Exhibit 10.2

 

LRE GP, LLC
LONG-TERM INCENTIVE PLAN

 

FORM OF RESTRICTED UNIT AWARD AGREEMENT

 

This Restricted Unit Award Agreement (this “Agreement”) is made and entered into
by and between LRE GP, LLC, a Delaware limited liability company (the
“Company”), and                                            (the “Participant”).
This Agreement is entered into as of the        day of
                          , 20     (the “Date of Grant”). Capitalized terms used
in this Agreement but not otherwise defined herein shall have the meanings
ascribed to such terms in the Plan (as defined below), unless the context
requires otherwise.

 

W I T N E S S E T H:

 

WHEREAS, the Company adopted the LRE GP, LLC LONG-TERM INCENTIVE PLAN (the
“Plan”) on                       , to attract, retain and motivate employees,
officers, directors and consultants; and

 

WHEREAS, the Board of Directors of the Company (the “Board”) has authorized the
grant to employees, officers and directors of restricted units of LRR ENERGY,
L.P., a Delaware limited partnership (the “Partnership”), as part of their
compensation for services performed for the Company, the Partnership, or any
other entity which is an affiliate (within the meaning of such term under the
Exchange Act and the rules promulgated thereunder) of the foregoing entities
(collectively, the “Partnership Entities”).

 

NOW, THEREFORE, in consideration of the Participant’s agreement to provide or to
continue providing services to the Partnership Entities, the Participant and the
Company agree as follows:

 

SECTION 1. Grant.

 

The Company hereby grants to the Participant as of the Date of Grant an award of
                   Units, subject to the terms and conditions set forth in the
Plan, which is incorporated herein by reference, and in this Agreement,
including, without limitation, those restrictions described in Section 2 (the
“Restricted Units”).

 

SECTION 2. Restricted Units.

 

The Restricted Units are restricted in that they may be forfeited to the Company
and in that they may not, except as otherwise provided in Section 5, be
transferred or otherwise disposed of by the Participant until such restrictions
are removed or expire as described in Section 4 of this Agreement. The Company
shall issue in the Participant’s name the Restricted Units and shall retain the
Restricted Units until the restrictions on such Restricted Units expire or until
the Restricted Units are forfeited as described in Section 4 of this Agreement.
The Participant agrees that the Company will hold the Restricted Units pursuant
to the terms of this Agreement until such time as the Restricted Units are
either delivered to the Participant or forfeited pursuant to this Agreement.

 

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SECTION 3. Rights of Participant; Unit Distribution Rights.

 

Effective as of the Date of Grant, the Participant shall be treated for all
purposes as a unitholder with respect to all of the Restricted Units granted to
him pursuant to Section 1 (except that the Participant shall not be treated as
the owner of the Units for federal income tax purposes until the Restricted
Units vest (unless the Participant makes an election under section 83(b) of the
Code, in which case the Participant shall be treated as the owner of the Units
for all purposes on the Date of Grant)) and shall, except as provided herein,
have all of the rights and obligations of a unitholder with respect to all such
Restricted Units, including any right to vote with respect to such Restricted
Units and to receive any UDRs thereon if, as, and when declared and paid by the
Partnership. Notwithstanding the preceding provisions of this Section 3, the
Restricted Units shall be subject to the restrictions described herein,
including, without limitation, those described in Section 2.

 

SECTION 4. Forfeiture and Expiration of Restrictions.

 

(a) Vesting Schedule. Subject to the terms and conditions of this Agreement, the
restrictions described in Section 2 shall lapse and the Restricted Units shall
become vested and nonforfeitable (“Vested Units”), provided the Participant has
continuously provided services to the Partnership Entities (including employment
with the Partnership Entities or membership on the Board, as applicable),
without interruption, from the Date of Grant through each applicable vesting
date (each, a “Vesting Date”), in accordance with the following schedule:

 

Vesting
Date                                                                        
Portion Vested

 

 

 

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.

 

(b) Termination of Service or Change of Control.

