EMPLOYMENT
      AGREEMENT

    


    BETWEEN

    


    TETON
      ENERGY CORPORATION

     

    AND

     

    
      LONNIE
        BROCK

    

    (Executive)

     

    THIS
      EMPLOYMENT AGREEMENT
      (this
“Agreement”), dated as of January 1, 2008, (the “Effective Date”) is entered
      into by and between Teton Energy Corporation, a Delaware corporation (the
“Company”), and Lonnie Brock, an individual with an address at 219 Gallagher
      Court, Erie, Colorado 80516, (the “Executive”) (collectively, the “Parties,”
individually, a “Party”).

     

    WITNESSETH:

     

    WHEREAS,
      the Board of Directors of the Company (the “Board”) has requested and the
      Executive has agreed to serve the Company as Executive Vice President and Chief
      Financial Officer pursuant to the terms and conditions herein; and 

    


    WHEREAS,
      the Board has determined that it is in the best interest of the Company, its
      affiliates, and its stockholders to assure that the Company will have the
      continued dedication of the Executive, notwithstanding the possibility, threat,
      or occurrence of a Change in Control (as defined in Article Seven herein);
      and


    


    WHEREAS,
      the Board has determined that it is in the best interests of the Company and
      its
      stockholders to indemnify the Executive for claims for damages arising out
      of or
      relating to the performance of such services to the Company in accordance with
      the terms and conditions set forth in this Agreement and pursuant to Delaware
      law; and

    


    WHEREAS,
      as
      an
      inducement to serve and in consideration for such services, the Company has
      agreed to indemnify the Executive for claims for damages
      arising out of or relating to the performance of such services to the Company
      in
      accordance with the terms and conditions set forth in a separate agreement,
      which indemnification agreement is attached as an exhibit hereto and is
      incorporated herein by reference; and

    


    WHEREAS,
      in order to accomplish these objectives and establish the rights, duties and
      obligations of the Parties, which shall be generally stated herein and which
      may
      be more fully stated in other agreements between the Parties, including
      equity-based agreements, indemnity agreements, and other employment or incentive
      related agreements as the Company or the Board may adopt from time to time,
      the
      Board has caused the Company to enter into this Agreement; 

    


    NOW,
      THEREFORE, in consideration of the premises and the mutual covenants and
      agreements set forth herein, the Parties, intending to be legally bound, hereby
      agree as follows:

     

    
      
        
        

      

      
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    ARTICLE
      ONE

     

    
      DEFINITIONS

    

     

    1. Definitions.
      As used in this Agreement:

     

    1.1 The
      term
“Accrued Obligations,” when used in the case of the Executive’s death or
      disability shall mean the sum of
      (1)  that portion Executive’s Base Salary that was not previously paid to
      the Executive from the last payment date through the Date of Termination, and
      (2) an amount equal to 12 months salary at the level of the Executive’s Base
      Salary then in effect,

     

    1.2 The
      term
“Automatic Extension” shall have the meaning set forth in Section 2.2
      herein.

     

    1.3 The
      term
“Base Salary”, shall have the meaning set forth in Section 3.1
      herein.

     

    1.4 The
      term
“Board” shall have the meaning set forth in the recitals.

     

    1.5 The
      term
“Cause” shall have the meaning set forth in Section 4.3 herein.

     

    1.6 The
      term
“Common Stock” shall mean the Common Stock, par value $0.001, of the
      Company.

     

    1.7 The
      term
“Compensation Committee” shall mean the Compensation Committee of the
      Company.

     

    1.8 The
      term
“Corporate Documents” shall mean the Company’s Certificate of Incorporation, as
      amended and/or its Bylaws, as amended.

     

    1.9 The
      term
“Effective Date” shall have the meaning set forth in the preamble.

     

    1.10 The
      term
“Good Reason” shall have the meaning set forth in Section 4.4
      herein.

     

    1.11 The
      term
“Initial Term” shall have the meaning set forth in Section 2.2
      herein.

     

    1.12 The
      term
“Severance Benefit” shall have the meaning set forth in Section 4.8(a)(i)
      herein.

     

    1.13 The
      term
“Without Cause” shall have the meaning set forth in Section 4.3
      herein.

     

    1.14 The
      term
“Without Good Reason” shall have the meaning set forth in Section 4.5
      herein.

     

    ARTICLE
      TWO

     

    POSITION
      & DUTIES

     

    2. Employment.

     

    2.1 Title.
      The
      Executive shall serve as the Executive Vice President and Chief Financial
      Officer of the Company and agrees to perform services for the Company and such
      other affiliates of the Company, as described in Section 2 herein.

     

    
      
        
        

      

      
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    2.2 Term.
      The
      Executive’s employment shall be for an initial term of two (2) years (“Initial
      Term”), commencing on the Effective Date. The Executive’s employment shall be
      automatically extended on the day after the second year anniversary of the
      Effective Date (“Automatic Extension”), and on each second anniversary date
      thereof, for additional two (2) year periods unless, with respect to any such
      Automatic Extension, Executive’s employment is terminated by either party during
      the 60-day period prior to such anniversary date as provided in Article
      Four.

     

    2.3 Duties
      and Responsibilities.
      The
      Executive shall report to the Chief Executive Officer (the “CEO”) and in his
      capacity as an officer of the Company shall perform such duties and services
      as
      may be appropriate for a senior executive and as are assigned to him by the
      CEO.
      During the term of this Agreement, the Executive shall, subject to the direction
      of the CEO, oversee and direct such assigned operations of the Company and
      shall
      perform such duties as are customarily performed by an Executive Vice President
      and Chief Financial Officer of an oil and gas exploration company such as the
      Company or as are otherwise delegated to him from time to time by the CEO or
      such other matters and projects as may from time to time be reasonably assigned
      to him by the CEO. 

     

    2.4 Performance
      of Duties.
      During
      the term of the Agreement, except as otherwise approved by the CEO or as
      provided below, the Executive agrees to devote his full business time, effort,
      skill and attention to the affairs of the Company and its subsidiaries, will
      use
      his best efforts to promote the interests of the Company, and will discharge
      his
      responsibilities in a diligent and faithful manner, consistent with sound
      business practices. The foregoing shall not, however, preclude Executive from
      devoting reasonable time, attention and energy in connection with the following
      activities, provided that such activities do not materially interfere with
      the
      performance of his duties and services hereunder:

     

    (a) serving
      as a director or a member of a committee of any company or organization, if
      serving in such capacity does not involve any conflict with the business of
      the
      Company or any subsidiary and such other company or organization is not in
      competition, in any manner whatsoever, with the business of the Company or
      any
      of its subsidiaries; 

     

    (b) fulfilling
      speaking engagements; 

     

    (c) engaging
      in charitable and community activities; 

     

    (d) managing
      his personal business and investments; and

     

    (e) any
      other
      activity approved of by the Board. For purposes of this Agreement, any activity
      specifically listed on Schedule A shall be considered as having been approved
      by
      the Board.

     

    2.5 Representations
      and Warranties of the Executive with Respect to Conflicts, Past Employers and
      Corporate Opportunities.
      The
      Executive represents and warrants that: 

     

    (a) his
      employment by the Company will not conflict with any obligations which he has
      to
      any other person, firm or entity; 

     

    (b) he
      has
      not brought to the Company (during the period before the signing of this
      Agreement) and he will not bring to the Company any materials or documents
      of a
      former or present employer, nor will he knowingly bring any confidential
      information or property of any other person, firm or entity; and 

     

    
      
        
        

      

      
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    (c) he
      will
      not, without disclosure to and approval of the Board, directly or indirectly,
      assist or have an active interest in (whether as a principal, stockholder,
      lender, employee, officer, director, partner, venturer, consultant or otherwise)
      in any person, firm, partnership, association, corporation or business
      organization, entity or enterprise that competes with or is engaged in a
      business which is substantially similar to the business of the Company except
      that ownership of not more than two percent (2%) of the outstanding securities
      of any class of any publicly held entity shall not be deemed a violation of
      this
      Section 2.5; provided,
      further,
      that
      any investment specifically listed on Schedule A shall not be deemed a violation
      of this Section 2.5.

     

    2.6 Activities
      and Interests with Companies Doing Business with the Company.
      In
      addition to those activities and interests of Executive disclosed on
Schedule
      A
      attached
      hereto, Executive shall promptly disclose to the Board, in accordance with
      the
      Company’s policies, full information concerning any interests, direct or
      indirect, he holds (whether as a principal, stockholder, lender, executive,
      director, officer, partner, venturer, consultant or otherwise) in any business
      which, as reasonably known to Executive, purchases or provides services or
      products to, the Company or any of its subsidiaries, provided that the Executive
      need not disclose any such interest resulting from ownership of not more than
      two (2%) of the outstanding securities of any class of any publicly held
      entity.

     

    2.7 Other
      Business Opportunities.
      Nothing
      in this Agreement shall be deemed to preclude the Executive from participating
      in other business opportunities if and to the extent that: (a) such business
      opportunities are not directly competitive with, similar to the business of
      the
      Company, or would otherwise be deemed to constitute an opportunity appropriate
      for the Company, (b) the Executive’s activities with respect to such
      opportunities do not have a material adverse effect on the performance of the
      Executive’s duties hereunder, and (c) the Executive’s activities with respect to
      such opportunity have been fully disclosed in writing to the Board.

     

    2.8 Reporting
      Location.
      For
      purposes of this Agreement, the Executive’s reporting location shall be Denver,
      Colorado, which shall include the metropolitan area within a 40 mile radius
      from
      the Company’s current office.

     

    ARTICLE
      THREE

     

    COMPENSATION

    3. Compensation.

     

    3.1 Base
      Salary.
      Executive shall receive an initial annual base salary of Two Hundred Five
      Thousand Dollars ($205,000.00), payable bi-monthly in arrears (the “Base
      Salary”) and subject to all federal, state, and municipal withholding
      requirements. The Base Salary shall be reviewed by the CEO and the Board,
      annually for any increase.

     

    3.2 Cash
      Bonus.
      The
      Executive shall be eligible for a cash bonus equal to an amount of up to one
      hundred percent (100%) of his Base Salary for each fiscal year he is employed
      by
      the Company (annualized for any fiscal year consisting of less than 12 full
      months or with respect to which the Executive has been employed by the Company
      for less than twelve (12) full months. Each Cash Bonus shall be paid no later
      than the end of the third month of the fiscal year next following the fiscal
      year in respect of which the Cash Bonus is awarded, unless the Executive shall
      elect to defer the receipt of such Cash Bonus that may be approved by the Board
      from time to time. The Executive understands that the cash bonus, if any, shall
      be performance based, which objectives shall be set by the Compensation
      Committee.

     

    
      
        
        

      

      
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    3.3 Equity-Based
      Compensation.
      The
      Executive shall be entitled to participate in all equity-based compensation
      plans offered by the Company to the same extent as provided to other senior
      executives of the Company and as determined by the Board of Directors. The
      Executive understands that as of the date of this Agreement, the only
      equity-based plan offered by the Company is the 2005 Long-term Incentive
      Plan.

     

    Notwithstanding
      any other provision of this Agreement, effective January 1, 2008, the Executive
      shall be entitled to 20,000 restricted shares of Teton common stock, which
      shall
      vest in equal increments over a period of three years and be subject to a
      restricted stock agreement in a form substantially similar to the form of
      agreement in Exhibit B. In addition, the Executive shall be entitled to a target
      grant of 100,000 (base objective) or 200,000 (stretch objective) performance
      share units (or such similar form of award as the Compensation Committee may
      determine) under the Company’s Long-term Incentive Plan at the next regularly
      scheduled grant (which normally occurs during the first quarter of the Company’s
      fiscal year). The Executive understands that this target is in respect of the
      first grant for which the Executive becomes eligible and that future grants,
      if
      any, will be subject to the discretion of the Compensation
      Committee.

     

    Upon
      a
      Change of Control, all equity-based compensation will be treated in the same
      manner as if Executive’s employment was terminated by the Company Without
      Cause.

     

    3.4 Participation
      In Benefit Plans.
      

     

    (a) Retirement
      Plans.
      Executive shall be entitled to participate, without any waiting or eligibility
      periods, in all qualified retirement plans provided to other executive officers
      and other key employees.

     

    (b) Taxes.
      The
      Company shall pay, on a grossed-up basis for federal, state, and local income
      taxes, the amount of any excise tax payable by Executive as a result of any
      payments triggered by this Agreement, or other compensation agreements between
      Executive and the Company, or any of its subsidiaries and any income tax payable
      by Executive as a result of any payments in Common Stock triggered by this
      Agreement or other compensation agreements between Executive and the Company,
      or
      any of its subsidiaries, except as might otherwise be provided such benefit
      plan.

