Exhibit 10.6

 

Form of

Amplify Energy Corp.

Management Incentive Plan

Restricted Stock Unit Award Agreement

This Restricted Stock Unit Award Agreement (this “Agreement”) is made by and
between Amplify Energy Corp., a Delaware corporation (the “Company”), and
[                   ] (the “Participant”), effective as of [                   ]
(the “Date of Grant”), pursuant to the Amplify Energy Corp. Management Incentive
Plan (as the same may be amended from time to time, the “Plan”), and the
Employment Agreement, by and between the Company and the Participant, dated
[                   ] (the “Employment Agreement”).

RECITALS

WHEREAS, the Company has adopted the Plan, which is incorporated herein by
reference and made a part of this Agreement, and capitalized terms not otherwise
defined in this Agreement shall have the meanings ascribed to those terms in the
Plan; and

WHEREAS, the Committee has authorized and approved the grant of an Award to the
Participant that will provide the Participant the opportunity to receive shares
of Common Stock upon the settlement of stock units on the terms and conditions
set forth in the Plan and this Agreement (“Restricted Stock Units”).

NOW THEREFORE, in consideration of the premises and mutual covenants set forth
in this Agreement, the parties hereto agree as follows:

1.Grant of Restricted Stock Unit Award. The Company hereby grants to the
Participant [          ] Restricted Stock Units, on the terms and conditions set
forth in the Plan and this Agreement, subject to adjustment as set forth in the
Plan. Each Restricted Stock Unit represents the promise of the Company to
deliver shares of Common Stock (initially one share of Common Stock per
Restricted Stock Unit) to the Participant pursuant to the terms and conditions
of the Plan and this Agreement.

2.Vesting of Restricted Stock Units. Subject to the terms and conditions set
forth in the Plan and this Agreement, the Restricted Stock Units shall vest as
follows:

a.TSUs.  Fifty percent (50%) of the Restricted Stock Units shall be subject to
time-vesting conditions (“TSUs”) and shall vest in accordance with the following
schedule, subject to the Participant’s continued Service through each applicable
vesting date, except as otherwise provided in this Section 2:

Vesting DateCumulative Vested Percentage

First Anniversary of the Date of Grant33⅓%

Second Anniversary of the Date of Grant66⅔%

Third Anniversary of the Date of Grant100%

b.PSUs.  Fifty percent (50%) of the Restricted Stock Units shall be subject to
both time-vesting and performance-vesting conditions (“PSUs”). The PSUs shall

 

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performance vest based on the Company’s achievement of the 15-Day VWAP targets
set forth below on or before the third anniversary of the Date of Grant (such
period, the “Performance Period”), subject to the Participant’s continued
Service through each applicable vesting date.  For purposes of this Agreement,
“15-Day VWAP” means the volume-weighted average price per share of Common Stock
over fifteen (15) consecutive trading days.  In the event the Company makes a
significant return of capital to its shareholders during the Performance Period,
the Company and the Participant will work together in good faith to effectuate
any necessary adjustments to the 15-Day VWAP Targets.   

15-Day VWAP TargetCumulative Performance-Vested Percentage

At or above $12.5033⅓%

At or above $15.0066⅔%

At or above $17.50100%

Any PSU that does not performance vest prior to the conclusion of the
Performance Period shall be forfeited immediately and without consideration at
the conclusion of the Performance Period.

Any PSUs that performance vest during the Performance Period (the
“Performance-Vested PSUs”) will be subject to time-based vesting, such that 50%
of the Performance-Vested PSUs will time vest on the applicable
performance-vesting date, and an additional 25% of the Performance-Vested PSUs
will time vest on each of the first and second anniversaries of the date on
which such Performance-Vested PSUs performance-vested, subject to the
Participant’s continued Service through each applicable vesting date.

