**Exhibit10.13**

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**EXECUTIONCOPY**

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**EMPLOYMENTAGREEMENT**

 

**February 7,2007**

 

The parties to this Employment Agreement (this *“Agreement”)*are **LINN****OPERATING, INC.,**a Delaware corporation (the *“Company’’)*and Arden L Walker, Jr. (the *“Employee”*).**Theparties desire to provide for the employment of the Employee as Senior VicePresident Operations - Chief Engineer of the Company and of Linn Energy (asdefined) commencing on Employee’s first date of employment, such date to bemutually agreed by the parties (the “Effective Date”) on the terms set forthherein. **LINN ENERGY, LLC,**aDelaware limited liability company and the 100% parent of the Company *(“Linn Energy”),*is joining in thisagreement for the limited purposes of reflecting its agreement to the mattersset forth herein as to it, but such joinder is not Intended to make Linn Energythe employer of the Employee for any purpose.

 

Accordingly, the parties, intending to be legally bound, agree asfollows:

 

**1.****            ****Position and Duties**

 

1.1**          **Employment; Titles; Reporting.  TheCompany agrees to employ the Employee and the Employee agrees to enteremployment with the Company, upon the terms and subject to the conditionsprovided under this Agreement. During the Employment Term (as defined in Section 2),the Employee will serve each of the Company and Linn Energy as the Senior VicePresident Operations – Chief Engineer. In such capacity, the Employee willreport to Linn Energy’s and the Company’s Executive Vice President and ChiefOperating Officer and otherwise will be subject to the direction and control ofthe Board of Directors of Linn Energy (including any committee thereof, the *“Board”),*and, the Employee willhave such duties, responsibilities and authorities as may be assigned to him bythe Company’s Executive Vice President and Chief Operating Officer or the Boardfrom time to time and otherwise consistent with such position in a publiccompany comparable to Linn Energy which is engaged in natural gas and oilacquisition, development and production (including, but not limited to,maintaining, to the extent applicable, compliance with the Sarbanes-Oxley Actof 2002 and related regulations and all other federal, state and local laws andregulations, as well as all regulations and rules of any exchange orelectronic trading system on which Linn Energy’s securities are traded).

 

1.2           Duties.  During the Employment Term,the Employee will devote substantially all of his full working time to thebusiness and affairs of the Company, will use his best efforts to promote theCompany’s interests and will perform his duties and responsibilitiesfaithfully, diligently and to the best of his ability, consistent with soundbusiness practices. The Employee may be required by the Board to provideservices to, or otherwise serve as an officer or director of, any direct orindirect subsidiary of the Company or to Linn Energy, as applicable. TheEmployee will comply with the Company’s and Linn Energy’s policies, codes andprocedures, as they may be in effect from time to time, applicable to executiveofficers of the Company and Linn Energy. Nevertheless, the Employee may, withthe prior approval of the Board in each instance, engage in such other businessand charitable activities that do not violate Section 7, create aconflict of interest or the appearance of a conflict of interest with theCompany or Linn

 

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Energyor materially Interfere with the performance of his obligations to the Companyor Linn Energy under this Agreement.

 

1.3           Place of Employment.  TheEmployee will perform his duties under this Agreement at the Company’s officesin Houston, Texas, with the likelihood of substantial business travel.

 

**2.****            ****Term of Employment.  **The term of the Employee’s employment by the Company under thisAgreement (the *“Employment Term”)*willcommence on the Effective Date and will continue until employment is terminatedby either party under Section 5. The date on which the Employee’semployment ends is referred to In this Agreement as the *“Termination Date.”*

 

**3.****            ****Compensation.**

 

3.1           Base Salary.  During the Employment Term,the Employee will be entitled to receive a base salary *(“Base Salary”)*at an annual rateof not less than $175,000 for services rendered to the Company and any of itsdirect or indirect subsidiaries, payable in accordance with the Company’sregular payroll practices. The Employee’s Base Salary will be reviewed annuallyby the Board and may be adjusted upward in the Board’s sole discretion.

 

3.2           Bonus Compensation.  (a) The Employee will be entitled to a one-time bonus (the “One-Time Bonus”) in theamount of $175,000 payable within thirty (30) days after the Effective Date. (b) TheEmployee will also be entitled to receive a guaranteed bonus (“Guaranteed Bonus”)payment of not less than $125,000 with respect to the Company’s fiscal year endingDecember 31, 2007. Thereafter, during the Employment Term, the Employeewill be entitled to receive incentive compensation in such amounts and at suchtimes as the Board may determine in its sole discretion to award to him underany incentive compensation or other bonus plan or arrangement as may beestablished by the Board from time to time (collectively, the *“Employee Bonus Plan”).*Anyadditional incentive compensation payable under any Employee Bonus Plan will bereferred to in the aggregate in this Agreement as the Employee’s “*Bonus.”*

 

3.3           Long-Term Incentive Compensation.

 

(a)           Unit Options.  Asof the Effective Date, the Employee will receive an award of non-qualifiedoptions to purchase up to 50,000 Units of Linn Energy at a per share exerciseprice equal to the fair market value of a Unit as of the date of grant, whichshall be awarded under the terms of the Linn Energy, LLC Long Term IncentivePlan or any successor plan, as it may be in effect from time to time (the “IncentivePlan”), and subject to a service-based vesting schedule and such other termsand conditions set forth in the applicable option agreement.

 

(b)           Restricted Units.  Asof the Effective Date, the Employee will receive a restricted Unit award in theamount of 50,000 Units of Linn Energy, which shall be awarded under the termsof the Incentive Plan, and subject to a service-based vesting schedule and suchother terms and conditions set forth in the applicable restricted unitagreement.

 

(c)           Future Awards.  Inaddition to the above long-term incentive compensation awards, awards of Unitoptions. Unit grants, restricted Units and/or other forms of equity-basedcompensation to the Employee on or after the Effective Date may be made fromtime to time during the Employment Term by the Board in its sole discretion,whose decision will

 

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bebased upon performance and award guidelines for executive officers of theCompany and Linn Energy established periodically by the Board in its solediscretion.

