SEC Form 4
FORM 4 UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940
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Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).
1. Name and Address of Reporting Person*
SMITH SCOTT W

(Last) (First) (Middle)
5847 SAN FELIPE
SUITE 3000

(Street)
HOUSTON TX US 77057

(City) (State) (Zip)
2. Issuer Name and Ticker or Trading Symbol
Vanguard Natural Resources, LLC [ VNR ]
5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)
Director 10% Owner
X Officer (give title below) Other (specify below)
Executive VP and CFO
3. Date of Earliest Transaction (Month/Day/Year)
01/01/2011
4. If Amendment, Date of Original Filed (Month/Day/Year)
6. Individual or Joint/Group Filing (Check Applicable Line)
X Form filed by One Reporting Person
Form filed by More than One Reporting Person
Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3) 2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code (Instr. 8) 4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4)
Code V Amount (A) or (D) Price
Common Units representing LLC interests 05/17/2011 P 1,000 A $27.5 45,980 D
Common Units representing LLC interests 05/18/2011 A 25,000 A $0 70,980 D
Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3) 2. Conversion or Exercise Price of Derivative Security 3. Transaction Date (Month/Day/Year) 3A. Deemed Execution Date, if any (Month/Day/Year) 4. Transaction Code (Instr. 8) 5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) 6. Date Exercisable and Expiration Date (Month/Day/Year) 7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4) 8. Price of Derivative Security (Instr. 5) 9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4) 10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 11. Nature of Indirect Beneficial Ownership (Instr. 4)
Code V (A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares
Phantom Units (1) 01/01/2011 A (2) 15,000 (2) 01/01/2014 (3) Common Units 15,000 $0 30,000 D
Explanation of Responses:
1. Each phantom unit is the equivalent in value to a common unit and gives the holder the right to receive a cash payment equal to the excess, if any, of (a) the market value of a common unit on the applicable determination date, over (b) the market value of a common unit on January 1, 2011. The issuer's common units at January 1, 2011 had a market value of $29.65.
2. The phantom units were granted pursuant to the execution of a Second Amended and Restated Employment Agreement on February 8, 2010 and subject to a Phantom Unit Award Agreement. Each phantom unit is the equivalent in value to a common unit but is subject to a three year vesting period from the effective date of the employment agreement which is January 1, 2010. The vesting is not pro-rata, but a one-time event which shall occur on the three year anniversary or January 1, 2014 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).
3. 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).
/s/ Scott W. Smith 05/18/2011
** Signature of Reporting Person Date
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* If the form is filed by more than one reporting person, see Instruction 4 (b)(v).
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