     

    (c) Employee
      Benefit Plans and Insurance.
      The
      Executive shall have the right to participate in employee benefit plans and
      insurance programs of the Company that the Company may sponsor from time to
      time
      and to receive customary Company benefits, if those benefits are so offered
      to
      other senior executives of the Company. Nothing herein shall obligate the
      Executive to accept such benefits if and when they are offered.

     

    (d) Vacation.

     

    (i) The
      Executive shall be entitled to four (4) weeks of vacation per calendar year,
      which vacation level shall be reviewed by the Board from time to time. No more
      than 1.5 times (1.5x) Executive’s authorized annual vacation allocation may be
      accrued, at any given time. In the event that Executive has reached his maximum
      authorized vacation allocation, accrual will not re-commence until Executive
      uses some of his paid vacation credit and thereby brings the balance below
      his
      maximum. Accrued paid vacation credit forfeited because of an excess balance
      can
      not be retroactively reapplied.

     

    
      
        
        

      

      
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    (ii) Pay
      will
      only be provided for any unused, accrued paid vacation credit at the time of
      Executive’s separation from the business by the Company due to a reduction in
      force, by Executive upon retirement, or upon the death of an employee, provided
      that Executive has been a regular full-time employee for three calendar months
      prior to such event. Termination of employment for Cause by the Company, or
      Executive’s resignation, will result in the forfeiture of any unused paid
      vacation credit.

     

    (e) Paid
      Holidays.
      The
      Executive shall be entitled to such paid holidays as are generally available
      to
      all employees. As of the date of this Agreement, the Company’s employees are
      permitted to observe ten (10) paid holidays.

     

    (f) Reimbursement
      of Expenses.
      Executive shall be entitled to reimbursement within a reasonable time for all
      properly documented and approved expenses for travel. The Company shall
      reimburse business expenses of Executive directly related to Company business,
      including, but not limited to, airfare, lodging, meals, travel expenses, medical
      expenses while traveling not covered by insurance, business entertainment,
      expenses associated with entertaining business persons, local expenses to
      governments or governmental officials, tariffs, applicable taxes outside of
      the
      United States, special expenses associated with travel to certain countries,
      supplemental life insurance or supplemental insurance of any kind or special
      insurance rates or charges for travel outside the United States (unless such
      insurance is being provided by the Company), rental cars and insurance for
      rental cars, and any other expenses of travel that are reasonable in nature
      or
      that have been otherwise pre-approved. Executive shall be governed by the travel
      and entertainment policy in effect at the Company.

     

    3.5 Relocation
      Expenses.
      In the
      event that Executive is required to move from his primary
      residence and consents to such move, then Executive shall be provided with
      relocation assistance as provided below:

     

    (a) Housing
      and Temporary Lodging.
      The
      Company will pay the costs for the Executive and his family of house-hunting
      trips and the cost of transporting Executive, his spouse, furniture, household
      effects, and vehicles, to the area in which the Company will be headquartered.
      In addition, the Company will pay the cost of Executive’s travel, temporary
      living expenses, including housing, whether hotel or apartment, and meals,
      during the period prior to Executive’s move to the city in which the Company
      will be headquartered.

     

    3.6 Severance
      Benefit.
      In the
      event that Executive’s employment is terminated, other than for Cause, Executive
      shall receive compensation pursuant to Section 4.8 herein.

     

    3.7 Payroll
      Procedures and Policies.
      All
      payments required to be made by the Company to the Executive pursuant to this
      Article Three shall be paid on a regular basis in accordance with the Company’s
      normal payroll procedures and policies.

     

    ARTICLE
      FOUR

     

    
      TERMINATION
        OF EMPLOYMENT

    

     

    4.1 Death.
      The
      Executive’s employment shall terminate automatically upon the Executive’s death
      during the Employment Term. 

     

    
      
        
        

      

      
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    4.2 Disability.
      If the
      Company determines in good faith that the Disability (as defined below) of
      the
      Executive has occurred during the Employment Term, the Company may give the
      Executive notice of its intention to terminate the Executive’s employment. In
      such event, the Executive’s employment hereunder shall terminate effective on
      the 30th
      day
      after receipt of such notice by the Executive (the “Disability Effective Date”);
provided,
      that,
      within
      the 30-day period after such receipt, the Executive shall not have returned
      to
      full-time performance of the Executive’s duties. For purposes of this Agreement,
“Disability” shall mean the absence of the Executive from the Executive’s duties
      hereunder on a full-time basis for an aggregate of 180 days within any
      given period of 270 consecutive days (in addition to any statutorily required
      leave of absence and any leave of absence approved by the Company) as a result
      of the incapacity of the Executive, despite any reasonable accommodation
      required by law, due to bodily injury or disease or any other mental or physical
      illness, which will, in the opinion of a physician selected by the Company
      or
      its insurers and acceptable to the Executive or the Executive’s legal
      representative, be permanent and continuous during the remainder of the
      Executive’s life. 

     

    4.3 Termination
      by Company.
      

     

    (a) Termination
      for Cause.

     

    The
      Company may terminate the Executive’s employment hereunder for Cause (as defined
      below). For purposes of this Agreement, “Cause” shall mean: 

     

    (i) the
      willful and continued failure of the Executive to perform substantially the
      Executive’s duties hereunder (other than any such failure resulting from bodily
      injury or disease or any other incapacity due to mental or physical illness)
      after a written demand for substantial performance is delivered to the Executive
      by the CEO or the Board, which specifically identifies the manner in which
      the
      CEO or the Board believes the Executive has not substantially performed the
      Executive’s duties; or 

     

    (ii) the
      willful engaging by the Executive in illegal conduct or gross misconduct that
      is
      materially and demonstrably detrimental to the Company and/or its affiliated
      companies, monetarily or otherwise. 

    


    For
      purposes of this provision, no act, or failure to act, on the part of the
      Executive shall be considered “willful” unless done, or omitted to be done, by
      the Executive in bad faith or without reasonable belief that the Executive’s
      action or omission was in the best interests of the Company. Any act, or failure
      to act, based upon authority given pursuant to a resolution duly adopted by
      the
      Board, upon the instructions of the Chief Executive Officer or another senior
      officer of Company, or based upon the advice of counsel for the Company shall
      be
      conclusively presumed to be done, or omitted to be done, by the Executive in
      good faith and in the best interests of the Company and its affiliated
      companies. The cessation of employment of the Executive shall not be deemed
      to
      be for Cause unless and until there shall have been delivered to the Executive
      a
      copy of a resolution duly adopted by the affirmative vote of not less than
      two-thirds of the entire membership of the Board then in office at a meeting
      of
      the Board called and held for such purpose (after reasonable notice is provided
      to the Executive and the Executive is given an opportunity, together with
      counsel, to be heard before the Board) finding that, in the good faith opinion
      of the Board, the Executive is guilty of the conduct described in subparagraph
      (i) or (ii) above, and specifying the particulars thereof in detail.


     

    (iii) the
      Executive’s conviction of, or plea of nolo contendere to, any felony of theft,
      fraud, embezzlement or violent crime.

     

    
      
        
        

      

      
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    (b) Termination
      Without Cause.

     

    All
      terminations by the Company that are not for Cause, or on the occasion of the
      Executive’s death or disability, or that are not terminations during the 60-day
      period prior to any anniversary date as provided in Section 2.2 or Section
      4.5,
      shall be considered Without Cause.

     

    4.4 Termination
      by Executive.
      The
      Executive may terminate the Executive’s employment hereunder (x) at any
      time during the Employment Term for Good Reason (as defined below) or (y) during
      the Window Period (as defined below) Without Good Reason. For purposes of this
      Agreement, the “Window Period” shall mean the 30-day period immediately
      following the first anniversary of the Effective Date, and “Good Reason” shall
      mean any of the following (without the Executive’s express written consent):


     

    (a) The
      assignment to the Executive of any duties inconsistent in any respect with
      the
      Executive’s position (including status, offices, titles and reporting
      requirements), duties, functions, responsibilities or authority as contemplated
      by Section 2.3 of this Agreement, or any other action by the Company that
      results in a diminution in such position, duties, functions, responsibilities
      or
      authority, excluding for this purpose an isolated, insubstantial and inadvertent
      action not taken in bad faith and which is remedied by the Company promptly
      after receipt of notice thereof given by the Executive;

     

    (b) Any
      failure by the Company to comply with any of the provisions of Section 2.3
      of
      this Agreement, other than an isolated, insubstantial and inadvertent action
      not
      taken in bad faith and which is remedied by the Company promptly after receipt
      of notice thereof given by the Executive; 

     

    (c) The
      Company’s requiring the Executive to be based at any office or location other
      than as provided in Section 2.8 of this Agreement or the Company’s requiring the
      Executive to travel on the Company’s or its affiliated companies’ business to a
      substantially greater extent than during the three-year period immediately
      preceding the Effective Date; 

    


    (d) Any
      failure by the Company to provide Executive with the compensation provided
      for
      in Article III, which is not promptly remedied by the Company after notice
      thereof given by Executive;

     

    (e) Any
      failure by the Company to comply with and satisfy Section 8.1 of this Agreement;
      or 

     

    (f) Any
      purported termination by the Company of the Executive’s employment hereunder
      otherwise than as expressly permitted by this Agreement, and for purposes of
      this Agreement, no such purported termination shall be effective. 

    


    For
      purposes of this Section 4.4, any good faith determination of “Good Reason” made
      by the Executive shall be conclusive. 

     

    4.5 Termination
      without Prejudice.
      The
      Company or Executive may terminate this Agreement at any time during the 60-day
      period prior to each Automatic Extension.

     

    
      
        
        

      

      
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    4.6 Notice
      of Termination.
      Any
      termination of the Executive’s employment hereunder by the Company or by the
      Executive (other than a termination pursuant to Section 4.1) shall be
      communicated by a Notice of Termination (as defined below) to the other party
      hereto. For purposes of this Agreement, a “Notice of Termination” shall mean a
      notice which (a) indicates the specific termination provision in this
      Agreement relied upon, (b) in the case of a termination for Disability,
      Cause or Good Reason, sets forth in reasonable detail the facts and
      circumstances claimed to provide a basis for termination of the Executive’s
      employment under the provision so indicated, and (c) specifies the Date of
      Termination (as defined in Section 4.7 below); provided, however, that
      notwithstanding any provision in this Agreement to the contrary, a Notice of
      Termination given in connection with a termination (i) for Cause shall be given
      by the Company, or (ii) for Good Reason shall be given by the Executive, within
      a reasonable period of time, not to exceed 120 days, following the
      occurrence of or the discovery of the event giving rise to such right of
      termination. The failure by the Company or the Executive to set forth in the
      Notice of Termination any fact or circumstance which contributes to a showing
      of
      Disability, Cause or Good Reason shall not waive any right of the Company or
      the
      Executive hereunder or preclude the Company or the Executive from asserting
      such
      fact or circumstance in enforcing the Company’s or the Executive’s rights
      hereunder. 

     

    4.7 Date
      of Termination.
      For
      purposes of this Agreement, the “Date of Termination” shall mean the effective
      date of termination of the Executive’s employment hereunder, which date shall be
      (a) if the Executive’s employment is terminated by the Executive’s death,
      the date of the Executive’s death, (b) if the Executive’s employment is
      terminated because of the Executive’s Disability, the Disability Effective Date,
      (c) if the Executive’s employment is terminated by the Company (or
      applicable affiliated company) for Cause or by the Executive for Good Reason,
      the date on which the Notice of Termination is given, (d) if the
      Executive’s employment is terminated pursuant to Section 2.2, the date on which
      the Employment Term ends pursuant to Section 2.2 due to a party’s delivery of a
      Notice of Termination thereunder, and (e) if the Executive’s employment is
      terminated for any other reason, the date specified in the Notice of
      Termination, which date shall in no event be earlier than the date such notice
      is given; provided, however, that if within 30 days after any
      Notice of Termination is given, the party receiving such Notice of Termination
      notifies the other party that a dispute exists concerning the termination,
      the
      Date of Termination shall be the date on which the dispute is finally
      determined, either by mutual written agreement of the parties or by a final
      judgment, order or decree of a court of competent jurisdiction (the time for
      appeal therefrom having expired and no appeal having been perfected).


