Document:

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                                                                    Exhibit 10.1

                              GENUINE PARTS COMPANY
                          2006 LONG-TERM INCENTIVE PLAN

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GENUINE PARTS COMPANY
2006 LONG-TERM INCENTIVE PLAN

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ARTICLE 1 PURPOSE
   1.1   General

ARTICLE 2 DEFINITIONS
   2.1   Definitions

ARTICLE 3 EFFECTIVE TERM OF PLAN
   3.1   Effective Date
   3.2   Term of Plan

ARTICLE 4 ADMINISTRATION
   4.1   Committee
   4.2   Actions and Interpretations by the Committee
   4.3   Authority of Committee
   4.4   Award Certificates

ARTICLE 5 SHARES SUBJECT TO THE PLAN
   5.1   Number of Shares
   5.2   Share Counting
   5.3   Stock Distributed
   5.4   Limitation on Awards

ARTICLE 6 ELIGIBILITY
   6.1   General

ARTICLE 7 STOCK OPTIONS
   7.1   General
   7.2   Incentive Stock Options

ARTICLE 8 STOCK APPRECIATION RIGHTS
   8.1   Grant of Stock Appreciation Rights

ARTICLE 9 PERFORMANCE AWARDS
   9.1   Grant of Performance Awards
   9.2   Performance Goals
   9.3   Right to Payment
   9.4   Other Terms

ARTICLE 10 RESTRICTED STOCK AND RESTRICTED STOCK UNIT AWARDS
   10.1  Grant of Restricted Stock and Restricted Stock Units
   10.2  Issuance and Restrictions
   10.3  Forfeiture
   10.4  Delivery of Restricted Stock

ARTICLE 11 DEFERRED STOCK UNITS
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   11.1  Grant of Deferred Stock Units

ARTICLE 12 DIVIDEND EQUIVALENTS
   12.1  Grant of Dividend Equivalents

ARTICLE 13 STOCK OR OTHER STOCK-BASED AWARDS
   13.1  Grant of Stock or Other Stock-Based Awards

ARTICLE 14 PROVISIONS APPLICABLE TO AWARDS
   14.1  Stand-Alone and Tandem Awards
   14.2  Term of Awards
   14.3  Form of Payment of Awards
   14.4  Limits on Transfer
   14.5  Beneficiaries
   14.6  Stock Certificates
   14.7  Acceleration upon Death or Disability
   14.9  Acceleration upon a Change in Control
   14.10 Acceleration for Any Other Reason
   14.11 Effect of Acceleration
   14.12 Qualified Performance-Based Awards
   14.13 Termination of Employment
   14.17 Forfeiture Events
   14.18 Substitute Awards

ARTICLE 15 CHANGES IN CAPITAL STRUCTURE
   15.1  General

ARTICLE 16 AMENDMENT, MODIFICATION AND TERMINATION
   16.1  Amendment, Modification and Termination
   16.2  Awards Previously Granted

ARTICLE 17 GENERAL PROVISIONS
   17.1  No Rights to Awards; Non-Uniform Determinations
   17.2  No Shareholder Rights
   17.3  Withholding
   17.4  Special Provisions Related to Section 409A of the Code
   17.5  No Right to Continued Service
   17.6  Unfunded Status of Awards
   17.7  Relationship to Other Benefits
   17.8  Expenses
   17.9  Titles and Headings
   17.10 Gender and Number
   17.11 Fractional Shares
   17.12 Government and Other Regulations
   17.13 Governing Law
   17.14 Additional Provisions
   17.15 No Limitations on Rights of Company
   17.16 Indemnification
</TABLE>

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GENUINE PARTS COMPANY
2006 LONG-TERM INCENTIVE PLAN

                                    ARTICLE 1
                                     PURPOSE

     1.1. GENERAL. The purpose of the Genuine Parts Company 2006 Long-Term
Incentive Plan (the "Plan") is to promote the success, and enhance the value, of
Genuine Parts Company (the "Company"), by linking the personal interests of
employees, officers, and directors of the Company or any Affiliate (as defined
below) to those of Company shareholders and by providing such persons with an
incentive for outstanding performance. The Plan is further intended to provide
flexibility to the Company in its ability to motivate, attract, and retain the
services of employees, officers and directors upon whose judgment, interest, and
special effort the successful conduct of the Company's operation is largely
dependent. Accordingly, the Plan permits the grant of incentive awards from time
to time to selected employees, officers and directors of the Company and its
Affiliates.

                                    ARTICLE 2
                                   DEFINITIONS

     2.1. DEFINITIONS. When a word or phrase appears in this Plan with the
initial letter capitalized, and the word or phrase does not commence a sentence,
the word or phrase shall generally be given the meaning ascribed to it in this
Section or in Section 1.1 unless a clearly different meaning is required by the
context. The following words and phrases shall have the following meanings:

          (a) "Affiliate" means (i) any Subsidiary or Parent, or (ii) an entity
     that directly or through one or more intermediaries controls, is controlled
     by or is under common control with, the Company, as determined by the
     Committee.

          (b) "Award" means any Option, Stock Appreciation Right, Restricted
     Stock Award, Restricted Stock Unit Award, Deferred Stock Unit Award,
     Performance Award, Dividend Equivalent Award, Other Stock-Based Award,
     Performance-Based Cash Awards, or any other right or interest relating to
     Stock or cash, granted to a Participant under the Plan.

          (c) "Award Certificate" means a written document, in such form as the
     Committee prescribes from time to time, setting forth the terms and
     conditions of an Award. Award Certificates may be in the form of individual
     award agreements or certificates or a program document describing the terms
     and provisions of an Awards or series of Awards under the Plan.

          (d) "Board" means the Board of Directors of the Company.

          (e) "Cause" as a reason for a Participant's termination of employment,
     unless otherwise defined in the applicable Award Certificate, shall mean a
     determination by the Board that Executive has committed or engaged in
     either (i) any act that constitutes, on the part of the Participant, fraud,
     dishonesty, breach of fiduciary duty, misappropriation, embezzlement or
     gross misfeasance of duty; (ii) willful disregard of published Company
     policies and procedures or codes of ethics; or (iii) conduct by the
     Participant in his office with the Company that is grossly inappropriate
     and demonstrably likely to lead to material injury to the Company, as
     determined by the Board acting reasonably and in good faith; provided, that
     in the case of (ii) or (iii) above, such conduct shall not constitute
     "Cause" unless the Board shall have delivered to Executive notice setting
     forth with specificity (A) the conduct deemed to qualify as "Cause", (B)
     reasonable action that would remedy such objection, and (C) a reasonable
     time (not less than 30 days) within which the Participant may take such
     remedial action, and the Participant shall not have taken such specified
     remedial action within the specified time.

          (f) "Change in Control" means and includes the occurrence of any one
     of the following events:

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               (i) The acquisition by any individual, entity or group (within
          the meaning of Section 13(d)(3) or 14(d)(2) of the 1934 Act) (a
          "Person") of beneficial ownership (within the meaning of Rule 13d-3
          promulgated under the 1934 Act) of 20% or more of the combined voting
          power of the then outstanding voting securities of the Company
          entitled to vote generally in the election of directors (the
          "Outstanding Company Voting Securities"); provided, however, that for
          purposes of this subsection (1), the following acquisitions shall not
          constitute a Change of Control: (i) any acquisition by a Person who is
          on the Effective Date the beneficial owner of 20% or more of the
          Outstanding Company Voting Securities, (ii) any acquisition directly
          from the Company, (iii) any acquisition by the Company, (iv) any
          acquisition by any employee benefit plan (or related trust) sponsored
          or maintained by the Company or any corporation controlled by the
          Company, or (v) any acquisition by any corporation pursuant to a
          transaction which complies with clauses (i), (ii) and (iii) of
          subsection (3) of this definition; or

               (ii) Individuals who, as of the Effective Date, constitute the
          Board (the "Incumbent Board") cease for any reason to constitute at
          least a majority of the Board; provided, however, that any individual
          becoming a director subsequent to the Effective Date whose election,
          or nomination for election by the Company's shareholders, was approved
          by a vote of at least a majority of the directors then comprising the
          Incumbent Board shall be considered as though such individual were a
          member of the Incumbent Board, but excluding, for this purpose, any
          such individual whose initial assumption of office occurs as a result
          of an actual or threatened election contest with respect to the
          election or removal of directors or other actual or threatened
          solicitation of proxies or consents by or on behalf of a Person other
          than the Board; or

