Document:

Exhibit 10.1

DYNTEK, INC.

2006 NONQUALIFIED STOCK OPTION PLAN

The
2006 STOCK OPTION PLAN (the “Plan”) is hereby established by Dyntek, Inc.,
a Delaware corporation (the “Company”), and adopted by its Board of Directors
as of the 15th day of June, 2006.

ARTICLE 1

PURPOSES
OF THE PLAN

Purposes. The
purposes of the Plan are (a) to enhance the Company’s ability to attract
and retain the services of qualified employees, officers, directors,
consultants and other service providers (to the extent qualifying under Article 3
hereof) upon whose judgment, initiative and efforts the successful conduct and
development of the Company’s business largely depends, and (b) to provide
additional incentives to such persons or entities to devote their utmost effort
and skill to the advancement and betterment of the Company, by providing them
an opportunity to participate in the ownership of the Company through the grant
of nonqualified stock options and thereby have an interest in the success and
increased value of the Company. Notwithstanding
anything in this Plan to the contrary, all Option Agreements, as defined
herein, must be structured to satisfy the exemption requirements applicable to
nonqualified stock options regarding Section 409A of the Code, as defined
herein, as set forth in any proposed, temporary or final regulations or other
official guidance that is published by the Internal Revenue Service from time
to time (the “Official Guidance”), as determined by the Company in its sole
discretion. In the absence of an applicable exemption, all Option Agreements
must be structured to satisfy the requirements of Section 409A of the Code
and the Official Guidance.

ARTICLE 2

DEFINITIONS

For purposes of this Plan, the following terms shall
have the meanings indicated:

2.1          “Administrator”
means the Board or, if the Board delegates responsibility for any matter to the
Committee, the term Administrator shall mean the Committee.

2.2          “Affiliated
Company” means any “parent corporation” or “subsidiary
corporation” of the Company, whether now existing or hereafter created or
acquired, as those terms are defined in Sections 424(e) and 424(f) of
the Code, respectively and any other corporation, limited liability company (“LLC”),
partnership or joint venture, whether now existing or hereafter created or
acquired, with respect to which the Company beneficially owns more than fifty
percent (50%) of:  (1) the total
combined voting power of all outstanding voting securities or (2) the
capital or profits interests of an LLC, partnership or joint venture.

2.3          “Board”
means the Board of Directors of the Company.

 

2.4          “Change
in Control” means:

(a)           The
acquisition, directly or indirectly, in one transaction or a series of related
transactions, by any person or group (within the meaning of Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended) of the beneficial ownership of
securities of the Company possessing more than fifty percent (50%) of the total
combined voting power of all outstanding securities of the Company;

(b)           A
merger or consolidation in which the Company is not the surviving entity,
except for a transaction in which the holders of the outstanding voting
securities of the Company immediately prior to such merger or consolidation
hold as a result of holding Company securities prior to such transaction, in
the aggregate, securities possessing more than fifty percent (50%) of the total
combined voting power of all outstanding voting securities of the surviving
entity (or the parent of the surviving entity) immediately after such merger or
consolidation;

(c)           A
reverse merger in which the Company is the surviving entity but in which the
holders of the outstanding voting securities of the Company immediately prior
to such merger hold, in the aggregate, securities possessing less than fifty
percent (50%) of the total combined voting power of all outstanding voting
securities of the Company or of the acquiring entity immediately after such
merger;

(d)           The
sale, transfer or other disposition (in one transaction or a series of related
transactions) of all or substantially all of the assets of the Company, except
for a transaction in which the holders of the outstanding voting securities of
the Company immediately prior to such transaction(s) receive as a
distribution with respect to securities of the Company, in the aggregate,
securities possessing more than fifty percent (50%) of the total combined
voting power of all outstanding voting securities of the acquiring entity
immediately after such transaction(s); or

(e)           The
approval by the stockholders of a plan or proposal for the liquidation or
dissolution of the Company.

2.5          “Code” means
the Internal Revenue Code of 1986, as amended from time to time.

2.6          “Committee”
means a committee of two or more members of the Board appointed to administer the
Plan, as set forth in Section 6.1 hereof.

2.7          “Common Stock”
means the Common Stock, par value $0.0001, of the Company, subject to
adjustment pursuant to Section 4.2 hereof.

2.8          “Disability”
means permanent and total disability as defined in Section 22(e)(3) of
the Code. The Administrator’s determination of a Disability or the absence
thereof shall be conclusive and binding on all interested parties.

2.9          “Effective Date”
means the date on which the Plan was adopted by the Board, as set forth on the
first page hereof.

2.10        “Exchange
Act” means the Securities and Exchange Act of 1934, as
amended.

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2.11        “Exercise
Price” means the purchase price per share of Common
Stock payable upon exercise of an Option.

