Exhibit 10.3


 





RESTRICTED STOCK UNIT AWARD AGREEMENT


VANGUARD NATURAL RESOURCES, INC.


2017 Management Incentive Plan


 


This Restricted Stock
Unit Award Agreement (this “Agreement”) is made as of the [●] day of [●], 2018 (the “Grant
Date”) between Vanguard Natural Resources, Inc. (the “Company”), and [●] (“Participant”),
and is made pursuant to the terms of the Vanguard Natural Resources, Inc. 2017 Management Incentive Plan (the “Plan”).
Any capitalized term used herein but not defined shall have the meaning set forth in the Plan.


 


Section 1.Grant
of Restricted Stock Units. The Company hereby grants to Participant, on the terms and conditions hereinafter set forth,
a Restricted Stock Unit Award consisting of [●] restricted stock units (“Restricted Stock Units”), subject
to the terms and conditions set forth in this Agreement and the Plan. Subject to the terms and conditions set forth in this Agreement
and the Plan, each Restricted Stock Unit represents the right to receive one share of Common Stock.


 


Section 2.Vesting
of the Restricted Stock Units.


 


(a)              
Generally.Except as otherwise provided herein, 1/3 of the Restricted Stock Units will vest on each of the first
three anniversaries of October 30, 2017 (each, a “Vesting Date”), in each case subject to Participant’s
continuous Service on the applicable Vesting Date.


 


(b)              
Qualified Liquidity Event.For purposes of this Agreement, the term “Qualified Liquidity Event”
shall have the definition set forth in the Plan, except that 60% shall be deemed to replace 40% in clause (c) of the definition
in the Plan. Upon the occurrence of a Qualified Liquidity Event where a Replacement Award (as defined below) is provided to Participant
at the time of the Qualified Liquidity Event in lieu of the Restricted Stock Units, the Restricted Stock Units that remain outstanding
and unvested as of immediately prior to the Qualified Liquidity Event shall remain outstanding and unvested. Upon the occurrence
of a Qualified Liquidity Event where a Replacement Award is not provided to Participant in lieu of the Restricted Stock Units,
the Restricted Stock Units shall immediately vest, and the date of such Qualified Liquidity Event will be treated as the Vesting
Date for purposes of Section 4. Any Restricted Stock Units that vest or become payable as a result of or in connection with a Qualified
Liquidity Event may be subject to the same terms and conditions applicable to the proceeds realized by the Company or its shareholders,
in connection therewith (including, without limitation, payment timing and any escrows, indemnities, payment contingencies or holdbacks),
as determined by the Committee in its good faith discretion, subject to compliance with Section 409A of the Code (“Section
409A”).


 


(c)              
Replacement Award. A “Replacement Award” is an Award that (i) is the same (i.e., the Award continues)
or is of the same type as the Award that is replaced or adjusted by a Replacement Award (the “Replaced Award”)
(i.e., restricted stock units); (ii) has a value at least equal to the value of the Replaced Award at the time of the Qualified
Liquidity Event; (iii) is subject to the same vesting schedule as the Replaced Award; (iv) relates to equity securities of the
Company or its successor upon the Qualified Liquidity Event, or another entity that is affiliated with the Company or its successor
upon the Qualified Liquidity Event, which securities are subject to an effective registration statement under the Securities Act;
(v) if Participant is subject to U.S. federal income tax under the Code, the tax consequences to Participant under the Code of
the Replacement Award are not less favorable to Participant than the tax consequences of the Replaced Award; and (vi) its other
terms and conditions are not less favorable to Participant than the terms and conditions of the Replaced Award (including, but
not limited to, the provisions that would apply in the event of a subsequent Qualified Liquidity Event). Without limiting the generality
of the foregoing, the Replacement Award may take the form of a continuation of the Replaced Award if the requirements of the preceding
sentence are satisfied. The determination of whether the requirements for a Replacement Award are satisfied will be made by the
Committee, as constituted immediately before the Qualified Liquidity Event, in its good faith discretion (taking into account the
requirements of Treasury Regulation 1.409A-3(i)(5)(iv)(B) and compliance of the Replaced Award or Replacement Award with Section
409A).