               (iii) Consummation of a reorganization, merger, consolidation or
          share exchange or sale or other disposition of all or substantially
          all of the assets of the Company (a "Business Combination"), in each
          case, unless, following such Business Combination, (i) all or
          substantially all of the individuals and entities who were the
          beneficial owners of the Outstanding Company Voting Securities
          immediately prior to such Business Combination beneficially own,
          directly or indirectly, more than 50% of the combined voting power of
          the then outstanding voting securities entitled to vote generally in
          the election of directors of the corporation resulting from such
          Business Combination (including, without limitation, a corporation
          which as a result of such transaction owns the Company or all or
          substantially all of the Company's assets either directly or through
          one or more subsidiaries) in substantially the same proportions as
          their ownership, immediately prior to such Business Combination of the
          Outstanding Company Voting Securities, and (ii) no Person (excluding
          any corporation resulting from such Business Combination or any
          employee benefit plan (or related trust) of the Company or such
          corporation resulting from such Business Combination) beneficially
          owns, directly or indirectly, 20% or more of the combined voting power
          of the then outstanding voting securities of such corporation except
          to the extent that such ownership existed prior to the Business
          Combination, and (iii) at least a majority of the members of the board
          of directors of the corporation resulting from such Business
          Combination were members of the Incumbent Board at the time of the
          execution of the initial agreement, or of the action of the Board,
          providing for such Business Combination; or

               (iv) Approval by the shareholders of the Company of a complete
          liquidation or dissolution of the Company.

          (g) "Code" means the Internal Revenue Code of 1986, as amended from
     time to time, and includes a reference to the underlying final regulations.

          (h) "Committee" means the committee of the Board described in Article
     4.

          (i) "Company" means Genuine Parts Company, a Georgia corporation, or
     any successor corporation.

          (j) "Continuous Status as a Participant" means the absence of any
     interruption or termination of service as an employee, officer or director
     of the Company or any Affiliate, as applicable; provided, however, that for
     purposes of an Incentive Stock Option, or a Stock Appreciation Right issued
     in tandem with an Incentive Stock Option, "Continuous Status as a
     Participant" means the absence of any interruption or termination of
     service as

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     an employee of the Company or any Parent or Subsidiary, as applicable,
     pursuant to applicable tax regulations. Continuous Status as a Participant
     shall not be considered interrupted in the case of any leave of absence
     authorized in writing by the Company prior to its commencement; provided,
     however, that for purposes of Incentive Stock Options, no such leave may
     exceed 90 days, unless reemployment upon expiration of such leave is
     guaranteed by statute or contract. If reemployment upon expiration of a
     leave of absence approved by the Company is not so guaranteed, on the 91st
     day of such leave any Incentive Stock Option held by the Participant shall
     cease to be treated as an Incentive Stock Option and shall be treated for
     tax purposes as a Non-Qualified Stock Option.

          (k) "Covered Employee" means a covered employee as defined in Code
     Section 162(m)(3).

          (l) "Disability" shall mean any illness or other physical or mental
     condition of a Participant that renders the Participant incapable of
     performing his customary and usual duties for the Company, or any medically
     determinable illness or other physical or mental condition resulting from a
     bodily injury, disease or mental disorder which, in the judgment of the
     Committee, is permanent and continuous in nature. The Committee may require
     such medical or other evidence as it deems necessary to judge the nature
     and permanency of the Participant's condition. Notwithstanding the above,
     with respect to an Incentive Stock Option, Disability shall mean Permanent
     and Total Disability as defined in Section 22(e)(3) of the Code.

          (m) "Deferred Stock Unit" means a right granted to a Participant under
     Article 11.

          (n) "Dividend Equivalent" means a right granted to a Participant under
     Article 12.

          (o) "Effective Date" has the meaning assigned such term in Section
     3.1.

          (p) "Eligible Participant" means an employee, officer, consultant or
     director of the Company or any Affiliate.

          (q) "Exchange" means the Nasdaq National Market or any national
     securities exchange on which the Stock may from time to time be listed or
     traded.

          (r) "Fair Market Value", on any date, means (i) if the Stock is listed
     on a securities exchange or is traded over the Nasdaq National Market, the
     closing sales price on such exchange or over such system on such date or,
     in the absence of reported sales on such date, the closing sales price on
     the immediately preceding date on which sales were reported, or (ii) if the
     Stock is not listed on a securities exchange or traded over the Nasdaq
     National Market, the mean between the bid and offered prices as quoted by
     Nasdaq for such date, provided that if it is determined that the fair
     market value is not properly reflected by such Nasdaq quotations, Fair
     Market Value will be determined by such other method as the Committee
     determines in good faith to be reasonable.

          (s) "Grant Date" of an Award means the first date on which all
     necessary corporate action has been taken to approve the grant of the Award
     as provided in the Plan, or such later date as is determined and specified
     as part of that authorization process. Notice of the grant shall be
     provided to the grantee within a relatively short period of time after the
     Grant Date.

          (t) "Incentive Stock Option" means an Option that is intended to be an
     incentive stock option and meets the requirements of Section 422 of the
     Code or any successor provision thereto.

          (u) "Non-Employee Director" means a director of the Company who is not
     a common law employee of the Company or an Affiliate.

          (v) "Non-Qualified Stock Option" means an Option that is not an
     Incentive Stock Option.

          (w) "Option" means a right granted to a Participant under Article 7 of
     the Plan to purchase Stock at a specified price during specified time
     periods. An Option may be either an Incentive Stock Option or a
     Non-

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     Qualified Stock Option.

          (x) "Other Stock-Based Award" means a right, granted to a Participant
     under Article 13, that relates to or is valued by reference to Stock or
     other Awards relating to Stock.

          (y) "Parent" means a corporation, limited liability company,
     partnership or other entity which owns or beneficially owns a majority of
     the outstanding voting stock or voting power of the Company.
     Notwithstanding the above, with respect to an Incentive Stock Option,
     Parent shall have the meaning set forth in Section 424(e) of the Code.

          (z) "Participant" means a person who, as an employee, officer,
     director or consultant of the Company or any Affiliate, has been granted an
     Award under the Plan; provided that in the case of the death of a
     Participant, the term "Participant" refers to a beneficiary designated
     pursuant to Section 14.5 or the legal guardian or other legal
     representative acting in a fiduciary capacity on behalf of the Participant
     under applicable state law and court supervision.

          (aa) "Performance Award" means Performance Shares or Performance Units
     or Performance-Based Cash Awards granted pursuant to Article 9.

          (bb) "Performance-Based Cash Award" means a right granted to a
     Participant under Article 9 to a cash award to be paid upon achievement of
     such performance goals as the Committee establishes with regard to such
     Award.

          (cc) "Performance Share" means any right granted to a Participant
     under Article 9 to a unit to be valued by reference to a designated number
     of Shares to be paid upon achievement of such performance goals as the
     Committee establishes with regard to such Performance Share.

          (dd) "Performance Unit" means a right granted to a Participant under
     Article 9 to a unit valued by reference to a designated amount of cash or
     property other than Shares, to be paid to the Participant upon achievement
     of such performance goals as the Committee establishes with regard to such
     Performance Unit.

          (ee) "Person" means any individual, entity or group, within the
     meaning of Section 3(a)(9) of the 1934 Act and as used in Section 13(d)(3)
     or 14(d)(2) of the 1934 Act.

          (ff) "Plan" means the Genuine Parts Company 2006 Long-Term Incentive
     Plan, as amended from time to time.

          (gg) "Qualified Performance-Based Award" means an Award that is either
     (i) intended to qualify for the Section 162(m) Exemption and is made
     subject to performance goals based on Qualified Business Criteria as set
     forth in Section 14.12(b), or (ii) an Option or SAR having an exercise
     price equal to or greater than the Fair Market Value of the underlying
     Stock as of the Grant Date.

          (hh) "Qualified Business Criteria" means one or more of the Business
     Criteria listed in Section 14.12(b) upon which performance goals for
     certain Qualified Performance-Based Awards may be established by the
     Committee.

          (ii) "Restricted Stock Award" means Stock granted to a Participant
     under Article 10 that is subject to certain restrictions and to risk of
     forfeiture.

          (jj) "Restricted Stock Unit Award" means the right granted to a
     Participant under Article 10 to receive shares of Stock (or the equivalent
     value in cash or other property if the Committee so provides) in the
     future, which right is subject to certain restrictions and to risk of
     forfeiture.