2.12        “Fair Market Value”
on any given date means the value of one share of Common Stock, determined as
follows:

(a)           If
the Common Stock is then listed or admitted to trading on a Nasdaq market
system, a stock exchange or over-the-counter market that reports closing sale
prices, the Fair Market Value shall be the closing sale price on the date of
valuation on such Nasdaq market system, principal stock exchange or
over-the-counter market on which the Common Stock is then listed or admitted to
trading, or, if no closing sale price is quoted on such day, then the Fair
Market Value shall be the closing sale price of the Common Stock on such Nasdaq
market system, such exchange or over-the-counter market on the next preceding
day on which a closing sale price is reported.

(b)           If
the Common Stock is not then listed or admitted to trading on a Nasdaq market
system, a stock exchange or over-the-counter market that reports closing sale
prices, the Fair Market Value shall be the average of the closing bid and asked
prices of the Common Stock in the over-the-counter market on which
the Common Stock is then listed on the date of valuation.

(c)           If
neither (a) nor (b) is applicable as of the date of valuation, then
the Fair Market Value shall be determined by the Administrator in good faith
using any reasonable method of evaluation, which determination shall be
conclusive and binding on all interested parties.

2.13        “Incentive Option”
means any Option designated and qualified as an “incentive stock option” as
defined in Section 422 of the Code.

2.14        “NASD Dealer”
means a broker-dealer that is a member of the National Association of
Securities Dealers, Inc.

2.15        “Option”
means any option to purchase Common Stock granted pursuant to the Plan that is
not an Incentive Option.

2.16        “Option
Agreement” means the written agreement entered into
between the Company and the Optionee with respect to an Option granted under
the Plan.

2.17        “Optionee”
means any Participant who holds an Option.

2.18        “Participant”
means an individual or entity that holds an Option granted pursuant to the
Plan.

2.19        “Service
Provider” means a consultant or other person or entity
the Administrator authorizes to become a Participant in the Plan and who
provides services to (i) the Company, (ii) an Affiliated Company, or (iii) any
other business venture designated by the Administrator in which the Company (or
any entity that is a successor to the Company) or an Affiliated Company has a
significant ownership interest.

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ARTICLE 3

ELIGIBILITY

Employees of the Company or of an Affiliated
Company, members of the Board (whether or not employed by the Company or an
Affiliated Company), and Service Providers are eligible to receive Options
under the Plan.

ARTICLE 4

PLAN
SHARES

4.1          Shares
Subject to the Plan. The number of shares of Common
Stock that may be issued under the Plan shall be equal to 11,790,672 shares,
subject to adjustment as to the number and kind of shares pursuant to Section 4.2
hereof. For purposes of this limitation, in the event that (a) all or any
portion of any Option granted under the Plan can no longer under any
circumstances be exercised, or (b) any shares of Common Stock are
reacquired by the Company pursuant to an Option Agreement, the shares of Common
Stock allocable to the unexercised portion of such Option or the shares so
reacquired shall again be available for grant or issuance under the Plan.

4.2          Changes
in Capital Structure. In the event that the
outstanding shares of Common Stock are hereafter increased or decreased or
changed into or exchanged for a different number or kind of shares or other
securities of the Company by reason of a recapitalization, stock split,
combination of shares, reclassification, stock dividend, or other change in the
capital structure of the Company, then appropriate adjustments shall be made by
the Administrator to the aggregate number and kind of shares subject to this
Plan, the number and kind of shares and the price per share subject to
outstanding Option Agreements in order to preserve, as nearly as practical, but
not to increase, the benefits to Participants.

ARTICLE 5

OPTIONS

5.1          Option
Agreement. Each Option granted pursuant to this Plan
shall be evidenced by an Option Agreement which shall specify the number of
shares subject thereto, vesting provisions relating to such Option and the
Exercise Price per share. As soon as is practical following the grant of an
Option, an Option Agreement shall be duly executed and delivered by or on
behalf of the Company to the Optionee to whom such Option was granted. Each
Option Agreement shall be in such form and contain such additional terms and
conditions, not inconsistent with the provisions of this Plan, as the
Administrator shall, from time to time, deem desirable. Each Option Agreement
may be different from each other Option Agreement.

5.2          Exercise
Price. The Exercise Price per share of Common Stock
covered by each Option shall be determined by the Administrator, but in no
event shall the Exercise Price of an Option be less than 100% of Fair Market
Value of Common Stock on the date the Option is granted. Notwithstanding the
foregoing, an Option may be granted with an exercise price lower than that set

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forth in the
preceding sentence if such Option is granted pursuant to an assumption or
substitution for another option in a manner satisfying the provisions of Section 424
of the Code.