     

    4.8 Obligations
      of the Company upon Termination.
      

     

    (a) Good
      Reason or During the Window Period; Other Than for Cause, Death or
      Disability.
      If,
      during the Employment Term, the Company (or applicable affiliated company)
      shall
      terminate the Executive’s employment hereunder other than for Cause, Death or
      Disability or the Executive shall terminate the Executive’s employment either
      for Good Reason or Without Good Reason during the Window Period: 

     

    (i) the
      Company shall pay to the Executive (either in a lump sum or on in equal monthly
      installments over a 12-month period after the Date of Termination, at the
      Company’s option) the sum
      of
      (1)  that portion of Executive’s Base Salary that was not previously paid
      to the Executive from the last payment date through the Date of Termination,
      and
      (2) an
      amount equal to 12 months salary at the level of the Executive’s Base Salary
      then in effect, (such 12 months amount is hereinafter referred to as the
“Severance Amount”);

     

    (ii) all
      stock
      options, stock appreciation rights, and restricted stock shall immediately
      vest;

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (iii) all
      stock
      options and stock appreciation rights shall be payable in Common Stock;


    


    (iv) all
      performance share units that would vest in the course of any fiscal year shall
      vest on a pro rata basis; and

    


    (v) the
      Company shall pay, on a grossed-up basis (as determined in the same manner
      as
      under Section 3.4(b) herein) the amount of any excise and income taxes payable
      by Executive as a result of any payments in Common Stock triggered by this
      Agreement, or other agreements between Executive and the Company, or any of
      its
      subsidiaries.

     

    To
      the
      extent not theretofore paid or provided, the Company shall timely pay or provide
      to the Executive any other amounts or benefits required to be paid or provided
      or which the Executive is eligible to receive under any plan, program, policy,
      practice or arrangement or contract or agreement of the Company and its
      affiliated companies (such other amounts and benefits hereinafter referred
      to as
      the “Other Benefits”).

     

    (b) Death.
      If the
      Executive’s employment is terminated by reason of the Executive’s death during
      the Employment Term, this Agreement shall terminate without further compensation
      obligations to the Executive’s legal representatives under this Agreement, other
      than for (i) payment of Accrued Obligations (which shall be paid to the
      Executive’s estate or beneficiary, as applicable, in a lump sum in cash within
      90 days of the Date of Termination) and the timely payment or settlement of
      any other amount pursuant to the Other Benefits and (ii)
      treatment of all other compensation under existing plans as provided by the
      terms and rules of those plans.

     

    (c) Disability.
      If the
      Executive’s employment is terminated by reason of the Executive’s Disability
      during the Employment Term, this Agreement shall terminate without further
      compensation obligations to the Executive, other than for payment of Accrued
      Obligations (which shall be paid to the Executive in a lump sum in cash within
      90 days of the Date of Termination) and the timely payment or settlement of
      any other amount pursuant to the Other Benefits, and (ii) treatment of all
      other compensation under existing plans as provided by the terms and rules
      of
      those plans.

     

    
      (d) Cause;
        Other than for Good Reason or During the Window Period.
        If the
        Executive’s employment is terminated for Cause during the Employment Term, this
        Agreement shall terminate without further compensation obligations to the
        Executive other than the obligation to pay the Executive the Base Salary
        through
        the Date of Termination plus the amount of any compensation previously deferred
        by the Executive, in each case to the extent theretofore unpaid and to reimburse
        expenses pursuant to Section 3.4(g) incurred prior to the Termination Date.
        If
        the Executive voluntarily terminates the Executive’s employment during the
        Employment Term, excluding a termination either for (i) Good Reason or (ii)
        Without Good Reason during the Window Period, this Agreement shall terminate
        without further compensation obligations to the Executive, other than for
        the
        that portion of Executive’s Base Salary that was not previously paid to the
        Executive from the last payment date through the effective date of the
        Executive’s voluntary termination plus the amount of any compensation previously
        deferred by the Executive, in each case to the extent theretofore unpaid,
        to
        reimburse expenses pursuant to Section 3.4(g) incurred prior to the Termination
        Date and the timely payment or provision of the Other Benefits, as provided
        in
        any applicable plan; and the Executive shall have no further obligations
        nor
        liability to the Company. In such case, any amounts owed to the Executive
        shall
        be paid to the Executive in a lump sum in cash within 90 days of the Date
        of Termination subject to applicable laws and regulations.

    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    4.9 Continuation
      of Payments During Disputes.
      The
      Parties agree that in the case of:

     

    (a) termination
      which the Company contends is for Cause, but Executive claims is not for Cause;
      or 

     

    (b) termination
      by Executive under Section 4.4 herein,

     

    the
      Company shall continue to pay all compensation due to the Executive hereunder
      until the resolution of such dispute, but the Company shall be entitled to
      repayment of all sums so paid, if ultimately it shall be determined by a court
      of competent jurisdiction, in a final non-appealable decision, that the
      termination was for Cause or such termination by Executive was not authorized
      under Section 4.4 herein, and all sums so repaid shall bear interest from the
      date from the date on which such court makes such determination at the prime
      rate as published in The
      Wall Street Journal
      on the
      date on which such court makes such determination. Any such reimbursement of
      payments by the Executive shall not include any legal fees or other loss, costs,
      or expenses incurred by the Company, notwithstanding any provision of the
      Indemnification Agreement, which is attached as Exhibit
      A
      and is
      considered a part of this Agreement. 

     

    ARTICLE
      FIVE

     

    
      
        
          INDEMNIFICATION

        

      

    

     

    5. Indemnification.
      The Executive shall be indemnified and held harmless pursuant to the terms
      and
      conditions set forth in the Indemnification Agreement substantially in the
      form
      attached as Exhibit
      A
      hereto.

     

    ARTICLE
      SIX

     

    
      
        
          CONFIDENTIALITY

        

      

    

     

    6. Confidentially;
      Non-Competition; and Non-Solicitation.
      

     

    6.1 Confidentiality.
      In
      consideration of employment by the Company and the Executive’s receipt of the
      salary and other benefits associated with the Executive’s employment, and in
      acknowledgment that (a) the Company is engaged in the oil and gas business,
      (b)
      maintains secret and confidential information, (c) during the course of the
      Executive’s employment by the Company such secret or confidential information
      may become known to the Executive, and (d) full protection of the Company’s
      business makes it essential that no employee appropriate for his or her own
      use,
      or disclose such secret or confidential information, the Executive agrees that
      during the time of the Executive’s employment and for a period of one (1) year
      following the termination of the Executive’s employment with the Company, the
      Executive agrees to hold in strict confidence and shall not, directly or
      indirectly, disclose or reveal to any person, or use for his own personal
      benefit or for the benefit of anyone else, any trade secrets, confidential
      dealings, or other confidential or proprietary information of any kind, nature,
      or description (whether or not acquired, learned, obtained, or developed by
      Executive alone or in conjunction with others) belonging to or concerning the
      Company or any of its subsidiaries, except (i) with the prior written consent
      of
      the Company duly authorized by its Board, (ii) in the course of the proper
      performance of the Executive’s duties hereunder, (iii) for information (x) that
      becomes generally available to the public other than as a result of unauthorized
      disclosure by Executive or his affiliates or (y) that becomes available to
      the
      Executive on a non-confidential basis from a source other than the Company
      or
      its subsidiaries who is not bound by a duty of confidentiality, or other
      contractual, legal, or fiduciary obligation, to the Company, or (iv) as required
      by applicable law or legal process. Notwithstanding the foregoing, this Section
      is not intended, nor shall be construed, to prohibit the Executive’s use of the
      Executive’s general knowledge, skill and experience or the Executive’s inventive
      powers.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    6.2 Non-Competition.
      During
      the Executive’s employment with the Company and for so long as the Executive
      receives any Severance Benefit or is receiving any Severance Amount as provided
      in Section 4.8(a)(i) in respect of the termination of his employment, Executive
      shall not be engaged as an officer or executive of, or in any way be associated
      in a management or ownership capacity with any corporation, company, partnership
      or other enterprise or venture which conducts a business which is in direct
      competition with the business of the Company; provided,
      however,
      that
      Executive may own not more than two percent (2%) of the outstanding securities,
      or equivalent equity interests, of any class of any corporation, company,
      partnership, or enterprise that is in direct competition with the business
      of
      the Company, which securities are listed on a national securities exchange
      or
      traded in the over-the-counter market. For purposes of this Agreement, if the
      Executive is paid a lump sum Severance Amount then it shall be deemed that
      the
      Executive is continuing to receive a Severance Benefit or Severance Amount
      for
      the number of months of the Executive’s Base Salary represented by the lump sum
      payment. It is expressly agreed that the remedy at law for breach of this
      covenant is inadequate and that injunctive relief shall be available to prevent
      the breach thereof.

     

    6.3 Non-Solicitation.
      The
      Executive also agrees that he will not, directly or indirectly, during the
      term
      of his employment or within one (1) year after termination of his employment
      for
      any reason, in any manner, encourage, persuade, or induce any other employee
      of
      the Company to terminate his employment, or any person or entity engaged by
      the
      Company to represent it to terminate that relationship without the express
      written approval of the Company. It is expressly agreed that the remedy at
      law
      for breach of this covenant is inadequate and that injunctive relief shall
      be
      available to prevent the breach thereof.

     

    ARTICLE
      SEVEN

     

    CHANGE
      OF CONTROL

     

    7. Certain
      Definitions.

     

    7.1 Change
      of Control Effective Date.
      The
“Change of Control Effective Date” shall mean the first date during the Change
      of Control Period (as defined in Section 7.2) on which a Change of Control
      occurs. Notwithstanding anything in this Agreement to the contrary, if a Change
      of Control occurs and if the Executive’s employment with the Company (or
      applicable affiliated company) is terminated prior to the date on which the
      Change of Control occurs, and if it is reasonably demonstrated by the Executive
      that such termination of employment (i) was at the request of a third party
      who has taken steps reasonably calculated to effect a Change of Control or
      (ii) otherwise arose in connection with or anticipation of a Change of
      Control, then for all purposes of this Agreement the “Change of Control
      Effective Date” shall mean the date immediately prior to the date of such
      termination of employment. 

     

    7.2 Change
      of Control Period.
      The
“Change of Control Period” shall mean the period commencing on the date of this
      Agreement and ending on the third anniversary of such date; provided,
      however, that commencing on the date one year after the date hereof, and on
      each annual anniversary of such date (such date and each annual anniversary
      thereof herein referred to as the “Renewal Date”), the Change of Control Period
      shall be automatically extended so as to terminate three years after such
      Renewal Date, unless at least 60 days prior to the Renewal Date the Company
      shall give notice to the Executive that the Change of Control Period shall
      not
      be so extended. 

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    7.3 Change
      of Control.
      For
      purposes of this Agreement, a “Change of Control” shall mean: 

     

    (a) the
      acquisition by any individual, entity or group (within the meaning of Section
      13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership
      (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of
      15% or more of either (A) the then outstanding Common Shares the Company
      (the “Outstanding Shares”) or (B) the combined voting power of the then
      outstanding voting securities of the Company entitled to vote generally in
      the
      election of directors (the “Outstanding Voting Securities”); provided,
      however,
      that
      for purposes of this Subsection 7.3(a) the following acquisitions shall not
      constitute a Change of Control: (w) Company-sponsored recapitalization that
      is approved by the Incumbent Board, as defined below; (x) a capital raise
      initiated by the Company where the Incumbent Board remains for at least at
      least
      548 days after the closing date of the raise, or (y) an acquisition of another
      company or asset(s) initiated by the Company and where the Company’s
      shareholders immediately after the transaction own at least 51% of the equity
      of
      the combined concern; or 

     

    (b) individuals
      who, as of the date of this Agreement, constitute the Company’s Board (the
“Incumbent Board”) cease for any reason to constitute a majority of such Board
      of Directors; provided,
      however,
      that
      any individual becoming a director of the Company shareholders subsequent to
      the
      date hereof whose election, or nomination for election by the Company’s
      shareholders was approved by a vote of a majority of the directors of the
      Company then comprising the Incumbent Board shall be considered as though such
      individual were a member of the Incumbent Board, but excluding, for this
      purpose, any such individual whose initial assumption of office occurs as a
      result of either an actual or threatened election contest or other actual or
      threatened solicitation of proxies or consents by or on behalf of a Person
      other
      than the Company Board; or 

     