 

**4.****            ****Expenses and Other Benefits.**

 

4.1           Reimbursement of Expenses.  TheEmployee will be entitled to receive prompt reimbursement for all reasonableexpenses incurred by him during the Employment Term (in accordance with thepolicies and practices presently followed by the Company or as may be establishedby the Board from time to time for the Company’s and Linn Energy’s seniorexecutive officers) in performing services under this Agreement, provided thatthe Employee properly accounts for such expenses in accordance with the Company’sand Linn Energy’s policies as in effect from time to time.

 

4.2           Vacation.  Employee will be entitled topaid vacation time each year during the Employment Term that will accrue inaccordance with the Company’s policies and procedures now in force or as suchpolicies and procedures may be modified with respect to all senior executiveofficers of the Company.

 

4.3           Other Employee Benefits.  Inaddition to the foregoing, during the Employment Term, the Employee will beentitled to participate in and to receive benefits as a senior executive underall of the Company’s employee benefit plans, programs and arrangementsavailable to senior executives, subject to the eligibility criteria and otherterms and conditions thereof, as such plans, programs and arrangements may beduly amended, terminated, approved or adopted by the Board from time to time.

 

**5.****            ****Termination of Employment.**

 

5.1           Death.    The Employee’s employmentunder this Agreement will terminate upon his death.

 

5.2           Termination by the Company.

 

(a) *Terminable at Will.  *The Company may terminate the Employee’s employment under thisAgreement at any time with or without Cause (as defined below).

 

(b) *Definitionof Cause.  *For purposes ofthis Agreement, the Company will have *“Cause”*to terminate the Employee’s employment under this Agreement byreason of any of the following: (i) the Employee’s conviction of, or pleaof nolo contendere to, any felony or to any crime or offense causingsubstantial 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 turpitudeor similar conduct; (ii) the Employee’s repeated intoxication by alcoholor drugs during the performance of his duties; (iii) malfeasance in theconduct of Employee’s duties, including, but not limited to, (A) willfuland Intentional misuse or diversion of any of the funds of Linn Energy or itsdirect or indirect subsidiaries, (B) embezzlement or (C) fraudulentor willful and material misrepresentations or concealments on any writtenreports submitted to any of Linn Energy or its direct or indirect subsidiaries;(iv) the Employee’s material failure to perform the duties of the Employee’semployment consistent with Employee’s position, expressly including theprovisions of this Agreement, or material failure to follow or comply with thereasonable and lawful written directives of the Board; (v) a material

 

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breach of this Agreement; or (vi) a material breach by the Employeeof written policies of the Company concerning employee discrimination orharassment.

 

(c) *Notice and Cure Opportunityin Certain Circumstances.  *The Employee may be afforded a reasonableopportunity to cure any act or omission that would otherwise constitute “Cause”hereunder according to the following terms: The Board will give the Employeewritten notice stating with reasonable specificity the nature of thecircumstances determined by the Board in good faith to constitute “Cause.” If,in the good faith judgment of the Board, the alleged breach is reasonablysusceptible to cure, the Employee will have fifteen (15) days from his receiptof such notice to effect the cure of such circumstances or such breach to thegood faith satisfaction of the Board. The Board will state whether the Employeewill have such an opportunity to cure in the initial notice of “Cause” referredto above. If, In the good faith judgment of the Board the alleged breach is notreasonably susceptible to cure, or such circumstances or breach have not beensatisfactorily cured within such fifteen (15) day cure period, such breach willthereupon constitute “Cause” hereunder.

 

5.3           Termination by the Employee.

 

(a)  *Terminable at Will*.* *TheEmployee may terminate his employment under this Agreement at any time with orwithout Good Reason (as defined below).

 

(b)  *Notice and Cure Opportunity.  *Ifsuch termination is with Good Reason, the Employee will give the Companywritten notice, which will identify with reasonable specificity the grounds forthe Employee’s resignation and provide the Company with fifteen (15) days fromthe day such notice is given to cure the alleged grounds for resignationcontained in the notice. A termination will not be for Good Reason if suchnotice is given by the Employee to the Company more than thirty (30) days afterthe occurrence of the event that the Employee alleges is Good Reason for histermination hereunder.

 

(c)  *Definition of Good Reason.  *Forpurposes of this Agreement, *“Good Reason”*will mean any of the following to which the Employee will notconsent in writing: (a) a reduction in the Employee’s Base Salary, or (b) arelocation within two (2) years from the Effective Date of this Agreementof the Employee’s primary place of employment to a location more than 50 milesfrom Houston, Texas.

 

5.4           Notice of Termination.  Anytermination of the Employee’s employment by the Company or by the Employeeduring the Employment Term (other than termination pursuant to Section 5.1)will be communicated by written Notice of Termination to the other party heretoin accordance with Section 8.7. For purposes of this Agreement, a “*Notice of Termination”*means a writtennotice that (a) indicates the specific termination provision in thisAgreement relied upon, (b) to the extent applicable, sets forth inreasonable detail the facts and circumstances claimed to provide a basis fortermination of the Employee’s employment under the provision so indicated, and (c) ifthe Termination Date (as defined herein) is other than the date of receipt ofsuch notice, specifies the Termination Date (which Termination Date will be notmore than thirty (30) days after the giving of such notice).

 

5.5*          *Disability.  If the Company determines ingood faith that the Disability (as defined herein) of the Employee has occurredduring the Employment Term, it may, without breaching this Agreement, give tothe Employee written notice in accordance with Section 5.4 of its

 

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intentionto terminate the Employee’s employment. In such event, the Employee’semployment with the Company will terminate effective on the fifteenth (15th) day after receipt of such notice by the Employee (the *“Disability Effective Date”),*providedthat, within the fifteen (15) days after such receipt, the Employee will nothave returned to full-time performance of the Employee’s duties, *“Disability’’*means thedetermination by a physician selected by the Company that the Employee has beenunable to perform substantially the Employee’s usual and customary duties underthis Agreement for a period of at least one hundred twenty (120) consecutivedays or a non-consecutive period of one hundred eighty (180) days during anytwelve-month period as a result of incapacity due to mental or physical illnessor disease. At any time and from time to time, upon reasonable requesttherefore by the Company, the Employee will submit to reasonable medicalexamination for the purpose of determining the existence, nature and extent ofany such disability.