          (kk) "Retirement" in the case of an employee means termination of
     employment with the Company, a

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     Parent or Subsidiary after attaining age 65.

          (ll) "Section 162(m) Exemption" means the exemption from the
     limitation on deductibility imposed by Section 162(m) of the Code that is
     set forth in Section 162(m)(4)(C) of the Code or any successor provision
     thereto.

          (mm) "Shares" means shares of the Company's Stock. If there has been
     an adjustment or substitution pursuant to Section 15.1, the term "Shares"
     shall also include any shares of stock or other securities that are
     substituted for Shares or into which Shares are adjusted pursuant to
     Section 15.1.

          (nn) "Stock" means the $1.00 par value common stock of the Company and
     such other securities of the Company as may be substituted for Stock
     pursuant to Article 15.

          (oo) "Stock Appreciation Right" or "SAR" means a right granted to a
     Participant under Article 8 to receive a payment equal to the difference
     between the Fair Market Value of a Share as of the date of exercise of the
     SAR over the grant price of the SAR, all as determined pursuant to Article
     8.

          (pp) "Subsidiary" means any corporation, limited liability company,
     partnership or other entity of which a majority of the outstanding voting
     stock or voting power is beneficially owned directly or indirectly by the
     Company. Notwithstanding the above, with respect to an Incentive Stock
     Option, Subsidiary shall have the meaning set forth in Section 424(f) of
     the Code.

          (qq) "1933 Act" means the Securities Act of 1933, as amended from time
     to time.

          (rr) "1934 Act" means the Securities Exchange Act of 1934, as amended
     from time to time.

                                    ARTICLE 3
                             EFFECTIVE TERM OF PLAN

     3.1. EFFECTIVE DATE. The Plan shall be effective as of the date it is
approved by both the Board and the shareholders of the Company (the "Effective
Date").

     3.2. TERMINATION OF PLAN. The Plan shall terminate on the tenth anniversary
of the Effective Date unless earlier terminated as provided herein. The
termination of the Plan on such date shall not affect the validity of any Award
outstanding on the date of termination.

                                    ARTICLE 4
                                 ADMINISTRATION

     4.1. COMMITTEE. The Plan shall be administered by the Compensation,
Nominating and Governance Committee (which Committee shall consist of at least
two directors) or, at the discretion of the Board from time to time, the Plan
may be administered by the Board. It is intended that at least two of the
directors appointed to serve on the Committee shall be "non-employee directors"
(within the meaning of Rule 16b-3 promulgated under the 1934 Act) and "outside
directors" (within the meaning of Code Section 162(m)) and that any such members
of the Committee who do not so qualify shall abstain from participating in any
decision to make or administer Awards that are made to Eligible Participants who
at the time of consideration for such Award (i) are persons subject to the
short-swing profit rules of Section 16 of the 1934 Act, or (ii) are reasonably
anticipated to become Covered Employees during the term of the Award. However,
the mere fact that a Committee member shall fail to qualify under either of the
foregoing requirements or shall fail to abstain from such action shall not
invalidate any Award made by the Committee which Award is otherwise validly made
under the Plan. The members of the Committee shall be appointed by, and may be
changed at any time and from time to time in the discretion of, the Board. The
Board may reserve to itself any or all of the authority and responsibility of
the Committee under the Plan or may act as administrator of the Plan for any and
all purposes. To the extent the Board has reserved any authority and
responsibility or during any time that the Board is acting as administrator of
the Plan, it shall have all the powers of

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the Committee hereunder, and any reference herein to the Committee (other than
in this Section 4.1) shall include the Board. To the extent any action of the
Board under the Plan conflicts with actions taken by the Committee, the actions
of the Board shall control.

     4.2. ACTION AND INTERPRETATIONS BY THE COMMITTEE. For purposes of
administering the Plan, the Committee may from time to time adopt rules,
regulations, guidelines and procedures for carrying out the provisions and
purposes of the Plan and make such other determinations, not inconsistent with
the Plan, as the Committee may deem appropriate. The Committee's interpretation
of the Plan, any Awards granted under the Plan, any Award Certificate and all
decisions and determinations by the Committee with respect to the Plan are
final, binding, and conclusive on all parties. Each member of the Committee is
entitled to, in good faith, rely or act upon any report or other information
furnished to that member by any officer or other employee of the Company or any
Affiliate, the Company's or an Affiliate's independent certified public
accountants, Company counsel or any executive compensation consultant or other
professional retained by the Company to assist in the administration of the
Plan.

     4.3. AUTHORITY OF COMMITTEE. Except as provided below, the Committee has
the exclusive power, authority and discretion to:

          (a) Grant Awards;

          (b) Designate Participants;

          (c) Determine the type or types of Awards to be granted to each
     Participant;

          (d) Determine the number of Awards to be granted and the number of
     Shares or dollar amount to which an Award will relate;

          (e) Determine the terms and conditions of any Award granted under the
     Plan, including but not limited to, the exercise price, grant price, or
     purchase price, any restrictions or limitations on the Award, any schedule
     for lapse of forfeiture restrictions or restrictions on the exercisability
     of an Award, and accelerations or waivers thereof, based in each case on
     such considerations as the Committee in its sole discretion determines;

          (f) Accelerate the vesting, exercisability or lapse of restrictions of
     any outstanding Award, in accordance with Article 14, based in each case on
     such considerations as the Committee in its sole discretion determines;

          (g) Determine whether, to what extent, and under what circumstances an
     Award may be settled in, or the exercise price of an Award may be paid in,
     cash, Stock, other Awards, or other property, or an Award may be canceled,
     forfeited, or surrendered;

          (h) Prescribe the form of each Award Certificate, which need not be
     identical for each Participant;

          (i) Decide all other matters that must be determined in connection
     with an Award;

          (j) Establish, adopt or revise any rules, regulations, guidelines or
     procedures as it may deem necessary or advisable to administer the Plan;

          (k) Make all other decisions and determinations that may be required
     under the Plan or as the Committee deems necessary or advisable to
     administer the Plan;

          (l) Amend the Plan or any Award Certificate as provided herein; and

          (m) Adopt such modifications, procedures, and subplans as may be
     necessary or desirable to comply with provisions of the laws of non-U.S.
     jurisdictions in which the Company or any Affiliate may operate, in order
     to assure the viability of the benefits of Awards granted to participants
     located in such other jurisdictions and to

<PAGE>

     meet the objectives of the Plan.

     Notwithstanding the foregoing, grants of Awards to Non-Employee Directors
hereunder shall be made only in accordance with the terms, conditions and
parameters of a plan, program or policy for the compensation of Non-Employee
Directors as in effect from time to time, and the Committee may not make
discretionary grants hereunder to Non-Employee Directors.

     4.4. AWARD CERTIFICATES. Each Award shall be evidenced by an Award
Certificate. Each Award Certificate shall include such provisions, not
inconsistent with the Plan, as may be specified by the Committee.

                                    ARTICLE 5
                           SHARES SUBJECT TO THE PLAN

     5.1. NUMBER OF SHARES. Subject to adjustment as provided in Sections 5.2
and 15.1, the aggregate number of Shares reserved and available for issuance
pursuant to Awards granted under the Plan shall be [8,000,000].

     5.2. SHARE COUNTING.

          (a) To the extent that an Award is canceled, terminates, expires, is
     forfeited or lapses for any reason, any unissued or forfeited Shares
     subject to the Award will again be available for issuance pursuant to
     Awards granted under the Plan.

          (b) Shares subject to Awards settled in cash will again be available
     for issuance pursuant to Awards granted under the Plan.

          (c) Shares withheld from an Award to satisfy minimum tax withholding
     requirements will again be available for issuance pursuant to Awards
     granted under the Plan (but Shares delivered by a Participant to satisfy
     tax withholding requirements shall not be added back to the number of
     Shares available for issuance under the Plan).

          (d) If the exercise price of an Option is satisfied by delivering
     Shares to the Company (by either actual delivery or attestation), only the
     number of Shares issued in excess of the delivery or attestation shall be
     considered for purposes of determining the number of Shares remaining
     available for issuance pursuant to Awards granted under the Plan.

          (e) To the extent that the full number of Shares subject to an Option
     or SAR is not issued upon exercise of the Option or SAR for any reason,
     only the number of Shares issued and delivered upon exercise of the Option
     or SAR shall be considered for purposes of determining the number of Shares
     remaining available for issuance pursuant to Awards granted under the Plan.

