Exhibit 10.4

 

KimbelL Royalty GP, LLC

2017 LONG-TERM INCENTIVE PLAN

 

RESTRICTED UNIT AGREEMENT

This Restricted Unit Agreement (“Agreement”) between Kimbell Royalty GP, LLC
(the “Company”) and _______ (the “Participant”), regarding an award (“Award”) of
__________ Restricted Units (as defined in the Kimbell Royalty GP, LLC 2017
Long-Term Incentive Plan (the “Plan”)) granted to the Participant on January 29,
2018 (the “Grant Date”), such number of Restricted Units subject to adjustment
as provided in the Plan, and further subject to the following terms and
conditions:

1. Relationship to Plan.  This Award is subject to all of the terms, conditions
and provisions of the Plan and administrative interpretations thereunder, if
any, which have been adopted by the Committee thereunder and are in effect on
the date hereof.  Except as otherwise provided herein, capitalized terms shall
have the same meanings ascribed to them under the Plan. 

2. Vesting Schedule. Except as otherwise provided herein or the Plan, the
Restricted Units shall vest in one-third installments on each of April 2, 2019,
April 2, 2020, and April 2, 2021, subject to the Participant’s Continuous
Service (as defined below) through each applicable vesting date.  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. Notwithstanding the foregoing, if the
Participant remains in Continuous Service as of the date of a Change in Control,
any unvested Restricted Units will be vested as of the date of such Change in
Control.  For this purpose, “Change in Control” means, and shall be deemed to
have occurred upon the occurrence of one or more of the following events:
(i) any “person” or “group” within the meaning of those terms as used in
Sections 13(d) and 14(d)(2) of the Exchange Act, other than Kimbell GP Holdings,
LLC or their respective Affiliates, shall become the beneficial owner, by way of
merger, consolidation, recapitalization, reorganization or otherwise, of 50% or
more of the combined voting power of the equity interests in the Company or the
Partnership; (ii) the limited partners of the Partnership approve, in one or a
series of transactions, a plan of complete liquidation of the Partnership;
(iii) the sale or other disposition by either the Company or the Partnership of
all or substantially all of its assets in one or more transactions to any Person
other than the Company or an Affiliate of the Company; or (iv) a transaction
resulting in a Person other than the Company or an Affiliate of the Company
being the general partner of the Partnership.

3. Forfeiture of Award.  If the Participant’s Continuous Service terminates for
any reason all unvested Restricted Units shall be immediately forfeited as of
the date of the Participant’s termination; provided, however, the Restricted
Units shall become fully vested with respect to all of the Restricted Units
subject to this Award if the Participant’s Continuous Service is terminated due
to death or Disability. For this purpose, “Continuous Service” means
Participant’s uninterrupted status as an Employee, Consultant or Director of the
Company or any Affiliate of the Company or the Partnership.  For the avoidance
of doubt, a transfer of service between Affiliates of the Company or the
Partnership, or a transition between status as an Employee, Consultant or
Director, shall not be deemed as termination of Continuous Service.

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4. Delivery of Units; Rights as Unitholder.  The Restricted Units will be
evidenced, at the sole option and in the sole discretion of the Committee,
either (i) in book-entry form in the Participant’s name in the Unit register of
the Partnership maintained by the Partnership’s transfer agent or (ii) a unit
certificate issued in the Participant’s name.  The Participant shall have voting
rights and shall be entitled to receive all distributions made by the
Partnership as if such Restricted Units were Units free and clear of any
restrictions.  As soon as administratively feasible following the vesting of the
Restricted Units, the restrictions on transfer of any vested Units shall lapse
and the Units, if not previously forfeited pursuant to Section 3, will become
freely transferable under this Agreement and the Plan, subject only to such
further limitations on transfer, if any, as may exist under applicable law or
any other agreement binding upon Participant. 

5. Code Section 83(b) Election.  The Participant 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.  If the Participant makes an election under Section
83(b) of the Code, the Participant hereby agrees to deliver a copy of such
election to the Company promptly after filing such election with the Internal
Revenue Service.

6. Assignment of Award.  The Participant’s rights under this Agreement and the
Plan are personal and no assignment or transfer of the Participant’s rights
under and interest in this Award may be made by the Participant other than by
will, by beneficiary designation, by the laws of descent and distribution or by
a qualified domestic relations order.  Except to the extent expressly permitted
by the preceding sentence, any purported sale, pledge, assignment, transfer,
attachment or encumbrance of the Restricted Units or any interest or right
therein shall be null, void and unenforceable against the Partnership, the
Company, and their respective Affiliates.

7. Withholding.  No issuance of vested Units shall occur or be made pursuant to
this Agreement until the Participant has paid or made arrangements approved by
the Committee to satisfy all the Participant’s federal, state and other
governmental withholding tax obligations.  For purposes of this Section, unless
the Participant makes other arrangements or is subsequently notified to the
contrary, the Partnership or applicable Affiliate will satisfy the Participant’s
obligations with respect to any tax withholding by withholding or repurchasing a
number of vested Units having a then-Fair Market Value equal to such tax
withholding obligations. With the consent of the Committee, the Participant may
elect to have the Company withhold or purchase, as applicable, from Restricted
Units that would otherwise vest or with respect to which an election under
Section 83(b) of the Code has been made a number of Restricted Units with a Fair
Market Value equal to the product of the maximum federal marginal rate that
could be applicable to the Participant and the Fair Market Value of the
Restricted Units otherwise vesting or delivered, as applicable. 

8. No Guarantee of Continuous Service.  No provision of this Agreement shall
confer any right upon the Participant to Continuous Service.

9. Governing Law.  This Agreement shall be governed by, construed, and enforced
in accordance with the laws of the State of Delaware.

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10. Amendment.  This Agreement cannot be modified, altered or amended, except by
an agreement, in writing, signed by both the Company and the Participant.

11. Clawback.  Notwithstanding any provision in this Agreement to the contrary,
to the extent required by (a) applicable law, including, without limitation, the
requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act of
2010, any Securities and Exchange Commission rule or any applicable securities
exchange listing standards and/or (b) any policy that may be adopted or amended
by the Board from time to time, all Restricted Units granted hereunder shall be
subject to forfeiture, repurchase, recoupment and/or cancellation to the extent
necessary to comply with such law(s) and/or policy.

12. Counterparts.  The Agreement may be executed in one or more counterparts,
each of which shall be deemed an original and all of which together shall
constitute one instrument. Delivery of an executed counterpart of the Agreement
by facsimile or pdf attachment to electronic mail shall be effective as delivery
of a manually executed counterpart of the Agreement.

13. Severability.  If a court of competent jurisdiction determines that any
provision of this Agreement is invalid or unenforceable, then the invalidity or
unenforceability of such provision shall not affect the validity or
enforceability of any other provision of this Agreement, and all other
provisions shall remain in full force and effect.

14. Entire Agreement.  The Plan and this Agreement represent the entire
agreement between the Participant and the Company with respect to the subject
matter hereof, and supersede and are in full substitution for any and all prior
agreements or understandings, whether oral or written, relating to the subject
matter hereof.

 

[signatures on next page]

 

 

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KIMBELL ROYALTY GP, LLC

Date: 1/30/18

By:

 

Name:

 

Title:

 

The Participant hereby accepts the foregoing Agreement, subject to the terms and
provisions of the Plan and administrative interpretations thereof referred to
above.

 

 

 

    

PARTICIPANT:

 

 

 

 

Date:

 

 

 

 

 

 

Participant Name & Signature

 

Signature Page to Restricted Unit Agreement

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