 

**6.****            ****Compensation of the Employee upon Termination.**

 

6.1           Death.  If the Employee’s employmentunder this Agreement is terminated by reason of his death, the Company will payto the person or persons designated by the Employee for that purpose in anotice filed with the Company, or, if no such person will have been sodesignated, to his estate, the amount of (a) the Employee’s accrued butunpaid Base Salary through the Termination Date paid in a lump sum withinthirty (30) days following the Termination Date, (b) with respect to anyTermination Date on or after January 1, 2008 by reason of Employee’sdeath, any accrued but unpaid Bonus, which Bonus will be payable at such timeas the bonuses of other executive officers of the Company are payable, (c) withrespect to any Termination Date on or before December 31, 2007 by reasonof Employee’s death, a cash amount equal to (i) any unpaid One-Time Bonusamounts, if any, and (ii) the Employee’s pro-rata Guaranteed Bonus amountset forth in Section 3.2 of this Agreement, payable at such time asbonuses for such annual period are paid to other executive officers of theCompany, and (d) any other amounts that may be reimbursable by the Companyto the Employee as expressly provided under this Agreement paid in a lump sumwithin thirty (30) days following the Termination Date, and the Companythereafter will have no further obligation to the Employee under thisAgreement, other than for payment of any amounts accrued and vested under anyemployee benefit plans or programs of the Company and any payments or benefitsrequired to be made or provided under applicable law. Without limiting thegenerality of the foregoing, any rights the Employee’s beneficiary may have tothe proceeds of any life insurance arrangement set forth in Section 4.3will be in lieu of any special entitlement to severance pay or benefits uponthe Employee’s death.

 

6.2           Disability.  In the event of the Employee’stermination by reason of Disability pursuant to Section 5.5, theEmployee will continue to receive his Base Salary and participate in applicableemployee benefit plans or programs of the Company (on an equivalent basis to Section 6.4(a)(iv) below)through the Termination Date, subject to offset dollar-for-dollar by the amountof any disability Income payments provided to the Employee under any Companydisability policy or program funded by the Company, and will receive (a) theEmployee’s accrued but unpaid Base Salary through the Termination Date paid ina lump sum within thirty (30) days following the Termination Date, (b) withrespect to any Termination Date on or after January 1, 2008 by reason ofEmployee’s Disability, any accrued but unpaid Bonus, which Bonus will bepayable at such time as the bonuses of other executive officers of the Companyare payable, (c) with respect to any Termination Date on or before December 31,2007 by reason of Employee’s Disability, a cash amount equal to (i) anyunpaid One-Time Bonus amounts, if any, and (ii) the Employee’s pro-rataGuaranteed Bonus amount set forth in Section 3.2 of this Agreement,payable at such time as bonuses for such annual period are paid to other

 

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executiveofficers of the Company, and (d) any other amounts that may bereimbursable by the Company to the Employee as expressly provided under thisAgreement paid in a lump sum within thirty (30) days following the TerminationDate, and the Company thereafter will have no further obligation to theEmployee under this Agreement, other than for payment of any amounts accruedand vested under any employee benefit plans or programs of the Company and anypayments or benefits required to be made or provided under applicable law.

 

6.3           By the Company for Cause or the EmployeeWithout Good Reason.  If the Employee’s employment is terminated bythe Company for Cause, or if the Employee terminates his employment other thanfor Good Reason, the Employee will receive (a) the Employee’s accrued butunpaid Base Salary through the Termination Date paid in a lump sum withinthirty (30) days following the Termination Date, (b) any accrued butunpaid Bonus, which Bonus will be payable at such time as the bonuses of otherexecutive officers of the Company are payable, and (c) any other amountsthat may be reimbursable by the Company to the Employee as expressly providedunder this Agreement paid in a lump sum within thirty (30) days following theTermination Date, and the Company thereafter will have no further obligation tothe Employee under this Agreement, other than for payment of any amountsaccrued and vested under any employee benefit plans or programs of the Companyand any payments or benefits required to be made or provided under applicablelaw.

 

6.4           By the Employee for Good Reason or theCompany other than for Cause.

 

(a)           *Severance Benefits on Non-Change of Control Termination.  *Subject to the provisions of Section 6.4(b) and Section 6.4(d),if prior to or more than one (1) year after the occurrence of a Change ofControl (as defined below) the Company terminates the Employee’s employmentwithout Cause, or the Employee terminates his employment for Good Reason, thenthe Employee will be entitled to the following benefits (the “*Severance Benefits*”*):*

 

(i)            an amount equal to (a) the Employee’saccrued but unpaid Base Salary through the Termination Date paid in a lump sumwithin thirty (30) days following the Termination Date, (b) with respectto any Termination Date on or after January 1, 2008 by the Employee forGood Reason or by the Company without Cause, any accrued but unpaid Bonus,which Bonus will be payable at such time as the bonuses of other executiveofficers of the Company are payable, (c) any other amounts that may bereimbursable by the Company to the Employee as expressly provided under thisAgreement paid in a lump sum within thirty (30) days following the TerminationDate;

 

(ii)           with respect to any termination event described in this paragraph (a) ofSection 6.4: (A) occurring after the Effective Date and prior to thefirst anniversary date thereof, twelve (12) monthly payments, and (B) occurringon or after the first anniversary of the Effective Date, twenty-four (24)monthly payments, in either case in an amount equal to one-twelfth (1/12) ofthe Employee’s annual Base Salary at the highest rate in effect at any timeduring the thirty-six (36)-month period prior to the Termination Date,commencing with the calendar month immediately following the calendar month inwhich the Termination Date occurs;

 

(iii)          With respect to any Termination Date on or before December 31,2007 by the Employee for Good Reason or by the Company without Cause, a

 

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cash amount equal to the Employee’s pro-rata Guaranteed Bonus amountset forth in Section 3.2 of this Agreement, payable at such time asbonuses for such annual period are paid to other executive officers of theCompany; and

 

(iv)          the Company will pay the full cost of the Employee’s COBRA continuationcoverage for such period, as such coverage is required to be continued underapplicable law; provided, however, that, notwithstanding the foregoing, thebenefits described in this Section 6.4(a)(iv) may bediscontinued prior to the end of the period provided in this subsection (iv) tothe extent, but only to the extent, that the Employee receives substantiallysimilar benefits from a subsequent employer *(“COBRABenefit”).*

