LINN ENERGY, LLC LONG-TERM INCENTIVE PLAN RESTRICTED UNIT GRANT AGREEMENT
EXHIBIT 10.2
This Restricted Unit grant agreement (“Grant Agreement”) is made and entered into
effective as of April 13, 2006, (the “Grant Date”) by and between LINN ENERGY, LLC, a
Delaware limited liability company (together with its subsidiaries, the “Company”), and
Xxxxxx X. Xxxxx (“Participant”).
WHEREAS, the Company considers it to be in its best interest that Participant
be given a proprietary interest in the Company and an added incentive to advance the
interests of the Company; and
WHEREAS, the Company desires to accomplish such objectives by granting
Participant Restricted Units pursuant to the Linn Energy, LLC Long-Term Incentive
Plan, which is attached hereto as Appendix A and incorporated by reference herein
(the “Plan”);
NOW, THEREFORE, in consideration of the mutual agreements hereinafter set
forth, the parties hereby agree as follows:
1. Grant of Restricted Units. The Company hereby grants to Participant Twenty Thousand
(20,000) Restricted Units, under and subject to the terms and conditions of this Grant Agreement
and the Plan.
2. Vesting and Restricted Period. Subject to Sections 4, 5, 6 and 7, the Restricted Period
shall lapse and the applicable number of Restricted Units shall be deemed vested in full and no
longer subject to forfeiture in three separate tiers, assuming the performance goals applicable to
each tier are achieved and the Participant remains employed with the Company as of the vesting
date. Tiers A and B shall each consist of 6,666 Units. Tier C shall consist of 6,667 Units. Each
Tier shall vest as of the later of (i) the date the Performance Goal for each Tier set forth in the
second column of the following schedule is achieved, and (ii) the date of the required Service
Period for each Tier set forth in the third column of the following schedule:
| Tier | Performance Goal | Service Period | ||
| Company annualized | ||||
| distribution rate is at least: | ||||
| Tier A | $1.92 per unit | March 31, 2007 | ||
| Tier B | $2.30 per unit | March 31, 2008 | ||
| Tier C | $2.76 per unit | March 31, 2009 | ||
In the event the Performance Goal applicable to a particular Tier is not met on or before December
31, 2009, that Tier shall be forfeited as of December 31, 2009.
3. General Restrictions. The Restricted Units shall not be assignable or transferable except
as expressly provided in the Plan or by the Committee in its sole discretion.
4. Termination by Company other than for Cause. Upon the termination by the Company of
Participant’s service relationship with the Company other than for Cause (as defined herein and as
determined by the Committee in its sole discretion), the Restricted Period established hereunder
shall automatically and immediately lapse, and the applicable Units shall be deemed vested, to the
extent that the applicable Performance Goals set forth in the schedule under Section 2 have been
met with respect to each Tier on or before the date of termination. “Cause” shall mean (a)
the Participant’s conviction of, or plea of nolo contendere to, any felony or to any crime or
offense causing substantial harm to any of Linn Energy or its direct or indirect subsidiaries
(whether or not for personal gain) or involving acts of theft, fraud, embezzlement, moral turpitude
or similar conduct; (b) the Participant’s repeated intoxication by alcohol or drugs during the
performance of his duties; (c) malfeasance in the conduct of Participant’s duties, including, but
not limited to, (i) willful and intentional misuse or diversion of any of the funds of Linn Energy
or its direct or indirect subsidiaries, (ii) embezzlement or (iii) fraudulent or willful and
material misrepresentations or concealments on any written reports submitted to any of Linn Energy
or its direct or indirect subsidiaries; (d) the Participant’s material failure to perform the
duties of the Participant’s employment consistent with Participant’s position or material failure
to follow or comply with the reasonable and lawful written directives of the Board of the Company;
(e) a material breach of this Agreement; or (vi) a material breach by the Participant of written
policies of the Company concerning employee discrimination or harassment.
5. Termination by Participant with Good Reason. Upon the termination by Participant of
Participant’s service relationship with the Company with Good Reason (as defined herein), the
Restricted Period established hereunder shall automatically and immediately lapse, and the
applicable Units shall be deemed vested, to the extent that the applicable Performance Goals set
forth in the schedule under Section 2 have been met with respect to each Tier on or before the date
of termination. “Good Reason” shall mean any of the following to which Participant does
not consent in writing: (a) a reduction in Participant’s base salary, or (b) a relocation within
two (2) years from April 3, 2006, of the Employee’s primary place of employment to a location more
than 50 miles from Pittsburgh, Pennsylvania.