5.3          Payment
of Exercise Price. Payment of the Exercise Price shall
be made upon exercise of an Option and may be made, in the discretion of the
Administrator, subject to any legal restrictions, by:  (a) cash; (b) check; (c) the
surrender of shares of Common Stock owned by the Optionee (provided that shares
acquired pursuant to the exercise of options granted by the Company must have
been held by the Optionee for the requisite period necessary to avoid a charge
to the Company’s earnings for financial reporting purposes), which surrendered
shares shall be valued at Fair Market Value as of the date of such exercise; (d) 
the cancellation of indebtedness of the Company to the Optionee; (e) the
waiver of compensation due or accrued to the Optionee for services rendered; (f) provided
that a public market for the Common Stock exists, a “same day sale” commitment
from the Optionee and an NASD Dealer whereby the Optionee irrevocably elects to
exercise the Option and to sell a portion of the shares so purchased to pay for
the Exercise Price and whereby the NASD Dealer irrevocably commits upon receipt
of such shares to forward the Exercise Price directly to the Company; (g) provided
that a public market for the Common Stock exists, a “margin” commitment from
the Optionee and an NASD Dealer whereby the Optionee irrevocably elects to
exercise the Option and to pledge the shares so purchased to the NASD Dealer in
a margin account as security for a loan from the NASD Dealer in the amount of
the Exercise Price, and whereby the NASD Dealer irrevocably commits upon
receipt of such shares to forward the Exercise Price directly to the Company;
or (h) any combination of the foregoing methods of payment or any other
consideration or method of payment as shall be permitted by applicable law.

5.4          Term
and Termination of Options. The term and termination
of each Option shall be as fixed by the Administrator, but no Option may be
exercisable more than ten (10) years after the date it is granted.

5.5          Vesting
and Exercise of Options. Each Option shall vest and
become exercisable in one or more installments at such time or times and
subject to such conditions, including without limitation the achievement of
specified performance goals or objectives, as shall be determined by the Administrator.

5.6          Nontransferability
of Options. No Option shall be assignable or
transferable except by will or the laws of descent and distribution and during
the life of the Optionee shall be exercisable only by such Optionee.

5.7          Rights
as Stockholder. An Optionee or permitted transferee of
an Option shall have no rights or privileges as a Stockholder with respect to
any shares covered by an Option until such Option has been duly exercised and
certificates representing shares purchased upon such exercise have been issued
to such person.

5.8          Unvested
Shares. The Administrator shall have the discretion to
grant Options that are exercisable for unvested shares of Common Stock provided
that the Company retains the right to repurchase, at the exercise price paid
per share, any or all of those unvested shares if the Optionee’s service to the
Company terminates before all the shares become vested. The terms upon which
such repurchase right shall be exercisable (including the period and procedure
for exercise and the appropriate vesting schedule for the purchased shares)
shall be established by the Administrator and set forth in the document
evidencing such repurchase right.

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ARTICLE 6

ADMINISTRATION OF THE PLAN

6.1          Administrator.
Authority to control and manage the operation and
administration of the Plan shall be vested in the Board, which may delegate
such responsibilities in whole or in part to a committee consisting of two (2) or
more members of the Board (the “Committee”). Members of the Committee may be
appointed from time to time by, and shall serve at the pleasure of, the Board. The
Board may limit the composition of the Committee to those persons necessary to
comply with the requirements of Section 162(m) of the Code and Section 16
of the Exchange Act. As used herein, the term “Administrator” means the Board
or, with respect to any matter as to which responsibility has been delegated to
the Committee, the term Administrator shall mean the Committee.

6.2          Powers
of the Administrator. In addition to any other powers or
authority conferred upon the Administrator elsewhere in the Plan or by law, the
Administrator shall have full power and authority:  (a) to determine the persons to whom,
and the time or times at which Options shall be granted, the number of shares
to be represented by each Option and the consideration to be received by the
Company upon the exercise of such Options, (b) to interpret the Plan; (c) to
create, amend or rescind rules and regulations relating to the Plan; (d) to
determine the terms, conditions and restrictions contained in, and the form of,
Option Agreements; (e) to determine the identity or capacity of any
persons who may be entitled to exercise a Participant’s rights under any Option
under the Plan; (f) to correct any defect or supply any omission or
reconcile any inconsistency in the Plan or in any Option Agreement; (g) to
accelerate the vesting of any Option,; (h) to extend the exercise
date of any Option; (i) to provide for rights of first refusal and/or
repurchase rights; (j) to amend outstanding Option Agreements to provide
for, among other things, any change or modification which the Administrator
could have included in the original Agreement or in furtherance of the powers
provided for herein; and (k) to make all other determinations necessary or
advisable for the administration of the Plan, but only to the extent not
contrary to the express provisions of the Plan. Any action, decision,
interpretation or determination made in good faith by the Administrator in the
exercise of its authority conferred upon it under the Plan shall be final and
binding on the Company and all Participants.

