Document:

First Amendment to Limited Liability Company Agreement

 
EXHIBIT 10.4 
  
 First Amendment to Limited Liability Agreement 
 of 
 Contango Offshore Exploration LLC 
 and 
 Additional Agreements 
  
 This First Amendment to Limited Liability Company Agreement (this “Amendment”) of Contango Offshore Exploration LLC, a Delaware limited
liability company (the “Company”), is entered into as of September 1, 2005, by and among COE Offshore, LLC, a Delaware limited liability company (“COE O/S”), Centaurus Oil and Gas, LP, a Texas limited partnership
(“Centaurus”), and Juneau Exploration, L.P., a Texas limited partnership (“JEX”). 
  
 1. JEX has transferred portions of its interests in the Company to COE O/S and Centaurus. COE O/S consents to those transfers on the terms hereinafter set forth. 
  
 2. By signing this Amendment, Centaurus executes the Agreement, hereby acknowledging
acceptance by Centaurus of all of the terms and provisions of the Agreement. 
  
 3. Section 5.A of the limited liability agreement of the Company dated November 1, 2002, as said agreement may have been amended (the “Agreement”), is hereby amended effective as of the date hereof by adding the following after
the last sentence thereof: 
  
 “Notwithstanding the
foregoing, Centaurus Oil and Gas, LP (“CENTAURUS”) shall have no obligation to contribute any amounts to the Company for working capital, and JEX shall have no right to demand any contribution from CENTAURUS.” 
  
 4. Section 5.B of the Agreement is hereby amended effective as of the date hereof by adding
the following after the last sentence thereof: 
  
 “Notwithstanding the foregoing, CENTAURUS shall have no obligation to pay any amounts due under or in connection with the DATA or LICENSES.” 
  

5. Section 8.A of the Agreement is hereby amended effective as of the date hereof in its entirety to read as follows: 
  
 “A. The Members will have the following interests in the profits and
losses of the Company. 
  

				
	 Name

	  	Interest

	 
	 COE Offshore, LLC
	  	76.03380	 
	 Centaurus Oil and Gas, LP
	  	9.36712	%
	 Juneau Exploration, L.P.
	  	14.59908	%”

  

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 6. Section 12.B of the Agreement is hereby amended effective as of the date hereof in its entirety to read as follows:

  
 “B. While the COMPANY is in existence
and for a period of one (1) year thereafter, COE O/S, Contango Oil & Gas Company, a Delaware corporation (“CONTANGO”), and CENTAURUS will not – and each of CONTANGO and CENTAURUS will cause any of its affiliates not to
– without the approval of the other Members, (i) acquire any interest in any area covered by any seismic data utilized hereunder, or (ii) exploit, participate in the recovery or exploitation of, derive any benefit from, or assist anyone else to
recover or exploit or derive any benefit from any area covered by any DATA utilized hereunder; provided, however, that CENTAURUS and its affiliates shall only be subject to this Section 12.B with respect to any DATA which CENTAURUS or
any of its affiliates gain knowledge as a result of CENTAURUS’ membership in the COMPANY.” 
  
 7. In accordance with Section 8.D of the Agreement, it is hereby agreed that the Company will file an election under Section 754 of the Internal Revenue Code on its return for the current fiscal year. 
  
 8. In accordance with Section 13.C(ii) of the Agreement, the transfers of portions of the
interest in the Company held by Juneau Exploration, L.P. that result in the interests in profits and losses of the Company set forth in Section 8.A of the Agreement, as amended above, are hereby approved. 
  
 9. Centaurus may transfer its entire interest under the Agreement to a newly-formed limited
liability company or limited partnership of which Centaurus is the sole member or sole manager or sole general partner or sole limited partner, as the case may be, provided that: 
  
 (a) if the transferee is not a limited liability company of which Centaurus is the sole member, Centaurus certifies to the
Company and the other parties hereto that the transfer was made in exchange for fair consideration or that the investors in Centaurus approved the transfer; 
  
 (b) if the transferee is not a limited liability company of which Centaurus is the sole member or a limited partnership of which Centaurus is the sole
general partner, Centaurus certifies to the Company and the other parties hereto that the transferee is controlled (as defined below) by Centaurus or by an entity that Centaurus controls or by an entity that controls Centaurus; and 
  
 (c) the transferee signs the Agreement by executing an instrument as required
by Section 13.D of the Agreement. 
  
 Control means the ability to
elect a majority of the directors or members of the governing body of an entity or in any other manner to control or determine the management of an entity. Control may be direct or indirect through one or more entities. 
  
 Centaurus will indemnify each of the other parties hereto against any
liability and hold each of them harmless from and pay any loss, damage, cost or expense (including, without 

  

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limitation, legal fees and court costs) that any such party incurs on account of any claim against it arising out of or in connection with a transfer by
Centaurus of its interest in the Company. 
  
 10. As hereinabove amended, the
Agreement will remain in full force and effect. 
  
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	Dated as of September 1, 2005	 	JUNEAU EXPLORATION, L.P.,
	 	 	a Texas limited partnership
			
	 	 	By:	 	Juneau GP, LLC, Its General Partner
			
	 	 	By:	 	  

	 	 	Name:	 	John B. Juneau
	 	 	Title:	 	Sole Manager
		
	 	 	COE OFFSHORE, LLC,
	 	 	a Delaware limited liability company
			
	 	 	By:	 	  

	 	 	Name:	 	Kenneth R. Peak
	 	 	Title:	 	Chairman and CEO
		
	 	 	CENTAURUS OIL AND GAS, LP,
	 	 	a Texas limited partnership
			
	 	 	By:	 	Centaurus Oil and Gas GP, LLC, its General Partner
			
	 	 	By:	 	  

	 	 	Name:	 	 
	 	 	Title:Sunoco, Inc, Director Compensation Summary Sheet

 Exhibit 10.1 
  
 Sunoco, Inc. Director Compensation Summary Sheet 
 (as amended September 1, 2005, effective October 1, 2005) 
  
 The corporate governance practices of Sunoco, Inc. (“Sunoco”) are designed so that qualified independent directors are elected. Recognizing that corporate governance is of critical importance to Sunoco and
its shareholders, the Governance Committee of Sunoco’s Board of Directors (the “Committee”) believes that the compensation program for the independent directors should be designed to attract highly qualified directors; provide
appropriate compensation for their time, efforts, commitment and contributions to Sunoco and Sunoco’s shareholders; and align the interests of the independent directors and Sunoco’s shareholders. The Committee’s compensation
philosophy includes providing a competitive level of compensation necessary to attract experienced and qualified individuals. The Committee directly engages a third-party compensation consultant to advise it on an annual basis as to the
“best practices” and emerging trends in director compensation. The compensation consultant also benchmarks Sunoco’s director compensation compared to the proxy performance peer group, the oil industry generally and general industry
data. As discussed in Sunoco’s Corporate Governance Guidelines (a copy of which can be found at Sunoco’s Internet web site, www.SunocoInc.com), Sunoco’s directors are compensated partially in Sunoco common stock or stock equivalents
to better align their interests with those of Sunoco shareholders. Currently, equity-based compensation represents a substantial portion of the total compensation package. The Chief Executive Officer is not paid for his services as a director. The
following table summarizes the annual compensation of Sunoco’s directors, effective October 1, 2005. 
  

				
	 Type of Compensation

	  	Value

	 Annual Retainer (Cash Portion)
	  	$	50,000
	 Annual Retainer (Stock-Based Portion)
	  	$	40,000
	 Annual Restricted Share Credit under Directors’ Deferred Compensation Plan
	  	$	60,000
	 	  	
	

	 TOTAL (excluding Committee Chair Retainer, Committee Chair Fee, and meeting fees)
	  	$	150,000
	 	  	
	

	 Annual Retainer for Committee Chair
	  	$	5,000
	 Committee Chair Fee (per meeting attended for which a director serves as chair)
	  	$	500
	 Board or Committee Attendance Fee (per meeting attended)1
	  	$	2,000

 NOTE TO TABLE: 
  