 

(i) Termination For Any Reason. If, at any time prior to the final Vesting Date,
the Participant’s employment with the Partnership Entities or membership on the
Board, as applicable, is terminated for any reason other than the Participant’s
death or disability, then all Restricted Units granted pursuant to this
Agreement that have not yet vested as of the date of the Participant’s
termination shall become null and void as of the date of such termination, shall
be forfeited to the Company and the Participant shall cease to have any rights
with respect thereto; provided, however, that the portion, if any, of the
Restricted Units for which forfeiture restrictions have lapsed as of the
Participant’s date of termination shall survive.

 

(ii) Termination due to Death or Disability. If, at any time prior to the final
Vesting Date, the Participant’s employment with the Partnership Entities or
membership on the Board, as applicable, is terminated by reason of the
Participant’s death or disability, then all Restricted Units granted pursuant to
this Agreement that remain

 

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unvested as of the date of the Participant’s termination shall immediately
become fully vested and nonforfeitable as of the date of such termination.

 

(iii) Change of Control. In the event of a Change of Control prior to the final
Vesting Date, except as otherwise provided in the Plan, all restrictions
described in Section 2 shall lapse and all Restricted Units granted pursuant to
this Agreement shall become immediately vested and nonforfeitable.

 

SECTION 5. Limitations on Transfer.

 

The Participant agrees that he shall not dispose of (meaning, without
limitation, sell, transfer, pledge, exchange, hypothecate or otherwise dispose
of) any Restricted Units hereby acquired prior to the applicable Vesting Dates,
including pursuant to a domestic relations order issued by a court of competent
jurisdiction. Any attempted disposition of the Restricted Units in violation of
the preceding sentence shall be null and void.

 

SECTION 6. Nontransferability of Agreement.

 

This Agreement and all rights under this Agreement shall not be transferable by
the Participant other than by will or pursuant to applicable laws of descent and
distribution. Any rights and privileges of the Participant in connection
herewith shall not be transferred, assigned, pledged or hypothecated by the
Participant or by any other person or persons, in any way, whether by operation
of law, or otherwise, and shall not be subject to execution, attachment,
garnishment or similar process. In the event of any such occurrence, the
Restricted Units shall automatically be forfeited.

 

SECTION 7. Adjustment of Restricted Units.

 

The number of Restricted Units granted to the Participant pursuant to this
Agreement shall be adjusted to reflect unit splits or other changes in the
capital structure of the Partnership, all in accordance with the Plan. All
provisions of this Agreement shall be applicable to such new or additional or
different units or securities distributed or issued pursuant to the Plan to the
same extent that such provisions are applicable to the Units with respect to
which they were distributed or issued.

 

SECTION 8. Delivery of Vested Units.

 

Promptly following the expiration of the restrictions on the Restricted Units as
contemplated in Section 4 of this Agreement, and subject to Section 9, the
Company shall cause to be issued and delivered to the Participant or the
Participant’s designee the number of Restricted Units as to which restrictions
have lapsed, free of any restrictive legend relating to the lapsed restrictions,
and shall pay to the Participant any previously unpaid UDRs distributed with
respect to the Restricted Units. Neither the value of the Restricted Units nor
the UDRs shall bear any interest owing to the passage of time.

 

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SECTION 9. Securities Act.

 

The Company shall have the right, but not the obligation, to cause the
Restricted Units to be registered under the appropriate rules and regulations of
the SEC. The Company shall not be required to deliver any Units hereunder if, in
the opinion of counsel for the Company, such delivery would violate the
Securities Act of 1933 or any other applicable federal or state securities laws
or regulations. By accepting this grant, the Participant agrees that any Units
that the Participant may acquire upon vesting of this Award will not be sold or
otherwise disposed of in any manner that would constitute a violation of any
applicable federal or state securities laws.

 

SECTION 10. Copy of Plan.

 

By the execution of this Agreement, the Participant acknowledges receipt of a
copy of the Plan. If any provision of this Agreement is held to be illegal,
invalid or unenforceable under any applicable law, then such provision will be
deemed to be modified to the minimum extent necessary to render it legal, valid
and enforceable; and if such provision cannot be so modified, then this
Agreement will be construed as if not containing the provision held to be
invalid, and the rights and obligations of the parties will be construed and
enforced accordingly.

 

SECTION 11. Notices.