6.3          Limitation
on Liability. No employee of the Company or member of
the Board or Committee shall be subject to any liability with respect to duties
under the Plan unless the person acts fraudulently or in bad faith. To the
extent permitted by law, the Company shall indemnify each member of the Board
or Committee, and any employee of the Company with duties under the Plan, who
was or is a party, or is threatened to be made a party, to any threatened,
pending or completed proceeding, whether civil, criminal, administrative or
investigative, by reason of such person’s conduct in the performance of duties
under the Plan.

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ARTICLE 7

CHANGE IN CONTROL

7.1          Change
in Control. In order to preserve a Participant’s
rights in the event of a Change in Control of the Company:

(a)           Vesting
of all outstanding Options shall accelerate automatically effective as of
immediately prior to the consummation of the Change in Control unless
the Options are to be assumed by the acquiring or successor entity (or parent
thereof) or new options or New Incentives, as defined in Section 7.1(b) below,
are to be issued in exchange therefore, as provided in subsection (b) below.

(b)           Vesting
of outstanding Options shall not accelerate if and to the extent
that:  (i) the Options (including
the unvested portion thereof) are to be assumed by the acquiring or successor
entity (or parent thereof) or new options of comparable value are to be issued
in exchange therefore pursuant to the terms of the Change in Control
transaction, or (ii) the Options (including the unvested portion thereof)
are to be replaced by the acquiring or successor entity (or parent thereof)
with other incentives of comparable value under a new incentive program (“New
Incentives”) containing such terms and provisions as the Administrator in its
discretion may consider equitable. If outstanding Options are assumed, or if
new options of comparable value are issued in exchange therefore, then each
such Option or new option shall be appropriately adjusted, concurrently with
the Change in Control, to apply to the number and class of securities or other
property that the Optionee would have received pursuant to the Change in
Control transaction in exchange for the shares issuable upon exercise of the
Option had the Option been exercised immediately prior to the Change in
Control, and appropriate adjustment also shall be made to the Exercise Price
such that the aggregate Exercise Price of each such Option or new option shall
remain the same as nearly as practicable.

(c)           If
any Option is assumed by an acquiring or successor entity (or parent thereof)
or a new option of comparable value or New Incentive is issued in exchange
therefore pursuant to the terms of a Change in Control transaction, then if so
provided in an Option Agreement, the vesting of the Option, the new option or
the New Incentive shall accelerate if and at such time as the Optionee’s
service as an employee, director, officer, consultant or other service provider
to the acquiring or successor entity (or a parent or subsidiary thereof) is
terminated involuntarily or voluntarily under certain circumstances within a
specified period following consummation of the Change in Control, pursuant to
such terms and conditions as shall be set forth in the Option Agreement.

(d)           If
vesting of outstanding Options will accelerate pursuant to subsection (a) above,
the Administrator in its discretion may provide, in connection with the Change
in Control transaction, for the purchase or exchange of each Option for an
amount of cash or other property having a value equal to the difference (or “spread”)
between:  (x) the value of the cash
or other property that the Optionee would have received pursuant to the Change
in Control transaction in exchange for the shares issuable upon exercise of the
Option had the Option been exercised immediately prior to the Change in
Control, and (y) the Exercise Price of the Option.

(e)           The
Administrator shall have the discretion to provide in each Option Agreement
other terms and conditions that relate to (i) vesting of such Option in
the event of a

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Change in Control, and (ii) assumption of such Options or issuance
of comparable securities or New Incentives in the event of a Change in Control.
The aforementioned terms and conditions may vary in each Option Agreement, and
may be different from and have precedence over the provisions set forth in
Sections 7.1(a) - 7.1(d) above.

(f)            Outstanding
Options shall terminate and cease to be exercisable upon consummation of a
Change in Control except to the extent that the Options are assumed by the
successor entity (or parent thereof) pursuant to the terms of the Change in
Control transaction.

(g)           If
outstanding Options will not be assumed by the acquiring or successor entity
(or parent thereof), the Administrator shall cause written notice of a proposed
Change in Control transaction to be given to Optionees not less than fifteen
(15) days prior to the anticipated effective date of the proposed transaction.

ARTICLE 8

AMENDMENT AND TERMINATION OF THE PLAN

8.1          Amendments.
The Board may from time to time alter, amend, suspend
or terminate the Plan in such respects as the Board may deem advisable. No such
alteration, amendment, suspension or termination shall be made which shall
substantially affect or impair the rights of any Participant under an
outstanding Option Agreement without such Participant’s consent. The Board may
alter or amend the Plan to comply with requirements under the Code relating to
Options that give Optionee more favorable tax treatment than that applicable to
Options granted under this Plan as of the date of its adoption. Upon any such
alteration or amendment, any outstanding Option granted hereunder may, if the
Administrator so determines and if permitted by applicable law, be subject to
the more favorable tax treatment afforded to an Optionee pursuant to such terms
and conditions.