 

(b)  *Change of Control Benefits.  *Subjectto the provisions of Section 6.4(d), if within the one(1)-year period following the occurrence of a**Change of Control, the Company terminates the Employee’s employmentwithout Cause, or the Employee terminates his employment for Good Reason (an “EligibleTermination”), then, in lieu of the Severance Benefits under Section 6.4(a),the Employee will be entitled to benefits (the *“Changeof Control Benefits”)*identical to those set forth in Section 6.4(a) exceptthat the amount described in clause (ii) will be paid in a lump sum withinthirty (30) days following the Termination Date and will be equal to: (A) twelve(12) monthly payments with respect to any Eligible Termination occurring afterthe Effective Date and prior to the first anniversary date thereof, and (B) withrespect to any Eligible Termination occurring on or after the first anniversarydate of the Effective Date an additional twelve (12) monthly payments.

 

(c)  *Definition of Change of Control.  *For purposes of this Agreement, a *“Change of Control*will mean thefirst to occur of:

 

(i)            The acquisition by any individual, entity orgroup (within the meaning of Section 13(d) (3) or 14(d) (2) ofthe Exchange Act) (a *“Person”)*ofbeneficial ownership (within the meaning of Rule 13d-3 promulgated underthe Exchange Act) of 35% or more of either (A) the then-outstanding equityinterests of Linn Energy (the *“OutstandingLinn Energy Equity”)*or (B) the combined voting power ofthe then-outstanding voting securities of Linn Energy entitled to votegenerally in the election of directors (the *“OutstandingLinn Energy Voting Securities”*);**provided,however, that, for purposes of this Section 6.4(c)(i), thefollowing acquisitions will not constitute a Change of Control: (A) anyacquisition directly from Linn Energy, (B) any acquisition by Linn Energy,(C) any acquisition by any employee benefit plan (or related trust)sponsored or maintained by Linn Energy or any affiliated company, or (D) anyacquisition by any corporation or other entity pursuant to a transaction thatcomplies with Section 6.4(c)(iii)(A), Section 6.4(c)(iii)(B) orSection 6.4(c)(iii)(C):

 

(ii)           Any time at which individuals who, as of the date hereof, constitutethe Board (the *“Incumbent Board”)*ceasefor any reason to constitute at least a majority of the Board; provided,however, that any individual becoming a director subsequent to the date hereofwhose election, or nomination for election by Linn Energy’s Unit holders, wasapproved by a vote of at least a majority of the directors then comprising theIncumbent Board will be considered as though such individual were a member ofthe Incumbent Board, but excluding, for this purpose, any such individual whoseinitial assumption of office occurs as

 

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a result of an actual or threatened election contest with respect tothe election or removal of directors or other actual or threatened solicitationof proxies or consents by or on behalf of a Person other than the Board;

 

(iii)          Consummation of a reorganization, merger, statutory share exchange orconsolidation or similar corporate transaction involving Linn Energy or any ofits subsidiaries, a sale or other disposition of all or substantially all ofthe assets of Linn Energy, or the acquisition of assets or equity interests ofanother entity by Linn Energy or any of its subsidiaries (each, a *“Business Combination”),*in eachcase unless, following such Business Combination, (A) all or substantiallyall of the individuals and entities that were the beneficial owners of theOutstanding Linn Energy Equity and the Outstanding Linn Energy VotingSecurities Immediately prior to such Business Combination beneficially own,directly or indirectly, more than 50% of the then-outstanding equity interestsand the combined voting power of the then-outstanding voting securitiesentitled to vote generally in the election of directors, as the case may be, ofthe corporation resulting from such Business Combination (including, withoutlimitation, a corporation or other entity that, as a result of suchtransaction, owns Linn Energy or all or substantially all of Linn Energy’sassets either directly or through one or more subsidiaries) in substantiallythe same proportions as their ownership immediately prior to such BusinessCombination of the Outstanding Linn Energy Equity and the Outstanding LinnEnergy Voting Securities, as the case may be, (B) no Person (excluding anycorporation resulting from such Business Combination or any employee benefitplan (or related trust) of Linn Energy or such corporation or other entityresulting from such Business Combination) beneficially owns, directly or indirectly,35% or more of, respectively, the then-outstanding equity interests of thecorporation or other entity resulting from such Business Combination or thecombined voting power of the then-outstanding voting securities of suchcorporation or other entity, except to the extent that such ownership existedprior to the Business Combination, and (C) at least a majority of themembers of the board of directors of the corporation or equivalent body of anyother entity resulting from such Business Combination were members of theIncumbent Board at the time of the execution of the initial agreement or of theaction of the Board providing for such Business Combination; or

 

(iv)          Consummation of a complete liquidation or dissolution of Linn Energy.

 

(d)  *Conditions to Receipt of**Severance Benefits.*

 

(i)            *Release**.  *As a condition to receiving any Severance Benefits or Change of ControlBenefits to which the Employee may otherwise be entitled under Section 6.4(a) orSection 6.4(b), the Employee will execute a release (the *“Release”),*which will include anaffirmation of the restrictive covenants set forth in Section 7 anda non-disparagement provision, in a form and substance satisfactory to theCompany, of any claims, whether arising under federal, state or local statute,common law or otherwise, against the Company and its direct or indirectsubsidiaries which arise or may have arisen on or before the date of theRelease, other than any claims under this Agreement or any rights toindemnification from the Company and its direct or indirect subsidiariespursuant to any provisions of the Company’s (or any of its subsidiaries’)organizational

 

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documents or any directors and officers liability insurance policiesmaintained by the Company. If the Employee fails or otherwise refuses toexecute a Release within a reasonable time after the Company’s request to doso, and in all events prior to the date on which such benefits are to be firstpaid to him, the Employee will not be entitled to any Severance Benefits orChange of Control Benefits, as the case may be, or any other benefits providedunder this Agreement and the Company will have no further obligations withrespect to the provision of those benefits except as may be required by law.