    (c) consummation
      of a reorganization, merger, amalgamation or consolidation of the Company,
      with
      or without approval by the shareholders of the Company, in each case, unless,
      following such reorganization, merger, amalgamation or consolidation,
      (i) more than 50% of, respectively, the then outstanding shares of common
      stock (or equivalent security) of the company resulting from such
      reorganization, merger, amalgamation or consolidation and the combined voting
      power of the then outstanding voting securities of such company entitled to
      vote
      generally in the election of directors is then beneficially owned, directly
      or
      indirectly, by all or substantially all of the individuals and entities who
      were
      the beneficial owners, respectively, of the Outstanding Shares and Outstanding
      Voting Securities immediately prior to such reorganization, merger, amalgamation
      or consolidation in substantially the same proportions as their ownership,
      immediately prior to such reorganization, merger, amalgamation or consolidation,
      of the Outstanding Shares and Outstanding Voting Securities, as the case may
      be,
      (ii) no Person (excluding a parent of the Company that may come into being
      after the date of this Agreement through any transaction deliberately undertaken
      by the Company after an affirmative vote of its Incumbent Directors and the
      Company shareholders), any employee benefit plan (or related trust) of the
      Company or such company resulting from such reorganization, merger, amalgamation
      or consolidation, and any Person beneficially owning, immediately prior to
      such
      reorganization, merger, amalgamation or consolidation, directly or indirectly,
      15% or more of the Outstanding Shares or Outstanding Voting Securities, as
      the
      case may be) beneficially owns, directly or indirectly, 15% or more of,
      respectively, the then outstanding shares of common stock (or equivalent
      security) of the company resulting from such reorganization, merger,
      amalgamation or consolidation or the combined voting power of the then
      outstanding voting securities of such company entitled to vote generally in
      the
      election of directors, and (ii) a majority of the members of the board of
      directors of the company resulting from such reorganization, merger,
      amalgamation or consolidation were members of the Incumbent Board at the time
      of
      the execution of the initial agreement providing for such reorganization,
      merger, amalgamation or consolidation; or 

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (d) consummation
      of a sale or other disposition of all or substantially all the assets of the
      Company, with or without approval by the shareholders of the Company, other
      than
      to a corporation, with respect to which following such sale or other
      disposition, (i) more than 50% of, respectively, the then outstanding
      shares of common stock (or equivalent security) of such corporation and the
      combined voting power of the then outstanding voting securities of such
      corporation entitled to vote generally in the election of directors is then
      beneficially owned, directly or indirectly, by all or substantially all the
      individuals and entities who were the beneficial owners, respectively, of the
      Outstanding Shares and Outstanding Voting Securities immediately prior to such
      sale or other disposition in substantially the same proportion as their
      ownership, immediately prior to such sale or other disposition, of the
      Outstanding Shares and Outstanding Voting Securities, as the case may be,
      (ii) no Person (excluding the Company, any employee benefit plan (or
      related trust) of the Company or such corporation, and any Person beneficially
      owning, immediately prior to such sale or other disposition, directly or
      indirectly, 15% or more of the Outstanding Shares or Outstanding Voting
      Securities, as the case may be) beneficially owns, directly or indirectly,
      15%
      or more of, respectively, the then outstanding shares of common stock (or
      equivalent security) of such corporation or the combined voting power of the
      then outstanding voting securities of such corporation entitled to vote
      generally in the election of directors, and (C) a majority of the members
      of the board of directors of such corporation were members of the Incumbent
      Board at the time of the execution of the initial agreement or action of the
      Incumbent Board providing for such sale or other disposition of assets of the
      Company; or 

     

    (e) approval
      by the shareholders of the Company of a complete liquidation or dissolution
      of
      the Company. 

     

    ARTICLE
      EIGHT

     

    
      MISCELLANEOUS

    

     

    8. Miscellaneous.

     

    8.1 Benefit.
      This
      Agreement shall inure to the benefit of and be binding upon each of the Parties,
      and their respective successors. This Agreement shall not be assignable by
      any
      Party without the prior written consent of the other Party. The Company shall
      require any successor, whether direct or indirect, to all or substantially
      all
      the business and/or assets of the Company to expressly assume and agree to
      perform, by instrument in a form reasonably satisfactory to Executive, this
      Agreement and any other agreements between Executive and the Company or any
      of
      its subsidiaries, in the same manner and to the same extent as the
      Company.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    8.2 Governing
      Law.
      This
      Agreement shall be governed by, and construed in accordance with the laws of
      the
      State of Colorado without resort to any principle of conflict of laws that
      would
      require application of the laws of any other jurisdiction; provided,
      however,
      that
      Delaware law shall govern with respect to the Executive’s rights under a Change
      of Control under Article Seven herein.

     

    8.3 Counterparts.
      This
      Agreement may be executed in counterparts and via facsimile, each of which
      shall
      be deemed to constitute an original, but all of which together shall constitute
      one and the same Agreement. Each such counterpart shall become effective when
      one counterpart has been signed by each Party thereto.

     

    8.4 Headings.
      The
      headings of the various articles and sections of this Agreement are for
      convenience of reference only and shall not be deemed a part of this Agreement
      or considered in construing the provisions thereof.

     

    8.5 Severability.
      Any
      term or provision of this Agreement that shall be prohibited or declared invalid
      or unenforceable in any jurisdiction shall, as to such jurisdiction, be
      ineffective only to the extent of such prohibition or declaration, without
      invalidating the remaining terms and provisions hereof or affecting the validity
      or enforceability of such provision in any other jurisdiction, and if any term
      or provision of this Agreement is held by any court of competent jurisdiction
      to
      be void, voidable, invalid or unenforceable in any given circumstance or
      situation, then all other terms and provisions hereof, being severable, shall
      remain in full force and effect in such circumstance or situation, and such
      term
      or provision shall remain valid and in effect in any other circumstances or
      situation.

     

    8.6 Construction.
      Use of
      the masculine pronoun herein shall be deemed to refer to the feminine and neuter
      genders and the use of singular references shall be deemed to include the plural
      and vice versa, as appropriate. No inference in favor of or against any Party
      shall be drawn from the fact that such Party or such Party’s counsel has drafted
      any portion of this Agreement.

     

    8.7 Equitable
      Remedies.
      The
      Parties hereto agree that, in the event of a breach of this Agreement by either
      Party, the other Party, if not then in breach of this Agreement, may be without
      an adequate remedy at law owing to the unique nature of the contemplated
      relationship. In recognition thereof, in addition to (and not in lieu of) any
      remedies at law that may be available to the non-breaching Party, the
      non-breaching Party shall be entitled to obtain equitable relief, including
      the
      remedies of specific performance and injunction, in the event of a breach of
      this Agreement, by the Party in breach, and no attempt on the part of the
      non-breaching Party to obtain such equitable relief shall be deemed to
      constitute an election of remedies by the non-breaching Party that would
      preclude the non-breaching Party from obtaining any remedies at law to which
      it
      would otherwise be entitled.

     

    8.8 Attorney’s
      Fees.
      If any
      Party hereto shall bring an action at law or in equity to enforce its rights
      under this Agreement, the prevailing Party in such action shall be entitled
      to
      recover from the Party against whom enforcement is sought its costs and expenses
      incurred in connection with such action (including fees, disbursements and
      expenses of attorneys and costs of investigation). In
      the
      event that Executive institutes any legal action to enforce Executive’s legal
      rights hereunder, or to recover damages for breach of this Agreement, Executive,
      if Executive prevails in whole or in part, shall be entitled to recover from
      the
      Company reasonable attorneys’ fees and disbursements incurred by Executive with
      respect to the claims or matters on which Executive has prevailed.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    8.9 No
      Waiver.
      No
      failure, delay or omission of or by any Party in exercising any right, power
      or
      remedy upon any breach or default of any other Party, or otherwise, shall impair
      any such rights, powers or remedies of the Party not in breach or default,
      nor
      shall it be construed to be a waiver of any such right, power or remedy, or
      an
      acquiescence in any similar breach or default; nor shall any waiver of any
      single breach or default be deemed a waiver of any other breach or default
      theretofore or thereafter occurring. Any waiver, permit, consent or approval
      of
      any kind or character on the part of any Party of any provisions of this
      Agreement must be in writing and be executed by the Parties and shall be
      effective only to the extent specifically set forth in such
      writing.

     

    8.10 Remedies
      Cumulative.
      All
      remedies provided in this Agreement, by law or otherwise, shall be cumulative
      and not alternative. 

     

    8.11 Amendment.
      This
      Agreement may be amended only by a writing signed by all of the Parties
      hereto.

     

    8.12 Entire
      Contract.
      This
      Agreement and the documents and instruments referred to herein constitute the
      entire contract between the parties to this Agreement and supersede all other
      understandings, written or oral, with respect to the subject matter of this
      Agreement.

     

    8.13 Survival.
      This
      Agreement shall constitute a binding obligation of the Company and any successor
      thereto. Notwithstanding any other provision in this Agreement, the obligations
      under Articles 5 and 6 shall survive termination of this Agreement.

     

    8.14 Savings
      Clause.
      Notwithstanding any other provision of this Agreement, if the indemnification
      provisions in Exhibit
      A
      hereto
      or any portion thereof shall be invalidated on any ground by any court of
      competent jurisdiction, then the Company shall nevertheless indemnify Executive
      as to Expenses, judgments, fines, penalties and amounts paid in settlement
      with
      respect to any Proceeding to the full extent permitted by any applicable portion
      of this Agreement that shall not have been invalidated and to the fullest extent
      permitted by applicable law.

     

    8.15 Modifications
      and Waivers.
      Notwithstanding any other provision of this Agreement, the indemnification
      provisions in Exhibit
      A
      hereto
      and the Change of Control provisions Article Seven herein, may be amended from
      time to time to reflect changes in Delaware law or for other
      reasons.

     

    8.16 Notices.
      All
      notices, requests, demands and other communications hereunder shall be in
      writing and shall be deemed to have been given (i) when delivered by hand or
      (ii) if mailed by certified or registered mail with postage prepaid, on the
      third day after the date on which it is so mailed:

     

    (a)        
       If
      to
      Executive:

     

    Lonnie
      Brock

    219
      Gallagher Ct.

    Erie,
      CO
      80516

    


    (b)          
      If
      to
      the Company:

     

    Teton
      Energy Corporation

    410
      17th
      Street – Suite 1850

    Denver,
      CO 80202

    Attn:
      CEO

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    or
      to
      such other address as may have been furnished to Executive by the Company or
      to
      the Company by Executive, as the case may be.

     

    8.17 No
      Limitation.
      Notwithstanding any other provision of this Agreement, for avoidance of doubt,
      the parties confirm that the foregoing does not apply to or limit Executive’s
      rights under Delaware law or the Company’s Corporate Documents. 

     

    8.18 Non-Binding
      Mediation.
      Before
      commencing any legal proceeding in any court of law, any controversy arising
      out
      of or relating to this Agreement, its enforcement or interpretation, or because
      of an alleged breach, default, or misrepresentation in connection with any
      of
      its provisions, or any other controversy arising out of Executive’s employment,
      including, but not limited to, any state or federal statutory claims, shall
      first be submitted to non-binding mediation in Denver, Colorado, before a sole
      mediator selected from Judicial Arbitration and Mediation Services, Inc.,
      Denver, Colorado, or its successor (“JAMS”), or if JAMS is no longer able to
      supply the mediator, such mediator shall be selected from the American
      Arbitration Association, provided, however, that provisional injunctive relief
      may, but need not, be sought by either party to this Agreement in a court of
      law
      while mediation proceedings are pending

     

    IN
      WITNESS WHEREOF,
      the
      parties have set their hands and seals hereunto on the date first above
      written.

    


    
      	
              Teton
                Energy Corporation

            	
              EXECUTIVE

            
	 	 
	
              By:

            	
              /s/
                Karl F. Arleth

            	 	
              By:

            	
              /s/
                Lonnie Brock

            	 


    

    
      	
              Name:

            	
              Karl
                F. Arleth

            	
               
                Name: Lonnie Brock

            
	
              Title:

            	
              President
                and Chief Executive Officer

            	 


    

    


    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    


    Schedule
      A

    


    Outside
      Activities

    Lonnie
      Brock

    


    
      	
              Company or

              Project Name

            	 	
              Nature of

              Business

            	 	
              Date Hired

              or

              Commenced

              Involvement

            	 	
              Position

            	 	
              Compensation

            	 	
              Annual Time

              Commitment, (time

              away from office)

            	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 


    

    


    Dated:
      January
      1, 2008

    


    Initials: Executive:
      _____ 
Company:
      ______

    


    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    


    Exhibit
      A

    Indemnification
      Agreement

     

    INDEMNIFICATION
      AGREEMENT

     

    This
      INDEMNIFICATION AGREEMENT (the “Agreement”) is dated and effective as of January
      1, 2008, and is made by and between Teton Energy Corporation a Delaware
      corporation (the “Company”), and Lonnie Brock, an officer or director of the
      Company (the “Indemnitee”).