8.2          Plan
Termination. Unless the Plan shall theretofore have
been terminated, the Plan shall terminate on the tenth (10) anniversary of
the Effective Date and no Options may be granted under the Plan thereafter, but
Option Agreements then outstanding shall continue in effect in accordance with
their respective terms.

ARTICLE 9

TAX
WITHHOLDING

9.1          Withholding.
The Company shall have the power to withhold, or
require a Participant to remit to the Company, an amount sufficient to satisfy
any applicable Federal, state, and local tax withholding requirements with
respect to any Options exercised under the Plan. To the extent permissible
under applicable tax, securities and other laws, the Administrator may, in its
sole discretion and upon such terms and conditions as it may deem appropriate,
permit a Participant to satisfy his or her obligation to pay any such tax, in
whole or in part, up to an amount determined on the basis of the highest
marginal tax rate applicable to such Participant, by (a) directing the
Company to apply shares of Common Stock to which the Participant is entitled as
a result of the exercise of an Option or (b) delivering to the Company
shares of Common Stock owned by the Participant. The shares of Common Stock so
applied or delivered in satisfaction of the Participant’s tax withholding

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obligation shall be valued at their Fair Market Value
as of the date of measurement of the amount of income subject to withholding.

ARTICLE 10

MISCELLANEOUS

10.1        Benefits
Not Alienable. Other than as provided above, benefits
under the Plan may not be assigned or alienated, whether voluntarily or involuntarily.
Any unauthorized attempt at assignment, transfer, pledge or other disposition
shall be without effect.

10.2        No
Enlargement of Employee Rights. This Plan is strictly
a voluntary undertaking on the part of the Company and shall not be deemed to
constitute a contract between the Company and any Participant to be
consideration for, or an inducement to, or a condition of, the employment of
any Participant. Nothing contained in the Plan shall be deemed to give the
right to any Participant to be retained as an employee of the Company or any
Affiliated Company or to interfere with the right of the Company or any
Affiliated Company to discharge any Participant at any time.

10.3        Application
of Funds. The proceeds received by the Company from
the sale of Common Stock pursuant to Option Agreements, except as otherwise
provided herein, will be used for general corporate purposes.

10.4        Annual
Reports. During the term of this Plan, the Company
will furnish to each Participant who does not otherwise receive such materials,
copies of all reports, proxy statements and other communications that the
Company distributes generally to its stockholders.

 9Exhibit 10.2

Option
No.____

DYNTEK, INC.

NONQUALIFIED STOCK OPTION AGREEMENT

This Stock Option Agreement (the “Agreement”) is
entered into as of the ____ day of _________________, 200__, by and between
Dyntek, Inc., a Delaware corporation (the “Company”), and
____________________________________ (the “Optionee”) pursuant to the Company’s
2006 Nonqualified Stock Option Plan (the “Plan”). Any capitalized term not
defined herein shall have the same meaning ascribed to it in the Plan.

1.    Grant of Option. The
Company hereby grants to Optionee an option (the “Option”) to purchase all or
any portion of a total of                                                   (          
) shares (the “Shares”) of the Common Stock of the Company at a
purchase price of                              ($            ) per share  (the “Exercise Price”), subject to the terms
and conditions set forth herein and the provisions of the Plan. This Option shall not constitute an “incentive
stock option” as defined in Section 422 of the Internal Revenue Code of
l986, as amended (the “Code”).

2.    Vesting of Option. The
right to exercise this Option shall vest in installments, and this Option shall
be exercisable from time to time in whole or in part as to any vested
installment (“Vested Shares”). ________________ percent (__%) of the Shares
shall become Vested Shares on the first anniversary of the “Vesting
Commencement Date,” and thereafter, the balance of the Shares shall become
Vested Shares in a series of _____ (__) successive equal _______ installments
for each full ___________ period of Continuous Service provided by the Optionee
after the Vesting Commencement Date, such that 100% of the Shares shall become
Vested Shares on the _______ anniversary of the “Vesting Commencement Date.”  For these purposes, the Vesting Commencement
Date shall be _______________.

No additional Shares shall vest after the date of
termination of Optionee’s “Continuous Service” (as defined below), but this
Option shall continue to be exercisable in accordance with Section 3
hereof with respect to that number of shares that have vested as of the date of
termination of Optionee’s Continuous Service.