 






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Section 3.Termination
of Service.Upon the occurrence of a termination of Participant’s Service, the Restricted Stock Units shall be
treated as set forth below:


 


(a)              
Qualifying Termination Not During a QLE Period. Upon the occurrence of a termination of Participant’s Service
(i) by the Company and its Affiliates without Cause, provided that, for purposes of this Agreement, if Participant is a party to
an employment agreement or offer letter with the Company that includes a definition of Cause, then such definition shall continue
to apply for purposes of this Agreement after any expiration or non-renewal of such employment agreement or offer letter (unless
there is a replacement employment agreement or offer letter), (ii) [[by Participant for Good Reason (as defined in Participant’s
Employment Agreement with the Company, dated [___], 2017)]/ if Participant is a party to an employment agreement or offer letter
with the Company that includes the concept, by Participant for “good reason,” “constructive termination”
or like term (as such term is defined in, and determined pursuant to, Participant’s employment agreement or offer letter
with the Company)]]1, provided that
such concept shall continue to apply for purposes of this Agreement after any expiration or non-renewal of such employment agreement
or offer letter (unless there is a replacement employment agreement or offer letter), or (iii) by reason of Participant’s
death or Disability (each, regardless of whether Participant’s employment agreement with the Company then remains in effect,
a “Qualifying Termination”), in each case not occurring upon or during a QLE Period (as defined below), Participant
will vest in the next tranche of Restricted Stock Units scheduled to vest under Section 2 hereof, and the date of such termination
of Participant’s Service will be treated as the Vesting Date for purposes of Section 4. For the avoidance of doubt, any expiration
or non-renewal of Participant’s employment agreement with the Company will not, in and of itself, constitute a Qualifying
Termination for purposes of this Agreement.


 


(b)              
Qualifying Termination During a QLE Period. If, prior to a Qualified Liquidity Event, Participant incurs a Qualifying
Termination during a QLE Period, then all Restricted Stock Units that remain outstanding and unvested immediately prior to the
Qualifying Termination shall immediately vest and become non-forfeitable, and the date of such Qualifying Termination will be treated
as the Vesting Date for purposes of Section 4. If, simultaneously with or following a Qualified Liquidity Event in connection with
which a Replacement Award was provided to Participant in lieu of the Restricted Stock Units, Participant incurs a Qualifying Termination
during a QLE Period, then the portion of the Replacement Award that remains outstanding and unvested immediately prior to the Qualifying
Termination shall immediately vest and become non-forfeitable, and the date of such Qualifying Termination will be treated as the
Vesting Date for purposes of Section 4.


 





 



1 Insert
as applicable.


 






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(c)              
A “QLE Period” is any time either (i) during the 12-month period following a Qualified Liquidity Event
or (ii) while the Company is party to a definitive transaction agreement that contemplates transactions which would result in a
Qualified Liquidity Event if such transactions were consummated.


 


(d)              
Termination for Cause. Upon the occurrence of a termination of Participant’s Service by the Company or any
of its Affiliates for Cause, all vested and unvested Restricted Stock Units shall be forfeited and cancelled and Participant shall
not be entitled to any compensation or other amount with respect thereto.


 


(e)              
Other Terminations of Service. Upon the occurrence of a termination of Participant’s Service for any reason
other than as provided in Section 3(a) or (b), all unvested Restricted Stock Units shall be forfeited and cancelled, and Participant
shall not be entitled to any compensation or other amount with respect thereto.


 


Section 4.Settlement.
 Any Restricted Stock Units that become vested and non-forfeitable pursuant to Section 2 or Section 3 (“Vested RSUs”)
shall be settled within three days following the applicable Vesting Date. Vested RSUs will be settled by the Company through the
delivery to Participant of a number of shares of Common Stock equal to the number of Vested RSUs (rounded down to the nearest whole
number). No fractional shares of Common Stock shall be issued with respect to any Vested RSUs. Notwithstanding the foregoing, if
Participant is subject to a trading blackout on the settlement date otherwise applicable pursuant to this Section 4, then the Vested
RSUs shall instead be settled as soon as reasonably practicable (and in any event within three days) following the date on which
the trading blackout is no longer applicable (but in no event later than March 15th of the calendar year following the calendar
year in which the earlier of the Vesting Date or Participant’s Qualifying Termination occurred).