     

    RECITALS

     

    A. The
      Company is aware that competent and experienced persons are increasingly
      reluctant to serve as directors or officers of corporations unless they are
      protected by comprehensive liability insurance and/or indemnification, due
      to
      increased exposure to litigation costs and risks resulting from their service
      to
      such corporations, and due to the fact that the exposure frequently bears no
      reasonable relationship to the compensation of such directors and
      officers;

     

    B. The
      Board
      of Directors of the Company (the “Board”) has concluded that, to retain and
      attract talented and experienced individuals to serve as officers and directors
      of the Company and to encourage such individuals to make the business decisions
      necessary or appropriate for the success of the Company and its Subsidiaries
      (as
      defined in Section 1 below), it is necessary for the Company contractually
      to
      indemnify its directors and certain of its officers, and certain of the
      directors and officers of its Subsidiaries, and to assume for itself maximum
      permissible liability for Expenses, losses, liabilities and damages in
      connection with claims against such officers and directors relating to their
      service in such capacities, and has further concluded that the failure to
      provide such contractual indemnification could result in significant harm to
      the
      Company and its Subsidiaries and the Company’s stockholders;

     

    C. The
      statutes and judicial decisions regarding the duties of directors and officers
      are often difficult to apply, ambiguous, or conflicting, and therefore fail
      to
      provide such directors and officers with adequate, reliable knowledge of legal
      risks to which they are exposed or information regarding the proper course
      of
      action to take;

     

    D. Plaintiffs
      often seek damages in such large amounts and the costs of litigation may be
      so
      great (whether or not the case is meritorious), that the defense and/or
      settlement of such litigation may be beyond the personal resources of directors
      and officers;

     

    E. Section
      145 of the General Corporation Law of Delaware, under which the Company is
      organized (the “GCL”), empowers the Company to indemnify by agreement its
      officers, directors, employees and agents, and persons who serve, at the request
      of the Company, as directors, officers, employees or agents of other
      corporations or enterprises, and expressly provides that the indemnification
      provided by the GCL is not exclusive; further the provisions of the Amended
      Certificate of Incorporation of the Company (the “Certificate of Incorporation”)
      specifically state that the rights to indemnification and payment of expenses
      described therein are not exclusive, and thereby contemplate that contracts
      with
      respect to indemnification and payment of Expenses by the Company and similar
      obligations of the Company may be entered into by and between the Company and
      persons entitled to such rights described in the Certificate of Incorporation;
      and

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    F. The
      Company desires and has requested the Indemnitee to serve or continue to serve
      as a director or officer of the Company. As an inducement to serve and in
      consideration for such service, the Company has agreed to indemnify the
      Indemnitee for claims for damages arising out of or related to the performance
      of such services to the Company in accordance with the terms and conditions
      set
      forth in this Agreement.

     

    NOW,
      THEREFORE, the parties hereto, intending to be legally bound, hereby agree
      as
      follows:

     

    1. Definitions.

     

    1.1.
      Agent.
      For the purposes of this Agreement, “Agent” of the Company means any person who
      is or at any time was a director or officer of the Company or a subsidiary
      of
      the Company; or is or at any time was serving at the request of, for the
      convenience of, or to represent the interest of the Company or a subsidiary
      of
      the Company as a director or officer of another foreign or domestic corporation,
      partnership, joint venture, trust or other enterprise or an affiliate of the
      Company; or was a director or officer of another enterprise or affiliate of
      the
      Company at the request of, for the convenience of, or to represent the interests
      of such predecessor corporation. The term “enterprise” includes any employee
      benefit plan of the Company, its subsidiaries, affiliates and predecessor
      corporations.

     

    1.2.
      Change
      in
      Control. “Change in Control” means a change in control of the Company occurring
      after January 1, 2008, of a nature that would be required to be reported in
      response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to
      any
      similar item on any similar schedule or form) promulgated under the Securities
      Exchange Act of 1934 (the “Act”), whether or not the Company is then subject to
      such reporting requirement; provided,
      however,
      that,
      without limitation, such a Change in Control shall be deemed to have occurred
      if
      after January 1, 2008, (i) any “person” (as such term is used in Sections 13(d)
      and 14(d) of the Act) other than a trustee or other fiduciary holding securities
      under an employee benefit plan of the Company or a corporation owned directly
      or
      indirectly by the stockholders of the Company in substantially the same
      proportions as their ownership of stock of the Company is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Act), directly or
      indirectly, of securities of the Company representing 15% or more of the
      combined voting power of the Company’s then-outstanding securities without the
      prior approval of at least two-thirds of the members of the board of directors
      of the Company in office immediately prior to such person attaining such
      percentage interest; (ii) there occurs a proxy contest, or the Company is a
      party to a merger, consolidation, sale of assets, plan of liquidation or other
      reorganization not approved by at least two-thirds of the members of the board
      of directors of the Company then in office, as a consequence of which members
      of
      the board of directors in office immediately prior to such transaction or event
      constitute less than a majority of the board of directors thereafter; or (iii)
      during any period of two consecutive years, other than as a result of an event
      described in clause (ii) of this subsection (c), individuals who at the
      beginning of such period constituted the board of directors of the Company
      (including for this purpose any new director whose election or nomination for
      election by the Company’s stockholders was approved by a vote of at least
      two-thirds of the directors then still in office who were directors at the
      beginning of such period) cease for any reason to constitute at least a majority
      of the board of directors.

     

    
      
        
        

      

      
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    1.3.
      Company.
      As used herein the term “Company” includes all successors and assigns to the
      Company, including, without limitation, any corporation or other entity that
      is
      a successor to the Company by virtue of a Change in Control.

     

    1.4.
      Controlled.
      “Controlled” means subject to the power to exercise a controlling influence over
      the management or policies of a corporation, partnership, joint venture, trust
      or other entity.

     

    1.5.
      Expenses.
      For purposes of this Agreement, “Expenses” includes all direct and indirect
      costs of any type or nature whatsoever (including, without limitation,
      attorneys’ fees and related disbursements and retainers, costs of travel, other
      out-of-pocket costs such as fees and disbursements of expert witnesses, private
      investigators and professional advisors, court costs, transcript costs, fees
      of
      experts, duplicating, printing, and binding costs, telephone and fax
      transmission charges, postage, delivery services, secretarial services and
      other
      disbursements and expenses and reasonable compensation for time spent by the
      Indemnitee for which he is not otherwise compensated by the Company or any
      third
      party) actually and reasonably incurred by the Indemnitee in connection with
      the
      investigation, defense or appeal of a proceeding or establishing or enforcing
      a
      right to indemnification or advancement of expenses under this Agreement,
      Section 145 of the GCL or otherwise.

     

    1.6.
      Proceeding.
      For the purposes of this Agreement, a “Proceeding” means any threatened,
      pending, or completed action, suit, arbitration, alternate dispute resolution
      process, investigation, administrative hearing, appeal, inquiry or other
      proceeding, whether civil, criminal, administrative, investigative or any other
      type whatsoever, whether formal or informal, including a proceeding initiated
      by
      Indemnitee pursuant to Section 9 of this Agreement to enforce Indemnitee’s
      rights hereunder.

     

    1.7.
      Subsidiary.
      For purposes of this Agreement, “Subsidiary” means any corporation, partnership,
      limited liability company, trust, joint venture, or other entity of which more
      than fifty percent (50%) of the outstanding voting securities is owned directly
      or indirectly by the Company, by the Company and one or more of its subsidiaries
      or by one or more of the Company’s subsidiaries.

     

    2. Agreement
      to Serve.
      The
      Indemnitee agrees to serve and/or continue to serve as an agent of the Company,
      at the will of the Company (or under separate agreement, if such agreement
      exists), in the capacity the Indemnitee currently serves as an agent of the
      Company, faithfully and to the best of his ability, so long as he is duly
      appointed or elected and qualified in accordance with the applicable provisions
      of the charter documents of the Company or any Subsidiary of the Company;
      provided, however, that the Indemnitee may at any time and for any reason resign
      from such position (subject to any contractual obligation that the Indemnitee
      may have assumed apart from this Agreement), and the Company or any Subsidiary
      shall have no obligation under this Agreement to continue the Indemnitee in
      any
      such position. For the avoidance of doubt, the Company and Indemnitee each
      acknowledge and agree that the resignation or other termination of Indemnitee
      as
      an agent of the Company under this paragraph 2 shall not impair any right that
      Indemnitee may otherwise have to be indemnified under the terms of this
      Agreement.

     

    
      
        
        

      

      
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    3. Directors’
      and Officers’ Insurance.
      The
      Company shall, to the extent that the Board determines it to be economically
      reasonable, maintain a policy of directors’ and officers’ liability insurance
      (“D&O Insurance”), on such terms and conditions as may be approved by the
      Board.

     

    4. Mandatory
      Indemnification.
      Subject
      to Section 9 below, the Company shall indemnify and hold the Indemnitee harmless
      to the fullest extent permitted by the GCL. Without limiting the generality
      of
      the foregoing, the Company shall indemnify and hold harmless the Indemnitee
      as
      follows:

     

    4.1.
      Third
      Party Actions. If the Indemnitee is a person who was or is a party or is
      threatened to be made a party to any proceeding (other than an action by or
      in
      the right of the Company) by reason of the fact that he is or at any time was
      an
      agent of the Company, or by reason of anything done or not done by him in any
      such capacity, against any and all claims, expenses and liabilities of any
      type
      whatsoever (including, but not limited to, attorneys’ fees, judgments, fines,
      ERISA excise taxes or penalties and amounts paid in settlement) actually and
      reasonably incurred by him in connection with the investigation, defense,
      settlement or appeal of such proceeding if he acted in good faith and in a
      manner he reasonably believed to be in, or not opposed to, the best interests
      of
      the Company and, with respect to any criminal action or proceeding, had no
      reasonable cause to believe his conduct was unlawful; and/or

     

    4.2.
      Derivative
      Actions. If the Indemnitee is a person who was or is a party or is threatened
      to
      be made a party to any proceeding by or in the right of the Company to procure
      a
      judgment in its favor by reason of the fact that he is or at any time was an
      agent of the Company, or by reason of anything done or not done by him in any
      such capacity, against any and all claims, expenses and liabilities, including
      without limitation attorneys’ fees, amounts paid in settlement of any such
      proceeding and all expenses actually and reasonably incurred by him in
      connection with the investigation, defense, settlement, or appeal of such
      proceeding if he acted in good faith and in a manner he reasonably believed
      to
      be in, or not opposed to, the best interests of the Company; except that no
      indemnification under this subsection shall be made in respect of any claim,
      issue or matter as to which such person shall have been finally adjudged, in
      a
      judgment not subject to appeal, to be liable to the Company by a court of
      competent jurisdiction due to willful misconduct of a culpable nature in the
      performance of his duty to the Company, unless and only to the extent that
      the
      Court of Chancery in Delaware or the court in which such proceeding was brought
      shall determine upon application that, despite the adjudication of liability
      but
      in view of all the circumstances of the case, such person is fairly and
      reasonably entitled to indemnity for such amounts which the Court of Chancery
      or
      such other court shall deem proper; and/or

     

    
      
        
        

      

      
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    4.3.
      Exception
      for Amounts Covered by Insurance. Notwithstanding the foregoing, the Company
      shall not be obligated to indemnify the Indemnitee for expenses or liabilities
      of any type whatsoever (including, but not limited to, judgments, fines, ERISA
      excise taxes or penalties and amounts paid in settlement) to the extent such
      have been paid directly to the Indemnitee by D&O Insurance.

     

    5. Partial
      Indemnification and Contribution.

     

    5.1.
      Partial
      Indemnification. If the Indemnitee is entitled under any provision of this
      Agreement to indemnification by the Company for some or a portion of any
      expenses or liabilities of any type whatsoever (including, but not limited
      to,
      judgments, fines, ERISA excise taxes or penalties and amounts paid in
      settlement) incurred by him in the investigation, defense, settlement, or appeal
      of a proceeding but is not entitled, however, to indemnification for all of
      the
      total amount thereof, then the Company shall nevertheless indemnify the
      Indemnitee for such total amount except as to the portion thereof to which
      the
      Indemnitee is not entitled to indemnification.

     

    5.2.  Contribution.
      If the Indemnitee is not entitled to the indemnification provided in Section
      4
      for any reason other than the statutory limitations set forth in the GCL, then
      in respect of any threatened, pending or completed proceeding in which the
      Company is jointly liable with the Indemnitee (or would be if joined in such
      proceeding), the Company shall contribute to the amount of Expenses (including
      attorneys’ fees), judgments, fines and amounts paid in settlement actually and
      reasonably incurred and paid or payable by the Indemnitee in such proportion
      as
      is appropriate to reflect (i) the relative benefits received by the Company
      on
      the one hand and the Indemnitee on the other hand from the transaction from
      which such proceeding arose and (ii) the relative fault of the Company on the
      one hand and of the Indemnitee on the other hand in connection with the events
      which resulted in such Expenses, judgments, fines or settlement amounts, as
      well
      as any other relevant equitable considerations. The relative fault of the
      Company on the one hand and of the Indemnitee on the other hand shall be
      determined by reference to, among other things, the parties’ relative intent,
      knowledge, access to information and opportunity to correct or prevent the
      circumstances resulting in such Expenses, judgments, fines or settlement
      amounts. The Company agrees that it would not be just and equitable if
      contribution pursuant to this Section 5 were determined by pro rata allocation
      or any other method of allocation, which does not take account of the foregoing
      equitable considerations.