For purposes of this Agreement, the term “Continuous
Service” means (i) employment by either the Company or any parent or subsidiary
corporation of the Company, or by a corporation or a parent or subsidiary of a
corporation issuing or assuming a stock option, which is uninterrupted except
for vacations, illness (except for permanent disability, as defined in Section 22(e)(3) of
the Code), or leaves of absence which are approved in writing by the Company or
any of such other employer corporations, if applicable, (ii) service as a
member of the Board of Directors of the Company until Optionee resigns, is
removed from office, or Optionee’s term of office expires and he or she is not
reelected, or (iii) so long as Optionee is engaged as a Service Provider,
as defined in the Plan.

3.    Term of Option. The
right of the Optionee to exercise this Option shall terminate upon the first to
occur of the following:

(a)          the
expiration of ________ (___) years from the date of this Agreement;

 

(b)         the
expiration of _______ (___) months from the date of termination of Optionee’s
Continuous Service if such termination is due to permanent disability of the
Optionee (as defined in Section 22(e)(3) of the Code);

(c)          the
expiration of _______ (___) months from the date of termination of Optionee’s
Continuous Service if such termination is due to Optionee’s death or if death
occurs during either the three-month or one-month period following termination
of Optionee’s Continuous Service pursuant to Section 3(d) or Section 3(e) below,
as the case may be;

(d)         the
expiration of _______ (___) months from the date of termination of Optionee’s
Continuous Service if such termination occurs for any reason other than
permanent disability, death, voluntary resignation or cause; provided, however,
that if Optionee dies during such three-month period the provisions of Section 3(c) above
shall apply;

(e)          the
expiration of _______ (___) months from the date of termination of Optionee’s
Continuous Service if such termination occurs due to voluntary resignation;
provided, however, that if Optionee dies during such one-month period the
provisions of Section 3(c) above shall apply;

(f)          the
termination of Optionee’s Continuous Service, if such termination is for cause;
or

(g)         upon
the consummation of a “Change in Control” (as defined in Section 2.4 of
the Plan), unless otherwise provided pursuant to Section 9 below.

4.    Exercise of Option. On
or after the vesting of any portion of this Option in accordance with Sections
2 or 9 hereof, and until termination of the right to exercise this Option in
accordance with Section 3 above, the portion of this Option that has
vested may be exercised in whole or in part by the Optionee (or, after his or
her death, by the person designated in Section 5 below) upon delivery of
the following to the Company at its principal executive offices:

(a)          a written notice of exercise which identifies this Agreement
and states the number of Shares then being purchased (but no fractional Shares
may be purchased), with any partial exercise being deemed to cover first vested
Shares and then the earliest vesting installments of unvested Shares;

(b)         a check or cash in the amount of the Exercise Price (or
payment of the Exercise Price in such other form of lawful consideration as the
Administrator may approve from time to time under the provisions of Section 5.3
of the Plan);

(c)          a check or cash in the amount reasonably requested by the
Company to satisfy the Company’s withholding obligations under federal, state
or other applicable tax laws with respect to the taxable income, if any,
recognized by the Optionee in connection with the exercise of this Option
(unless the Company and Optionee shall have made other arrangements for
deductions or withholding from Optionee’s wages, bonus or other compensation
payable to Optionee, or by the withholding of Shares issuable upon exercise of
this Option, provided such arrangements satisfy the requirements of applicable
tax laws); and

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(d)         a letter, if requested by the Company, in such form and
substance as the Company may require, setting forth the investment intent of
the Optionee, or person designated in Section 5 below, as the case may be.

5.    Death of Optionee; No Assignment.
The rights of the Optionee under this Agreement may not be assigned or
transferred except by will or by the laws of descent and distribution, and may
be exercised during the lifetime of the Optionee only by such Optionee. Any
attempt to sell, pledge, assign, hypothecate, transfer or dispose of this
Option in contravention of this Agreement or the Plan shall be void and shall
have no effect. If the Optionee’s Continuous Service terminates as a result of
his or her death, and provided Optionee’s rights hereunder shall have vested
pursuant to Section 2 hereof, Optionee’s legal representative, his or her
legatee, or the person who acquired the right to exercise this Option by reason
of the death of the Optionee (individually, a “Successor”) shall succeed to the
Optionee’s rights and obligations under this Agreement. After the death of the
Optionee, only a Successor may exercise this Option.

6.    Representations of Optionee.
Optionee represents and warrants that this Option is being acquired by Optionee
for Optionee’s personal account, for investment purposes only, and not with a
view to the distribution, resale or other disposition thereof. Optionee further
represents and warrants that Optionee has a pre-existing business or personal
relationship with the Company or one or more of its officers or directors,
Optionee is of sufficient sophistication to make an informed investment
decision and Optionee has the capacity to protect Optionee’s own interest in
connection with this Agreement. Optionee acknowledges receipt of a copy of the
Plan and understands that all rights and obligations connected with this Option
are set forth in this Agreement and in the Plan.

