholder

 

The holder of the Option
Right shall not be, nor have any of the rights or privileges of, a shareholder
of the Corporation in respect of any shares purchasable upon the exercise of
any part of the Option Right unless and until certificates representing such
shares shall have been issued by the Corporation to such holder.

 

Section 4.6
– Limitations on Resale

 

Any Common Shares
issuable upon the exercise of all or a portion of the Option Right awarded
under this Agreement, other than Common Shares sold to pay the Option Price or
to satisfy the Optionee’s tax obligation set forth in section 4.3(d) of
this Agreement, shall be held by the Company in a segregated account for the
benefit of the Optionee and shall not be sold, transferred, pledged or
hypothecated for a period of at least one year from the date on which the Option
Right or portion was exercised.  In
addition, if the Optionee is subject to the Corporation’s Stock Ownership
Guidelines, no more than one-half of any Common Shares issuable upon the
exercise of all or a portion of the Option Right awarded under this Agreement,
after any reductions for Common Shares sold to pay the Option Price or to
satisfy the Optionee’s tax obligation set forth in section 4.3(d) of this
Agreement, may be sold, transferred, pledged or hypothecated until the Optionee
has satisfied the applicable stock ownership guidelines.  These limitations shall lapse and be of no
further effect immediately upon the Optionee’s death or permanent and total
disability (within the meaning of Section 822(e)(3) of the Code).

 

ARTICLE V

OTHER PROVISIONS

 

Section 5.1
- Administration

 

The Board shall have the
power to interpret the Plan and this Agreement and to adopt such rules for the
administration, interpretation and application of the Plan as are consistent
therewith and to interpret, amend or revoke any such rules.  All actions taken and all interpretations and
determinations made by the Board in good faith shall be final and binding upon
the Optionee, the Corporation and all other interested persons.  No member of the Board shall be personally
liable for any action, determination or interpretation made in good faith with
respect to the Plan or the Option Right.

 

Section 5.2
- Option Right Not Transferable

 

Option Rights under the
Plan may not be sold, pledged, assigned or transferred in any manner other than
by will or the laws of descent and distribution; provided, however, an
Optionee may designate a Beneficiary to exercise his Option Right or other
rights under the Plan after his death. 
Neither the Option Right nor any interest or right therein or part
thereof shall be liable for the debts, contracts or engagements of the Optionee
or his successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, 

 

7

 

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 5.2 shall not prevent transfers by will or
by the applicable laws of descent and distribution.  An Option Right shall be exercised during the
Optionee’s lifetime only by the Optionee or his guardian or legal
representative.

 

Section 5.3
- Shares to Be Reserved

 

The Corporation shall at
all times during the term of the Option Right reserve and keep available such
number of shares of stock as will be sufficient to satisfy the requirements of
this Agreement.

 

Section 5.4
– No Guarantee of Employment

 

Nothing in this Agreement
or in the Plan shall confer upon the Optionee any right to continue in the
employ of the Corporation or any Subsidiary, or shall interfere with or
restrict in any way the rights of the Corporation and its Subsidiaries, which
are hereby expressly reserved, to discharge the Optionee at any time for any
reason whatsoever, with or without cause.

 

Section 5.5
- Notices

 

Any notice to be given
under the terms of this Agreement to the Corporation shall be addressed to the
Corporation in care of its Secretary, and any notice to be given to the
Optionee shall be addressed to him at the address given beneath his signature
hereto.  By a notice given pursuant to
this Section 5.5, 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 Optionee shall, if the Optionee is
then deceased, be given to the Optionee’s personal representative if such representative
has previously informed the Corporation of his status and address by written
notice under this Section 5.5.  Any
notice shall be deemed duly given when enclosed in a properly sealed envelope
or wrapper addressed as aforesaid, deposited (with postage prepaid) in a post
office or branch post office regularly maintained by the United States Postal
Service.

 

Section 5.6
- Titles

 

Titles are provided
herein for convenience only and are not to serve as a basis for interpretation
or construction of this Agreement.

 

Section 5.7
- Construction

 

This Agreement shall be
administered, interpreted and enforced under the internal substantive laws of
the State of Delaware.

 

8

 

Section 5.8
- Conformity to Securities Laws

 

The Optionee acknowledges
that the Plan is intended to conform to the extent necessary with all
applicable federal and state laws, rules and regulations, including provisions
of the Securities Act and the Exchange Act and any and all regulations and
rules promulgated by the Securities and Exchange Commission thereunder,
including without limitation Rule 16b-3 under the Exchange Act. Notwithstanding
anything herein to the contrary, the Plan shall be administered, and the Option
Right is awarded and may be exercised, only in such a manner as to conform to
such laws, rules and regulations.  To the
extent permitted by applicable law, the Plan and this Agreement shall be deemed
amended to the extent necessary to conform to such laws, rules and regulations.

 

IN WITNESS WHEREOF, this
Agreement has been executed and delivered by the parties hereto.

 

	
   

  	
  WASHINGTON GROUP INTERNATIONAL,
  INC.

  
	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Larry L. Myers

  
	
   

  	
   

  	
  Senior Vice President –
  Human Resources

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  OPTIONEE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
						

 

Spousal Consent

 

The undersigned has read
and is familiar with the preceding Agreement and the Plan and hereby consents
and agrees to be bound by all the terms of the Agreement and the Plan.  Without limiting the foregoing, the undersigned
specifically agrees that the Corporation may rely on any authorization,
instruction or election made under the Agreement by the Optionee alone and that
all of his or her right, title or interest, if any, in the Common Shares
purchased by the Optionee under the Agreement, whether arising by operation of
community property law, by property settlement or otherwise, shall be subject
to all of such terms.

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Printed Name

  	
   

  

 

9

 

Exhibit A:  Copy of the Plan

 

10

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