	1	A fee of $2,000 per day is also paid in cash for special meetings. 

  
 Directors’ Deferred Compensation Plan: The Directors’ Deferred Compensation Plan permits independent directors to defer a
portion of their compensation. Payments of compensation deferred under this plan are restricted in terms of the earliest and latest dates that payments may begin. Deferred compensation is designated as share units, cash units, or a combination of
both. Cash units accrue interest at a rate based upon Sunoco’s cost of borrowing. A share unit is treated as if it was invested in shares of Sunoco common stock, but it does not have voting rights. If share units are chosen, dividend
equivalents are credited in the form of additional share units. Share units are settled in cash, based upon the fair market value of Sunoco common stock at the time of payment. The Plan also provides for the annual crediting of restricted share
units, which is a portion of the directors’ compensation package. The restricted share units are not payable until death or other termination of Board service, or in the event of a change in control of the Company. 

 Directors’ Retainer Stock Plan: The Retainer Stock Plan for independent directors allows for the payment of a
portion of the independent directors’ annual retainer in stock. The retainer is granted to each director after the annual meeting. Any shares issued are restricted, prohibiting the transfer or sale of such shares for one year from the date of
issue. The holder of the shares receives quarterly dividend equivalents equal to the dividends declared on the Company’s shares. A director may defer receipt of these shares pursuant to the Directors’ Deferred Compensation Plan in share
units. 
  
 Long-Term Performance Enhancement Plan II: The Long-Term
Performance Enhancement Plan II provides that stock option awards under the plan may be made to independent directors of the Company. The options generally have a ten-year term and are generally exercisable two years after the date of grant. The
purchase price payable upon exercise of an option will not be less than the fair market value of a share of Sunoco common stock on the date the option was granted. The purchase price may be paid in cash or in shares of common stock. In 2003, the
Company discontinued granting stock options to the Company’s independent directors. 
  
 The Directors’ Retainer Stock Plan and the Long-Term Performance Enhancement Plan II, which are equity compensation plans, were approved by the shareholders. 
  
 Directors’ Deferred Compensation and Benefits Trust: In the event of a change in
control, the Directors’ Deferred Compensation and Benefits Trust may be funded to provide the source of funds for the Company to meet its liabilities under certain benefit plans and arrangements, including the Directors’ Deferred
Compensation Plan. Assets held by the Trust are subject to the claims of the Company’s general creditors under federal and state law in the event of insolvency. 
  
 Other Compensation and Benefits: As part of their compensation package, the directors are also reimbursed for their expenses related
to their attendance at Sunoco meetings, including, room, meals, and transportation to and from board and committee meetings (e.g., commercial flights, trains, cars and parking). At times, a director may travel to and from Sunoco meetings on Sunoco
corporate aircraft. When traveling on Sunoco business, a director may be accompanied by his or her spouse at Sunoco’s expense. As a member of the Board of Directors, the directors are automatically covered by the following insurance plans
– travel accident insurance coverage of $250,000, which protects them whenever they travel on Sunoco business, and life insurance, which is provided to independent directors in the amount of $50,000 until the director’s Board service
terminates. Also as part of their compensation package, the directors are reimbursed for attendance at qualified third-party director education programs. 
  
 Directors’ Stock Ownership Guidelines: Each independent director is expected to own Sunoco common stock with a market value equal to at least 5 times the
total annual retainer. Included in the determination of stock ownership for purposes of these guidelines are all shares beneficially owned and any share units held in the Directors’ Deferred Compensation Plan. New directors are allowed a
five-year phase-in period to comply with the guidelines. As of December 31, 2004, all independent directors were in compliance with the guidelines or, in the case of directors elected during the past five years, on track to achieve compliance with
the guidelines within the five-year period. 
  
 Directors’ &
Officers’ Indemnification Agreements: Sunoco’s bylaws require that Sunoco indemnify its directors and officers, to the extent permitted by Pennsylvania law, against any costs, expenses (including attorneys’ fees) and other
liabilities to which they may become subject by reason of their service to Sunoco. Sunoco has purchased liability insurance for its directors and officers and has entered into indemnification agreements with its directors and certain key executive
officers and other management personnel. This insurance and the indemnification agreements supplement the provisions in Sunoco’s Articles of Incorporation which eliminate the potential monetary liability of directors and officers to Sunoco or
its shareholders in certain situations as permitted by law.

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