7.    Adjustments Upon Changes in Capital
Structure. In the event that the outstanding shares of
Common 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 by reason of a recapitalization, stock split, combination of
shares, reclassification, stock dividend or other change in the capital
structure of the Company, then appropriate adjustment shall be made by the
Administrator to the number of Shares subject to the unexercised portion of
this Option and to the Exercise Price per share, in order to preserve, as
nearly as practical, but not to increase, the benefits of the Optionee under
this Option, in accordance with the provisions of Section 4.2 of the Plan.

8.    Change in Control.
In the event of a Change in Control (as defined in Section 2.4 of the
Plan):

(a)          The right to exercise
this Option shall accelerate automatically and vest in full (notwithstanding
the provisions of Section 2 above) effective as of immediately prior to
the consummation of the Change in Control unless this Option is to be assumed
by the acquiring or successor entity (or parent thereof) or a new option or New
Incentives are to be issued in exchange therefor, as provided in subsection (b) below.
If vesting of this Option will accelerate pursuant to the preceding sentence,
the Administrator in its discretion may provide, in connection with the Change
in Control transaction, for the purchase or exchange of this Option for an
amount of cash or other property having a value equal to the difference (or “spread”)
between:  (x) the value of the cash
or other property that the Optionee would have received pursuant to the Change
in Control transaction in exchange for the Shares issuable upon exercise of
this Option had this Option been exercised immediately prior to the Change in
Control, and (y) the aggregate Exercise Price for such Shares. If the
vesting of this Option will accelerate pursuant to this subsection (a), then
the Administrator shall

 3
 

 

cause written
notice of the Change in Control transaction to be given to the Optionee not
less than fifteen (15) days prior to the anticipated effective date of the
proposed transaction.

(b)         The vesting of this
Option shall not accelerate if and to the extent that:  (i) this Option (including the unvested
portion thereof) is to be assumed by the acquiring or successor entity (or
parent thereof) or a new option of comparable value is to be issued in exchange
therefor pursuant to the terms of the Change in Control transaction, or (ii) this
Option (including the unvested portion thereof) is to be replaced  by the acquiring or successor entity (or
parent thereof) with other incentives of comparable value under a new incentive
program (“New Incentives”) containing such terms and provisions as the
Administrator in its discretion may consider equitable. If this Option is
assumed, or if a new option of comparable value is issued in exchange therefor,
then this Option or the new option shall be appropriately adjusted,
concurrently with the Change in Control, to apply to the number and class of
securities or other property that the Optionee would have received pursuant to
the Change in Control transaction in exchange for the Shares issuable upon
exercise of this Option had this Option been exercised immediately prior to the
Change in Control, and appropriate adjustment also shall be made to the
Exercise Price such that the aggregate Exercise Price of this Option or the new
option shall remain the same as nearly as practicable.

(c)          If the provisions of
subsection (b) above apply, then this Option, the new option or the New
Incentives shall continue to vest in accordance with the provisions of Section 2
hereof and shall continue in effect for the remainder of the term of this
Option in accordance with the provisions of Section 3 hereof. However, in
the event of an Involuntary Termination (as defined below) of Optionee’s
Continuous Service within twelve (12) months following such Change in Control,
then vesting of this Option, the new option or the New Incentives shall
accelerate in full automatically effective upon such Involuntary Termination.

(d)         For purposes of this Section 8,
the following terms shall have the meanings set forth below:

(i)  “Involuntary Termination”
shall mean the termination of Optionee’s Continuous Service by reason of:

(A)      Optionee’s involuntary
dismissal or discharge by the Company, or by the acquiring or successor entity
(or parent or any subsidiary thereof employing the Optionee) for reasons other
than Misconduct (as defined below), or

(B)       Optionee’s voluntary
resignation following (x) a change in Optionee’s position with the
Company, the acquiring or successor entity (or parent or any subsidiary
thereof) which materially reduces Optionee’s duties and responsibilities or the
level of management to which Optionee reports, (y) a reduction in Optionee’s
level of compensation (including base salary, fringe benefits and target bonus
under any performance based bonus or incentive programs) by more than ten
percent (10%), or (z) a relocation of Optionee’s principal place of
employment by more than thirty (30) miles, provided and only if such change,
reduction or relocation is effected without Optionee’s written consent.

