Exhibit
10.3
 LINN
ENERGY, LLC
 LONG-TERM
INCENTIVE PLAN
 FORM
OF EXECUTIVE OPTION AGREEMENT
  This
option agreement (“Option
Agreement”) is made and entered into effective as of [Grant Date], (the
“Grant
Date”) by and between LINN ENERGY, LLC, a Delaware limited liability
company (together with its subsidiaries, the “Company”),
and [Executive] (“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 affording Participant an option to purchase
Units pursuant to the Linn Energy, LLC Amended and Restated Long-Term Incentive
Plan, as amended, which is attached hereto as Appendix A and incorporated by
reference herein (the “Plan”).
Unless otherwise defined herein, capitalized terms shall have the meaning given
such terns in the Plan.
  NOW, THEREFORE, in
consideration of the mutual agreements hereinafter set forth, the parties hereby
agree as follows:
  1.Grant
of Option.The Company
hereby grants to Participant an option (the “Option”) to purchase
all or any part of an aggregate of [________] Units, under and subject to the
terms and conditions of this Option Agreement and the Plan.
  2.Purchase
Price.The purchase price for each Unit to be purchased
hereunder shall be $ [______] (the “Exercise
Price”).
  3.Vesting
and Option Period.Participant may exercise the Option in
whole or in part.  Except as otherwise provided herein, the Option
shall become vested and exercisable with respect to one third (1/3) of the
covered Units on January 19, [_______], with respect to an additional one third
(1/3) of the covered Units on January 19, [_______] and with respect to the
final one third (1/3) of the covered Units on January 19,
[_______].  Prior to such time, no portion of the Option shall be
exercisable unless its exercisability is accelerated as provided in this Option
Agreement or the Plan.  Except as provided otherwise in this Option
Agreement or the Plan, the Option, to the extent not theretofore exercised,
shall terminate on the expiration of ten (10) years from the date of grant of
the Option; provided, however, that upon the termination Participant’s service
relationship with the Company for any reason other than (a) the death or
Disability (as defined herein) of the Participant or (b) termination of the
Participant’s service relationship with the Company during the period beginning
six months prior to and ending two years following a Change of Control,
Participant may, until the earlier of (i) 90 days from the date of such
termination or (ii) the expiration of the Option in accordance with this Section
3, exercise the Option, to the extent such Option had vested immediately prior
to such termination
   Form of
Executive Option Agreement (revised 2-2009)
  and,
thereafter, the Option shall, to the extent not previously exercised,
automatically terminate and become null and void.
  4.Method
of Exercise and Payment.To the extent that the Option has
become exercisable, the Option may be exercised from time to time by written
notice to General Counsel, in substantially the form attached hereto as Appendix
B or such other form as may be approved from time to time by the Committee,
accompanied by the aggregate Exercise Price for the Units to be purchased and
any required tax withholding amount as may be determined in the discretion of
General Counsel.  The Exercise Price and any withholding shall be
payable in cash, by certified check, by bank check or other means provided for
in the Plan and approved by the Committee, including without limitation by
cashless-broker exercise or the withholding of Units upon the exercise of the
Option.
  5.General
Restrictions.  Subject to the terms of this Option Agreement
and the Plan, the Option may be exercised at any time, and from time to time, in
whole or in part, until the termination thereof as set forth herein, or until
all Units covered by the Option shall have been purchased, whichever first
occurs.  The Option shall not be assignable or transferable except as
expressly provided by the Committee.
  6.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 Option granted hereby shall automatically
and immediately vest in full.  The Company will have “Cause” to
terminate the Participant’s employment by reason of any of the following: (i)
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 the Company or its
direct or indirect subsidiaries (whether or not for personal gain) or involving
acts of theft, fraud, embezzlement, moral turpitude or similar conduct; (ii) the
Participant’s repeated intoxication by alcohol or drugs during the performance
of his duties; (iii) the Participant’s willful and intentional misuse of any of
the funds of the Company or its direct or indirect subsidiaries; (iv)
embezzlement by the Participant; (v) the Participant’s willful and material
misrepresentations or concealments on any written reports submitted to any of
the Company or its direct or indirect subsidiaries; (vi)the Participant’s
willful and intentional material breach of [Employment Agreement, dated _____
among Participant, the Company and Linn Operating, Inc. (the “Employment
Agreement”)]; (vii) the Participant’s willful and material failure to follow or
comply with the reasonable and lawful written directives of the Board of
Directors of the Company (the “Board”); or (viii) conduct constituting a
material breach by the Participant of the Company’s then current (A) Code of
Business Conduct and Ethics, and any other written policy referenced therein,
(B) Code of Ethics for Chief Executive Officer and Senior Financial Officers, if
applicable, provided that in each case the Participant knew or should have known
such conduct to be a breach. “Cause” shall not include actions or inactions
taken or not taken in good faith or at the direction of the Board or of the
Company’s legal counsel.
  7.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 Option granted hereby shall
automatically and immediately vest in full.  “Good Reason” shall
mean any of the following to which Participant will not consent in writing: (i)
a
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  reduction
in the Participant’s then current base salary; (ii) failure by the Company to
pay in full on a current basis (A) any of the compensation or benefits described
in the Employment Agreement that are due and owing, or (B) any amounts that are
due and owing to the Participant under any long-term or short-term or other
incentive compensation plans, agreements or awards; (iii) material breach of any
provision of the Employment Agreement by Company; (iv) any material reduction in
the Participant’s title, authority or responsibilities; or (v)  a
relocation of the Participant’s primary place of employment to a location more
than fifty (50) miles from the Company’s location in Houston, Texas at the
effective date of the Employment Agreement.
  8.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 Option granted hereby shall
automatically and immediately vest in full.  “Disability” means the
earlier of (a) written determination by a physician selected by the Company and
reasonably agreed to by the Participant that the Participant has been unable to
perform substantially the 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; and (b)
“disability” as such term is defined in the Company’s applicable long-term
disability insurance plan.  In the case of termination of
Participant’s service relationship with the Company due to death or Disability,
Participant or Participant’s estate (or any person who acquired the right to
exercise such Option by bequest or inheritance or otherwise by reason of
Participant’s death or by reason of Participant’s Disability) may, until the
earlier of (a) one year after the date of death or Disability or (b) the
expiration of the Option in accordance with Section 3, exercise the Option and,
thereafter, the Option shall, to the extent not previously exercised,
automatically terminate and become null and void.
  9.Change
of Control.Notwithstanding
anything in the Plan to the contrary, in the event of a Change of Control (as
defined in the Plan), the Option granted hereby shall automatically and
immediately vest in full.  In the event of the termination of
Participant’s service relationship with the Company during the period beginning
six months prior to and ending two years following   a Change of
Control, the Participant may, until the earlier of (a) one year after the date
of such termination or (b) the expiration of the Option in accordance with
Section 3, exercise the Option and, thereafter, the Option shall, to the extent
not previously exercised, automatically terminate and become null and
void.
  10.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, Participant shall immediately forfeit all
rights with respect to any unvested Options.  Participant hereby
agrees to undertake any action and execute any document, instrument or papers
reasonably requested by the Company to effect such forfeiture of the Option
resulting from any such termination.
  11.Rights
as a Unitholder.Participant, or a transferee of the Option,
shall have no rights as a holder of a membership interest in the Company except
as to any Units actually purchased pursuant to the exercise of the
Option.
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  12.Plan
Controlling Document.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 Option Agreement, the Plan shall control and be the
governing document.
  13.Limited
Liability Company Agreement.As a condition to the exercise of
the Option, 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.
  14.Taxes.The
Company and any affiliate thereof are authorized to withhold from any payment
relating to the Option, or any payroll or other payment to Participant, amounts
of withholding and other taxes due or potentially payable in connection with the
exercise of the Option, 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 Option.  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.
  15.Issuance
of Units.The Company shall not be obligated to issue any
Units pursuant to the Option at any time when the Units covered by such Option
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 and sale of such Units.
  16.Notices.Any
notices given in connection with this Option 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.
  17.Execution
of Receipts and Releases.Any payment of cash or any issuance
or transfer of 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.
  18.Successors.This
Option 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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of this Page Intentionally Left Blank]
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  IN WITNESS WHEREOF, the
parties hereto have executed this Option Agreement to be effective as of the day
and year first above written.
  LINN
ENERGY, LLC
 
