Attached files
| file | filename |
|---|---|
| EX-10.6 - Vanguard Natural Resources, Inc. | exhibit10-6.htm |
| EX-10.4 - Vanguard Natural Resources, Inc. | exhibit10-4.htm |
| EX-10.1 - Vanguard Natural Resources, Inc. | exhibit10-1.htm |
| EX-10.3 - Vanguard Natural Resources, Inc. | exhibit10-3.htm |
| EX-10.2 - Vanguard Natural Resources, Inc. | exhibit10-2.htm |
| EX-10.5 - Vanguard Natural Resources, Inc. | exhibit10-5.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of The Securities Exchange Act of
1934
Date of
Report (Date of earliest event reported): February 8, 2010
Vanguard
Natural Resources, LLC
(Exact
name of registrant as specified in its charter)
|
DELAWARE
|
001-33756
|
61-1521161
|
||
|
(State
or other jurisdiction of
incorporation)
|
(Commission
File Number)
|
(IRS
Employer Identification
No.)
|
7700
San Felipe, Suite 485
Houston,
Texas 77063
(Address
of principal executive offices) (Zip Code)
Registrant’s
telephone number, including area code (832) 327-2255
(Former
name or former address, if changed since last report.)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
Item
5.02 Departure
of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
Employment
Agreements. Vanguard Natural Resources, LLC (the “Company”) is
the parent of VNR Holdings, LLC, a Delaware limited liability company
(“VNRH”). The Company and VNRH initially entered into employment
agreements with the following named executive officers, effective as
follows: Scott W. Smith, originally effective October 9, 2006, and
Richard A. Robert, originally effective January 1, 2007. The Company
and VNRH later entered into amended and restated employment agreements with
Messrs. Smith and Robert, effective April 18, 2007 (the “Executive Employment
Agreements”). The Company has previously described the material terms
of both of the Executive Employment Agreements in the Registration Statement
under the Securities Act of 1933 filed with the Securities and Exchange
Commission on April 25, 2007.
On
February 8, 2010, the Company and VNRH entered into second amended and restated
Executive Employment Agreements (the “Amended Agreements”) with each of Messrs.
Smith and Robert, respectively, in order to set forth in writing the new terms
of the named executive officers’ employment relationship with
VNRH. The new term of the Amended Agreements will continue until
January 1, 2013, with subsequent one year renewals in the event that neither the
Company, VNRH nor the executives have given notice to the other parties that the
agreements should not be extended. The annual base salaries for the executives
were increased from $225,000 to $295,000 for Mr. Smith, and from $225,000 to
$275,000 in the case of Mr. Robert. The Amended Agreements also
include a new annual bonus structure for the executives. The annual
bonus will be composed of two company performance elements, absolute target
distribution growth and relative unit performance to peer group, as well as a
third discretionary element to be determined by the Company’s board of
directors. Each of the three components will comprise an equal
one-third of each annual bonus. The annual bonus does not require a
minimum payout, although the maximum payout may not exceed two times the
respective executive’s annual base salary.
In the
event of the Company’s change of control, the Amended Agreements will provide a
change in control payment to each of the executives in the amount of two times
their then-current base salary and annual bonus, and the value of any restricted
unit awards that became vested in the year immediately prior to the change of
control, although this payment is capped at $2,000,000 despite the value of the
individual components for that year. Any outstanding restricted units
or phantom units held by the executives at the time of the change of control
shall be accelerated and settled according to the terms of the Vanguard Natural
Resources, LLC Long-Term Incentive Plan (the “LTIP”) and any applicable
individual award agreement. A “Change of Control” shall defined for
purposes of the Amended Agreements by utilizing the “Change of Control”
definition contained within the LTIP at the time a change of control
occurs. For reference, the LTIP has been previously described and
filed with the Securities Exchange Commission on the Company’s Current Report on
Form 8-K on October 24, 2007. In the event such a change of control
payment creates an excise tax for either of the executives pursuant to section
4999 of the Internal Revenue Code of 1986, as amended (the “Code”), the
executives will receive a gross-up payment in an amount necessary to cover the
additional excise taxes, though such a gross-up will not apply to any Federal,
state or local taxes that were imposed upon the change of control payment that
originally gave rise to the excise taxes.
The
Amended Agreements contain the same non-competition, non-solicitation and
confidentiality provisions as the executives’ original employment agreements, as
well as continue to require the executives to sign a release in the Company’s
favor prior to receiving any severance payments pursuant to the Amended
Agreements. Severance payments pursuant to the executives’
termination for reasons other than “Cause” also remain consistent with the
original employment agreements.
The
Amended Agreements also provide for equity-based awards in connection with the
entrance into to the Amended Agreements, as described below.
The
foregoing summary description of the Amended Agreements is not intended to be
complete and is qualified in its entirety by the complete text of the Amended
Agreements, which are attached as exhibits hereto.
