Document:

Exhibit 10.2

INDEMNITY AGREEMENT

This INDEMNITY AGREEMENT (the “Agreement”) is dated as
of            , and is
made by and between Teton Energy Corporation a Delaware corporation (the “Company”),
and                   ,
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 “Law”), 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 Law 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 June 1, 2006, 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 June 1, 2006, (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)

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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.

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 Law 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,

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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.

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 Law. 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

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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

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 Law, 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

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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 Law 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.

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.

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,

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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

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and of any
proceeding commenced by the Indemnitee pursuant to Section 10 of this Agreement
relating thereto.

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

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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.

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 General
Corporation Law of the State of Delaware (the “Delaware Law”) 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 Delaware Law.

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: 

  	
   

  	
   

  	
  By:

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
  Date:

  	
   

  	
   

  
	
   

  	
   

  
	
  Address:

  	
  Teton Energy
  Corporation

  410 17th Street – Suite 1850

  Denver, CO 80202

  	
  Address:

  
										

 

 12Exhibit
10.4

Option
No.: 20    -         

AMENDED AND RESTATED ARRAY BIOPHARMA INC.

STOCK OPTION AND INCENTIVE PLAN

INCENTIVE STOCK OPTION AGREEMENT

Array BioPharma Inc., a
Delaware corporation (the “Company”), hereby grants an option to
purchase shares of its common stock, $.001 par value, (the “Stock”) to
the optionee named below.  The terms and
conditions of the option are set forth in this cover sheet, in the attachment
and in the Amended and Restated Array BioPharma Inc. Stock Option and Incentive
Plan (the “Plan”).

 

Grant Date:          
     , 20  

	
  Name of Optionee

  	
   

  	
   

  

 

Optionee’s Social Security Number: 
        -        -        

Number of Shares Covered by Option:            

Option Price per Share:  $      .    
(At least 100% of Fair Market Value)

Vesting Start Date:          
      ,       

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

 

	
  Optionee:

  	
   

  	
   

  
	
  (Signature)

  
	
   

  
	
   

  
	
  Company:

  	
   

  	
   

  
	
  (Signature)

  
	
   

  
	
   

  	
  Robert E. Conway, Chief Executive Officer

  
				

Attachment

This is not a stock certificate or a negotiable
instrument.

 

AMENDED
AND RESTATED

ARRAY BIOPHARMA INC.

STOCK OPTION AND INCENTIVE PLAN

INCENTIVE STOCK OPTION AGREEMENT

Capitalized terms used in this
Agreement that are not otherwise defined in this Agreement have the meaning
given such terms in the Plan.

	
  Incentive Stock Option

  	
  This option is intended to be an incentive stock
  option under Section 422 of the Internal Revenue Code and will be interpreted
  accordingly.  If you cease to be an
  employee of the Company, its parent or a subsidiary (“Employee”) but
  continue to provide Service, this option will be deemed a nonstatutory stock
  option on the 90th day after you cease to be an Employee.  In addition, to the extent that all or part
  of this option exceeds the $100,000 threshold of section 422(d) of the
  Internal Revenue Code, this option or the lesser excess part will be deemed
  to be a nonstatutory stock option.

  

 

	
  Vesting

  	
  You
  may purchase shares which have vested under this option at any time prior to
  expiration of this option by following the procedures set forth in the Plan
  and below in this Agreement.  You may
  only exercise this option for a whole number of vested shares, not less than
  100 shares, unless the number of shares purchased is the total number
  available for purchase under the option.

  Provided you continue in Service on each vesting
  date and subject to the deceleration provisions in the following paragraph, your
  right to purchase shares of covered by this option (the “Option Shares”)
  vests as follows:

  [To be determined]

  The resulting aggregate number of vested shares
  will be rounded to the nearest whole number. 
  You cannot vest in more than the number of shares covered by this
  option.

  No additional Option Shares will vest after
  your Service has terminated for any reason.

  

 

	
  Term

  	
  Your option will expire in any event at the
  close of business at Company headquarters on the day before the 10th
  anniversary of the Grant Date, as shown on the cover sheet.  Your option will expire earlier if your
  Service terminates, as described below.

  

 

	
  Regular Termination

  	
  If
  your Service terminates for any reason, other than death, Disability or
  Cause, then your option will expire at the close of business at Company
  headquarters on the 90th day after your termination date.

  

 

 

 

	
  Termination for

  Cause

  	
  If your Service is terminated for Cause,
  then you shall immediately forfeit all rights to your option and the option
  shall immediately expire.  

  

 

	
  Death

  	
  If
  your Service terminates because of your death, then your option will expire
  at the close of business at Company headquarters on the date 12 months after
  the date of death.  During that 12-month
  period, your estate or heirs may exercise the vested portion of your option.

  In addition, if you die during the 90-day
  period described in connection with a regular termination (i.e., a
  termination of your Service not on account of your death, Disability or
  Cause), and a vested portion of your option has not yet been exercised, then
  your option will instead expire on the date 12 months after your termination
  date.  In such a case, during the
  period following your death up to the date 12 months after your termination
  date, your estate or heirs may exercise the vested portion of your option. 

  

 

	
  Disability

  	
  If your Service terminates because of your
  Disability, then your option will expire at the close of business at Company
  headquarters on the date 12 months after your termination date.

  

 

	
  Leaves
  of Absence

  	
  For
  purposes of this option, your Service does not terminate when you go on a bona
  fide employee leave of absence (i) that was approved by an
  authorized representative of the
  Company in writing, if the terms of the leave provide for continued Service
  crediting, or (ii) when continued Service crediting is required by
  applicable law.  However, your Service
  will be treated as terminating for purposes of the “Vesting” and the “Regular
  Termination” sections of this Agreementin accordance with the then effective policies of the Company relating
  to leaves of absence, unless your
  right to return to active work is guaranteed by law or by a contract.  Your Service terminates in any event when
  the approved leave ends unless you immediately return to active employee
  work.

  The Company determines, in its sole
  discretion, which leaves count for this purpose, and when your Service
  terminates for all purposes under the Plan.

  

 

	
  Notice
  of Exercise

  	
  When
  you wish to exercise this option, you must do so through the Company’s
  account with Deutsche Bank Alex. Brown using the user name and password
  supplied to you by Deutsche Bank.  You
  can access this account on the Deutsche Bank website at
  www.optionselect.db.com or by calling 800-776-7564.

  You
  must also notify the Company prior to exercising this option by submitting a
  notice of exercise, in the form attached as Exhibit A, to the Company’s
  Chief Financial Officer, or another Company employee designated by him.

  If
  someone else wants to exercise this option after your death, that 

  

 

 

 

	
   

  Form
  of Payment

  	
  person
  must prove to the Company’s satisfaction that he or she is entitled to do so.

  When
  you submit a notice of exercise, you must indicate how you have paid the
  option price for the shares you are purchasing using one (or a combination)
  of the following forms:

  ·      Cash,
  your personal check, a cashier’s check, a money order, wire or another cash
  equivalent acceptable to the Company.

  ·      Shares
  of Stock which you have owned for more than six months and which are
  surrendered to the Company.  The value
  of the shares, determined as of the effective date of the option exercise,
  will be applied to the option price.

  ·      So
  long as a public market for the Stock exists as determined by the Company, by
  delivery (on a form acceptable to the Company) of an irrevocable direction to
  Deutsche Bank Alex. Brown or another licensed securities broker acceptable to
  the Company to sell Stock and to deliver all or part of the sale proceeds to
  the Company in payment of the aggregate option price and any withholding
  taxes.

  

 

	
  Withholding Taxes

  	
  You will not be allowed to exercise this
  option unless you make acceptable arrangements to pay any withholding or
  other taxes that may be due as a result of the option exercise or sale of
  Stock acquired under this option.  In
  the event that the Company determines that any federal, state, local or
  foreign tax or withholding payment is required relating to the exercise or
  sale of shares arising from this grant, the Company shall have the right to
  require such payments from you, or withhold such amounts from other payments
  due to you from the Company or any Affiliate.

  

 

	
  Transfer of Option

  	
  During your lifetime, only you (or, in the
  event of your legal incapacity or incompetency, your guardian or legal
  representative) may exercise the option. 
  You cannot transfer or assign this option.  For instance, you may not sell this option
  or use it as security for a loan.  If
  you attempt to do any of these things, this option will immediately become
  invalid.  You may, however, dispose of
  this option in your will or it may be transferred upon your death by the laws
  of descent and distribution.

   

  Regardless of any marital property
  settlement agreement, the Company is not obligated to honor a notice of
  exercise from your spouse, nor is the Company obligated to recognize your
  spouse’s interest in your option in any other way.