 By:
 Name:  []
 Title:    []
 
 
 
 PARTICIPANT:
 
 
 
 
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  APPENDIX
A
  
 LINN
ENERGY, LLC
  AMENDED
AND RESTATED
  LONG-TERM
INCENTIVE PLAN
 
  
  APPENDIX
B
 
 LINN
ENERGY, LLC
 LONG-TERM
INCENTIVE PLAN
 OPTION
EXERCISE NOTICE
 
 PLEASE
PRINT:
 TODAY’S
DATE:
 OPTIONHOLDER
NAME:
 MAILING
ADDRESS:
 
 
 Attention:                                General
Counsel
 
 I hereby
exercise my Option to acquire __________ Units, as defined in the LINN ENERGY,
LLC Amended and Restated Long-Term Incentive Plan (the “Plan”), at my
exercise price per Unit of $_____________.  In accordance with the
Plan and the Grant Agreement, the Board has approved payment of the Option
Exercise Price (and any applicable withholding) by the following methods, and I
hereby elect to make payment for the Units being purchased as
indicated:
 
 □         Cash
or check in immediately available funds
 □         Cashless
Exercise pursuant to established Company procedure
 □         Withholding
of Units pursuant to established Company procedure
 
 
 I hereby
represent that I have previously received a copy of the Plan from the Company
and that I understand the terms and restrictions described therein and agree to
be bound by the terms of such document and my Option Agreement.
 
 
 By:
 
 Receipt
of Notice and Payment in Full Acknowledged:
 
 
 By:
 
 Name:
 
 Date:
 
 NOTE:  If
exercising the Option represented by the enclosed Option Agreement to purchase
less than all of the Units to which the Option relates, the original Option
Agreement will be returned with an appropriate notation evidencing the Units for
which the Option has been exercised.