LGCYP Legacy Reserves LP - 8% Series A Fixed-To-Floating Rate Cumulative Redeemable Perpetual Preferred Units (delisted)

On September 20, 2018, Legacy Reserves LP, a Delaware limited partnership (the “Partnership”), completed the previously announced transactions contemplated by the Amended and Restated Agreement and Plan of Merger (the “Merger Agreement”), dated July 9, 2018, by and among the Partnership, Legacy Reserves Inc., a Delaware corporation (the “Company”), Legacy Reserves GP, LLC, a Delaware limited liability company and general partner of the Partnership (the “General Partner”), and Legacy Reserves Merger Sub LLC, a Delaware limited liability company and a wholly owned subsidiary of the Company (“Merger Sub”), and the GP Purchase Agreement (the “GP Purchase Agreement”), dated March 23, 2018, by and among the Partnership, the General Partner, the Company, Lion GP Interests, LLC (“Lion LLC”), Moriah Properties Limited, and Brothers Production Properties, Ltd., Brothers Production Company, Inc., Brothers Operating Company, Inc., J&W McGraw Properties, Ltd., DAB Resources, Ltd. and H2K Holdings, Ltd. (such transactions referred to herein collectively as the “Corporate Reorganization”). Pursuant to the terms and conditions set forth in the Merger Agreement and the GP Purchase Agreement, upon the consummation of the Corporate Reorganization:

Merger Agreement

Pursuant to the Merger Agreement, at the effective time of the Merger (the “Effective Time”), (i) each outstanding unit representing a limited partner interest in the Partnership (a “Unit” and collectively, the “Units”) was converted into the right to receive one share of Common Stock, (ii) each outstanding 8% Series A Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Unit representing a limited partner interest in the Partnership (a “Series A Preferred Unit” and collectively, the “Series A Preferred Units”) was converted into the right to receive 2.92033118 shares of Common Stock, with any rights to accumulated and unpaid distributions discharged, and (iii) each outstanding 8% Series B Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Unit representing a limited partner interests in the Partnership (a “Series B Preferred Unit” and collectively, the “Series B Preferred Units” and, together with the Units and Series A Preferred Units, the “Partnership Equity”) were converted into the right to receive 2.90650421 shares of Common Stock, with any rights to accumulated and unpaid distributions discharged (such amounts, collectively, the “Merger Consideration”).

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All IDUs issued and outstanding prior to the Corporate Reorganization were automatically cancelled and ceased to exist. Following the Corporate Reorganization, the General Partner’s general partner interest remains outstanding in the Partnership, unaffected by the Merger. No fractional shares of Common Stock were issued in the Merger; holders of Series A Preferred Units and Series B Preferred Units will receive cash in lieu of such fractional shares.

Pursuant to the Merger Agreement and the approval of the board of directors of the General Partner (the “GP Board”), for each named executive officer of the General Partner and for all of the employees of the Partnership, each award previously granted pursuant to the Amended and Restated Legacy Reserves LP Long-Term Incentive Plan, as amended (the “Partnership LTIP”), held by such person that is outstanding and unvested immediately prior to the Effective Time will, automatically and without any action on the part of the holder, fully vest or become exercisable in full, as the case may be, and shall be settled in accordance with each award’s applicable award agreement. Certain of these award agreements relating to outstanding phantom units under the Partnership LTIP granted to certain of the General Partner’s executive officers, including each of the named executive officers, provide that such phantom units be settled in cash (the “Cash Settled Awards”). Pursuant to the Amendments to Grant of Phantom Units Agreement approved by each of the Compensation Committee of the GP Board, the GP Board and the board of directors of the Company (the “Board of Directors”) and entered into by certain of the General Partner’s executive officers that have Cash Settled Awards, including each of the named executive officers (the “Amendments”), each of such executive officers have the option to elect to reinvest any portion of the cash received pursuant to the Cash Settled Awards in Common Stock (a “Stock Purchase Election”). Additionally, pursuant to the Amendments, each of the General Partner’s executive officers that are to receive Cash Settled Awards have agreed to make a Stock Purchase Election as necessary such that the aggregate amount of cash paid in settlement of any incentive equity-based awards being settled in connection with the Corporate Reorganization will not exceed $30 million. Lastly, all amounts previously credited to the named executive officers as distribution equivalent rights under awards granted pursuant to the Partnership LTIP shall continue to remain so credited and payable on the same payment date set forth in the respective award agreements, subject to the same time-based vesting schedule previously included in the award, but without application of any performance factor.

Pursuant to the Merger Agreement, the Company issued approximately 106.1 million shares of Common Stock to the holders of Partnership Equity as the Merger Consideration as described above.

The summary of the Merger Agreement in this Current Report on Form 8-K does not purport to be complete and is qualified by reference to the full text of the Merger Agreement, which was filed as Exhibit 2.1 to the Partnership’s Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on July 12, 2018 and incorporated herein by reference.

GP Purchase Agreement

Pursuant to the GP Purchase Agreement, the Company acquired all of the GP Interests from Lion LLC, making the Company the sole member of the General Partner. The aggregate consideration paid by the Company in exchange for the GP Interests was $3.0 million, plus certain expenses and legal fees.

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The foregoing description of the GP Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the GP Purchase Agreement, which was filed as Exhibit 2.2 to the Partnership’s Current Report on Form 8-K filed with the SEC on March 26, 2018 and incorporated herein by reference.

At the Effective Time, each outstanding Partnership restricted unit was converted into the right to receive the Merger Consideration for each Partnership common unit subject to such awards.

The information set forth in Item 2.01 is incorporated herein by reference.

The approval of each Proposal required the affirmative vote of the majority of votes cast (abstentions did not count as votes cast for purposes of approval of each of the Proposals). The following are the final voting results on the Proposals considered and voted upon at the Special Meeting, each of which is more fully described in the Proxy Statement:

The Merger Proposal was approved by the following vote:

The Board Classification Proposal was defeated by the following vote:

The LTIP Proposal was approved by the following vote:

The Compensation Proposal was approved by the following vote:

The Adjournment Proposal was approved by the following vote: