**Grant      No.: **
**_____**

**RANCHER      ENERGY CORP.**

**2006      STOCK INCENTIVE PLAN**

**RESTRICTED      STOCK AGREEMENT**

***Company***
***Stock***
***Plan***

***By      signing this cover sheet, you agree to all of the terms and conditions described      in the attached Agreement and in the Plan, a copy of which is also attached.      You      acknowledge that you have carefully reviewed the Plan, and agree that the Plan      will control in the event any provision of this Agreement should appear to      be      inconsistent.***

*This      is not a stock certificate or a negotiable instrument*

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**RANCHER      ENERGY CORP.**

**2006      STOCK INCENTIVE PLAN**

**RESTRICTED      STOCK AGREEMENT**

| **Restricted                Stock/ Nontransferability** | This                grant is an award of Stock in the number of shares set forth on the                cover                sheet, at the grant price set forth on the cover sheet, and subject                to the                vesting conditions described below (“***Restricted                Stock***”).                To the extent not yet vested, your Restricted Stock may not be sold,                transferred, assigned, pledged, hypothecated, or otherwise disposed                of,                whether by operation of law or otherwise, and will be subject to                a risk of                forfeiture. |
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| **Issuance                and Vesting**                 | The                Company will issue your Restricted Stock in your name as of the Grant                Date. As                described below, your right to the Stock under this Restricted Stock                grant                vests on the Grant Date and on the one-year anniversary dates of                the Grant                Date for each vesting date that you remain in Service as                follows:                                                                                                                                                                                                                           |

| **Vesting                Date** |   | **Percentage                of Shares                of****Restricted                Stock Vested** |
|---------------------------------|--------|-----------------------------------------------------------------------------------------------------|
|                            |   |                                                                                                |
|                            |   |                                                                                                |
|                            |   |                                                                                                |
|                            |   |                                                                                                |
|                            |   |                                                                                                |
|                            |   |                                                                                                |
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|   | The                  resulting aggregate number of vested shares will be rounded to                  the nearest                  whole number, and you cannot vest in more than the number of shares                  covered by this grant.For                  purposes of this agreement, “***Service***”                  means service as an employee, officer, director or other service                  provider                  of the Company or an affiliate of the Company. If your Service                  relationship with the Company terminates for any reason prior to                  the                  Fourth Anniversary of the Grant Date, then the Restricted Stock                  and any                  and all accrued but unpaid dividends that are, at that time subject                  to the                  restrictions set forth herein, shall be forfeited to the Company,                  and you                  shall have no further rights or interests in such shares of Restricted                  Stock or certificates. No additional shares of Stock will vest                  after your                  Service has terminated for any reason. |
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| **Escrow**                           | The                certificates for the unvested Restricted Stock (each of which shall                correspond to the applicable vesting percentages described above)                shall be                deposited in escrow with the Secretary of the Company to be held                in                accordance with the provisions of this paragraph. Each deposited                certificate shall be accompanied by a duly executed Assignment Separate                from Certificate in the form attached hereto as Exhibit                A.                The deposited certificates shall remain in escrow until such time                or times                as the certificates are to be released or otherwise surrendered for                cancellation as discussed below. All                regular cash dividends on the Stock (or other securities at the time                held                in escrow) shall be paid directly to you and shall not be held in                escrow.                However, in the event of any stock dividend, stock split, recapitalization                or other change affecting the Company's outstanding common stock                as a                class effected without receipt of consideration or in the event of                a stock                split, a stock dividend or a similar change in the Company’s stock, any                new, substituted or additional securities or other property which                is by                reason of such transaction distributed with respect to the Stock                shall be                immediately delivered to the Secretary of the Company to be held                in escrow                hereunder, but only to the extent the Stock is at the time subject                to the                escrow requirements hereof. The                shares of Stock held in escrow hereunder shall be subject to the                following                terms and conditions relating to their release from escrow or their                surrender to the Company for cancellation: -  As                    your interest in the shares of Restricted Stock vests as described                    above, the certificates for such vested shares shall be released                    from                    escrow and delivered to you, at your request, within thirty (30)                    days                    following the date on which such shares become vested.                     
-  Upon                    termination of your Service, any escrowed shares in which you                    are at the                    time vested shall be promptly released from escrow. 
-  Upon                    termination of your Service, escrowed shares which are not vested                    shall                    be surrendered to the Company for cancellation, and you shall                    have no                    further rights with respect to such shares of                    Stock. |
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| **Withholding                Taxes** | You                agree, as a condition of this grant, that you will make acceptable                arrangements to pay any withholding or other taxes that may be due                as a                result of the vesting of Stock acquired under this grant. If the                Company                determines that any federal, state, local or foreign tax or withholding                payment is required relating to the vesting of shares arising from                this                grant, the Company shall have the right to require such payments                from you,                or withhold such amounts from other payments due to you from the                Company                or any Affiliate.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |

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| **Section                83(b)****Election**  | Under                Section 83 of the Internal Revenue Code of 1986, as amended (the                “***Code***”),                the fair market value of the Stock on the date any forfeiture restrictions                applicable to the shares lapse will be reportable as ordinary income                at                that time. You may elect to be taxed currently rather than when such                shares cease to be subject to such forfeiture restrictions by filing                an                election under Section 83(b) of the Code with the Internal Revenue                Service                within thirty days after the Grant Date. The form for making this                election                is attached as Exhibit                B                hereto. Failure to make this filing within the thirty day period                will                result in the recognition of ordinary income by you (in the event                the fair                market value of the shares increases after the date of the grant)                as the                forfeiture restrictions lapse. **YOU                ACKNOWLEDGE THAT IT IS YOUR SOLE RESPONSIBILITY, AND NOT THE COMPANY'S,                TO                FILE A TIMELY ELECTION UNDER SECTION 83(b), EVEN IF YOU REQUEST THE                COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON YOUR BEHALF.                YOU ARE                RELYING SOLELY ON YOUR OWN ADVISORS WITH RESPECT TO THE DECISION                AS TO                WHETHER TO FILE ANY 83(b) ELECTION.** |
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| **Market                Stand-off Agreement** | In                connection with any underwritten public offering by the Company of                its                equity securities pursuant to an effective registration statement                filed                under the Securities Act, you agree not to sell, make any short sale                of,                loan, hypothecate, pledge, grant any option for the purchase of,                or                otherwise dispose or transfer for value or agree to engage in any                of the                foregoing transactions with respect to any shares of vested Stock                without                the prior written consent of the Company or its underwriters, for                such                period of time after the effective date of such registration statement                as                may be requested by the Company or the underwriters (not to exceed                180                days in length).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
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| **Investment                Representations** | You                hereby agree and represent, as a condition of this grant of Restricted                Stock, that: (i)                you are acquiring the shares of Restricted Stock for investment for                your                own account and not with a view to, or intention of, or otherwise                for                resale in connection with, any distribution to any person or entity,                 (ii) neither                the offer nor the grant of the shares of Restricted Stock hereunder,                or                the shares of Restricted Stock themselves, have been registered under                the                Securities Act or registered or qualified under any applicable state                securities laws and that the shares of Restricted Stock are being                granted                to you by reason of and in reliance upon a specific exemption from                the                registration provisions of the Securities Act and exemptions from                registration or qualification provisions of such applicable state                or other                jurisdiction's securities laws which depend upon, among other things,                the                bona fide nature of the investment intent as expressed herein and                the                truth and accuracy of your representations, warranties, agreements,                acknowledgments and understandings as set forth herein,                                                                                            |

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|                                    | (iii)                  you must, and are able to, bear the economic risk of the value                  of the                  shares of Restricted Stock for an indefinite period of time, (iv)                  you are sophisticated in financial matters and have such knowledge                  and                  experience in financial and business matters as to be capable of                  evaluating the risks and benefits of your investment in the shares                  of                  Restricted Stock,  (v) you                  are as of the date hereof an “accredited investor” as such term is defined                  under Rule 501 of the Securities Act, and (vii)                  the Company has made available to you all documents that you have                  requested relating to the Company, the shares of Restricted Stock                  and your                  acquisition of the shares of Restricted Stock, and you have had                  an                  opportunity to ask questions and receive answers concerning the                  Company                  and the terms and conditions of the offering and acquisition of                  the shares                  of Restricted Stock pursuant to this Restricted Stock Agreement                  and have                  had full access to such other information concerning the Company                  and the                  shares of Restricted Stock as you deemed necessary or                  desirable. |
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| **Retention                  Rights**   | **This                  Agreement does not give you the right to be retained or employed                  by the                  Company (or any parent, subsidiary or affiliate) in any capacity.                  The                  description of vesting schedules in this Agreement in units of                  years or                  months shall not be construed as guaranteeing you any term of employment                  or service to the end of any such period of time or for any period                  of                  time. The Company (and any parent, subsidiary or affiliate) reserve                  the                  right to terminate your Service at any time and for any                  reason.**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
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| **Shareholder                  Rights** | You                  have the right to vote the Restricted Stock and to receive any                  dividends                  declared or paid on such stock. Any distributions you receive as                  a result                  of any stock split, stock dividend, combination of shares or other                  similar                  transaction shall be deemed to be a part of the Restricted Stock                  and                  subject to the same conditions and restrictions applicable thereto.                  The                  Company may in its sole discretion require any dividends paid on                  the                  Restricted Stock to be reinvested in shares of Stock, which the                  Company                  may in its sole discretion deem to be a part of the shares of Restricted                  Stock and subject to the same conditions and restrictions applicable                  thereto. Except as described in the Plan, no adjustments are made                  for                  dividends or other rights if the applicable record date occurs                  before your                  stock certificate is issued.                                                                                                                                                                                                                                                                                                                                                                      |