c.Involuntary Termination without Cause or Voluntary Termination for Good
Reason. If the Participant’s Service is terminated by the Company without Cause
or by the Participant for Good Reason (not due to [his][her] death or
Disability), (i) all TSUs shall fully vest, and all PSUs shall fully time vest,
upon such termination, and (ii) if such termination occurs after the second
anniversary of the Effective Date (as defined in the Employment Agreement) and
prior to the end of the Performance Period, then with respect to any PSUs that
have not performance-vested as of such termination, such PSUs shall performance
vest to the extent that the price per share of Common Stock as of such
termination equals or exceeds the 15-Day VWAP targets set forth above (in each
case, reduced by $0.25), in each case, subject to the Participant’s execution
and non-revocation of the Release (as defined in the Employment Agreement) no
later than the 60th day following the Participant’s termination of Service.  Any
PSUs that have not performance-vested in accordance with Section 2.b hereof as
of such termination of Service will be forfeited immediately and without
consideration.  For all purposes of this Agreement, the terms “Cause” and “Good
Reason” shall have the definitions given to them in the Employment Agreement as
of the termination date.

d.Change of Control. If a Change of Control is consummated during the
Participant’s Service, all TSUs shall fully vest, and all PSUs shall fully time
vest, upon the consummation of such Change of Control.  Further, if a Change of
Control occurs during the Performance Period, then with respect to any PSUs that
have not performance vested

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as of the Change of Control, such PSUs shall performance vest to the extent that
the price per share of Common Stock achieved in the Change of Control equals or
exceeds the 15-Day VWAP targets set forth above.  Any PSUs that have not
performance-vested in accordance with Section 2.b and this Section 2.d as of
such Change of Control will be forfeited immediately and without consideration.

e.Forfeiture. Any Restricted Stock Units that are not fully vested will be
forfeited immediately and without consideration upon a termination of the
Participant’s Service for any or no reason, except as set forth in Section 2.c.

3.Dividend Equivalent Rights. Each Restricted Stock Unit is granted together
with dividend equivalent rights, which dividend equivalent rights will be (a)
accumulated and deemed reinvested in additional Restricted Stock Units and (b)
subject to the same vesting and forfeiture provisions as the Restricted Stock
Units granted pursuant to Section 2. Any payments made pursuant to dividend
equivalent rights will be paid in either cash or in shares of Common Stock, or
any combination thereof, as elected by the Participant (to the extent
permissible under applicable law), effective as of the date of settlement under
Section 4 below.

4.Payment.

a.Settlement.  Promptly following the vesting date of the Restricted Stock Units
(but no later than 60 days following each such vesting date), the Company shall
deliver to the Participant (or the Participant’s legal representatives of the
estate of the Participant) a number of shares of Common Stock equal to the
aggregate number of Restricted Stock Units that vested as of such date.  No
fractional shares of Common Stock shall be delivered; the Company shall pay cash
in respect of any fractional shares of Common Stock. The Company may deliver
such shares either through book entry accounts held by, or in the name of, the
Participant or cause to be issued a certificate or certificates representing the
number of shares of Common Stock to be issued in respect of the Restricted Stock
Units, registered in the name of the Participant.  If the 60-day period
following the vesting date of the Restricted Stock Units extends across two
calendar years, settlement shall always occur in the second calendar year.

b.Withholding Requirements. The Company shall have the power and the right to
deduct or withhold automatically from any shares of Common Stock or cash
deliverable under this Agreement, or to require the Participant or the
Participant’s representative to remit to the Company, the amount necessary to
satisfy federal, state and local taxes required by law or regulation to be
withheld with respect to any taxable event arising as a result of this Agreement
(collectively, “Withheld Taxes”). If the Restricted Stock Units are settled in
shares of Common Stock, all or a portion of the applicable Withheld Taxes may,
except as otherwise determined by the Committee at such time, be paid by
reducing the number of shares of Common Stock otherwise deliverable upon such
settlement by the number of shares of Common Stock having an aggregate Fair
Market Value equal to the applicable Withheld Taxes (or a portion thereof).

5.Adjustment of Shares of Common Stock. In the event of any change with respect
to the outstanding shares of Common Stock contemplated by Section 4.4 of the
Plan, the number

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of Restricted Stock Units and the performance vesting conditions set forth in
Section 2.b may be adjusted in accordance with Section 4.4 of the Plan.

6.Restrictive Covenants. In consideration of the Restricted Stock Units granted
pursuant to this Agreement, the Participant shall comply with the restrictions
relating to confidentiality, non-solicitation of employees, consultants and
customers, and non-competition set out in the Employment Agreement.

