Attached files
Exhibit
99.2
Legacy
Reserves LP
Long-Term
Incentive Plan
Grant
of Phantom Units Under Subjective Component of Long-Term Equity Incentive
Compensation
Grantee
Grant
Date: February 18, 2010
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1.Grant
of Phantom Units. Legacy Reserves LP
(the “Partnership”)
hereby grants to you [Number] Phantom Units under the Amended and Restated
Legacy Reserves LP Long-Term Incentive Plan (the “Plan”)
on the terms and conditions set forth herein and in the Plan, which is
attached hereto as Appendix
A and is incorporated herein by reference as a part of this
Agreement. A Phantom Unit is a notional Unit of the Partnership
that is subject to the forfeiture and non-transferability provisions set
forth below in this Agreement. Each Phantom Unit granted to you
also includes a tandem Distribution Equivalent Right (“DER”),
which provides that when the Partnership makes a cash distribution with
respect to a Unit, an amount of cash with respect to each of your Phantom
Units equal to the amount of the quarterly distribution paid on such Unit
will be accrued and on each vesting date, such accrued amounts will be
payable to you with respect to the number of your Phantom Units actually
vested. The terms of this Agreement are set forth
below. 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.
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2.Regular
Vesting. Except as otherwise
provided in Section 3 below, the Phantom Units granted pursuant to this
Agreement under the subjective or service-based component of equity-based
incentive compensation shall vest over a three-year period in accordance
with the following
schedule:
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Vesting
Date
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Vested
Units
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Cumulative
Vested
Units
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Your
“employment with the Partnership” (as defined in Section 3), or any of its
Affiliates, as the case may be (the “Employer”), must be
continuous from the Grant Date through the applicable vesting date in order for
the Phantom Units to become vested under the provisions of this
Agreement.
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3.Events
Occurring Prior to Regular Vesting.
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(a)
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Death or
Disability. If your “employment with the Employer” (as
defined below in this Section 3) terminates as a result of your death
or you become disabled (within the meaning of Section 409A
of the Internal Revenue Code of 1986, as amended and in effect from time
to time (the “Code”)), the
Phantom Units automatically will become fully
vested.
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(b)
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Termination
by the Employer other than for Cause. If your
“employment with the Employer” (as defined below in this Section 3) is
terminated by the Employer for any reason other than “Cause” (as defined
below in this Section 3), as determined by the Employer, the Phantom Units
then held by you automatically will become fully
vested.
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(c)
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Other
Terminations. Except as provided in Section 2 hereof, if
your “employment with the Employer” (as defined below in this Section 3)
should terminate for any reason other than as provided in Sections 3(a)
and (b) above, all unvested Phantom Units then held by you automatically
shall be forfeited and cancelled without payment upon such
termination. Upon vesting or forfeiture of a Phantom Unit, the
tandem DER, along with any associated accrued distribution of cash with
respect to the tandem DER, shall automatically be cancelled without
payment.
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(d)
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Change of
Control. All outstanding Phantom Units held by you
automatically shall become fully vested upon a Change of
Control.
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For
purposes of this Section 3, “employment with the
Employer” or “employment with the
Partnership” shall include being an employee of or a director (or
equivalent) or consultant to the Partnership or an Affiliate.
For
purposes of this Section 3, “Cause” means
"Cause" as defined in the Grantee's employment agreement.
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4.Payment
Upon Vesting of Phantom Units and Payment of Amounts Due Under
DERs.
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(a)
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Subject
to the tax withholding requirements of Section 5 below, not later than
seventy-four (74) days following the date on which a Phantom Unit vests
hereunder, (i) the Partnership shall mail or otherwise deliver to you, in
a single lump sum in cash, an amount of cash in respect of each Phantom
Unit equal to the Fair Market Value of a Unit (determined as of the
vesting date of the Phantom Unit), or (ii) if determined by the
Committee in its sole discretion prior to the payment date, the
Partnership shall mail or otherwise deliver to you, in book-entry form, a
Unit in respect of each Phantom Unit then vested, or (iii) the
Partnership shall mail or deliver to you some combination of cash and
Units, as described in clauses (i) and (ii), as may be determined by the
Committee in its sole discretion prior to the payment
date. Subject to any tax withholding requirements of Section 5
below, not later than seventy-four (74) days following any date on which a
Phantom Unit vests hereunder, the Partnership shall mail or otherwise
deliver to you, in a single lump sum in cash in respect of each DER
granted in tandem with a Phantom Unit, an amount of cash equal to all
accrued cash distributions on such
Unit.
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(b)
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Notwithstanding
the preceding provisions of Section 4(a), to the extent that (i) the
limitations (set forth in Code Section 409A and regulations or other
regulatory guidance issued thereunder) on payments to specified employees,
as defined in Code Section 409A and regulations or other regulatory
guidance issued thereunder, apply to you and (ii) at any time prescribed
under Code Section 409A and regulations or other regulatory guidance
issued thereunder, you are a key employee, as defined in Code Section
416(i) without regard to paragraph 5 thereof, except to the extent
permitted under Code Section 409A and regulations or other regulatory
guidance issued thereunder, no distribution or payment that is subject to
Code Section 409A shall be made under this Agreement on account of your
separation from service, as defined in Code Section 409A and the
regulations or other regulatory guidance issued thereunder, with the
Employer (at any time when you are deemed under Code Section 409A and
regulations or other regulatory guidance issued thereunder to be a
specified employee, as defined in Code Section 409A and regulations or
other regulatory guidance issued thereunder, and any equity interest of
the Employer is publicly traded on an established securities market or
otherwise) before the date that is the first day of the month that occurs
six (6) months after the date of your separation from service (or, if
earlier, your date of death or any other date permitted under Code Section
409A and regulations or other regulatory guidance issued
thereunder).
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5.Withholding
of Tax. Any amount payable
pursuant to Section 4 shall be subject to collection by the Partnership or
an Affiliate, as applicable, of all applicable federal, state and local
income and employment taxes required to be withheld in respect of such
amount.
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6.No
Rights as a Unitholder. You shall not be, or
have any of the rights or privileges of, a unitholder of the Partnership
with respect to any Phantom
Unit.
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7.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.
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8.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.
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9.Rights
of Grantee. Any benefits payable under Section 4 of this
Agreement shall be provided from the general assets of the Partnership or
an Affiliate, as applicable. The Grantee’s rights hereunder
shall not rise above those of a general creditor of the Partnership or an
Affiliate, as applicable.
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10.Entire
Agreement and Amendment. 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 Phantom
Units and DERs, and any associated accrued distributions of cash with
respect to the DERs, 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.
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11.Notices. Any notices given in
connection with this Agreement shall, if issued to Grantee, be delivered
to Grantee’s current address on file with the Partnership, or if issued to
the Partnership, be delivered to the Partnership’s principal
offices.
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12.Execution
of Receipts and Releases. Any payment of cash
or property to Grantee, or to Grantee’s legal representatives, heirs,
legatees or distributees, in accordance with the provisions hereof, shall,
to the extent thereof, be in full satisfaction of all claims of such
persons hereunder. The Partnership may require Grantee or
Grantee’s legal representatives, heirs, legatees or distributees, as a
condition precedent to such payment or issuance, to execute a release and
receipt therefor in such form as it shall
determine.
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13.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.
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| Legacy Reserves LP | Grantee | |||
| By: Legacy Reserves GP, LLC, its General Partner | ||||
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Name
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Name
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Title
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Title
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APPENDIX
A
AMENDED
AND RESTATED
LEGACY
RESERVES LP
LONG-TERM
INCENTIVE PLAN