 

(ii)           *Limitation on Benefits**.  *If, following a termination of employment that gives the Employee aright to the payment of Severance Benefits under Section 6.4(a) orSection 6.4(b), the Employee violates in any material respect anyof the covenants in Section 7 or as otherwise set forth in theRelease, the Employee will have no further right or claim to any payments orother benefits to which the Employee may otherwise be entitled under Section 6.4(a) orSection 6.4(b) from and after the date on which the Employeeengages in such activities and the Company will have no further obligationswith respect to such payments or benefits, and the covenants in Section 7will nevertheless continue in full force and effect.

 

6.5           Severance Benefits Not Includable forEmployee Benefits Purposes.  Except to the extent the terms of anyapplicable benefit plan, policy or program provide otherwise, any benefitprograms of the Company that takes into account the Employee’s income willexclude any and all Severance Benefits and Change of Control Benefits providedunder this Agreement.

 

6.6           Exclusive Severance Benefits.  TheSeverance Benefits payable under Section 6.4(a) or the Changeof Control Benefits payable under Section 6.4(b), if they becomeapplicable under the terms of this Agreement, will be in lieu of any otherseverance or similar benefits that would otherwise be payable under any otheragreement, plan, program or policy of the Company.

 

6.7           Additional Provisions Regarding PaymentsUnder This Agreement.  Notwithstanding anything in this Agreement tothe contrary, in the event that any benefits payable or otherwise providedunder this Agreement would be

 

(a)  subject to the excise taximposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the“*Code*”). (such excise tax referred toin this Agreement as the *“Excise Tax”*)*,*thenthe Board may, in its sole discretion, provide for the payment of, or otherwisereimburse the Employee for, an amount up to such Excise Tax and any relatedtaxes, fees or penalties thereon as the Board may consider to be customary andappropriate for a comparable public company; or

 

(b)  deemed to constitutenon-qualified deferred compensation subject to Section 409A of the Code,Linn Energy or the Company, as the case may be, will have the discretion toadjust the terms of such payment or benefit as it deems necessary to complywith the requirements of Section 409A to avoid the imposition of anyexcise tax or other penalty with respect to such payment or benefit under Section 409Aof the Code.

 

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**7.****            ****Restrictive Covenants.**

 

7.1           Confidential Information.  TheEmployee hereby acknowledges that in connection with his employment by theCompany he will be exposed to and may obtain certain Confidential Information(as defined below) (including, without limitation, procedures, memoranda,notes, records and customer and supplier lists whether such information hasbeen or is made, developed or compiled by the Employee or otherwise has been oris made available to him) regarding the business and operations of the Companyand its subsidiaries or affiliates. The Employee further acknowledges that suchConfidential Information is unique, valuable, considered trade secrets anddeemed proprietary by the Company. For purposes of their Agreement, *“Confidential Information’’*includes,without limitation, any information heretofore or hereafter acquired, developedor used by any of the Company, Linn Energy or their direct or indirectsubsidiaries relating to Business Opportunities or Intellectual Property orother geological, geophysical, economic, financial or management aspects of thebusiness, operations, properties or prospects of the Company, Linn Energy ortheir direct or indirect subsidiaries, whether oral or in written form. TheEmployee agrees that all Confidential information is and will remain theproperty of the Company, Linn Energy or their direct or indirect subsidiaries,as the case may be. The Employee further agrees, except for disclosuresoccurring in the good faith performance of his duties for the Company, LinnEnergy or their direct or indirect subsidiaries, during the Employment Term andfor a period of two (2) years after the Termination Date, to hold in thestrictest confidence all Confidential Information, and not to, directly orindirectly, duplicate, sell, use, lease, commercialize, disclose or otherwisedivulge to any person or entity any portion of the Confidential information oruse any Confidential Information, directly or indirectly, for his own benefitor profit or allow any person, entity or third party, other than the Company,Linn Energy or their direct or indirect subsidiaries and authorized executivesof the same, to use or otherwise gain access to any Confidential Information.The Employee will have no obligation under this Agreement with respect to anyinformation that becomes generally available to the public other than as aresult of a disclosure by the Employee or his agent or other representative orbecomes available to the Employee on a non-confidential basis from a sourceother than the Company, Linn Energy or their direct or indirect subsidiaries.Further, the Employee will have no obligation under this Agreement to keepconfidential any of the Confidential Information to the extent that adisclosure of it is required by law or is consented to by the Company or LinnEnergy; provided, however, that if and when such a disclosure is required bylaw, the Employee promptly will provide the Company with notice of suchrequirement, so that the Company may seek an appropriate protective order.

 

7.2           Return of Property.  Employeeagrees to deliver promptly to the Company, upon termination of his employmenthereunder, or at any other time when the Company so requests, all documentsrelating to the business of the Company, Linn Energy or their direct orindirect subsidiaries, including without limitation: all geological andgeophysical reports and related data such as maps, charts, logs, seismographs,seismic records and other reports and related data, calculations, summaries,memoranda and opinions relating to the foregoing, production records, electriclogs, core data, pressure data, lease files, well files and records, landfiles, abstracts, title opinions, title or curative matters, contract files,notes, records, drawings, manuals, correspondence, financial and accountinginformation, customer lists, statistical data and compilations, patents,copyrights, trademarks, trade names, inventions, formulae, methods, processes,agreements, contracts, manuals or any documents relating to the business of theCompany, Linn Energy or their direct or indirect subsidiaries and all copiesthereof and therefrom; provided, however, that the Employee will be permittedto retain copies of any

 

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documentsor materials of a personal nature or otherwise related to the Employee’s rightsunder this Agreement.