     

    6. Mandatory
      Advancement of Expenses.

     

    6.1.
      Advancement.
      Subject to Section 9 below, the Company shall advance all expenses incurred
      by
      the Indemnitee in connection with the investigation, participation, defense,
      settlement or appeal of any proceeding to which the Indemnitee is a party or
      is
      threatened to be made a party by reason of the fact that the Indemnitee is
      or at
      any time was an agent of the Company or by reason of anything done or not done
      by him in any such capacity. The Indemnitee hereby undertakes promptly to repay
      such amounts advanced only if, and to the extent that, it shall ultimately
      be
      determined that the Indemnitee is not entitled to be indemnified by the Company
      under the provisions of this Agreement, the Certificate of Incorporation, or
      Bylaws of the Company, the GCL or otherwise. The advances to be made hereunder
      shall be paid by the Company to the Indemnitee within thirty (30) days following
      delivery of a written request therefor by the Indemnitee to the
      Company.

     

    
      
        
        

      

      
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    6.2.
      Exception.
      Notwithstanding the foregoing provisions of this Section 6, the Company shall
      not be obligated to advance any expenses to the Indemnitee arising from a
      lawsuit filed directly by the Company against the Indemnitee if an absolute
      majority of the members of the Board reasonably determines in good faith, within
      thirty (30) days of the Indemnitee’s request to be advanced expenses, that the
      facts known to them at the time such determination is made demonstrate clearly
      and convincingly that the Indemnitee acted in bad faith. If such a determination
      is made, the Indemnitee may have such decision reviewed by another forum, in
      the
      manner set forth in Sections 8.3, 8.4 and 8.5 hereof, with all references
      therein to “indemnification” being deemed to refer to “advancement of expenses,”
and the burden of proof shall be on the Company to demonstrate clearly and
      convincingly that, based on the facts known at the time, the Indemnitee acted
      in
      bad faith. The Company may not avail itself of this Section 6.2 as to a given
      lawsuit if, at any time after the occurrence of the activities or omissions
      that
      are the primary focus of the lawsuit, the Company has undergone a change in
      control. For this purpose, a change in control shall mean a given person or
      group of affiliated persons or groups increasing their beneficial ownership
      interest in the Company by at least fifteen (15) percentage points without
      advance Board approval.

     

    7. Notice
      and Other Indemnification Procedures.

     

    7.1.
      Promptly
      after receipt by the Indemnitee of notice of the commencement of or the threat
      of commencement of any proceeding, the Indemnitee shall, if the Indemnitee
      believes that indemnification with respect thereto may be sought from the
      Company under this Agreement, notify the Company of the commencement or threat
      of commencement thereof.

     

    7.2.
      If,
      at
      the time of the receipt of a notice of the commencement of a proceeding pursuant
      to Section 7.1 hereof, the Company has D&O Insurance in effect, the Company
      shall give prompt notice of the commencement of such proceeding to the insurers
      in accordance with the procedures set forth in the respective policies. The
      Company shall thereafter take all necessary or desirable action to cause such
      insurers to pay, on behalf of the Indemnitee, all amounts payable as a result
      of
      such proceeding in accordance with the terms of such D&O Insurance
      policies.

     

    
      
        
        

      

      
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    7.3.
      In
      the
      event the Company shall be obligated to advance the expenses for any proceeding
      against the Indemnitee, the Company, if appropriate, shall be entitled to assume
      the defense of such proceeding, with counsel approved by the Indemnitee (which
      approval shall not be unreasonably withheld), upon the delivery to the
      Indemnitee of written notice of its election to do so. After delivery of such
      notice, approval of such counsel by the Indemnitee and the retention of such
      counsel by the Company, the Company will not be liable to the Indemnitee under
      this Agreement for any fees of counsel subsequently incurred by the Indemnitee
      with respect to the same proceeding, provided that: (a) the Indemnitee shall
      have the right to employ his own counsel in any such proceeding at the
      Indemnitee’s expense; (b) the Indemnitee shall have the right to employ his own
      counsel in connection with any such proceeding, at the expense of the Company,
      if such counsel serves in a review, observer, advice, and counseling capacity
      and does not otherwise materially control or participate in the defense of
      such
      proceeding; or (c) if (i) the employment of counsel by the Indemnitee has been
      previously authorized by the Company, (ii) the Indemnitee shall have reasonably
      concluded that there may be a conflict of interest between the Company and
      the
      Indemnitee in the conduct of any such defense or (iii) the Company shall not,
      in
      fact, have employed counsel to assume the defense of such proceeding, then
      the
      fees and expenses of the Indemnitee’s counsel shall be at the expense of the
      Company.

     

    8. Determination
      of Right to Indemnification.

     

    8.1.
      To
      the
      extent the Indemnitee has been successful on the merits or otherwise in defense
      of any proceeding referred to in Section 4.1 or 4.2 of this Agreement or in
      the
      defense of any claim, issue or matter described therein, the Company shall
      indemnify the Indemnitee against expenses actually and reasonably incurred
      by
      him in connection with the investigation, defense or appeal of such proceeding,
      or such claim, issue or matter, as the case may be, including without limitation
      Indemnitee’s attorneys’ fees.

     

    8.2.
      In
      the
      event that Section 8.1 is inapplicable, or does not apply to the entire
      proceeding, the Company shall nonetheless indemnify the Indemnitee unless the
      Company shall prove by clear and convincing evidence to a forum listed in
      Section 8.3 below that the Indemnitee has not met the applicable standard of
      conduct required to entitle the Indemnitee to such indemnification.

     

    8.3.
      The
      Indemnitee shall be entitled to select the forum in which the validity of the
      Company’s claim under Section 8.2 hereof that the Indemnitee is not entitled to
      indemnification will be heard from among the following:

     

    (a) a
      quorum
      of the Board consisting of directors who are not parties to the proceeding
      for
      which indemnification is being sought;

     

    (b) the
      stockholders of the Company, provided however that the Indemnitee can select
      a
      forum consisting of the stockholders of the Company only with the approval
      of
      the Company;

     

    (c) legal
      counsel mutually agreed upon by the Indemnitee and the Board, which counsel
      shall make such determination in a written opinion;

     

    (d) a
      panel
      of three arbitrators, one of whom is selected by the Company, another of whom
      is
      selected by the Indemnitee and the last of whom is selected by the first two
      arbitrators so selected; or

     

    
      
        
        

      

      
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    (e) the
      Court
      of Chancery of Delaware or other court having jurisdiction of subject matter
      and
      the parties.

     

    8.4.
      As
      soon
      as practicable, and in no event later than thirty (30) days after the forum
      has
      been selected pursuant to Section 8.3 above, the Company shall, at its own
      expense, submit to the selected forum its claim that the Indemnitee is not
      entitled to indemnification, and the Company shall act in the utmost good faith
      to assure the Indemnitee a complete opportunity to defend against such
      claim.

     

    8.5.
      If
      the
      forum selected in accordance with Section 8.3 hereof is not a court, then after
      the final decision of such forum is rendered, the Company or the Indemnitee
      shall have the right to apply to the Court of Chancery of Delaware, the court
      in
      which the proceeding giving rise to the Indemnitee’s claim for indemnification
      is or was pending or any other court having jurisdiction of subject matter
      and
      the parties, for the purpose of appealing the decision of such forum, provided
      that such right is executed within sixty (60) days after the final decision
      of
      such forum is rendered. If the forum selected in accordance with Section 8.3
      hereof is a court, then the rights of the Company or the Indemnitee to appeal
      any decision of such court shall be governed by the applicable laws and rules
      governing appeals of the decision of such court.

     

    8.6.
      Notwithstanding
      any other provision in this Agreement to the contrary, the Company shall
      indemnify the Indemnitee against all Expenses incurred by the Indemnitee in
      connection with any hearing or proceeding under this Section 8 involving the
      Indemnitee and against all Expenses incurred by the Indemnitee in connection
      with any other proceeding between the Company and the Indemnitee involving
      the
      interpretation or enforcement of the rights of the Indemnitee under this
      Agreement unless a court of competent jurisdiction finds that each of the
      material claims and/or defenses of the Indemnitee in any such proceeding was
      frivolous or not made in good faith.

     

    9. Exceptions.
      Any
      other provision herein to the contrary notwithstanding, the Company shall not
      be
      obligated pursuant to the terms of this Agreement:

     

    9.1.
      Claims
      Initiated by Indemnitee. To indemnify or advance expenses to the Indemnitee
      with
      respect to proceedings or claims initiated or brought voluntarily by the
      Indemnitee and not by way of defense, except with respect to proceedings
      specifically authorized by the Board or brought to establish or enforce a right
      to indemnification and/or advancement of Expenses arising under this Agreement,
      the charter documents of the Company or any Subsidiary or any statute or law
      or
      otherwise, but such indemnification or advancement of Expenses may be provided
      by the Company in specific cases if the Board finds it to be appropriate;
      or

     

    9.2.
      Unauthorized
      Settlements. To indemnify the Indemnitee hereunder for any amounts paid in
      settlement of a proceeding unless the Company consents in advance in writing
      to
      such settlement, which consent shall not be unreasonably withheld;
      or

     

    
      
        
        

      

      
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    9.3.
      Securities
      Law Actions. To indemnify the Indemnitee on account of any suit in which
      judgment is rendered against the Indemnitee for an accounting of profits made
      from the purchase or sale by the Indemnitee of securities of the Company
      pursuant to the provisions of Section l6(b) of the Securities Exchange Act
      of
      1934 and amendments thereto or similar provisions of any federal, state or
      local
      statutory law; or

     

    9.4.
      Unlawful
      Indemnification. To indemnify the Indemnitee if a final decision by a court
      having jurisdiction in the matter, in a judgment not subject to appeal, shall
      determine that such indemnification is not lawful. In this respect, the Company
      and the Indemnitee have been advised that the Securities and Exchange Commission
      takes the position that indemnification for liabilities arising under the
      federal securities laws is against public policy and is, therefore,
      unenforceable and that claims for indemnification should be submitted to
      appropriate courts for adjudication.

     

    10. Non-Exclusivity.
      

     

    THE
      PROVISIONS FOR INDEMNIFICATION AND ADVANCEMENT OF EXPENSES SET FORTH IN THIS
      AGREEMENT SHALL NOT BE DEEMED EXCLUSIVE OF ANY OTHER RIGHTS WHICH THE INDEMNITEE
      MAY HAVE UNDER ANY PROVISION OF LAW, THE COMPANY’S CERTIFICATE OF INCORPORATION
      OR BYLAWS, THE VOTE OF THE COMPANY’S STOCKHOLDERS OR DISINTERESTED DIRECTORS,
      OTHER AGREEMENTS OR OTHERWISE, BOTH AS TO ACTION IN THE INDEMNITEE’S OFFICIAL
      CAPACITY AND TO ACTION IN ANOTHER CAPACITY WHILE OCCUPYING HIS POSITION AS
      AN
      AGENT OF THE COMPANY, AND THE INDEMNITEE’S RIGHTS HEREUNDER SHALL CONTINUE AFTER
      THE INDEMNITEE HAS CEASED ACTING AS AN AGENT OF THE COMPANY AND SHALL INURE
      TO
      THE BENEFIT OF THE HEIRS, EXECUTORS AND ADMINISTRATORS OF THE
      INDEMNITEE.

     

    11. Burden
      of Proof.
      In
      making a determination with respect to entitlement to indemnification hereunder,
      the person or persons or entity making such determination shall presume that
      Indemnitee is entitled to indemnification under this Agreement, and the Company
      shall have the burden of proof to overcome that presumption in connection with
      the making by any person, persons or entity of any determination contrary to
      that presumption.

     

    12. Duration
      of Agreement.

     

    This
      Agreement shall continue until and terminate upon the later of: (a) 10 years
      after the date that the Indemnitee shall have ceased to serve as a director
      and/or officer of the Company or director, officer, employee or agent of any
      other corporation, partnership, joint venture, trust, employee benefit plan
      or
      other enterprise which the Indemnitee served at the request of the Company;
      or
      (b) one year after the final, nonappealable termination of any Proceeding then
      pending in respect of which the Indemnitee is granted rights of indemnification
      or advancement of Expenses hereunder and of any proceeding commenced by the
      Indemnitee pursuant to Section 10 of this Agreement relating
      thereto.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    13. General
      Provisions.