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| **Adjustments** | In                the event of a stock split, a stock dividend or a similar change                in the                Company’s stock, the number of shares covered by this grant may be                adjusted (and rounded down to the nearest whole number) pursuant                to the                Plan. Your Restricted Stock shall be subject to the terms of the                agreement                of merger, liquidation or reorganization in the event the Company                is                subject to such corporate activity.                                                                                                                                                                                                                                                                                                                                                                         |
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| **Legends**     | All                certificates representing the Stock issued in connection with this                grant                shall, where applicable, have endorsed thereon substantially the                following                legends: “THE                SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS                ON TRANSFER AND A RIGHT OF FORFEITURE ON BEHALF OF THE COMPANY ON                SUCH                SHARES SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED                HOLDER, OR HIS OR HER PREDECESSOR IN INTEREST. A COPY OF SUCH AGREEMENT                IS                ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY AND WILL BE FURNISHED                UPON                WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY BY THE HOLDER OF                RECORD OF                THE SHARES REPRESENTED BY THIS CERTIFICATE.” |
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|            | THE                SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER                THE                SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES                LAWS.                THE SHARES MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED, TRANSFERRED                OR                ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT                FOR                THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B)                AN                OPINION OF COUNSEL, IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY,                THAT                REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT                TO RULE 144 OR RULE 144A UNDER SAID                ACT.                                                                                                                                    |

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| **Applicable                Law** | This                Agreement will be interpreted and enforced under the laws of the                State of                Colorado, other than any conflicts or choice of law rule or principle                that                might otherwise refer construction or interpretation of this Agreement                to                the substantive law of another jurisdiction, except that the Nevada                Revised Statutes shall govern as to corporate law.                                                                                                                                    |
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| **The                Plan**       | The                text of the Plan is incorporated in this Agreement by                reference.This                Agreement and the Plan constitute the entire understanding between                you and                the Company regarding this grant of Restricted Stock. Any prior                agreements, commitments or negotiations concerning this grant are                superseded.                                                                                                                                                                                                            |
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| **Amendment**                     | This                Agreement may be amended or modified only by a written instrument                executed                by both the Company and the Grantee.                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
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| **Notice**                        | All                notices required or permitted hereunder shall be in writing and deemed                effectively given upon personal delivery or five days after deposit                in the                United States Post Office, by registered or certified mail, postage                prepaid, if to the Grantee, to the address set forth below on the                records                of the Company, and if to the Company, to the Company’s principal                executive offices, attention of the Corporate Secretary or Chief                Financial                Officer. |
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| **Binding                Effect** | This                Agreement shall be binding upon and inure to the benefit of the Company                and the Grantee and their respective heirs, executors, administrators,                legal representatives, successors and assigns, subject to the restrictions                on transfer set forth in this Agreement.                                                                                                                                                                                                                                                                                   |
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| **Pronouns**                      | Whenever                the context may require, any pronouns used in this Agreement shall                include                the corresponding masculine, feminine or neuter forms, and the singular                form of nouns and pronouns shall include the plural, and                vice versa.                                                                                                                                                                                                                                                                                                      |
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| **Waiver**                        | Any                provision for the benefit of the Company contained in this Agreement                may                be waived, either generally or in any particular instance, by the                Board of                Directors of the Company.                                                                                                                                                                                                                                                                                                                                                          |
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| **Severability**                  | The                invalidity or unenforceability of any provision of this Agreement                shall                not affect the validity or enforceability of any other provision                of this                Agreement, and each other provision of this Agreement shall be severable                and enforceable to the extent permitted by                law.                                                                                                                                                                                                                                |

***By      signing the cover sheet of this Agreement, you agree to all of the terms      and***

***conditions      described above and in the Plan.***

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**EXHIBIT      A**

**ASSIGNMENT      SEPARATE FROM CERTIFICATE**

***“Grantee”***
***Company***

**INSTRUCTIONS:      PLEASE DO NOT FILL IN ANY BLANKS OTHER THAN THE SIGNATURE LINE. THE PURPOSE      OF      THIS ASSIGNMENT IS TO RETURN THE SHARES TO THE COMPANY IN THE EVENT THE GRANTEE      FORFEITS ANY SHARES AS SET FORTH IN THE AGREEMENT WITHOUT REQUIRING ADDITIONAL      SIGNATURES ON THE PART OF GRANTEE.**

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**EXHIBIT      B **

**[Insert      Name]**

**[Taxpayer      Address]**

**VIA      CERTIFIED MAIL**

| Re:    | Section                  83(b) Election              |
|--------|------------------------------------------------------|
|   | Taxpayer                  Name: _____________        |
|   | Taxpayer                  I.D. NO. ____________ |

| cc:    | Daniel                  Foley, Chief Financial Officer |
|--------|--------------------------------------------------------|
|   | Rancher                  Energy Corp.                  |

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**ELECTION      UNDER SECTION 83(b) OF**

**THE      INTERNAL REVENUE CODE**

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**PROCEDURES      FOR MAKING ELECTION**

**UNDER INTERNAL REVENUE CODE SECTION 83(b)**

**must**

***3.***
***You        must file another copy of the election form with your federal income tax        return        (generally, Form 1040) for the taxable year in which the stock is transferred        to        you.***

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