 

7.3           Non-Compete Obligations.

 

(a) *Non-Compete**Obligations During Employment Term.*The Employee agrees that during theEmployment Term:

 

(i)            the Employee will not, other than through theCompany, engage or participate in any manner, whether directly or indirectlythrough any family member or as an employee, employer, consultant, agent, principal,partner, more than one percent shareholder, officer, director, licensor,lender, lessor or in any other individual or representative capacity, in anybusiness or activity which is engaged in leasing, acquiring, exploring,producing, gathering or marketing hydrocarbons and related products; providedthat the foregoing shall not be deemed to restrain the participation byEmployee’s spouse in any capacity set forth above in any business or activityengaged in any such activity and provided further that Linn Energy may, in goodfaith, take such reasonable action with respect to Employee’s performance ofhis duties, responsibilities and authorities as set forth in Sections 1.1 and1.2 of this Agreement as it deems necessary and appropriate to protect its legitimatebusiness interests with respect to any actual or apparent conflict of interestreasonably arising from or out of the participation by Employee’s spouse in anysuch competitive business or activity; and

 

(ii)           all investments made by the Employee (whether in his own name or in thename of any family members or other nominees or made by the Employee’scontrolled affiliates), which relate to the leasing, acquisition, exploration,production, gathering or marketing of hydrocarbons and related products will bemade solely through the Company; and the Employee will not (directly orindirectly through any family members or other persons), and will not permitany of his controlled affiliates to: (A) invest or otherwise participatealongside the Company or its direct or indirect subsidiaries in any BusinessOpportunities, or (B) invest or otherwise participate in any business oractivity relating to a Business Opportunity, regardless of whether any of theCompany or its direct or indirect subsidiaries ultimately participates in suchbusiness or activity, in either case, except through the Company.Notwithstanding the foregoing, nothing in this Section 7.3 shall be deemedto prohibit the Employee or any family member from owning, or otherwise havingan interest in, less than one percent (1 %) of any publicly-owned entity orthree percent (3%) or less of any private equity fund or similar investmentfund that invests in any business or activity engaged in any of the activitiesset forth above, provided that Employee has no active role with respect to anyinvestment by such fund in any entity.

 

(b) *Non-CompeteObligations After Termination Date.  *TheEmployee agrees that the Employee will not engage or participate in any manner,whether directly or indirectly through any family member or other person or asan employee, employer, consultant, agent principal, partner, more than onepercent shareholder, officer, director, licensor, lender, lessor or in anyother individual or representative capacity:

 

(i)            during the one-year period following theTermination Date, in any business or activity which is engaged in leasing,acquiring, exploring, producing,

 

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gathering or marketing hydrocarbons and related products within (A) anycounty or parish in which the Company owns any oil and gas interests orconducts operations on the Termination Date or in which the Company has ownedany oil and gas interests or conducted operations at any time during the sixmonths immediately preceding the Termination Date or (B) any county orparish adjacent to any county or parish described in clause (A); and

 

(ii)           during the one-year period following the Termination Date, in anybusiness or activity which is in direct competition with the business of theCompany or its direct or indirect subsidiaries in the leasing, acquiring,exploring, producing, gathering or marketing of hydrocarbons and relatedproducts within the boundaries of, or within a two-mile radius of theboundaries of, any mineral property interest of any of the Company or itsdirect or indirect subsidiaries (including, without limitation, a minerallease, overriding royalty interest production payment net profits interest,mineral fee interest or option or right to acquire any of the foregoing, or anarea of mutual interest as designated pursuant to contractual agreementsbetween the Company and any third party) or any other property on which any ofthe Company or its direct or indirect subsidiaries has an option, right,license or authority to conduct or direct exploratory activities, such asthree-dimensional seismic acquisition or other seismic, geophysical andgeochemical activities (but not including any preliminary geological mapping),as of the Termination Date or as of the end of the six-month period followingsuch Termination Date; provided that, this subsection (ii) will notpreclude the Employee from making investments in securities of oil and gascompanies which are registered on a national stock exchange, if (A) theaggregate amount owned by the Employee and all family members and affiliatesdoes not exceed 5% of such company’s outstanding securities, and (B) theaggregate amount invested in such investments by the Employee and all familymembers and affiliates after the date hereof does not exceed $500,000.

 

Notwithstandingthe foregoing, nothing in this Section 7.3 shall be deemed to restrain theparticipation by Employee’s spouse in any capacity set forth above in anybusiness or activity described above.

 

(c) *NotApplicable**Following Change of Control Termination.  *The Employee will not be subject tothe covenants contained in this Section 7.3 and such covenants willnot be enforceable against the Employee from and after the date that theEmployee’s employment is terminated within one (1) year after a Change ofControl.

 

7.4           Non-Solicitation.  Duringthe Employment Term and for a period of twenty-four (24) months after theTermination Date, the Employee will not, whether for his own account or for theaccount of any other Person (other than the Company or its direct or indirectsubsidiaries), intentionally solicit, endeavor to entice away from the Companyor its direct or indirect subsidiaries, or otherwise interfere with therelationship of the Company or its direct or indirect subsidiaries with, (a) anyperson who is employed by the Company or its direct or indirect subsidiaries(including any independent sales representatives or organizations), or (b) anyclient or customer of the Company or its direct or indirect subsidiaries.

 

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7.5           Assignment of Developments.  TheEmployee assigns and agrees to assign without further compensation to theCompany and its successors, assigns or designees, all of the Employee’s right,title and interest in and to all Business Opportunities and IntellectualProperty (as those terms are defined below), and further acknowledges andagrees that all Business Opportunities and Intellectual Property constitute theexclusive property of the Company.

 

For purposes of this Agreement, *“BusinessOpportunities”*means all business ideas, prospects, proposals orother opportunities pertaining to the lease, acquisition, exploration,production, gathering or marketing of hydrocarbons and related products and theexploration potential of geographical areas on which hydrocarbon explorationprospects are located, which are developed by the Employee during theEmployment Term, or originated by any third party and brought to the attentionof the Employee during the Employment Term, together with information relatingthereto (including, without limitation, geological and seismic data andinterpretations thereof, whether In the form of maps, charts, logs,seismographs, calculations, summaries, memoranda, opinions or other written orcharted means).

 

For purposes of this Agreement, *“IntellectualProperty”*shall mean all ideas, inventions, discoveries,processes, designs, methods, substances, articles, computer programs andimprovements (Including, without limitation, enhancements to, or furtherinterpretation or processing of, information that was in the possession of theEmployee prior to the date of this Agreement), whether or not patentable orcopyrightable, which do not fall within the definition of Business Opportunities,which the Employee discovers, conceives, invents, creates or develops, alone orwith others, during the Employment Term, if such discovery, conception,invention, creation or development (A) occurs in the course of theEmployee’s employment with the Company, or (B) occurs with the use of anyof the time, materials or facilities of the Company or its direct or indirectsubsidiaries, or (C) in the good faith judgment of the Board, relates orpertains in any material way to the purposes, activities or affairs of theCompany or its direct or indirect subsidiaries.

