FORM 10-K CONTANGO OIL & GAS COMPANY

CONTANGO OIL & GAS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (continued)
13. Commitments and Contingencies
Operating Leases. Contango leases its office space and certain other equipment. As of June 30, 2009
minimum future lease payments are as follows:
2010………………………………………………………………………………… 184,482
2011………………………………………………………………………………… 188,340
2012…………………………………………………………………………………… 63,582
2013………………..………………………………………………………………… 420
2014 and thereafter………………..………………………………………………… -
Total $ 436,824
The amount incurred under operating leases during the years ended June 30, 2009, 2008 and 2007 was
$160,405, $149,782 and $173,259, respectively.
14. Stock Based Compensation
In September 1999, the Company established the Contango Oil & Gas Company 1999 Stock Incentive
Plan (the “1999 Plan” or the “Option Plan”). Under the Option Plan, the Company may issue up to 2,500,000 shares
of common stock with an exercise price of each option equal to or greater than the market price of the Company’s
common stock on the date of grant, but in no event less than $2.00 per share. The Company may grant key
employees both incentive stock options intended to qualify under Section 422 of the Internal Revenue Code of 1986,
as amended, and stock options that are not qualified as incentive stock options. Stock option grants to nonemployees,
such as directors and consultants, can only be stock options that are not qualified as incentive stock
options. Options generally expire after five or ten years. The vesting schedule varies, but vesting generally occurs
over a two-year period (1/3 immediately, 1/3 one year from the date of grant and 1/3 two years from the date of
grant) or four-year period (1/4 one year from the date of grant and 1/4 two years, three years and four years from the
date of grant). As of June 30, 2009, options under the Option Plan to acquire 685,167 shares of common stock at
prices between $3.00 and $54.99 per share were outstanding.
DB2/21043537.7 F-20