 

Whenever any notice is required or permitted hereunder, such notice must be in
writing and personally delivered or sent by mail. Any such notice required or
permitted to be delivered hereunder shall be deemed to be delivered on the date
on which it is personally delivered or, whether actually received or not, on the
third business day (on which banking institutions in the State of Texas are
open) after it is deposited in the United States mail, certified or registered,
postage prepaid, addressed to the person who is to receive it at the address
which such person has theretofore specified by written notice delivered in
accordance herewith. The Company or the Participant may change at any time and
from time to time by written notice to the other, the address which it or he or
she previously specified for receiving notices. The Company and the Participant
agree that any notices shall be given to the Company or to the Participant at
the following addresses:

 

Company:

LRE GP, LLC

 

Attn: Chief Executive Officer

 

Heritage Plaza

 

1111 Bagby Street, Suite 4600

 

Houston, Texas 77002

 

 

Participant:

At the Participant’s current address as shown in the Company’s records.

 

SECTION 12. General Provisions.

 

(a) Administration. This Agreement shall at all times be subject to the terms
and conditions of the Plan. The Committee shall have sole and complete
discretion with respect to all

 

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matters reserved to it by the Plan and decisions of the Committee with respect
thereto and with respect to this Agreement shall be final and binding upon the
Participant and the Company. In the event of any conflict between the terms and
conditions of this Agreement and the Plan, the provisions of the Plan shall
control.

 

(b) Continuation of Service. This Agreement shall not be construed to confer
upon the Participant any right to continue in the service of the Partnership
Entities.

 

(c) Governing Law. This Agreement shall be interpreted and administered under
the laws of the State of Texas, without giving effect to any conflict of laws
provisions.

 

(d) Amendments. This Agreement may be amended only by a written agreement
executed by the Company and the Participant, except that the Committee may
unilaterally waive any conditions or rights under, amend any terms of, or alter
this Agreement provided no such change (other than pursuant to Section 4(c) or
7(c) of the Plan) materially reduces the rights or benefits of the Participant
with respect to the Restricted Units without his or her consent.

 

(e) Binding Effect. This Agreement shall be binding upon and inure to the
benefit of any successor or successors of the Company and upon any person
lawfully claiming under the Participant.

 

(f) Entire Agreement. This Agreement constitutes the entire agreement of the
parties with regard to this 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.

 

(g) No Liability for Good Faith Determinations. Neither the Partnership
Entities, nor the members of the Committee or the Board, nor any officer of the
Company, shall be liable for any act, omission or determination taken or made in
good faith with respect to this Agreement or the Restricted Units granted
hereunder.

 

(h) No Guarantee of Interests. The Board and the Partnership Entities do not
guarantee the Units from loss or depreciation.

 

(i) Withholding Taxes. To the extent that the grant or vesting of a Restricted
Unit or distribution thereon results in the receipt of compensation by the
Participant with respect to which any Partnership Entity has a tax withholding
obligation pursuant to applicable law, unless other arrangements have been made
by the Participant that are acceptable to such Partnership Entity, the
Participant shall deliver to the Partnership Entity such amount of money as the
Partnership Entity may require to meet its withholding obligations under
applicable law. No issuance of an unrestricted Unit shall be made pursuant to
this Agreement until the Participant has paid or made arrangements approved by
the Partnership Entity to satisfy in full the applicable tax withholding
requirements of the Partnership Entity with respect to such event.

 

(j) Insider Trading Policy. The terms of the Company’s Insider Trading Policy
with respect to Units are incorporated herein by reference.

 

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(k) Section 83(b) Election.  The Participant agrees that, if he or she makes an
election under Section 83(b) of the Code with regard to Restricted Units, the
Participant will notify the Company in writing within two (2) days after making
such election.

 

SECTION 13. Claw-back Policy.

 

In accordance with Section 10 of the Plan, the Restricted Units (including any
distributions paid on the Restricted Units and any proceeds, gain or other
economic benefit actually or constructively received by the Participant in
connection with or related to the Restricted Units or the sale of any Vested
Units) shall be subject to the provisions of any claw-back policy implemented in
the future from time to time by the Company or the Partnership.

 

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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
officer thereunto duly authorized, and the Participant has set his or her hand
as to the date and year first above written.

 

 

 

LRE GP, LLC

 

 

 

 

 

 

By:

 

 

 

 

 

 

 

Name:

 

 

 

 

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

 

Participant

 

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