     

    13.1. Interpretation
      of Agreement. It is understood that the parties hereto intend this Agreement
      to
      be interpreted and enforced so as to provide indemnification and advancement
      of
      expenses to the Indemnitee to the fullest extent now or hereafter permitted
      by
      law, except as expressly limited herein. 

     

    13.2. Severability.
      If any provision or provisions of this Agreement shall be held to be invalid,
      illegal, or unenforceable for any reason whatsoever, then:

     

    (a) the
      validity, legality and enforceability of the remaining provisions of this
      Agreement (including, without limitation, all portions of any paragraphs of
      this
      Agreement containing any such provision held to be invalid, illegal, or
      unenforceable that are not themselves invalid, illegal, or unenforceable) shall
      not in any way be affected or impaired thereby; and 

     

    (b) to
      the
      fullest extent possible, the provisions of this Agreement (including, without
      limitation, all portions of any paragraphs of this Agreement containing any
      such
      provision held to be invalid, illegal or unenforceable, that are not themselves
      invalid, illegal or unenforceable) shall be construed so as to give effect
      to
      the intent manifested by the provision held invalid, illegal or unenforceable
      and to give effect to Section 13.1 hereof.

     

    13.3. Modification
      and Waiver. No supplement, modification or amendment of this Agreement shall
      be
      binding unless executed in writing by both of the parties hereto. No waiver
      of
      any of the provisions of this Agreement shall be deemed or shall constitute
      a
      waiver of any other provision hereof (whether or not similar), nor shall such
      waiver constitute a continuing waiver.

     

    13.4. Subrogation.
      In the event of full payment under this Agreement, the Company shall be
      subrogated to the extent of such payment to all of the rights of recovery of
      the
      Indemnitee, who shall execute all documents required and shall do all acts
      that
      may be necessary or desirable to secure such rights and to enable the Company
      effectively to bring suit to enforce such rights.

     

    13.5. Counterparts.
      This Agreement may be executed in one or more counterparts and via facsimile,
      each of which shall constitute an original, but all of which when taken together
      shall constitute a single agreement.

     

    13.6. Successors
      and Assigns. The terms of this Agreement shall bind, and shall inure to the
      benefit of, the successors and assigns of the parties hereto.

     

    13.7. Notice.
      All notices, requests, demands and other communications under this Agreement
      shall be in writing and shall be deemed duly given: (a) if delivered by hand
      and
      signed for by the party addressee; or (b) if mailed by certified or registered
      mail, with postage prepaid, on the third business day after the mailing date.
      Addresses for notices to either party are as shown on the signature page of
      this
      Agreement or as subsequently modified by written notice.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    13.8. Gender.
      The masculine, feminine or neuter pronouns used herein shall be interpreted
      without regard to gender, and the use of the singular or plural shall be deemed
      to include the other whenever the context so requires.

     

    13.9. Governing
      Law. This Agreement shall be governed exclusively by and construed according
      to
      the laws of the State of Delaware, as applied to contracts between Delaware
      residents entered into and to be performed entirely within
      Delaware.

     

    If
      the
      GCL or any other applicable law is amended after the date hereof to permit
      the
      Company to indemnify Indemnitee for Expenses or liabilities, or to indemnify
      Indemnitee with respect to any action or Proceeding, not contemplated by this
      Agreement, then this Agreement (without any further action be either party
      hereto) shall automatically be deemed to be amended to require that the Company
      indemnify Indemnitee to the fullest extent permitted by the GCL.

     

    13.10. Consent
      to Jurisdiction. The Company and the Indemnitee each hereby irrevocably consent
      to the jurisdiction of the courts of the State of Delaware for all purposes
      in
      connection with any action or proceeding, which arises out of or relates to
      this
      Agreement.

     

    13.11. Attorneys’
      Fees. In the event Indemnitee is required to bring any action to enforce rights
      under this Agreement (including, without limitation, the payment or
      reimbursement of expenses of any proceeding described in Section 4), the
      Indemnitee shall be entitled to all reasonable fees and expenses in bringing
      and
      pursuing such action, unless a court of competent jurisdiction finds each of
      the
      material claims of the Indemnitee in any such action was frivolous and not
      made
      in good faith.

    


    [Balance
      of the Page Intentionally Left Blank]

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    


    IN
      WITNESS WHEREOF, the parties hereto have entered into this Agreement effective
      as of the date first written above.

     

    
      
        	
                TETON
                  ENERGY CORPORATION

              	 	
                INDEMNITEE

              
	 	 	 
	
                By:

              	
                /s/
                  Karl F. Arleth

              	 	
                By:

              	
                /s/
                  Lonnie Brock

              
	
                Name:

              	
                Karl
                  F. Arleth

              	 	
                Name:

              	
                Lonnie
                  Brock

              
	
                Title:

              	
                President
                  and Chief Executive Officer

              	 	
                Title:

              	
                Chief
                  Financial Officer and 

                Executive
                  Vice-President

              


      

    

     

    
      
        	
                Date:
                  December 11, 2007

              	
                Date:
                  December 11, 2007

              
	 	 
	
                Address:

              	
                Teton
                  Energy Corporation

                410
                  17th
                  Street – Suite 1850

                Denver,
                  CO 80202

              	
                Address:

              	
                219
                  Gallagher Court

                Erie,
                  CO 80516

              


      

    

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    
       

      Exhibit
        B

      


      Form
        of Restricted Stock Agreement

       

    

    TETON
      ENERGY CORPORATION

    


    2005
      Long
      Term Incentive Plan

    


    FORM
      OF RESTRICTED STOCK AWARD AGREEMENT

    


    THIS
      AGREEMENT is made as of this [___] day of [_______] 200[_], by and between
      Teton
      Energy Corporation, a Delaware corporation (the “Company”), and [__________]
      (“Participant”).

    


    The
      Company, pursuant to its 2005
      Long
      Term Incentive Plan
      (the
“Plan”), hereby grants the following stock award to Participant, which award
      shall have the terms and conditions set forth in this Agreement:

    


    
      	 	
              1.

            	
              Award

            


    

     

    The
      Company, effective as of the date of this Agreement, hereby grants to
      Participant a restricted stock award of [________] shares (the “Shares”) of
      common stock, par value $0.001 per share, of the Company (the “Common Stock”),
      subject to the terms and conditions set forth herein.

    


    
      	 	
              2.

            	
              Vesting

            


    

     

    Subject
      to the terms and conditions of this Agreement, the Shares shall vest in
      Participant as follows: the Shares shall vest ratably over a three-year
      period, with one-third of the Shares ([______]) vesting on [________],
      200[_];one-third of the Shares ([______]) vesting on [________], 200[_], and
      the
      balance or [_______] of the Shares vesting on [________], 200[_], if, and only
      if, Participant remains continuously employed by the Company from the date
      hereof until each respective vesting date, and subject to the forfeiture
      provisions below.  Vesting of the Shares shall be accelerated to an earlier
      date only under the following conditions:

    


    
      	 	
              (a)

            	
              in
                the event of a Change in Control of Company (as defined in the attached
                Exhibit A), and provided that Participant remains continuously in
                the
                service of or employed by the Company until the effective date of
                such
                Change in Control, all unvested Shares granted under this Agreement
                shall
                become immediately vested on the effective date of the Change in
                Control;

            


    

    


    
      	 	
              (b)

            	
              in
                the event that Participant’s employment by or service provision for the
                Company is terminated because Participant becomes in the service
                of a new
                owner of any business of the Company pursuant to a Change in Control
                event, and provided that Participant remains continuously employed
                by or
                in the service of the Company until the date of closing of the Change
                in
                Control event, all unvested Shares granted under this Agreement shall
                become immediately vested as of the last date of Participant’s service to
                or employment by the Company; or

            


    

    


    
      	 	
              (c)

            	
              in
                the event that Participant’s service to the Company is involuntarily
                terminated by the Company without cause within one year following
                a Change
                in Control Event, and provided that Participant remains continuously
                in
                the service of the Company until the date of such involuntary termination,
                all unvested Shares granted under this Agreement shall become immediately
                vested as of the last date of Participant’s employment with or service for
                the Company.

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (d)

            	
              in
                the event that the Participant’s employment with or service to the Company
                terminates because of death or Disability or at the request of the
                Chief
                Executive Officer of the Company (other than for Cause) or of a U.S.
                government agency, all the Shares issuable under this award will
                vest on
                such termination. Except to the extent provided in the preceding
                sentence
                or unless specifically provided in this Agreement or in a side letter
                thereto, this award will not vest upon the Participant’s retirement. On
                the Vesting Date (or promptly thereafter), the Company will deliver
                to the
                Participant a certificate representing the Shares which have vested
                on
                such date. For purposes of this Agreement, the term “Disability” shall be
                defined as
                any condition which shall render the Participant incapable of fulfilling
                his or her obligations hereunder because of injury or physical or
                mental
                illness, and such incapacity shall exist or reasonably may be expected,
                upon the competent medical opinion of a doctor chosen by the Company,
                for
                a period exceeding 60 consecutive days or 120 nonconsecutive days
                within a
                six-month period.

            


    

    


    
      	 	
              3.

            	
              Restriction
                on Transfer

            


    

     

    Until
      the
      Shares vest pursuant to Section 2 hereof, none of the Shares may be sold,
      assigned, transferred, pledged, hypothecated or otherwise disposed of or
      encumbered, and no attempt to transfer the Shares, whether voluntary or
      involuntary, by operation of law or otherwise, shall vest the transferee with
      any interest or right in or with respect to the Shares.

    


    
      	 	
              4.

            	
              Forfeiture
                

            


    

     

    If
      Participant ceases to be an employee of or otherwise providing services to
      the
      Company or any majority-owned affiliate of the Company for any reason prior
      to
      the vesting of the Shares pursuant to Section 2 hereof, Participant’s rights to
      the unvested portion of the Shares shall be immediately and irrevocably
      forfeited.

    


    
      	 	
              5.

            	
              Issuance
                and Custody of
                Certificate

            


    

     

    
      	 	
              (a)

            	
              The
                Company shall cause to be issued one or more stock certificates,
                registered in the name of Participant, evidencing the Shares.  Each
                such certificate (except for certificates in respect of shares to
                be sold
                for taxes) shall bear the following
                legend:

            


    

     

    “The
      shares of common stock represented by this certificate are subject to
      forfeiture, and the transferability of this certificate and the shares of stock
      represented hereby are subject to the restrictions, terms and conditions
      (including restrictions against transfer) contained in the 2005
      Long
      Term Incentive Plan
      (the
“Plan”) and a Restricted Stock Award Agreement (the “Agreement”) entered into
      between Teton Energy Corporation and the registered owner of such shares. 
Copies of the Plan and the Agreement are on file in the office of the Secretary
      of Teton Energy Corporation, 410 17th
      Street,
      Suite 1850, Denver, Colorado 80202.”

     

    
      	 	
              (b)

            	
              Participant
                shall execute stock powers relating to the Shares and deliver the
                same to
                the Company.  Company shall use such stock powers only for the
                purpose of canceling any unvested Shares that are
                forfeited.

            


    

     

    
      	 	
              (c)

            	
              Each
                certificate issued pursuant to Section 5(a) hereof, together with
                the
                stock powers relating to the Shares, shall be deposited by the Company
                with the Secretary of the Company or a custodian designated by the
                Secretary.  The Secretary or such custodian shall issue a receipt to
                Participant evidencing the certificate or certificates held which
                are
                registered in the name of
                Participant.

            


    

     

    
      	 	
              (d)

            	
              After
                any Shares vest pursuant to Section 2 hereof, the Company shall promptly
                cause to be issued a certificate or certificates evidencing such
                vested
                Shares, free of the legend provided in section 5(a) hereof, and shall
                cause such certificate or certificates to be delivered to Participant
                or
                Participant’s legal representatives, beneficiaries or
                heirs.

            


    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      	 	
              6.

            	
              Distributions
                and Adjustments

            


    

     

    
      	 	
              (a)

            	
              If
                all or any portion of the Shares vest in Participant subsequent to
                any
                change in the number or character of Shares of Common Stock (through stock
                dividend, recapitalization, stock split, reverse stock split,
                reorganization, merger, consolidation, split-up, spin-off, combination,
                repurchase or exchange of Shares of Common Stock or other securities
                of
                the Company, issuance of warrants or other rights to purchase Shares
                of
                Common Stock or other securities of the Company or other similar
                corporate
                transaction or event affecting the Shares such that an adjustment
                is
                determined by the Compensation Committee of the Board of Directors
                (the
                “Committee”) to be appropriate in order to prevent dilution or enlargement
                of the interest represented by the Shares), Participant shall then
                receive
                upon such vesting the number and type of securities or other consideration
                which he would have received if the Shares had vested prior to the
                event
                changing the number or character of outstanding Shares of Common
                Stock.