 

7.6           Injunctive Relief.  TheEmployee acknowledges that a breach of any of the covenants contained in this Section 7may result in material, irreparable injury to the Company for which there is noadequate remedy at law, that it may not be possible to measure damages for suchinjuries precisely and that, in the event of such a breach or threat of breach,the Company may be entitled to obtain a temporary restraining order and/or apreliminary or permanent injunction restraining the Employee from engaging inactivities prohibited by this Section 7 or such other relief as maybe required to specifically enforce any of the covenants in this Section 7.To the extent that the Company seeks a temporary restraining order (but not apreliminary or permanent Injunction), the Employee agrees that a temporaryrestraining order may be obtained *ex parte,*tothe extent provided by Texas law.

 

7.7           Adjustment of Covenants.  Theparties consider the covenants and restrictions contained in this Section. 7to be reasonable. However, if and when any such covenant or restriction isfound to be void or unenforceable and would have been valid had some part of itbeen deleted or had its scope of application been modified, such covenant orrestriction will be deemed to have been applied with such modification as wouldbe necessary and consistent with the intent of the parties to have made itvalid, enforceable and effective.

 

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7.8           Forfeiture Provision.

 

(a) *DetrimentalActivities.  *If the Employeeengages in any activity that violates any covenant or restriction contained inthis Section 7. in addition to any other remedy the Company mayhave at law or in equity, (i) the Employee will be entitled to no furtherpayments or benefits from theCompany under this Agreement or otherwise, except for any payments or benefitsrequired to be made or provided under applicable law, (ii) all unexercisedUnit options, restricted Units and other forms of equity compensation held byor credited to the Employee will terminate effective as of the date on whichthe Employee engages in that activity, unless terminated sooner by operation ofanother term or condition of this Agreement or other applicable plans andagreements, and (iii) any exercise, payment or delivery pursuant to anyequity compensation award that occurred within one year prior to the date onwhich the Employee engages in that activity may be rescinded within one yearafter the first date that a majority of the members of the Board first becameaware that the Employee engaged in that activity. In the event of any suchrescission, the Employee will pay to the Company the amount of any gainrealized or payment received as a result of the rescinded exercise, payment ordelivery, in such manner and on such terms and conditions as may be required.

 

(b) *Rightof Set-Off.  *The Employeeconsents to a deduction from any amounts the Company owes the Employee fromtime to time (Including amounts owedas wages or other compensation, fringe benefits, or vacation pay, as well asany other amounts owed to the Employee by the Company), to the extent of theamounts the Employee owes the Company under Section 7.8(a) above.Whether or not the Company elects to make any set-off in whole or in part, ifthe Company does not recover by means of set-off the full amount the Employeeowes, calculated as set forth above, the Employee agrees to pay immediately theunpaid balance to the Company. In the discretion of the Board, reasonableinterest may be assessed on the amounts owed, calculated from the later of (i) thedate the Employee engages in the prohibited activity and (ii) theapplicable date of exercise, payment or delivery.

 

**8.****            ****Miscellaneous.**

** **

8.1           Assignment: Successors: Binding Agreement.  ThisAgreement may not be assigned by either party, whether by operation of law orotherwise, without the prior written consent of the other party, except thatany right, title or Interest of the Company arising out of this Agreement maybe assigned to any corporation or entity controlling, controlled by, or undercommon control with the Company, or succeeding to the business andsubstantially all of the assets of the Company or any affiliates for which theEmployee performs substantial services. Subject to the foregoing, thisAgreement will be binding upon and will inure to the benefit of the parties andtheir respective heirs, legatees, devisees, personal representatives,successors and assigns.

 

8.2           Modification and Waiver.  Exceptas otherwise provided below, no provision of this Agreement may be modified,waived, or discharged unless such waiver, modification or discharge is dulyapproved by the Board and is agreed to in writing by the Employee and suchofficer(s) as may be specifically authorized by the Board to effect it. Nowaiver by any party of any breach by any other party of, or of compliance with,any term or condition of this Agreement to be performed by any other party, atany time, will use constitute a waiver of similar or dissimilar terms orconditions at that time or at any prior or subsequent time.

 

8.3           Entire Agreement.  ThisAgreement embodies the entire understanding of the parties hereof, and, uponthe Effective Date, will supersede all other oral or written agreements

 

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orunderstandings between them regarding the subject matter hereof. No agreementor representation, oral or otherwise, express or implied, with respect to thesubject matter of this Agreement, has been made by either party which is notset forth expressly in this Agreement.

 

8.4           Governing Law.  Thevalidity, interpretation, construction and performance of this Agreement willbe governed by the laws of the State of Texas other than the conflict of lawsprovision thereof.

 

8.5           Consent to Jurisdiction and Service ofProcess.

 

(a)  *Section 7 Disputes.  *Inthe event of any dispute, controversy or claim between the Company and theEmployee arising out of or relating to the interpretation, application orenforcement of the provisions of Section 7, the Company and theEmployee agree and consent to the personal jurisdiction of the state districtcourts located within Harris County, Texas and/or the United States DistrictCourt for the Southern District of Texas, Houston Division for resolution ofthe dispute, controversy or claim, and that those courts, and only thosecourts, will have jurisdiction to determine any dispute, controversy or claimrelated to, arising under or in connection with Section 7 of thisAgreement. The Company and the Employee also agree that those courts areconvenient forums for the parties to any such dispute, controversy or claim andfor any potential witnesses and that process issued out of any such court or inaccordance with the rules of practice of that court may be served by mailor other forms of substituted service to the Company at the address of itsprincipal executive offices and to the Employee at his last known address asreflected in the Company’s records.