          (f) Substitute Awards granted pursuant to Section 14.14 of the Plan
     shall not count against the Shares otherwise available for issuance under
     the Plan under Section 5.1.

     5.3. STOCK DISTRIBUTED. Any Stock distributed pursuant to an Award may
consist, in whole or in part, of authorized and unissued Stock, treasury Stock
or Stock purchased on the open market.

     5.4. LIMITATION ON AWARDS. Notwithstanding any provision in the Plan to the
contrary (but subject to adjustment as provided in Section 15.1), the maximum
number of Shares with respect to one or more Options and/or SARs that may be
granted during any one calendar year under the Plan to any one Participant shall
be 500,000; The maximum aggregate grant with respect to Awards of Restricted
Stock, Restricted Stock Units, Deferred Stock Units, Performance Shares or other
Stock-Based Awards (other than Options or SARs) granted in any one calendar year
to any one Participant shall be 500,000. The aggregate dollar value of any
Performance-Based Cash Award or other cash-based award that may be paid to any
one Participant during any one calendar year

<PAGE>

under the Plan shall be $7,500,000.

                                    ARTICLE 6
                                   ELIGIBILITY

     6.1. GENERAL. Awards may be granted only to Eligible Participants; except
that Incentive Stock Options may be granted to only to Eligible Participants who
are employees of the Company or a Parent or Subsidiary as defined in Section
424(e) and (f) of the Code.

                                    ARTICLE 7
                                  STOCK OPTIONS

     7.1. GENERAL. The Committee is authorized to grant Options to Participants
on the following terms and conditions:

          (a) EXERCISE PRICE. The exercise price per Share under an Option shall
     be determined by the Committee, provided that the exercise price for any
     Option (other than an Option issued as a substitute Award pursuant to
     Section 14.18) shall not be less than the Fair Market Value as of the Grant
     Date.

          (b) TIME AND CONDITIONS OF EXERCISE. The Committee shall determine the
     time or times at which an Option may be exercised in whole or in part,
     subject to Section 7.1(d). The Committee shall also determine the
     performance or other conditions, if any, that must be satisfied before all
     or part of an Option may be exercised or vested. Subject to Section 14.9,
     the Committee may waive any exercise or vesting provisions at any time in
     whole or in part based upon factors as the Committee may determine in its
     sole discretion so that the Option becomes exercisable or vested at an
     earlier date. The Committee may permit an arrangement whereby receipt of
     Stock upon exercise of an Option is delayed until a specified future date.

          (c) PAYMENT. The Committee shall determine the methods by which the
     exercise price of an Option may be paid, the form of payment, including,
     without limitation, cash, Shares, or other property (including "cashless
     exercise" arrangements), and the methods by which Shares shall be delivered
     or deemed to be delivered to Participants.

          (d) EXERCISE TERM. In no event may any Option be exercisable for more
     than ten years from the Grant Date.

     7.2. INCENTIVE STOCK OPTIONS. The terms of any Incentive Stock Options
granted under the Plan must comply with the following additional rules:

          (a) EXERCISE PRICE. The exercise price of an Incentive Stock Option
     shall not be less than the Fair Market Value as of the Grant Date.

          (b) LAPSE OF OPTION. Subject to any earlier termination provision
     contained in the Award Certificate, an Incentive Stock Option shall lapse
     upon the earliest of the following circumstances; provided, however, that
     the Committee may, prior to the lapse of the Incentive Stock Option under
     the circumstances described in subsections (3), (4) or (5) below, provide
     in writing that the Option will extend until a later date, but if an Option
     is so extended and is exercised after the dates specified in subsections
     (3) and (4) below, it will automatically become a Non-Qualified Stock
     Option:

               (1) The expiration date set forth in the Award Certificate.

               (2) The tenth anniversary of the Grant Date.

               (3) Three months after termination of the Participant's
          Continuous Status as a Participant for any reason other than the
          Participant's Disability or death.

<PAGE>

               (4) One year after the Participant's Continuous Status as a
          Participant by reason of the Participant's Disability.

               (5) One year after the Participant's death if the Participant
          dies while employed, or during the three-month period described in
          paragraph (3) or during the one-year period described in paragraph (4)
          and before the Option otherwise lapses.

          Unless the exercisability of the Incentive Stock Option is accelerated
     as provided in Article 14, if a Participant exercises an Option after
     termination of employment, the Option may be exercised only with respect to
     the Shares that were otherwise vested on the Participant's termination of
     employment. Upon the Participant's death, any exercisable Incentive Stock
     Options may be exercised by the Participant's beneficiary, determined in
     accordance with Section 14.5.

          (c) INDIVIDUAL DOLLAR LIMITATION. The aggregate Fair Market Value
     (determined as of the Grant Date) of all Shares with respect to which
     Incentive Stock Options are first exercisable by a Participant in any
     calendar year may not exceed $100,000.00.

          (d) TEN PERCENT OWNERS. No Incentive Stock Option shall be granted to
     any individual who, at the Grant Date, owns stock possessing more than ten
     percent of the total combined voting power of all classes of stock of the
     Company or any Parent or Subsidiary unless the exercise price per share of
     such Option is at least 110% of the Fair Market Value per Share at the
     Grant Date and the Option expires no later than five years after the Grant
     Date.

          (e) RIGHT TO EXERCISE. During a Participant's lifetime, an Incentive
     Stock Option may be exercised only by the Participant or, in the case of
     the Participant's Disability, by the Participant's guardian or legal
     representative.

          (f) ELIGIBLE GRANTEES. The Committee may not grant an Incentive Stock
     Option to a person who is not at the Grant Date an employee of the Company
     or a Parent or Subsidiary.

                                    ARTICLE 8
                            STOCK APPRECIATION RIGHTS

     8.1. GRANT OF STOCK APPRECIATION RIGHTS. The Committee is authorized to
grant Stock Appreciation Rights to Participants on the following terms and
conditions:

          (a) RIGHT TO PAYMENT. Upon the exercise of a Stock Appreciation Right,
     the Participant to whom it is granted has the right to receive the excess,
     if any, of:

               (1) The Fair Market Value of one Share on the date of exercise;
          over

               (2) The base price of the Stock Appreciation Right as determined
          by the Committee, which shall not be less than the Fair Market Value
          of one Share on the Grant Date (unless the SAR is granted in tandem
          with an Option after the Grant Date of the Option, in which case, the
          base price of the SAR may equal the exercise price of the related
          Option even if less than the Fair Market Value of one Share on the
          Grant Date of the SAR).

          (b) OTHER TERMS. All awards of Stock Appreciation Rights shall be
     evidenced by an Award Certificate. The terms, methods of exercise, methods
     of settlement, form of consideration payable in settlement, and any other
     terms and conditions of any Stock Appreciation Right shall be determined by
     the Committee at the time of the grant of the Award and shall be reflected
     in the Award Certificate.

                                    ARTICLE 9
                               PERFORMANCE AWARDS

<PAGE>

     9.1. GRANT OF PERFORMANCE AWARDS. The Committee is authorized to grant
Performance Shares, Performance Units or Performance-Based Cash Awards to
Participants on such terms and conditions as may be selected by the Committee.
The Committee shall have the complete discretion to determine the number of
Performance Awards granted to each Participant, subject to Section 5.4, and to
designate the provisions of such Performance Awards as provided in Section 4.3.
All Performance Awards shall be evidenced by an Award Certificate or a written
program established by the Committee, pursuant to which Performance Awards are
awarded under the Plan under uniform terms, conditions and restrictions set
forth in such written program.

     9.2. PERFORMANCE GOALS. The Committee may establish performance goals for
Performance Awards which may be based on any criteria selected by the Committee.
Such performance goals may be described in terms of Company-wide objectives or
in terms of objectives that relate to the performance of the Participant, an
Affiliate or a division, region, department or function within the Company or an
Affiliate. If the Committee determines that a change in the business,
operations, corporate structure or capital structure of the Company or the
manner in which the Company or an Affiliate conducts its business, or other
events or circumstances render performance goals to be unsuitable, the Committee
may modify such performance goals in whole or in part, as the Committee deems
appropriate. If a Participant is promoted, demoted or transferred to a different
business unit or function during a performance period, the Committee may
determine that the performance goals or performance period are no longer
appropriate and may (i) adjust, change or eliminate the performance goals or the
applicable performance period as it deems appropriate to make such goals and
period comparable to the initial goals and period, or (ii) make a cash payment
to the participant in amount determined by the Committee. The foregoing two
sentences shall not apply with respect to a Performance Award that is intended
to be a Qualified Performance-Based Award if the recipient of such award (a) was
a Covered Employee on the date of the modification, adjustment, change or
elimination of the performance goals or performance period, or (b) in the
reasonable judgment of the Committee, may be a Covered Employee on the date the
Performance Award is expected to be paid.

     9.3. RIGHT TO PAYMENT. The grant of a Performance Share to a Participant
will entitle the Participant to receive at a specified later time a specified
number of Shares, or the equivalent cash value, if the performance goals
established by the Committee are achieved and the other terms and conditions
thereof are satisfied. The grant of a Performance Unit to a Participant will
entitle the Participant to receive at a specified later time a specified dollar
value in cash or other property, including Shares, variable under conditions
specified in the Award, if the performance goals in the Award are achieved and
the other terms and conditions thereof are satisfied. The grant of a
Performance-Based Cash Award to a Participant will entitle the Participant to
receive at a specified later time a specified dollar value in cash variable
under conditions specified in the Award, if the performance goals in the Award
are achieved and the other terms and conditions thereof are satisfied. The
Committee shall set performance goals and other terms or conditions to payment
of the Performance Awards in its discretion which, depending on the extent to
which they are met, will determine the value of the Performance Awards that will
be paid to the Participant.

     9.4. OTHER TERMS. Performance Awards may be payable in cash, Stock, or
other property, and have such other terms and conditions as determined by the
Committee and reflected in the Award Certificate. For purposes of determining
the number of Shares to be used in payment of a Performance Award denominated in
cash but payable in whole or in part in Shares or Restricted Stock, the number
of Shares to be so paid will be determined by dividing the cash value of the
Award to be so paid by the Fair Market Value of a Share on the date of
determination by the Committee of the amount of the payment under the Award, or,
if the Committee so directs, the date immediately preceding the date the Award
is paid.

                                   ARTICLE 10
                RESTRICTED STOCK AND RESTRICTED STOCK UNIT AWARDS

     10.1. GRANT OF RESTRICTED STOCK AND RESTRICTED STOCK UNITS. The Committee
is authorized to make Awards of Restricted Stock or Restricted Stock Units to
Participants in such amounts and subject to such terms and conditions as may be
selected by the Committee. An Award of Restricted Stock or Restricted Stock
Units shall be evidenced by an Award Certificate setting forth the terms,
conditions, and restrictions applicable to the Award.
<PAGE>

     10.2. ISSUANCE AND RESTRICTIONS. Restricted Stock or Restricted Stock Units
shall be subject to such restrictions on transferability and other restrictions
as the Committee may impose (including, without limitation, limitations on the
right to vote Restricted Stock or the right to receive dividends on the
Restricted Stock). These restrictions may lapse separately or in combination at
such times, under such circumstances, in such installments, upon the
satisfaction of performance goals or otherwise, as the Committee determines at
the time of the grant of the Award or thereafter. Except as otherwise provided
in an Award Certificate or any special Plan document governing an Award, the
Participant shall have all of the rights of a shareholder with respect to the
Restricted Stock, and the Participant shall have none of the rights of a
stockholder with respect to Restricted Stock Units until such time as Shares of
Stock are paid in settlement of the Restricted Stock Units.

     10.3. FORFEITURE. Except as otherwise determined by the Committee at the
time of the grant of the Award or thereafter, upon termination of Continuous
Status as a Participant during the applicable restriction period or upon failure
to satisfy a performance goal during the applicable restriction period,
Restricted Stock or Restricted Stock Units that are at that time subject to
restrictions shall be forfeited; provided, however, that the Committee may
provide in any Award Certificate that restrictions or forfeiture conditions
relating to Restricted Stock or Restricted Stock Units will be waived in whole
or in part in the event of terminations resulting from specified causes, and the
Committee may in other cases waive in whole or in part restrictions or
forfeiture conditions relating to Restricted Stock or Restricted Stock Units.

     10.4. DELIVERY OF RESTRICTED STOCK. Shares of Restricted Stock shall be
delivered to the Participant at the time of grant either by book-entry
registration or by delivering to the Participant, or a custodian or escrow agent
(including, without limitation, the Company or one or more of its employees)
designated by the Committee, a stock certificate or certificates registered in
the name of the Participant. If physical certificates representing shares of
Restricted Stock are registered in the name of the Participant, such
certificates must bear an appropriate legend referring to the terms, conditions,
and restrictions applicable to such Restricted Stock.

                                   ARTICLE 11
                              DEFERRED STOCK UNITS

     11.1. GRANT OF DEFERRED STOCK UNITS. The Committee is authorized to grant
Deferred Stock Units to Participants subject to such terms and conditions as may
be selected by the Committee. Deferred Stock Units shall entitle the Participant
to receive Shares of Stock (or the equivalent value in cash or other property if
so determined by the Committee) at a future time as determined by the Committee,
or as determined by the Participant within guidelines established by the
Committee in the case of voluntary deferral elections. An Award of Deferred
Stock Units shall be evidenced by an Award Certificate setting forth the terms
and conditions applicable to the Award.

                                   ARTICLE 12
                              DIVIDEND EQUIVALENTS

     12.1. GRANT OF DIVIDEND EQUIVALENTS. The Committee is authorized to grant
Dividend Equivalents to Participants subject to such terms and conditions as may
be selected by the Committee. Dividend Equivalents shall entitle the Participant
to receive payments equal to dividends with respect to all or a portion of the
number of Shares subject to an Award, as determined by the Committee. The
Committee may provide that Dividend Equivalents be paid or distributed when
accrued or be deemed to have been reinvested in additional Shares, or otherwise
reinvested.

                                   ARTICLE 13
                        STOCK OR OTHER STOCK-BASED AWARDS

     13.1. GRANT OF STOCK OR OTHER STOCK-BASED AWARDS. The Committee is
authorized, subject to limitations under applicable law, to grant to
Participants such other Awards that are payable in, valued in whole or in part
by reference to, or otherwise based on or related to Shares, as deemed by the
Committee to be consistent with the purposes of the Plan, including without
limitation Shares awarded purely as a "bonus" and not subject to

<PAGE>

any restrictions or conditions, convertible or exchangeable debt securities,
other rights convertible or exchangeable into Shares, and Awards valued by
reference to book value of Shares or the value of securities of or the
performance of specified Parents or Subsidiaries. The Committee shall determine
the terms and conditions of such Awards.

                                   ARTICLE 14
                         PROVISIONS APPLICABLE TO AWARDS

     14.1. STAND-ALONE AND TANDEM AWARDS. Awards granted under the Plan may, in
the discretion of the Committee, be granted either alone or in addition to, in
tandem with, any other Award granted under the Plan. Subject to Section 16.2,
awards granted in addition to or in tandem with other Awards may be granted
either at the same time as or at a different time from the grant of such other
Awards.

     14.2. TERM OF AWARD. The term of each Award shall be for the period as
determined by the Committee, provided that in no event shall the term of any
Option or a Stock Appreciation Right exceed a period of ten years from its Grant
Date (or, if Section 7.2(d) applies, five years from its Grant Date).

     14.3. FORM OF PAYMENT FOR AWARDS. Subject to the terms of the Plan and any
applicable law or Award Certificate, payments or transfers to be made by the
Company or an Affiliate on the grant or exercise of an Award may be made in such
form as the Committee determines at or after the Grant Date, including without
limitation, cash, Stock, other Awards, or other property, or any combination,
and may be made in a single payment or transfer, in installments, or on a
deferred basis, in each case determined in accordance with rules adopted by, and
at the discretion of, the Committee.

     14.4. LIMITS ON TRANSFER. No right or interest of a Participant in any
unexercised or restricted Award may be pledged, encumbered, or hypothecated to
or in favor of any party other than the Company or an Affiliate, or shall be
subject to any lien, obligation, or liability of such Participant to any other
party other than the Company or an Affiliate. No unexercised or restricted Award
shall be assignable or transferable by a Participant other than by will or the
laws of descent and distribution; provided, however, that the Committee may (but
need not) permit other transfers where the Committee concludes that such
transferability (i) does not result in accelerated taxation, (ii) does not cause
any Option intended to be an Incentive Stock Option to fail to be described in
Code Section 422(b), and (iii) is otherwise appropriate and desirable, taking
into account any factors deemed relevant, including without limitation, state or
federal tax or securities laws applicable to transferable Awards.