Grants
of Equity-Based Compensation Awards. Messrs. Smith and Robert
will each receive 15,000 restricted units granted pursuant to the LTIP, as well
as an annual grant of 15,000 phantom units granted pursuant to the
LTIP.
The
restricted unit agreements are subject to a restricted period of three
years. One-third of the aggregate number of the units will vest on
each one-year anniversary of the date of grant so long as the Executive remains
continuously employed with the Company. In the event the executives
are terminated without “Cause,” or the executive resigns for “Good Reason” (each
term of which is defined in the executive’s respective Amended Agreement), or
the executive is terminated due to his death or “Disability” (as such term is
defined in the Amended Agreement), all unvested outstanding restricted units
shall receive accelerated vesting. Where the executive is terminated
for “Cause,” all restricted units, whether vested or unvested, will be
forfeited. Upon the occurrence of a “Change of Control,” (as defined
in the LTIP), all unvested outstanding restricted units shall receive
accelerated vesting.
The
phantom units are also subject to a three year vesting period, although the
vesting is not pro-rata, but a one-time event which shall occur on the three
year anniversary of the date of grant so long as the Executive remains
continuously employed with the Company during such time. The phantom units are
accompanied by dividend equivalent rights, which entitle the executives to
receive the value of any dividends made by the Company on its units generally
with respect to the number of phantom shares that executive received pursuant to
this grant. In the event the executive is terminated for “Cause” (as
such term is defined in the Amended Agreement), all phantom units, whether
vested or unvested, will be forfeited. The phantom units, once
vested, shall be settled upon the earlier to occur of (a) the occurrence of a
“Change of Control,” (as defined in the LTIP), or (b) the executive’s separation
from service (as defined in section 409A of the Code).
Both the
restricted units and the phantom units will be subject to all the terms and
conditions of the LTIP as well as the individual award agreements which govern
the equity-based compensation awards. Neither the restricted units
nor the phantom units are transferable other than by will or the laws of descent
and distribution. The Company shall withhold from the settlement or
payment of the awards, as applicable, any amounts or shares of units necessary
to satisfy the Company’s withholding obligations.
The
foregoing summary description of the restricted unit agreements and the phantom
unit agreements is not intended to be complete and is qualified in its entirety
by the complete text of such agreements, which are attached as exhibits
hereto.
Item
9.01 Financial
Statements and Exhibits
(d) Exhibits
|
Exhibit No.
|
Description
|
|
10.1
|
Second
Amended and Restated Employment Agreement, by and between Vanguard Natural
Resources, LLC, VNR Holdings, LLC. and Scott W. Smith
|
|
10.2
|
Second
Amended and Restated Employment Agreement, by and between Vanguard Natural
Resources, LLC, VNR Holdings, LLC. and Richard A.
Robert
|
|
10.3
|
Restricted
Unit Award Agreement, by and between Vanguard Natural Resources, LLC, VNR
Holdings, LLC. and Scott W. Smith
|
|
10.4
|
Restricted
Unit Award Agreement, by and between Vanguard Natural Resources, LLC, VNR
Holdings, LLC. and Richard A. Robert
|
|
10.5
|
Phantom
Unit Award Agreement, by and between Vanguard Natural Resources, LLC, VNR
Holdings, LLC. and Scott W. Smith
|
|
10.6
|
Phantom
Unit Award Agreement, by and between Vanguard Natural Resources, LLC, VNR
Holdings, LLC. and Richard A.
Robert
|
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
VANGUARD
NATURAL RESOURCES, LLC.
Date: February
8,
2010 By: /s/ Scott W.
Smith
Scott W.
Smith
President
and Chief Executive Officer
EXHIBIT
INDEX
|
Exhibit No.
|
Description
|
|
10.1
|
Second
Amended and Restated Employment Agreement, by and between Vanguard Natural
Resources, LLC, VNR Holdings, LLC. and Scott W. Smith
|
|
10.2
|
Second
Amended and Restated Employment Agreement, by and between Vanguard Natural
Resources, LLC, VNR Holdings, LLC. and Richard A.
Robert
|
|
10.3
|
Restricted
Unit Award Agreement, by and between Vanguard Natural Resources, LLC, VNR
Holdings, LLC. and Scott W. Smith
|
|
10.4
|
Restricted
Unit Award Agreement, by and between Vanguard Natural Resources, LLC, VNR
Holdings, LLC. and Richard A. Robert
|
|
10.5
|
Phantom
Unit Award Agreement, by and between Vanguard Natural Resources, LLC, VNR
Holdings, LLC. and Scott W. Smith
|
|
10.6
|
Phantom
Unit Award Agreement, by and between Vanguard Natural Resources, LLC, VNR
Holdings, LLC. and Richard A.
Robert
|