 

(b)  *Disputes Other**Than Under Section *7.  In the event of any dispute relating to thisAgreement, other than a dispute relating solely to Section 7, the partieswill use their best efforts to settle the dispute, claim, question, ordisagreement. To this effect, they will consult and negotiate with each otherin good faith and, recognizing their mutual interests, attempt to reach a justand equitable solution satisfactory to both parties. If such a dispute cannotbe settled through negotiation, the parties agree first to try in good faith tosettle the dispute by mediation administered by the American ArbitrationAssociation under its Employment Mediation Procedures before resorting toarbitration, litigation, or some other dispute resolution procedure. If theparties do not reach such solution through negotiation or mediation within aperiod of sixty (60) days, then, upon notice by either party to the other, alldisputes, claims, questions, or differences shall be resolved exclusively byarbitration administered by the American Arbitration Association under theEmployment Arbitration Rules and before a single neutral arbitrator. Ifarbitration is elected by one party, the other is bound to submit itself andall disputes to arbitration. The arbitrator will be selected by agreement ofthe parties or, if they do not agree on an arbitrator within thirty (30) daysafter either party has notified the other of his or its desire to have thequestion settled by arbitration, then the arbitrator will be selected pursuantto the Employment Arbitration Rules of the American ArbitrationAssociation. The decision of the Arbitrator shall be final and binding, and maybe enforced in any court with jurisdiction. Unless otherwise mutually agreed bythe parties in writing, any such arbitration shall take place in Houston,Texas.

 

8.6           Withholding of Taxes.  TheCompany will withhold from any amounts payable under the Agreement all federal,state, local or other taxes as legally will be required to be withheld.

 

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8.7           Notices. All notices, consents, waivers, and other communications under thisAgreement must be in writing and will be deemed to have been duly given when (a) deliveredby hand (with written confirmation of receipt), (b) sent by facsimile(with written confirmation of receipt), provided that a copy is mailed byregistered mail, return receipt requested, or (c) when received by theaddressee, if sent by a nationally recognized overnight delivery service(receipt requested). In each case to the appropriate addresses and facsimilenumbers set forth below (or to such other addresses and facsimile numbers as aparty may designate by notice to the other parties):

 

to the Company, to:

 

Attn: General Counsel

Linn Energy, LLC

650 Washington Road, Suite 800

Pittsburgh, Pennsylvania 15228

 

to the Employee, to:

 

Arden L. Walker, Jr.

4461 Bella Vista Circle

Farmington, New Mexico 87401

 

Addressesmay be changed by written notice sent to the other party at the last recordedaddress of that party.

 

8.8           Severability.  Theinvalidity or unenforceability of any provision or provisions of this Agreementwill not affect the validity or enforceability of any other provision of thisAgreement, which will remain in full force and effect.

 

8.9           Counterparts.  ThisAgreement may be executed in one or more counterparts, each of which will bedeemed to be an original but all of which together will constitute one and thesame Instrument.

 

8.10         Headings.  The headings used in thisAgreement are for convenience only, do not constitute a part of the Agreement,and will not be deemed to limit, characterize, or affect in any way theprovisions of the Agreement, and all provisions of the Agreement will beconstrued as if no headings had been used in the Agreement.

 

8.11         Construction.  Asused in this Agreement, unless the context otherwise requires: (a) theterms defined herein will have the meanings set forth herein for all purposes; (b) referencesto “Section” are to a section hereof; (c) “include,” “Includes” and “including”are deemed to be followed by “without limitation” whether or not they are infact followed by such words or words of like import; (d) “writing,” “written”and comparable terms refer to printing, typing, lithography and other means ofreproducing words in a visible form; (e) “hereof,” “herein.” “hereunder” andcomparable terms refer to the entirety of this Agreement and not to anyparticular section or other subdivision hereof or attachment hereto; (f) referencesto any gender include references to all genders; and (g) references to anyagreement or other instrument or statute or regulation are referred to asamended or supplemented from time to time (and, in the case of a statute orregulation, to any successor provision).

 

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8.12         Capacity: No Conflicts. The Employee represents and warrants to theCompany that: (i) he has full power, authority and capacity to execute anddeliver this Agreement, and to perform his obligations hereunder, (ii) suchexecution, delivery and performance will not (and with the giving of notice orlapse of time, or both, would not) result in the breach of any agreement orother obligation to which he is a party or Is otherwise bound, and (iii) thisAgreement is his valid and binding obligation, enforceable in accordance withits terms.

 

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IN WITNESS WHEREOF, the parties have duly executed this Agreement as ofthe 22 day of January, 2007.

 
| ** ** | **LINN OPERATING, INC.**                       |
|------------|------------------------------------------------|
|       |                                           |
|       | By:                                            | /s/  Michael C. Linn |   |
|       |                                           |
|       | Name:                                          | Michael  C. Linn |
|       | Title:                                         | Chairman,  President and Chief Executive |
|       | Officer                                        |
|       |                                           |
|       |                                           |
| ** ** | **EMPLOYEE**                                   |
|       |                                           |
|       |                                           |
|       | Arden  L. Walker, Jr.                     |
|       |                                           |
|       | **For the limited purposes set forth herein:** |
|       |                                           |
|       | **LINN ENERGY, LLC**                           |
|       |                                           |
|       | By:                                            | /s/  Michael C. Linn |
|       | Name:                                          | Michael  C. Linn |
|       | Title:                                         | Chairman,  President and Chief Executive |
|       | Officer                                        |

 

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IN WITNESS WHEREOF, the parties have duly executed this Agreement as ofthe 22nd day ofFebruary, 2007.

 
| ** ** | **LINN OPERATING, INC.**                       |
|------------|------------------------------------------------|
|       |                                           |
|       | By:                                            |   |   |
|       |                                           |
|       | Name:                                          | Michael  C. Linn |
|       | Title:                                         | Chairman,  President and Chief Executive |
|       | Officer                                        |
|       |                                           |
|       |                                           |
| ** ** | **EMPLOYEE**                                   |
|       |                                           |
|       | /s/  Arden L. Walker, Jr.                 |
|       | Arden  L. Walker, Jr.                     |
|       |                                           |
|       | **For the limited purposes set forth herein:** |
|       |                                           |
|       | **LINN ENERGY, LLC**                           |
|       |                                           |
|       | By:                                            |   |
|       | Name:                                          | Michael  C. Linn |
|       | Title:                                         | Chairman,  President and Chief Executive |
|       | Officer                                        |

 

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