Exhibit 10.6
LEGACY RESERVES LP
LONG-TERM INCENTIVE PLAN
GRANT OF RESTRICTED UNITS
Grantee
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Grant Date , 200__
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1. GRANT OF RESTRICTED UNITS. Legacy Reserves LP (the "Partnership") hereby
grants to you _____________ Restricted Units under the Legacy Reserves LP
Long-Term Incentive Plan (the "Plan") on the terms and conditions set forth
herein and in the Plan, which is incorporated herein by reference as a part
of this Agreement. In the event of any conflict between the terms of this
Agreement and the Plan, the Plan shall control. Capitalized terms used in
this Agreement but not defined herein shall have the meanings ascribed to
such terms in the Plan, unless the context requires otherwise.
2. REGULAR VESTING. Except as otherwise provided in Section 3 below, the
Restricted Units granted hereunder shall vest (in installments if
applicable) in accordance with the following schedule:
CUMULATIVE VESTED
VESTING DATE VESTED INCREMENT PERCENTAGE
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You are entitled to receive all cash distributions made with respect to
Restricted Units registered in your name and are entitled to vote such
Restricted Units, unless and until the Restricted Units are forfeited. Such cash
distribution shall be made without interest no later than on the first day of
the month next following the month in which cash distributions are made to
Unitholders.
The number of Restricted Units that vest as of each date described above will be
rounded down to the nearest whole Restricted Unit, with any remaining Restricted
Units to vest with the final installment. Your employment with the Partnership,
the Company or any of their Affiliates, as the case may be (the "Employer") must
be continuous from the date of the grant through the applicable vesting date in
order for the Award to become vested with respect to additional Units on such
date.
3. EVENTS OCCURRING PRIOR TO REGULAR VESTING.
(A) DEATH OR DISABILITY. If your employment with the Employer terminates
as a result of your death or a disability (within the meaning of
Section 22(e)(3) of the Internal Revenue Code of 1986, as amended and
in effect from time to time (the "Code")), the Restricted Units then
held by you automatically will become fully vested upon such
termination.
(B) TERMINATION BY THE PARTNERSHIP OTHER THAN FOR CAUSE. If your
employment is terminated by the Partnership for any reason other than
"Cause," as determined by the Partnership, the Restricted Units then
held by you automatically will become fully vested upon such
termination.
(C) OTHER TERMINATIONS. Except as provided in Section 3 hereof, if you
terminate from the Partnership for any reason other than as provided
in Sections 3(a) and (b) above, all unvested Restricted Units then
held by you automatically shall be forfeited without payment upon such
termination.
(D) CHANGE OF CONTROL. All outstanding Restricted Units held by you
automatically shall become fully vested upon a Change of Control.
For purposes of this Section 3, "employment with the Partnership" shall include
being an employee of or a director or consultant to the Partnership or an
Affiliate.
For purposes of this Section 3, "Cause" is defined as:
(1) an act by the Grantee of willful misrepresentation, fraud or willful
dishonesty intended to result in substantial personal enrichment at the expense
of the Partnership or an Affiliate;
(2) the Grantee's willful misconduct with regard to the Partnership or an
Affiliate that is intended to have a material adverse impact on the Partnership
or an Affiliate;
(3) the Grantee's material, willful and knowing violation of Partnership or
Affiliate guidelines or policies or the Grantee's fiduciary duties which has or
is intended to have a material adverse impact on the Partnership or an
Affiliate;
(4) the Grantee's willful or reckless behavior in the performance of his or her
duties which has a material adverse impact on the Partnership or an Affiliate;
(5) the Grantee's willful failure to perform his or her duties or to follow a
written direction of the Chairman or the board of directors of the Partnership;
(6) the Grantee's conviction of, or pleading nolo contendere or guilty to, a
felony; or
(7) any other willful material breach by the Grantee of his or her obligations
to the Partnership or an Affiliate that, if curable, is not cured within 20 days
of receipt of written notice from the Partnership or an Affiliate.
4. UNIT CERTIFICATES. A certificate evidencing the Restricted Units may be
issued in your name, pursuant to which you shall have all voting rights.