7.Miscellaneous Provisions.

a.Securities Laws Requirements. No shares of Common Stock will be issued or
transferred pursuant to this Agreement unless and until all then applicable
requirements imposed by federal and state securities and other laws, rules and
regulations and by any regulatory agencies having jurisdiction, and by any
exchanges upon which the shares of Common Stock may be listed, have been fully
met. As a condition precedent to the issuance of shares of Common Stock pursuant
to this Agreement, the Company may require the Participant to take any
reasonable action to meet those requirements. The Committee may impose such
conditions on any shares of Common Stock issuable pursuant to this Agreement as
it may deem advisable, including, without limitation, restrictions under the
Securities Act, under the requirements of any exchange upon which shares of the
same class are then listed and under any blue sky or other securities laws
applicable to those shares of Common Stock.

b.Rights of a Shareholder of the Company. Prior to settlement of the Restricted
Stock Units in shares of Common Stock, neither the Participant nor the
Participant’s representative will have any rights as a shareholder of the
Company with respect to any shares of Common Stock underlying the Restricted
Stock Units.

c.Transfer Restrictions. The shares of Common Stock delivered hereunder will be
subject to such stop transfer orders and other restrictions as the Committee may
deem advisable under the Plan or the rules, regulations and other requirements
of the Securities and Exchange Commission, any stock exchange upon which such
shares are listed, any applicable federal or state laws and any agreement with,
or policy of, the Company or the Committee to which the Participant is a party
or subject, and the Committee may cause orders or designations to be placed upon
the books and records of the Company’s transfer agent to make appropriate
reference to such restrictions.

d.No Right to Continued Service. Nothing in this Agreement or the Plan confers
upon the Participant any right to continue in Service for any period of specific
duration or interferes with or otherwise restricts in any way the rights of the
Company (or any Subsidiary employing or retaining the Participant) or of the
Participant, which rights are hereby expressly reserved by each, to terminate
[his][her] Service at any time and for any reason, with or without Cause or Good
Reason.

e.No Transfer of Restricted Stock Units. The Participant shall not sell, assign,
transfer, exchange, pledge, encumber, gift, devise, hypothecate or otherwise
dispose of (collectively, “Transfer”) any Restricted Stock Units granted
hereunder.  Any purported

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Transfer of Restricted Stock Units in breach of this Agreement shall be void and
ineffective and shall not operate to Transfer any interest or title in the
purported transferee.

f.Notification. Any notification required by the terms of this Agreement will be
given by the Participant (i) in writing addressed to the Company at its
principal executive office and will be deemed effective upon actual receipt when
delivered by personal delivery or by registered or certified mail, with postage
and fees prepaid, or (ii) by electronic transmission to the Company’s e-mail
address of the Company’s General Counsel and will be deemed effective upon
actual receipt. Any notification required by the terms of this Agreement will be
given by the Company (x) in writing addressed to the address that the
Participant most recently provided to the Company and will be deemed effective
upon personal delivery or within three (3) days of deposit with the United
States Postal Service, by registered or certified mail, with postage and fees
prepaid, or (y) by facsimile or electronic transmission to the Participant’s
primary work fax number or e-mail address (as applicable), and will be deemed
effective upon confirmation of receipt by the sender of such transmission.

g.Entire Agreement. This Agreement and the Plan constitute the entire agreement
between the parties hereto with regard to the subject matter of this Agreement.
This Agreement and the Plan supersede any other agreements, representations or
understandings (whether oral or written and whether express or implied) that
relate to the subject matter of this Agreement.

h.Waiver. No waiver of any breach or condition of this Agreement will be deemed
to be a waiver of any other or subsequent breach or condition whether of like or
different nature.

i.Survival of Certain Provisions. Wherever appropriate to the intention of the
parties hereto, the respective rights and obligations of the parties hereunder
shall survive any termination or expiration of this Agreement or the
Participant’s termination of Service.

j.Successors and Assigns. The provisions of this Agreement will inure to the
benefit of, and be binding upon, the Company and its successors and assigns and
upon the Participant, the Participant’s executor, personal representative(s),
distributees, administrator, permitted transferees, permitted assignees,
beneficiaries, and legatee(s), as applicable, whether or not any such person has
become a party to this Agreement or agreed in writing to be joined herein and be
bound by the terms hereof.

k.Severability. The provisions of this Agreement are severable, and if any one
or more provisions are determined to be illegal or otherwise unenforceable, in
whole or in part, then such provision shall be reformed to create a valid and
enforceable provision to the maximum extent permitted by law; provided, however,
if such provision cannot be reformed, it shall be deemed ineffective and deleted
herefrom, and the remaining provisions will nevertheless be binding and
enforceable. This Agreement should be construed by limiting and reducing it only
to the minimum extent necessary to be enforceable under then applicable law.