            


    

     

    
      	 	
              (b)

            	
              Any
                additional Shares of Common Stock, any other securities of the Company
                and
                any other property (except for cash dividends) distributed with respect
                to
                the Shares prior to the date the Shares vest shall be subject to
                the same
                restrictions, terms and conditions as the Shares.  Any cash dividends
                payable with respect to the Shares shall be distributed to Participant
                at
                the same time cash dividends are distributed to shareholders of the
                Company generally.

            


    

     

    
      	 	
              (c)

            	
              Any
                additional Shares of Common Stock, any securities and any other property
                (except for cash dividends) distributed with respect to the Shares
                prior
                to the date such Shares vest shall be promptly deposited with the
                Secretary or the custodian designated by the Secretary to be held
                in
                custody in accordance with Section 5(c)
                hereof.

            


    

     

    
      	 	
              7.

            	
              Taxes

            


    

     

    
      	 	
              (a)

            	
              In
                order to provide the Company with the opportunity to claim the benefit
                of
                any income tax deduction which may be available to it in connection
                with
                this restricted stock award, and in order to comply with all applicable
                federal or state tax laws or regulations, the Company may take such
                action
                as it deems appropriate to assure that, if necessary, all applicable
                federal or state income and social security taxes are withheld or
                collected from Participant, including through means of grossing up
                the
                grant to so provide for the collection of such
                taxes.

            


    

     

    
      	 	
              (b)

            	
              Participant
                may elect to satisfy his federal and state income tax withholding
                obligations in connection with this restricted stock award by (i)
                having
                the Company withhold a portion of the shares of Common Stock otherwise
                to
                be delivered upon vesting of this restricted stock award having a
                fair
                market value equal to the amount of federal and state income taxes
                required to be withheld in connection with this restricted stock
                award, in
                accordance with the rules of the Committee, or (ii) delivering to
                the
                Company shares of Common Stock other than the shares to be delivered
                upon
                vesting of this restricted stock award having a fair market value
                equal to
                such taxes, in accordance with the rules of the
                Committee.

            


    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (c)

            	
              Notwithstanding
                clause 7(b) above, if Participant elects, in accordance with
                Section 83(b) of the Internal Revenue Code of 1986, as amended, to
                recognize ordinary income in the year of acquisition of the Shares,
                the
                Company may require at the time of such election an additional payment
                for
                withholding tax purposes based on the fair market value of such Shares
                as
                of the date of the acquisition of such Shares by
                Participant.

            


    

    


    
      	 	
              8.

            	
              Confidentiality,
                Non-Competition And Non-Solicitation 

            


    

    


    In
      consideration of Participant’s receipt of this award, Participant agrees as
      follows: 

     

    
      	 	
              (a)

            	
              Participant
                will hold in a fiduciary capacity for the benefit of the Company
                all
                information, knowledge or data relating to the Company or any Subsidiaries
                and their respective businesses which the Company or any Subsidiaries
                consider to be proprietary, trade secret or confidential that Participant
                obtains or have previously obtained during its service and that is
                not
                public knowledge (other than as a result of Participant’s violation of
                this provision) (“Confidential Information”). Participant will not
                directly or indirectly use any Confidential Information for any purpose
                not associated with the activities of the Company or any Subsidiaries,
                or
                communicate, divulge or disseminate Confidential Information to any
                person
                or entity not authorized by the Company or any Subsidiaries to receive
                it
                at any time during or after Participant’s service, except with the prior
                written consent of the Company or as otherwise required by law or
                legal
                process. 

            


    

    


    
      	 	
              (b)

            	
              For
                a period of two years after the termination of Participant’s service, for
                any reason, voluntary or involuntary, Participant will not, without
                the
                written consent of the Company, directly or indirectly, engage or
                hold an
                interest in any company listed in Exhibit B, or any subsidiary or
                affiliate of such company (the “Competing Businesses”), or directly or
                indirectly have any interest in, own, manage, operate, control, be
                connected with as a stockholder (other than as a holder of less than
                five
                percent (5%) of any class of publicly traded securities of any such
                Competing Business). Participant and the Company explicitly acknowledge
                that the companies, entities, or interests identified in Exhibit
                C were
                owned by Participant prior to his employment with the Company and
                are
                specifically approved.

            


    

     

    
      	 	
              (c)

            	
              For
                a period of one year after the termination of Participant’s service, for
                any reason, Participant will not, without the written consent of
                the
                Company, directly or indirectly solicit, entice, persuade or induce
                any
                person to leave the employment of the Company or any Subsidiaries
                (other
                than persons employed in a clerical, non-professional or non-management
                position). 

            


    

    


    
      	 	
              (d)

            	
              Participant
                understands and agrees that the restrictions set forth above, including,
                without limitation, the duration, and the business scope of such
                restrictions, are reasonable and necessary to protect the legal interests
                of the Company. Participant further agrees that the Company will
                be
                entitled to seek injunctive relief in the event of any actual or
                threatened breach of such restrictions. In addition, Participant
                also
                agrees that in the event it is found by a court of law to have violated
                the confidentiality provisions of this Agreement, that an adequate
                remedy
                will including, among other things, the immediate forfeit of all
                shares
                (whether or not vested) and disgorgement of any profit associated
                with
                this grant. If any provision of this Agreement is determined to be
                unenforceable by any court, then such provision will be modified
                or
                omitted only to the extent necessary to make the remaining provisions
                of
                this Agreement enforceable. 

            


    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    


    
      	 	
              9.

            	
              Miscellaneous

            


    

     

    
      	 	
              (a)

            	
              This
                Agreement is issued pursuant to the Plan and is subject to its
                terms.  Participant hereby acknowledges receipt of a copy of the
                Plan.  The Plan is also available for inspection during business
                hours at the principal office of the
                Company.

            


    

     

    
      	 	
              (b)

            	
              This
                Agreement shall not confer on Participant any right with respect
                to
                continuance of service of or employment by the Company or any of
                its
                subsidiaries.

            


    

    


    
      	 	
              (c)

            	
              This
                award is governed by and subject to the terms and conditions of the
                Plan,
                which contain important provisions of this award and form a part
                of this
                Agreement. Copies of the Plan are being provided to or have been
                provided
                to Participant, along with a summary of the Plan. If there is any
                conflict
                between any provision of this Agreement and the Plan, this Agreement
                will
                control, unless the provision is not permitted by the Plan, in which
                case
                the provision of the Plan will apply. Participant’s rights and obligations
                under this Agreement are also governed by and are subject to applicable
                U.S. laws and foreign laws. 

            


    

    


    
      	 	
              (d)

            	
              This
                Agreement may be executed via facsimile and in counterparts, each
                of which
                shall be considered an original, but all of which together shall
                constitute one and the same
                Agreement.

            


    

    


    
      	 	
              (e)

            	
              This
                Agreement shall be governed by and construed under the internal laws
                of
                the State of Colorado, without regard for conflicts of laws principles
                thereof.

            


    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
      on
      the day and year first above written.

     

    
      	
               

            	
              TETON
                ENERGY CORPORATION

            
	
               

            	
               

            	
               

            
	
               

            	
               

            	
               

            
	
               

            	
              By:

            	 	
               

            
	
               

            	
               

            	 
	
               

            	
              Its:

            	
              Chairman

            	
               

            
	
               

            	
               

            	
               

            
	
               

            	
               

            	
               

            
	
               

            	
              PARTICIPANT

            
	
               

            	
               

            	
               

            
	
               

            	
               

            	
               

            
	
               

            	
               

            	 	
               

            


    

     

     

    
      	
              Grantee:

            	
               

            	
              No.
                of Shares:

            	
               

            	
              Grant
                Date:

            	
               

            	
              Vesting
                Date:

            
	 	
               

            	 	
               

            	 	
               

            	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 


    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    Exhibit
      A

     

    Change
      In Control.

     

    
      	
              (i)

            	
              For
                purposes of this Agreement and this Exhibit A, a Change in Control” of the
                Company shall mean:

            


    

     

    
      	 	
              (a)

            	
              a
                change in control of the Company of a nature that would be required
                to be
                reported in response to Item 6(e) of Schedule 14A of Regulation 14A
                promulgated under the Securities Exchange Act of 1934, as amended
                (the
                “Exchange Act”), whether or not the Company is then subject to such
                reporting requirement;

            


    

     

    
      	 	
              (b)

            	
              the
                public announcement (which, for purposes of this definition, shall
                include, without limitation, a report filed pursuant to Section 13(d)
                of
                the Exchange Act) by the Company or any “person” (as such term is used in
                Sections 13(d) and 14(d) of the Exchange Act) that such person has
                become
                the “beneficial owner” (as defined in Rule 13d-3 promulgated under the
                Exchange Act), directly or indirectly, of securities of the Company
                representing 15% or more of the combined voting power of the Company’s
                then outstanding securities, determined in accordance with Rule 13d-3,
                excluding, however, any securities acquired directly from the Company
                (other than an acquisition by virtue of the exercise of a conversion
                privilege unless the security being so converted was itself acquired
                directly from the Company); however, that for purposes of this clause
                the
                term “person” shall not include the Company, any subsidiary of the Company
                or any employee benefit plan of the Company or of any subsidiary
                of the
                Company or any entity holding shares of Common Stock organized, appointed
                or established for, or pursuant to the terms of, any such
                plan;

            


    

     

    
      	 	
              (c)

            	
              the
                Continuing Directors cease to constitute a majority of the Company’s Board
                of Directors;

            


    

     

    
      	 	
              (d)

            	
              consummation
                of a reorganization, merger or consolidation of, or a sale or other
                disposition of all or substantially all of the assets of, the Company
                (a
                “Business Combination”), in each case, unless, following such Business
                Combination, (A) all or substantially all of the persons who were
                the
                beneficial owners of the Company’s outstanding voting securities
                immediately prior to such Business Combination beneficially own voting
                securities of the corporation resulting from such Business Combination
                having more than 50% of the combined voting power of the outstanding
                voting securities of such resulting Corporation and (B) at least
                a
                majority of the members of the Board of Directors of the corporation
                resulting from such Business Combination were Continuing Directors
                at the
                time of the action of the Board of Directors of the Company approving
                such
                Business Combination;

            


    

     

    
      	 	
              (e)

            	
              approval
                by the shareholders of the Company of a complete liquidation or
                dissolution of the Company; or

            


    

     

    
      	 	
              (f)

            	
              the
                majority of the Continuing Directors determine in their sole and
                absolute
                discretion that there has been a change in control of the
                Company.

            


    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    
      	
              (ii)

            	
              “Continuing
                Director” shall mean any person who is a member of the Board of Directors
                of the Company, while such person is a member of the Board of Directors,
                who is not an Acquiring Person (as defined below) or an Affiliate
                or
                Associate (as defined below) of an Acquiring Person, or a representative
                of an Acquiring Person or of any such Affiliate or Associate, and
                who (x)
                was a member of the Board of Directors on the date of this Agreement
                as
                first written above or (y) subsequently becomes a member of the Board
                of Directors, if such  person’s initial nomination for election or
                initial election to the Board of Directors is recommended or approved
                by a
                majority of the Continuing Directors.  For purposes of this
                subparagraph (ii), “Acquiring Person” shall mean any “person” (as such
                term is used in Sections 13(d) and 14(d) of the Exchange Act) who
                or
                which, together with all Affiliates and Associates of such person,
                is the
                “beneficial owner” (as defined in Rule 13d-3 promulgated under the
                Exchange Act), directly or indirectly, of securities of the Company
                representing 20% or more of the combined voting power of the Company’s
                then outstanding securities, but shall not include the Company, any
                subsidiary of the Company or any employee benefit plan of the Company
                or
                of any subsidiary of the Company or any entity holding shares of
                Common
                Stock organized, appointed or established for, or pursuant to the
                terms
                of, any such plan; and “Affiliate” and “Associate” shall have the
                respective meanings ascribed to such terms in Rule 12b-2 promulgated
                under
                the Exchange Act.

            


    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    


    Exhibit
      B

    


    Prohibited
      Activities or Ownership Interests

    


    


    None.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    Exhibit
      C

    


    Permitted
      Activities or Ownership Interests

    


    


    None.

     

    
      
        
        

      

      
        10