 


Section 5.Restrictions
on Transfer. No Restricted Stock Units (nor any interest therein) may be transferred, pledged, assigned, hypothecated or
otherwise disposed of in any way by Participant, except by will or by the laws of descent and distribution. In the event that Participant
becomes legally incapacitated, Participant’s rights with respect to the Restricted Stock Units shall be exercisable by Participant’s
legal guardian or legal representative. The Restricted Stock Units shall not be subject to execution, attachment or similar process.
Any attempted assignment, transfer, pledge, hypothecation or other disposition of the Restricted Stock Units contrary to the provisions
hereof, and the levy of any execution, attachment or similar process upon any Restricted Stock Units, shall be null and void and
without effect. Notwithstanding the foregoing, Participant may, with the prior written consent of the Committee, make transfers
of Restricted Stock Units to immediate family members or to a trust, the sole beneficiaries of which are Participant or immediate
family members, in each case solely for estate planning purposes, in all instances subject to compliance with any applicable spousal
consent requirements and all other applicable laws.


 






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Section 6.Investment
Representation. The Restricted Stock Units are being granted to Participant as of the Grant Date pursuant to an effective
registration statement under the Securities Act relating to the shares of Common Stock underlying the Restricted Stock Units. However,
upon any acquisition of the shares of Common Stock underlying the Restricted Stock Units at a time when there is not in effect
a registration statement under the Securities Act relating to the shares of Common Stock, Participant hereby represents and warrants,
and by virtue of such acquisition shall be deemed to represent and warrant, to the Company that such shares of Common Stock shall
be acquired for investment and not with a view to the distribution thereof, and not with any present intention of distributing
the same, and Participant shall provide the Company with such further representations and warranties as the Company may reasonably
require in order to ensure compliance with applicable federal and state securities, blue sky and other laws.


 


Section 7.
Adjustments. The Restricted Stock Units granted hereunder shall be subject to the provisions of Section 4.2 of the Plan.


 


Section 8.No
Right of Continued Service. Nothing in the Plan or this Agreement shall confer upon Participant any right to continued
Service with the Company or any Affiliate.


 


Section 9.Limitation
of Rights; Dividend Equivalents. Participant shall not have any privileges of a stockholder of the Company with respect
to any Restricted Stock Units, including, without limitation, any right to vote any shares of Common Stock underlying such Restricted
Stock Units or to receive dividends or other distributions or payments of any kind in respect thereof or exercise any other right
of a holder of any such securities, unless and until there is a date of settlement and issuance to Participant of the underlying
shares of Common Stock. Notwithstanding the foregoing, the Restricted Stock Unit Award granted hereunder is hereby granted in tandem
with corresponding dividend equivalents with respect to each share of Common Stock underlying the Restricted Stock Unit Award granted
hereunder (each, a “Dividend Equivalent”), which Dividend Equivalent shall remain outstanding from the Grant
Date until the earlier of the settlement or forfeiture of the Restricted Stock Unit to which it corresponds. Participant shall
be entitled to accrue payments equal to dividends declared, if any, on the Common Stock underlying the Restricted Stock Unit to
which such Dividend Equivalent relates, payable in cash and subject to the vesting of the Restricted Stock Unit to which it relates,
at the time the Common Stock underlying the Restricted Stock Unit is settled and delivered to Participant pursuant to Section 4;
provided, however, if any dividends or distributions are paid in shares of Common Stock, the shares of Common Stock shall be deposited
with the Company, shall be deemed to be part of the Dividend Equivalent, and shall be subject to the same vesting requirements,
restrictions on transferability and forfeitability as the Restricted Stock Units to which they correspond. Dividend Equivalents
shall not entitle Participant to any payments relating to dividends declared after the earlier to occur of the settlement or forfeiture
of the Restricted Stock Units underlying such Dividend Equivalents.


 


Section 10.Construction.
The Restricted Stock Unit Award granted hereunder is granted pursuant to the Plan and is in all respects subject to the terms and
conditions of the Plan. Participant hereby acknowledges that a copy of the Plan has been delivered to Participant and accepts the
Restricted Stock Unit Award hereunder subject to all terms and provisions of the Plan, which are incorporated herein by reference.
In the event of a conflict or ambiguity between any term or provision contained herein and a term or provision of the Plan, the
Plan will govern and prevail. The construction of and decisions under the Plan and this Agreement are vested in the Committee,
whose determinations shall be final, conclusive and binding upon Participant.