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l.Amendment.  Except as otherwise provided in the Plan, this Agreement will not
be amended unless the amendment is agreed to in writing by both the Participant
and the Company.

m.Code Section 409A Compliance. It is the intention of the parties that this
Agreement is written and administered, and will be interpreted and construed, in
a manner such that no amount under this Agreement becomes subject to (a) gross
income inclusion under Code Section 409A or (b) interest and additional tax
under Code Section 409A (collectively, “Section 409A Penalties”), including,
where appropriate, the construction of defined terms to have meanings that would
not cause imposition of the Section 409A Penalties.  Accordingly, the
Participant consents to any amendment of this Agreement which the Company may
reasonably make in furtherance of such intention, and the Company shall promptly
provide, or make available to, the Participant a copy of such
amendment.  Further, to the extent that any terms of the Agreement are
ambiguous, such terms shall be interpreted as necessary to comply with, or an
exemption under, Code Section 409A when applicable.  Under no circumstances will
the Company have any liability for any violation of Code Section 409A.

n.Choice of Law; Jurisdiction. This Agreement and all claims, causes of action
or proceedings (whether in contract, in tort, at law or otherwise) that may be
based upon, arise out of or relate to this Agreement will be governed by the
internal laws of the State of Delaware, excluding 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.  Jurisdiction and
venue of any action or proceeding relating to this Agreement shall be
exclusively in the federal and state courts of competent jurisdiction located in
Houston, Harris County, Texas, and the parties hereby waive any objection to
such venue and jurisdiction including, without limitation, that it is
inconvenient.

o.Signature in Counterparts. This Agreement may be signed in counterparts,
manually or electronically, each of which will be an original, with the same
effect as if the signatures to each were upon the same instrument.

p.Electronic Delivery. The Company may, in its sole discretion, decide to
deliver any documents related to any Awards granted under the Plan by electronic
means or to request the Participant’s consent to participate in the Plan by
electronic means. The Participant hereby consents to receive such documents by
electronic delivery and to agree to participate in the Plan through an on-line
or electronic system established and maintained by the Company or another third
party designated by the Company, if applicable. Such on-line or electronic
system shall satisfy notification requirements discussed in Section 7.f.

q.Acceptance. The Participant hereby acknowledges receipt of a copy of the Plan,
this Agreement and the Restrictive Covenant Agreement. The Participant has read
and understands the terms and provisions of the Plan, this Agreement and the
Restrictive Covenant Agreement, and accepts the Restricted Stock Units subject
to all of the terms and conditions of the Plan and this Agreement. In the event
of a conflict between any term or provision contained in this Agreement and a
term or provision of the Plan, the applicable term and provision of the Plan
will govern and prevail.

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r.Interpretive Matters. In the interpretation of this Agreement, except where
the context otherwise requires:

(i)The headings used in this Agreement headings are for reference purposes only
and will not affect in any way the meaning or interpretation of this Agreement.

(ii)The terms “including” and “include” do not denote or imply any limitation;

(iii)The conjunction “or” has the inclusive meaning “and/or”;

(iv)The singular includes the plural, and vice versa, and each gender includes
each of the others;

(v)Reference to any statute, rule, or regulation includes any amendment thereto
or any statute, rule, or regulation enacted or promulgated in replacement
thereof; and

(vi)The words “herein”, “hereof”, “hereunder” and other compounds of the word
“here” shall refer to the entire Agreement and not to any particular provision.

[Signature page follows.]

 

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IN WITNESS WHEREOF, the Company and the Participant have executed this
Restricted Stock Unit Award Agreement as of the dates set forth below.

PARTICIPANT

 

AMPLIFY ENERGY CORP.

 

 

 

 

 

 

 

Name:

 

 

 

By:

 

Date:

 

 

Title:

 

 

 

Date:

 

 

Signature Page to Restricted Stock Unit Award Agreement