Exhibit 10.1
LINN ENERGY, LLC
LONG-TERM INCENTIVE PLAN
FORM OF
PHANTOM UNIT GRANT AGREEMENT
FOR INDEPENDENT DIRECTORS
     This Phantom Unit grant agreement (“Grant Agreement”) is made and entered
into effective as of                      (the “Grant Date”) by and between LINN
ENERGY, LLC, a Delaware limited liability company (together with its
subsidiaries, the “Company”), and                      (“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 Phantom 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 Phantom Units. The Company hereby grants to Participant
_________Phantom Units, under and subject to the terms and conditions of this
Grant Agreement and the Plan. This grant of Phantom Units also includes a tandem
grant of DERs with respect to each Phantom Unit.
          2. Vesting and Restricted Period. Except as otherwise provided herein,
the Restricted Period with respect to all of the Phantom Units granted under
this Grant Agreement shall be one year from the Grant Date. Subject to the
provisions of Paragraph 4, upon the termination of the Restricted Period with
respect to a Phantom Unit, provided that the Participant continues to serve on
the Company’s Board on such date or has stood for re-election and not been
re-elected by such date, such Phantom Unit shall vest in full but shall remain
subject to the deferral provisions of Paragraph 6 below. Notwithstanding the
foregoing, in the event that, at any time after the Grant Date and regardless of
whether the Restricted Period has terminated, the Participant’s service on the
Board is terminated for Cause (as defined herein and as determined by the
Committee, in its sole discretion or, if the Participant is a member of the
Committee, the members of the Committee other than the Participant, in their
sole discretion), the Participant shall forfeit to the Company all Phantom Units
granted pursuant to this Grant Agreement without payment of any consideration
therefor by the Company and Participant hereby agrees to undertake any action
and execute any document, instrument or papers reasonably requested by

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the Company to effect such forfeiture. “Cause” shall mean (a) Participant’s
conviction of, or plea of guilty or nolo contendere to, any felony, any crime or
offense causing substantial harm to the Company (whether or not for personal
gain) or involving acts of theft, fraud, embezzlement, moral turpitude or
similar conduct; (b) Participant’s repeated intoxication by alcohol or drugs
during the performance of his or her duties; (c) malfeasance or other willful
misconduct in the conduct of Participant’s duties, including, but not limited
to, (i) willful and intentional misuse or diversion of any Company funds,
(ii) embezzlement or (iii) fraudulent or willful and material misrepresentations
or concealments on any written reports submitted to the Company;
(d) Participant’s material failure to perform the duties of Participant on the
Board or any Committees thereof; or (e) a material breach by Participant of the
written policies of the Company concerning employee discrimination or
harassment. Notwithstanding any provisions of the Plan to the contrary, the
Restricted Period shall not terminate upon a Change of Control and shall
continue to apply for the remainder of its stated duration as provided above.
     3. General Restrictions. The Phantom Units shall not be assignable or
transferable except as expressly provided in the Plan or by the Committee in its
sole discretion. Notwithstanding any permitted assignment of the Phantom Units,
such assignment shall not result in a change to the deferral arrangement
regarding the Phantom Units pursuant to Paragraph 6.
     4. Death or Disability. In the case of termination of Participant’s service
on the Board due to death or Vesting Disability (as defined herein), all
Restricted Periods established hereunder shall automatically and immediately
terminate and all outstanding Phantom Units granted hereby shall automatically
and immediately vest in full. “Vesting 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.
     5. Termination by Participant. In the case of termination by Participant of
Participant’s service on the Board other than due to Participant’s death or
Vesting Disability, all outstanding Phantom Units granted hereby which have not
vested pursuant to any provision of this Grant Agreement 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 Phantom Units resulting from any such
termination.
     6. Deferral of Phantom Units. With respect to any Phantom Units that have
become vested pursuant to the preceding provisions of this Grant Agreement,
notwithstanding any provision of the Plan to the contrary, the Participant and
the Company hereby agree that the payment in respect of such Phantom Units
(other than DER payments, as described below), which shall take the form of the
issuance by the Company of unrestricted Units to the Participant, shall be
deferred until the earliest of the Participant’s death, Separation From Service
(as defined herein), Disability (as defined herein) or Unforeseeable Emergency
(as defined

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herein). For purposes of this Grant Agreement, “Separation From Service” and
“Unforeseeable Emergency” shall have the respective meanings assigned to such
terms under Section 409A of the Code and the regulations or other applicable
authoritative guidance issued thereunder. Further, for purposes of this Grant
Agreement, “Disability” means the Participant is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment that can be expected to result in death or can be expected to
last for a continuous period of not less than 12 months. Upon occurrence of the
earliest of such events, provided the Phantom Units have vested pursuant to the
preceding provisions of this Grant Agreement, the Company will issue one
unrestricted Unit in respect of each Phantom Unit granted hereunder to the
Participant (or, in the event of his death, his beneficiaries or estate, as
applicable). Issuance of unrestricted Units in the event of the Participant’s
Unforeseeable Emergency shall be made at the written request of the Participant,
provided that the Committee (or, if the Participant is a member of the
Committee, the members of the Committee other than the Participant) determines
that the Participant has provided satisfactory information which establishes the
existence of such Unforeseeable Emergency, as determined by the Committee (or
such members of the Committee, as applicable), in its (or their, as applicable)
sole discretion.
     7. Payment of DERs. As soon as administratively practicable following the
payment of any cash distribution upon Units of the Company, with respect to each
Phantom Unit granted hereunder, the Company will pay the Participant an amount
in cash equal to the amount of such cash distribution made by the Company with
respect to one Unit; provided that any such payment in respect of the
Participant’s DERs shall be made no later than the end of the calendar year in
which the applicable distribution is paid to the Unitholders of the Company or,
if later, by the 1st day of the third calendar month following the date of such
distribution, or by such other date as shall be required under the final
regulations under Section 409A of the Code or other authoritative guidance
issued thereunder.
     8. 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
unintended conflict between the terms of the Plan and this Grant Agreement, the
Plan shall control and be the governing document.
     9. Limited Liability Company Agreement. Upon any issuance to Participant of
Units hereunder, 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.
     10. Taxes. The Company and any affiliate thereof are authorized to withhold
from any payment relating to the Phantom 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 Phantom 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 Phantom 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. In the event that any provision

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of this Grant Agreement would cause any compensation to the Participant to
become subject to the tax under Section 409A of the Code, as determined in the
reasonable judgment of the Committee, the Participant and the Company shall
amend this Grant Agreement in a mutually agreeable manner intended to avoid the
application of such tax, to the extent possible and without additional economic
effect to the Company.
          11. Issuance of Units. The Company shall not be obligated to issue any
Phantom Units at any time when the Phantom 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 Phantom Units.
          12. 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.
          13. Execution of Receipts and Releases. Any payment of cash or any
issuance or transfer of Phantom Units or other property to Participant, or to
Participant’s legal representatives, heirs, legatees or distributees, in
accordance with the provisions hereof, shall, to 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.
          14. 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    
 
           
 
  By:        
 
           
 
  Name:   Michael C. Linn    
 
  Title:   Chairman, President and CEO    
 
                PARTICIPANT:      
 
                     

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