     14.5. BENEFICIARIES. Notwithstanding Section 14.4, a Participant may, in
the manner determined by the Committee, designate a beneficiary to exercise the
rights of the Participant and to receive any distribution with respect to any
Award upon the Participant's death. A beneficiary, legal guardian, legal
representative, or other person claiming any rights under the Plan is subject to
all terms and conditions of the Plan and any Award Certificate applicable to the
Participant, except to the extent the Plan and Award Certificate otherwise
provide, and to any additional restrictions deemed necessary or appropriate by
the Committee. If no beneficiary has been designated or survives the
Participant, payment shall be made to the Participant's estate. Subject to the
foregoing, a beneficiary designation may be changed or revoked by a Participant
at any time provided the change or revocation is filed with the Committee.

     14.6. STOCK CERTIFICATES. All Stock issuable under the Plan is subject to
any stop-transfer orders and other restrictions as the Committee deems necessary
or advisable to comply with federal or state securities laws, rules and
regulations and the rules of any national securities exchange or automated
quotation system on which the Stock is listed, quoted, or traded. The Committee
may place legends on any Stock certificate or issue instructions to the transfer
agent to reference restrictions applicable to the Stock.

     14.7. ACCELERATION UPON DEATH OR DISABILITY. Except as otherwise provided
in the Award Certificate or any special Plan document governing an Award, upon
the Participant's death or Disability during his or her Continuous Status as a
Participant, (i) all of such Participant's outstanding Options, SARs, and other
Awards in the nature of rights that may be exercised shall become fully
exercisable, (ii) all time-based vesting restrictions

<PAGE>

on the Participant's outstanding Awards shall lapse, and (iii) the target payout
opportunities attainable under all of such Participant's outstanding
performance-based Awards shall be deemed to have been fully earned as of the
date of termination based upon (A) an assumed achievement of all relevant
performance goals at the "target" level if the date of termination occurs during
the first half of the applicable performance period, or (B) the actual level of
achievement of all relevant performance goals against target, if the date of
termination occurs during the second half of the applicable performance period,
and, in either such case, there shall be a prorata payout to the Participant or
his or her estate within thirty (30) days following the date of termination
based upon the length of time within the performance period that has elapsed
prior to the date of termination. Any Awards shall thereafter continue or lapse
in accordance with the other provisions of the Plan and the Award Certificate.
To the extent that this provision causes Incentive Stock Options to exceed the
dollar limitation set forth in Section 7.2(c), the excess Options shall be
deemed to be Non-Qualified Stock Options.

     14.8. ACCELERATION UPON A CHANGE IN CONTROL. Except as otherwise provided
in the Award Certificate or in an employment agreement, consulting agreement,
change in control agreement or similar agreement in effect between the Company
or an Affiliate and the Participant, if a Participant's employment is terminated
without Cause within two years after the effective date of a Change in Control,
then (i) all of that Participant's outstanding Options, SARs and other Awards in
the nature of rights that may be exercised shall become fully exercisable, (ii)
all time-based vesting restrictions on the Participant's outstanding Awards
shall lapse, and (iii) the target payout opportunities attainable under all
outstanding of that Participant's performance-based Awards shall be deemed to
have been fully earned based upon an assumed achievement of all relevant
performance goals at the "target" level and there shall be prorata payout to
such Participant within thirty (30) days following the date of termination of
employment based upon the length of time within the performance period that has
elapsed prior to the date of termination of employment.

     14.9. ACCELERATION FOR ANY OTHER REASON. Regardless of whether an event has
occurred as described in Section 14.7 or 14.8 above, and subject to Section
14.11 as to Qualified Performance-Based Awards, the Committee may in its sole
discretion at any time determine that all or a portion of a Participant's
Options, SARs, and other Awards in the nature of rights that may be exercised
shall become fully or partially exercisable, that all or a part of the
time-based vesting restrictions on all or a portion of the outstanding Awards
shall lapse, and/or that any performance-based criteria with respect to any
Awards shall be deemed to be wholly or partially satisfied, in each case, as of
such date as the Committee may, in its sole discretion, declare. The Committee
may discriminate among Participants and among Awards granted to a Participant in
exercising its discretion pursuant to this Section 14.9.

     14.10. EFFECT OF ACCELERATION. If an Award is accelerated under Section
14.7, 14.8, or 14.9, the Committee may, in its sole discretion, provide (i) that
the Award will expire after a designated period of time after such acceleration
to the extent not then exercised, (ii) that the Award will be settled in cash
rather than Stock, (iii) that the Award will be assumed by another party to a
transaction giving rise to the acceleration or otherwise be equitably converted
or substituted in connection with such transaction, (iv) that the Award may be
settled by payment in cash or cash equivalents equal to the excess of the Fair
Market Value of the underlying Stock, as of a specified date associated with the
transaction, over the exercise price of the Award, or (v) any combination of the
foregoing. The Committee's determination need not be uniform and may be
different for different Participants whether or not such Participants are
similarly situated. To the extent that such acceleration causes Incentive Stock
Options to exceed the dollar limitation set forth in Section 7.2(c), the excess
Options shall be deemed to be Non-Qualified Stock Options.

     14.11. QUALIFIED PERFORMANCE-BASED AWARDS.

          (a) The provisions of the Plan are intended to ensure that all Options
     and Stock Appreciation Rights granted hereunder to any Covered Employee
     shall qualify for the Section 162(m) Exemption; provided that the exercise
     or base price of such Award is not less than the Fair Market Value of the
     Shares on the Grant Date.

          (b) When granting any other Award, the Committee may designate such
     Award as a Qualified Performance-Based Award, based upon a determination
     that the recipient is or may be a Covered Employee with respect to such
     Award, and the Committee wishes such Award to qualify for the Section
     162(m)

<PAGE>

     Exemption. If an Award is so designated, the Committee shall establish
     performance goals for such Award within the time period prescribed by
     Section 162(m) of the Code based on one or more of the following Qualified
     Business Criteria, which may be expressed in terms of Company-wide
     objectives or in terms of objectives that relate to the performance of an
     Affiliate or a division, region, department or function within the Company
     or an Affiliate:

          Revenue

          Sales

          Profit (net profit, gross profit, operating profit, economic profit,
          profit margins or other corporate profit measures)

          Earnings (EBIT, EBITDA, earnings per share, or other corporate
          earnings measures)

          Net income (before or after taxes, operating income or other income
          measures)

          Cash (cash flow, cash generation or other cash measures)

          Stock price or performance

          Total stockholder return (stock price appreciation plus reinvested
          dividends divided by beginning share price)

          Return measures (including, but not limited to, return on assets,
          capital, equity, or sales, and cash flow return on assets, capital,
          equity, or sales);

          Market share

          Improvements in capital structure

          Expenses (expense management, expense ratio, expense efficiency ratios
          or other expense measures)

          Business expansion or consolidation (acquisitions and divestitures)

          Internal rate of return or increase in net present value

          Working capital targets relating to inventory and/or accounts
          receivable

          Service or product delivery

          Service or product quality

          Inventory management

          Customer satisfaction

          Meeting budgets

          Employee retention

          Performance goals with respect to the foregoing Qualified Business
     Criteria may be specified in absolute terms, in percentages, or in terms of
     growth from period to period or growth rates over time, as well as

<PAGE>

     measured relative to an established or specially-created performance index
     of Company competitors or peers. Any member of an index that disappears
     during a measurement period shall be disregarded for the entire measurement
     period. Performance Goals need not be based upon an increase or positive
     result under a business criterion and could include, for example, the
     maintenance of the status quo or the limitation of economic losses
     (measured, in each case, by reference to a specific business criterion).

          (c) Each Qualified Performance-Based Award (other than a market-priced
     Option or SAR) shall be earned, vested and payable (as applicable) only
     upon the achievement of performance goals established by the Committee
     based upon one or more of the Qualified Business Criteria, together with
     the satisfaction of any other conditions, such as continued employment, as
     the Committee may determine to be appropriate; provided, however, that the
     Committee may provide, either in connection with the grant thereof or by
     amendment thereafter, that achievement of such performance goals will be
     waived upon the death or Disability of the Participant, or on the effective
     date of a Change in Control. Performance periods established by the
     Committee for any such Qualified Performance-Based Award may be as short as
     three months and may be any longer period.