  

 

	
  Retention
  Rights

  	
  Neither
  your option nor this Agreement gives you the right to be retained by the
  Company (or any Parent, Subsidiaries or Affiliates) in any capacity.  The Company (and any Parent, Subsidiaries
  or Affiliates) reserves the right to terminate your Service at any time and 

  

 

 

 

	
   

  Shareholder
  Rights

  	
  for
  any reason.

  You, or your estate or heirs, have no
  rights as a shareholder of the Company until a certificate for your option’s
  shares has been issued or an appropriate book entry has been made.  No adjustments are made for dividends or
  other rights if the applicable record date occurs before your stock
  certificate is issued or book entry is made, except as described in the Plan.

  

 

	
  Adjustments

  	
  In the event of a stock split, a stock dividend
  or a similar change in the Stock, the number of shares covered by this option
  and the option price per share may be adjusted (and rounded down to the
  nearest whole number) pursuant to the Plan. 
  Your option shall be subject to the terms of the agreement of merger,
  liquidation or reorganization in the event the Company is subject to such
  corporate activity.

  

 

	
  Applicable
  Law

  	
  This Agreement will be interpreted and
  enforced under the laws of the State of Colorado, other than any conflicts or
  choice of law rule or principle that might otherwise refer construction or
  interpretation of this Agreement to the substantive law of another
  jurisdiction.

  

 

	
  The
  Plan 

  	
  The
  text of the Plan is incorporated in this Agreement by reference.

  This Agreement and the Plan constitute the
  entire understanding between you and the Company regarding this option.  Any prior agreements, commitments or
  negotiations concerning this option are superseded.

  

 

	
  Notice
  of Certain 

  Dispositions

  	
  So that the Company can comply with its tax
  reporting obligations, if you sell or otherwise dispose of Stock acquired upon
  exercise of this option sooner than the one year anniversary of the date you
  acquired the Stock, then you agree to notify the Company in writing of the
  date of sale or disposition, the number of share of Stock sold or disposed of
  and the sale price per share within 30 days of such sale or disposition.

  

 

	
  Consent
  to Electronic Delivery

  	
  The Company may choose to deliver certain
  statutory materials relating to the Plan in electronic form.  By accepting this option grant you agree
  that the Company may deliver the Plan prospectus and the Company’s annual
  report and proxy statement to you in an electronic format.  If at any time you would prefer to receive
  paper copies of these documents, as you are entitled to, the Company would be
  pleased to provide copies.  Please
  contact the Human Resources department or the Company’s Stock Administrator to
  request paper copies of these documents.

  

By
signing the cover sheet of this Agreement,

you
agree to all of the terms and conditions described above and in the Plan.

 

EXHIBIT
A

NOTICE
OF EXERCISE

INCENTIVE STOCK OPTION

The undersigned hereby
gives notice to Array BioPharma Inc. (the “Company”) of the desire to purchase shares of common stock of
the Company pursuant to Incentive Stock Option Agreement No.          .

1.                                       Exercise of Option.

	
  Name

  	
   

  	
   

  
	
  Date

  	
   

  	
   

  
	
  Shares to be Exercised

  	
   

  	
   

  
	
  Option Exercise Price

  	
   

  	
   

  
							

 

Limit Orders.

If you have elected to
exercise your option pursuant to a Limit Order, check the applicable box below:

o            Limit Order that is good until
cancelled

o            Limit Order expires on 

2.                                       Delivery of Payment.  Indicate
below how the full option exercise price for the Shares is to be paid:

o Pursuant
to an “exercise and sell”, “sell to cover” or other broker transaction with
Deutsche Bank Alex. Brown

o Cash
in the form of check, wire or funds from my Deutsche Bank Alex. Brown account

o By
surrender to the Company of Shares owned and held for more than six months with
a value of $          represented
by certificate number(s)                

3.                                       Taxes to be Withheld. 
Please indicate whether you want taxes withheld from any
disqualifying disposition, such as a same-day-sale.  (Check only one)

o Yes, withhold taxes on a disqualifying
disposition.

o No,
do not withhold taxes on a disqualifying disposition.

 

	
   

  	
   

  
	
  Signature

  
	
   

  
	
  Social Security No.:
          -        -

  
	
   

  
	
  Address:

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