The certificate shall bear the following legend:
The Units evidenced by this certificate have been issued
pursuant to an agreement made as of ________, 200__, a copy of which is
attached hereto and incorporated herein, between Legacy Reserves LP
(the "Partnership") and the registered holder of the Units, and are
subject to forfeiture
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to the Partnership under certain circumstances described in such
agreement. The sale, assignment, pledge or other transfer of the Units
evidenced by this certificate is prohibited under the terms and
conditions of such agreement, and such Units may not be sold,
assigned, pledged or otherwise transferred except as provided in such
agreement.
The Partnership may cause the certificate to be delivered upon issuance to the
Secretary of the Company as a depository for safekeeping until the forfeiture
occurs or the restrictions lapse pursuant to the terms of this Agreement. Upon
request of the Partnership, you shall deliver to the Partnership a unit power,
endorsed in blank, relating to the Restricted Units then subject to the
restrictions. Upon the lapse of the restrictions without forfeiture, the
Partnership shall cause a certificate or certificates to be issued without
legend in your name in exchange for the certificate evidencing the Restricted
Units.
5. LIMITATIONS UPON TRANSFER. All rights under this Agreement shall belong to
you alone and may not be transferred, assigned, pledged, or hypothecated by
you in any way (whether by operation of law or otherwise), other than by
will or the laws of descent and distribution and shall not be subject to
execution, attachment, or similar process. Upon any attempt by you to
transfer, assign, pledge, hypothecate, or otherwise dispose of such rights
contrary to the provisions in this Agreement or the Plan, or upon the levy
of any attachment or similar process upon such rights, such rights shall
immediately become null and void.
6. RESTRICTIONS. By accepting this grant, you agree that any Units which you
may acquire upon vesting of this award will not be sold or otherwise
disposed of in any manner which would constitute a violation of any
applicable federal or state securities laws. You also agree that (i) the
certificates representing the Units acquired under this award may bear such
legend or legends as the Committee deems appropriate in order to assure
compliance with applicable securities laws, (ii) the Company may refuse to
register the transfer of the Units acquired under this award on the
transfer records of the Partnership if such proposed transfer would in the
opinion of counsel satisfactory to the Partnership constitute a violation
of any applicable securities law, and (iii) the Partnership may give
related instructions to its transfer agent, if any, to stop registration of
the transfer of the Units to be acquired under this award.
7. WITHHOLDING OF TAX. To the extent that the grant or vesting of a Restricted
Unit results in the receipt of compensation by you with respect to which
the Partnership or an Affiliate has a tax withholding obligation pursuant
to applicable law, unless other arrangements have been made by you that are
acceptable to the Partnership or such Affiliate, you shall deliver to the
Partnership or the Affiliate such amount of money as the Partnership or the
Affiliate may require to meet its withholding obligations under such
applicable law. No issuance of an unrestricted Unit shall be made pursuant
to this Agreement until you have paid or made arrangements approved by the
Partnership or the Affiliate to satisfy in full the applicable tax
withholding requirements of the Partnership or Affiliate with respect to
such event.
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8. CODE SECTION 83(b) ELECTION. You shall be permitted to make an election
under Section 83(b) of the Code, to include an amount in income in respect
of the Award of Restricted Units in accordance with the requirements of
Section 83(b) of the Code.
9. BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of any successor or successors of the Partnership and upon any
person lawfully claiming under you.
10. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement of the
parties with regard to the subject matter hereof, and contains all the
covenants, promises, representations, warranties and agreements between the
parties with respect to the Restricted Units granted hereby. Without
limiting the scope of the preceding sentence, all prior understandings and
agreements, if any, among the parties hereto relating to the subject matter
hereof are hereby null and void and of no further force and effect. Any
modification of this Agreement shall be effective only if it is in writing
and signed by both you and an authorized officer of the Company.
11. GOVERNING LAW. This grant shall be governed by, and construed in accordance
with, the laws of the State of [
TEXAS], without regard to conflicts of laws
principles thereof.
LEGACY RESERVES LP GRANTEE
By: Legacy Reserves GP, LLC, its General Partner
By: By:
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Name: Name:
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Title: Title:
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