(ii) “Misconduct” shall mean (A) the
commission of any act of fraud, embezzlement or dishonesty by Optionee which
materially and adversely affects the business of the Company, the acquiring or
successor entity (or parent or any subsidiary thereof), (B) any
unauthorized use or disclosure by Optionee of confidential information or trade
secrets of the Company, the acquiring or successor entity (or parent or any
subsidiary thereof), (C) the continued refusal or omission by the Optionee
to perform any material duties required of him if such duties are consistent
with duties customary for the position held with the Company, the acquiring or
successor entity (or parent or any subsidiary thereof), (D) any material
act or omission by the Optionee involving malfeasance or gross negligence in
the performance of Optionee’s duties to, or material deviation from any of the
policies or directives of, the Company or the acquiring or successor entity (or
parent or any subsidiary thereof), (E) conduct on the part of Optionee
which constitutes the breach of any statutory or common law duty of loyalty to
the Company, the acquiring or successor entity (or parent or any subsidiary
thereof), or (F) any illegal act by Optionee which materially and
adversely affects the business of the Company, the acquiring or successor
entity (or parent or any subsidiary thereof), or any felony committed by
Optionee, as evidenced by conviction thereof. The provisions of this Section shall
not limit the grounds for the dismissal or discharge of Optionee or any other
individual in the service of the Company, the acquiring or successor entity (or
parent or any subsidiary thereof).

9.    Limitation of Company’s Liability for
Nonissuance. The Company agrees to use its reasonable
best efforts to obtain from any applicable regulatory agency such authority or
approval as may be required in order to issue and sell the Shares to the
Optionee pursuant to this Option. Inability of the Company to obtain, from any
such regulatory agency, authority or approval deemed by the Company’s counsel
to be necessary for the lawful issuance and sale of the Shares hereunder and under
the Plan shall relieve the Company of any liability in respect of the
nonissuance or sale of such shares as to which such requisite authority or
approval shall not have been obtained.

10. No Employment Contract Created.
Neither the granting of this Option nor the exercise hereof shall be construed
as granting to the Optionee any right with respect to continuance of employment
by the Company or any of its subsidiaries. The right of the Company or any of
its subsidiaries to terminate at will the Optionee’s employment at any time
(whether by dismissal, discharge or otherwise), with or without cause, is
specifically reserved.

11. Rights as Stockholder.
The Optionee (or transferee of this option by will or by the laws of descent
and distribution) shall have no rights as a stockholder with respect to any
Shares covered by this Option until such person has duly exercised this Option,
paid the Exercise Price and become a holder of record of the Shares purchased.

12. “Market Stand-Off” Agreement.
Optionee agrees that, if requested by the Company or the managing underwriter
of any proposed public offering of the Company’s securities, Optionee will not
sell or otherwise transfer or dispose of any Shares held by Optionee without
the prior written consent of the Company or such underwriter, as the case may
be, during such period of time, not to exceed 180 days following the effective
date of the registration statement filed by the Company with respect to such
offering, as the Company or the underwriter may specify.

 4
 

 

 

13. Interpretation. This Option is granted
pursuant to the terms of the Plan, and shall in all respects be interpreted in
accordance therewith. The Administrator shall interpret and construe this
Option and the Plan, and any action, decision, interpretation or determination
made in good faith by the Administrator shall be final and binding on the
Company and the Optionee. As used in this Agreement, the term “Administrator”
shall refer to the committee of the Board of Directors of the Company appointed
to administer the Plan, and if no such committee has been appointed, the term
Administrator shall mean the Board of Directors.

15. Notices. Any notice,
demand or request required or permitted to be given under this Agreement shall
be in writing and shall be deemed given when delivered personally or three (3) days
after being deposited in the United States mail, as certified or registered
mail, with postage prepaid, (or by such other method as the Administrator may
from time to time deem appropriate), and addressed, if to the Company, at its
principal place of business, Attention: the Chief Financial Officer, and if to
the Optionee, at his or her most recent address as shown in the employment or
stock records of the Company.

16. Governing Law. The
validity, construction, interpretation, and effect of this Option shall be
governed by and determined in accordance with the laws of the State of
California except for matters related to corporate law, in which case the
provisions of the Delaware General Corporation Law shall govern.

17. Severability. Should
any provision or portion of this Agreement be held to be unenforceable or
invalid for any reason, the remaining provisions and portions of this Agreement
shall be unaffected by such holding.

18. Attorneys’ Fees. If
any party shall bring an action in law or equity against another to enforce or
interpret any of the terms, covenants and provisions of this Agreement, the
prevailing party in such action shall be entitled to recover from the other
party reasonable attorneys’ fees and any expert witness fees.

19. Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original and all of which together shall be deemed one instrument.

Signature
Page Follows

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IN WITNESS
WHEREOF, the parties have executed this Agreement as of the date first above
written.

THE COMPANY:                                                                                OPTIONEE:

Dyntek, Inc.

By:                                                                                                                                                                                                          

(Signature)

Name:
____________________________________                                                                                                                

(Type or print name)

Title:
___________________________________

Address:

____________________________________

____________________________________

 6

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