 






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Section 11.Notices.
Any notice hereunder by Participant shall be given to the Company in writing and such notice shall be deemed duly given only upon
receipt thereof by the General Counsel of the Company at the Company’s principal executive offices. Any notice hereunder
by the Company shall be given to Participant in writing at the most recent address as Participant may have on file with the Company.


 


Section 12.Governing
Law. This Agreement shall be construed and enforced in accordance with, the laws of the State of Delaware, without giving
effect to the choice of law principles thereof.


 


Section 13.Counterparts.
This Agreement may be executed in counterparts, each of which shall be deemed to be an original but all of which together shall
constitute one and the same instrument.


 


Section 14.Binding
Effect. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs,
executors, administrators, successors and assigns.


 


Section 15.Section
409A. This Agreement is intended to comply with Section 409A or an exemption thereunder and shall be construed and administered
in accordance with Section 409A. Notwithstanding any other provision of the Plan or this Agreement, payments provided under this
Agreement may only be made upon an event and in a manner that complies with Section 409A or an applicable exemption. Any payments
under this Agreement that may be excluded from Section 409A shall be excluded from Section 409A to the maximum extent possible.
The Restricted Stock Units granted hereunder shall be subject to the provisions of Section 13.3 of the Plan. Notwithstanding the
foregoing, the Company makes no representations that the payments and benefits provided under this Agreement comply with Section
409A, and in no event shall the Company or any of its Subsidiaries or Affiliates be liable for all or any portion of any taxes,
penalties, interest or other expenses that may be incurred by Participant on account of non-compliance with Section 409A or otherwise.


 


Section 16.Entire
Agreement. Participant acknowledges and agrees that this Agreement and the Plan constitute the entire agreement between
the parties with respect to the subject matter hereof and thereof, superseding any and all prior agreements whether verbal or otherwise,
between the parties with respect to such subject matter.


 


Section 17.Clawback.
The Restricted Stock Unit Award will be subject to recoupment in accordance with any clawback or recoupment policy of the Company,
including, without limitation, any clawback or recoupment policy that the Company is required to adopt pursuant to the listing
standards of any national securities exchange or association on which the Company’s securities are listed or as is otherwise
required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law.


 


Section 18.
Taxes. The Restricted Stock Units granted under this Agreement shall be subject to withholding in accordance with Section
13.4 of the Plan. If required by law, the Company will withhold or cause to be withheld federal, state and/or local income or any
other applicable taxes in connection with the settlement or vesting of the Restricted Stock Units.


 






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Section 19.
Lock-Up Period. If so requested by the Company or the underwriters in connection with an IPO, Participant shall not
sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any securities of the Company
however or whenever acquired without the prior written consent of the Company or such underwriters, as the case may be, for up
to 180 days from the effective date of the registration statement, plus such additional period as may be required by applicable
law, exchange rules or regulations, and Participant shall execute an agreement reflecting the foregoing as may be requested by
the underwriters or the Company at the time of such offering.


 


[Section 20.
Coordination. Participant hereby acknowledges that this Restricted Stock Unit Award satisfies the Company’s
obligations with respect to the “MIP” pursuant to Section 5(c)(vii) of Participant’s Employment Agreement with
the Company, dated [___], 2017, and that Participant has not claimed, and may no longer claim, Good Reason thereunder as a result
of such Section 5(c)(vii).]2


  


 


(SIGNATURES ON FOLLOWING PAGE)


 





 



2 Insert
as applicable.


 




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IN WITNESS WHEREOF, the parties hereto have
executed this Agreement effective as of the date first above written.


 





	 	VANGUARD NATURAL RESOURCES, INC.	 
	 	 	 	 
	 	 	 	 
	 	By: 	 	 
	 	Name: 	 	 
	 	Title:	 	 
	 	 	 	 
	 	 	 	 
	 	PARTICIPANT	 	 
	 	 	 	 
	 	 	 
	 	Name:	 	 
	 	Date:	 	 


 






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