          (d) The Committee may provide in any Qualified Performance-Based Award
     that any evaluation of performance may include or exclude any of the
     following events that occurs during a performance period: (a) asset
     write-downs or impairment charges; (b) litigation or claim judgments or
     settlements; (c) the effect of changes in tax laws, accounting principles
     or other laws or provisions affecting reported results; (d) accruals for
     reorganization and restructuring programs; (e) extraordinary nonrecurring
     items as described in Accounting Principles Board Opinion No. 30 and/or in
     management's discussion and analysis of financial condition and results of
     operations appearing in the Company's annual report to stockholders for the
     applicable year; (f) acquisitions or divestitures; and (g) foreign exchange
     gains and losses. To the extent such inclusions or exclusions affect Awards
     to Covered Employees, they shall be prescribed in a form that meets the
     requirements of Code Section 162(m) for deductibility.

          (e) Any payment of a Qualified Performance-Based Award granted with
     performance goals pursuant to subsection (c) above shall be conditioned on
     the written certification of the Committee in each case that the
     performance goals and any other material conditions were satisfied. Except
     as specifically provided in subsection (c), no Qualified Performance-Based
     Award held by a Covered Employee or by an employee who in the reasonable
     judgment of the Committee may be a Covered Employee on the date of payment,
     may be amended, nor may the Committee exercise any discretionary authority
     it may otherwise have under the Plan with respect to a Qualified
     Performance-Based Award under the Plan, in any manner to waive the
     achievement of the applicable performance goal based on Qualified Business
     Criteria or to increase the amount payable pursuant thereto or the value
     thereof, or otherwise in a manner that would cause the Qualified
     Performance-Based Award to cease to qualify for the Section 162(m)
     Exemption.

          (f) Section 5.4 sets forth the maximum number of Shares or dollar
     value that may be granted in any one-year period to a Participant in
     designated forms of Qualified Performance-Based Awards.

     14.12. TERMINATION OF EMPLOYMENT. Whether military, government or other
service or other leave of absence shall constitute a termination of employment
shall be determined in each case by the Committee at its discretion, and any
determination by the Committee shall be final and conclusive. A Participant's
Continuous Status as a Participant shall not be deemed to terminate (i) in a
circumstance in which a Participant transfers from the Company to an Affiliate,
transfers from an Affiliate to the Company, or transfers from one Affiliate to
another Affiliate, or (ii) in the discretion of the Committee as specified at or
prior to such occurrence, in the case of a spin-off, sale or disposition of the
Participant's employer from the Company or any Affiliate. To the extent that
this provision causes Incentive Stock Options to extend beyond three months from
the date a Participant is deemed to be an employee of the Company, a Parent or
Subsidiary for purposes of Sections 424(e) and 424(f) of the Code, the Options
held by such Participant shall be deemed to be Non-Qualified Stock Options.

     14.13. FORFEITURE EVENTS. The Committee may specify in an Award Certificate
that the Participant's rights, payments and benefits with respect to an Award
shall be subject to reduction, cancellation, forfeiture or recoupment upon the
occurrence of certain specified events, in addition to any otherwise applicable
vesting or

<PAGE>

performance conditions of an Award. Such events shall include, but shall not be
limited to, termination of employment for cause, violation of material Company
or Affiliate policies, breach of noncompetition, confidentiality or other
restrictive covenants that may apply to the Participant, or other conduct by the
Participant that is detrimental to the business or reputation of the Company or
any Affiliate.

     14.14. SUBSTITUTE AWARDS. The Committee may grant Awards under the Plan in
substitution for stock and stock-based awards held by employees of another
entity who become employees of the Company or an Affiliate as a result of a
merger or consolidation of the former employing entity with the Company or an
Affiliate or the acquisition by the Company or an Affiliate of property or stock
of the former employing corporation. The Committee may direct that the
substitute awards be granted on such terms and conditions as the Committee
considers appropriate in the circumstances.

                                   ARTICLE 15
                          CHANGES IN CAPITAL STRUCTURE

     15.1. GENERAL. In the event of a corporate event or transaction involving
the Company (including, without limitation, any stock dividend, stock split,
extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, combination or exchange of shares), the
authorization limits under Section 5.1 and 5.4 shall be adjusted
proportionately, and the Committee may adjust the Plan and Awards to preserve
the benefits or potential benefits of the Awards. Action by the Committee may
include: (i) adjustment of the number and kind of shares which may be delivered
under the Plan; (ii) adjustment of the number and kind of shares subject to
outstanding Awards; (iii) adjustment of the exercise price of outstanding Awards
or the measure to be used to determine the amount of the benefit payable on an
Award; and (iv) any other adjustments that the Committee determines to be
equitable. In addition, upon the occurrence or in anticipation of such an event,
the Committee may, in its sole discretion, provide (i) that Awards will be
settled in cash rather than Stock, (ii) that Awards will become immediately
vested and exercisable and will expire after a designated period of time to the
extent not then exercised, (iii) that Awards will be assumed by another party to
a transaction or otherwise be equitably converted or substituted in connection
with such transaction, (iv) that outstanding Awards may be settled by payment in
cash or cash equivalents equal to the excess of the Fair Market Value of the
underlying Stock, as of a specified date associated with the transaction, over
the exercise price of the Award, (v) that performance targets and performance
periods for Performance Awards will be modified, consistent with Code Section
162(m) where applicable, or (vi) any combination of the foregoing. The
Committee's determination need not be uniform and may be different for different
Participants whether or not such Participants are similarly situated. Without
limiting the foregoing, in the event of a subdivision of the outstanding Stock
(stock-split), a declaration of a dividend payable in Shares, or a combination
or consolidation of the outstanding Stock into a lesser number of Shares, the
authorization limits under Section 5.1 and 5.4 shall automatically be adjusted
proportionately, and the Shares then subject to each Award shall automatically
be adjusted proportionately without any change in the aggregate purchase price
therefor. To the extent that any adjustments made pursuant to this Article 15
cause Incentive Stock Options to cease to qualify as Incentive Stock Options,
such Options shall be deemed to be Non-Qualified Stock Options.

                                   ARTICLE 16
                     AMENDMENT, MODIFICATION AND TERMINATION

     16.1. AMENDMENT, MODIFICATION AND TERMINATION. The Board or the Committee
may, at any time and from time to time, amend, modify or terminate the Plan
without shareholder approval; provided, however, that if an amendment to the
Plan would, in the reasonable opinion of the Board or the Committee, (i)
materially increase the number of Shares available under the Plan, (ii) expand
the types of awards under the Plan, (iii) materially expand the class of
participants eligible to participate in the Plan, (iv) materially extend the
term of the Plan, or (v) otherwise constitute a material change requiring
shareholder approval under applicable laws, policies or regulations or the
applicable listing or other requirements of an Exchange, then such amendment
shall be subject to shareholder approval; and provided, further, that the Board
or Committee may condition any other amendment or modification on the approval
of shareholders of the Company for any reason, including by reason of such
approval being necessary or deemed advisable (i) to comply with the listing or
other requirements of an Exchange, or (ii) to satisfy any other tax, securities
or other applicable laws, policies or regulations.

<PAGE>

     16.2. AWARDS PREVIOUSLY GRANTED. At any time and from time to time, the
Committee may amend, modify or terminate any outstanding Award without approval
of the Participant; provided, however:

          (a) Subject to the terms of the applicable Award Certificate, such
     amendment, modification or termination shall not, without the Participant's
     consent, reduce or diminish the value of such Award determined as if the
     Award had been exercised, vested, cashed in or otherwise settled on the
     date of such amendment or termination (with the per-share value of an
     Option or Stock Appreciation Right for this purpose being calculated as the
     excess, if any, of the Fair Market Value as of the date of such amendment
     or termination over the exercise or base price of such Award);

          (b) The original term of an Option may not be extended without the
     prior approval of the shareholders of the Company;

          (c) Except as otherwise provided in Article 15, the exercise price of
     an Option may not be reduced, directly or indirectly, without the prior
     approval of the shareholders of the Company; and

          (d) No termination, amendment, or modification of the Plan shall
     adversely affect any Award previously granted under the Plan, without the
     written consent of the Participant affected thereby. An outstanding Award
     shall not be deemed to be "adversely affected" by a Plan amendment if such
     amendment would not reduce or diminish the value of such Award determined
     as if the Award had been exercised, vested, cashed in or otherwise settled
     on the date of such amendment (with the per-share value of an Option or
     Stock Appreciation Right for this purpose being calculated as the excess,
     if any, of the Fair Market Value as of the date of such amendment over the
     exercise or base price of such Award).