6. Death or Disability. In the case of termination of Participant’s service relationship with
the Company due to death or Disability (as defined herein), the Restricted Period established
hereunder shall automatically and immediately lapse, and the applicable Units shall be deemed
vested, to the extent that the applicable Performance Goals set forth in the schedule under Section
2 have been met with respect to each Tier on or before the date of termination.
“Disability” shall mean the determination by a physician selected by the Company that
Participant has been unable to perform substantially Participant’s usual and customary duties for a
period of at least one hundred twenty (120) consecutive days or a non-consecutive period of one
hundred eighty (180) days during any twelve-month period as a result of incapacity due to mental or
physical illness or disease.
7. Change of Control. Notwithstanding anything in the Plan to the contrary, in the event of
a Change of Control (as defined in the employment agreement between the Participant
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and the Company, dated April 3, 2006 and as amended), the Restricted Period established
hereunder shall automatically and immediately lapse, and the applicable Units shall be deemed
vested, to the extent that the applicable Performance Goals set forth in the schedule under Section
2 have been met with respect to each Tier on or before the date of the Change of Control.
8. Termination by Company for Cause or by Participant without Good Reason. In the case of (a)
termination by the Company of Participant’s service relationship with the Company for Cause or (b)
termination by Participant of Participant’s service relationship with the Company without Good
Reason and other than due to Participant’s death or disability, all outstanding Restricted Units
granted hereby shall be automatically and immediately forfeited, and Participant hereby agrees to
undertake any action and execute any document, instrument or papers reasonably requested by the
Company to effect such forfeiture of Restricted Units resulting from any such termination.
9. Plan Controlling Document. Unless otherwise defined herein, capitalized terms shall have
the meaning given such terms in the Plan. Participant agrees that the Plan is the controlling
instrument and that to the extent there is any conflict between the terms of the Plan and this
Grant Agreement, the Plan shall control and be the governing document.
10. Limited Liability Company Agreement. Participant agrees to be bound by all applicable
provisions of the Company’s limited liability company agreement, as it may be amended from time to
time.
11. Taxes. The Company and any affiliate thereof are authorized to withhold from any payment
relating to the Restricted Units granted hereby, or any payroll or other payment to Participant,
amounts of withholding and other taxes due or potentially payable in connection with the Restricted
Units granted hereby, and to take such other action as the Committee may deem advisable to enable
the Company, any affiliate, and Participant to satisfy obligations for the payment of withholding
taxes and other tax obligations relating to the Restricted Units granted hereby. This authority
shall include authority to withhold or receive Units or other property and to make cash payments in
respect thereof in satisfaction of Participant’s tax obligations, either on a mandatory or elective
basis in the discretion of the Committee.
12. Issuance of Units. The Company shall not be obligated to issue any Restricted Units at
any time when the Restricted Units have not been registered under the Securities Act of 1933, as
amended, and such other state and federal laws, rules or regulations as the Company or the
Committee deems applicable and, in the opinion of legal counsel for the Company, there is no
exemption from the registration requirements of such laws, rules or regulations available for the
issuance of such Restricted Units.
13. Notices. Any notices given in connection with this Grant Agreement shall, if issued to
Participant, be delivered to Participant’s current address on file with the Company, or if issued
to the Company, be delivered to the Company’s principal offices.
14. Execution of Receipts and Releases. Any payment of cash or any issuance or transfer of
Restricted Units or other property to Participant, or to Participant’s legal representatives,
heirs, legatees or distributees, in accordance with the provisions hereof, shall, to
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the extent thereof, be in full satisfaction of all claims of such persons hereunder. The
Company may require Participant or Participant’s legal representatives, heirs, legatees or
distributees, as a condition precedent to such payment or issuance, to execute a release and
receipt therefor in such form as it shall determine.
15. Successors. This Grant Agreement shall be binding upon Participant, Participant’s legal
representatives, heirs, legatees and distributees, and upon the Company, its successors and
assigns.
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IN WITNESS WHEREOF, the parties hereto have executed this Grant Agreement to be effective as
of the day and year first above written.
| LINN ENERGY, LLC |
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| By: | /s/ Xxxxxxx X. Xxxx | |||
| Name: | Xxxxxxx X. Xxxx | |||
| Title: | President and CEO | |||
| PARTICIPANT: |
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| /s/ Xxxxxx X. Xxxxx | ||||
| Xxxxxx X. Xxxxx | ||||