                                   ARTICLE 17
                               GENERAL PROVISIONS

     17.1. NO RIGHTS TO AWARDS; NON-UNIFORM DETERMINATIONS. No Participant or
any Eligible Participant shall have any claim to be granted any Award under the
Plan. Neither the Company, its Affiliates nor the Committee is obligated to
treat Participants or Eligible Participants uniformly, and determinations made
under the Plan may be made by the Committee selectively among Eligible
Participants who receive, or are eligible to receive, Awards (whether or not
such Eligible Participants are similarly situated).

     17.2. NO SHAREHOLDER RIGHTS. No Award gives a Participant any of the rights
of a shareholder of the Company unless and until Shares are in fact issued to
such person in connection with such Award.

     17.3. WITHHOLDING. The Company or any Affiliate shall have the authority
and the right to deduct or withhold, or require a Participant to remit to the
Company, an amount sufficient to satisfy federal, state, and local taxes
(including the Participant's FICA obligation) required by law to be withheld
with respect to any exercise, lapse of restriction or other taxable event
arising as a result of the Plan. If Shares are surrendered to the Company to
satisfy tax obligations in excess of the minimum tax withholding obligation,
such Shares must have been held by the Participant as fully vested shares for
such period of time, if any, as necessary to avoid the recognition of an expense
under generally accepted accounting principles. The Company shall have the
authority to require a Participant to remit cash to the Company in lieu of the
surrender of Shares for taxes if the surrender of Shares for such purpose would
result in the Company's recognition of expense under generally accepted
accounting principles. With respect to withholding required upon any taxable
event under the Plan, the Committee may, at the time the Award is granted or
thereafter, require or permit that any such withholding requirement be
satisfied, in whole or in part, by withholding from the Award Shares having a
Fair Market Value on the date of withholding equal to the minimum amount (and
not any greater amount) required to be withheld for tax purposes, all in
accordance with such procedures as the Committee establishes.

     17.4. SPECIAL PROVISIONS RELATED TO SECTION 409A OF THE CODE.

          (a) Notwithstanding anything in the Plan or in any Award Certificate
     to the contrary, to the extent that any

<PAGE>

     amount or benefit that would constitute "deferred compensation" for
     purposes of Section 409A of the Code would otherwise be payable or
     distributable under the Plan or any Award Certificate by reason the
     occurrence of a Change in Control or the Participant's Disability or
     separation from service, such amount or benefit will not be payable or
     distributable to the Participant by reason of such circumstance unless (i)
     the circumstances giving rise to such Change in Control, Disability or
     separation from service meet the description or definition of "change in
     control event", "disability" or "separation from service", as the case may
     be, in Section 409A of the Code and applicable proposed or final
     regulations, or (ii) the payment or distribution of such amount or benefit
     would be exempt from the application of Section 409A of the Code by reason
     of the short-term deferral exemption or otherwise. This provision does not
     prohibit the vesting of any Award or the vesting of any right to eventual
     payment or distribution of any amount or benefit under the Plan or any
     Award Certificate.

          (b) Notwithstanding anything in the Plan or in any Award Certificate
     to the contrary, to the extent necessary to avoid the application of
     Section 409A of the Code, (i) the Committee may not amend an outstanding
     Option, SAR or similar Award to extend the time to exercise such Award
     beyond the later of the 15th day of the third month following the date at
     which, or December 31 of the calendar year in which, the Award would
     otherwise have expired if the Award had not been extended, based on the
     terms of the Award at the original Grant Date (the "Safe Harbor Extension
     Period"), and (ii) any purported extension of the exercise period of an
     outstanding Award beyond the Safe Harbor Extension Period shall be deemed
     to be an amendment to the last day of the Safe Harbor Extension Period and
     no later.

     17.5 NO RIGHT TO CONTINUED SERVICE. Nothing in the Plan, any Award
Certificate or any other document or statement made with respect to the Plan,
shall interfere with or limit in any way the right of the Company or any
Affiliate to terminate any Participant's employment or status as an officer,
director or consultant at any time, nor confer upon any Participant any right to
continue as an employee, officer, director or consultant of the Company or any
Affiliate, whether for the duration of a Participant's Award or otherwise.

     17.6. UNFUNDED STATUS OF AWARDS. The Plan is intended to be an "unfunded"
plan for incentive and deferred compensation. With respect to any payments not
yet made to a Participant pursuant to an Award, nothing contained in the Plan or
any Award Certificate shall give the Participant any rights that are greater
than those of a general creditor of the Company or any Affiliate. This Plan is
not intended to be subject to ERISA.

     17.7. RELATIONSHIP TO OTHER BENEFITS. No payment under the Plan shall be
taken into account in determining any benefits under any pension, retirement,
savings, profit sharing, group insurance, welfare or benefit plan of the Company
or any Affiliate unless provided otherwise in such other plan.

     17.8. EXPENSES. The expenses of administering the Plan shall be borne by
the Company and its Affiliates.

     17.9. TITLES AND HEADINGS. The titles and headings of the Sections in the
Plan are for convenience of reference only, and in the event of any conflict,
the text of the Plan, rather than such titles or headings, shall control.

     17.10. GENDER AND NUMBER. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.

     17.11. FRACTIONAL SHARES. No fractional Shares shall be issued and the
Committee shall determine, in its discretion, whether cash shall be given in
lieu of fractional Shares or whether such fractional Shares shall be eliminated
by rounding up or down.

     17.12. GOVERNMENT AND OTHER REGULATIONS.

          (a) Notwithstanding any other provision of the Plan, no Participant
     who acquires Shares pursuant to the Plan may, during any period of time
     that such Participant is an affiliate of the Company (within the meaning of
     the rules and regulations of the Securities and Exchange Commission under
     the 1933 Act), sell such Shares, unless such offer and sale is made (i)
     pursuant to an effective registration statement under the 1933 Act, which

<PAGE>

     is current and includes the Shares to be sold, or (ii) pursuant to an
     appropriate exemption from the registration requirement of the 1933 Act,
     such as that set forth in Rule 144 promulgated under the 1933 Act.

          (b) Notwithstanding any other provision of the Plan, if at any time
     the Committee shall determine that the registration, listing or
     qualification of the Shares covered by an Award upon any Exchange or under
     any foreign, federal, state or local law or practice, or the consent or
     approval of any governmental regulatory body, is necessary or desirable as
     a condition of, or in connection with, the granting of such Award or the
     purchase or receipt of Shares thereunder, no Shares may be purchased,
     delivered or received pursuant to such Award unless and until such
     registration, listing, qualification, consent or approval shall have been
     effected or obtained free of any condition not acceptable to the Committee.
     Any Participant receiving or purchasing Shares pursuant to an Award shall
     make such representations and agreements and furnish such information as
     the Committee may request to assure compliance with the foregoing or any
     other applicable legal requirements. The Company shall not be required to
     issue or deliver any certificate or certificates for Shares under the Plan
     prior to the Committee's determination that all related requirements have
     been fulfilled. The Company shall in no event be obligated to register any
     securities pursuant to the 1933 Act or applicable state or foreign law or
     to take any other action in order to cause the issuance and delivery of
     such certificates to comply with any such law, regulation or requirement.

     17.13. GOVERNING LAW. To the extent not governed by federal law, the Plan
and all Award Certificates shall be construed in accordance with and governed by
the laws of the State of Georgia.

     17.14. ADDITIONAL PROVISIONS. Each Award Certificate may contain such other
terms and conditions as the Committee may determine; provided that such other
terms and conditions are not inconsistent with the provisions of the Plan.

     17.15. NO LIMITATIONS ON RIGHTS OF COMPANY. The grant of any Award shall
not in any way affect the right or power of the Company to make adjustments,
reclassification or changes in its capital or business structure or to merge,
consolidate, dissolve, liquidate, sell or transfer all or any part of its
business or assets. The Plan shall not restrict the authority of the Company,
for proper corporate purposes, to draft or assume awards, other than under the
Plan, to or with respect to any person. If the Committee so directs, the Company
may issue or transfer Shares to an Affiliate, for such lawful consideration as
the Committee may specify, upon the condition or understanding that the
Affiliate will transfer such Shares to a Participant in accordance with the
terms of an Award granted to such Participant and specified by the Committee
pursuant to the provisions of the Plan.

     17.16. INDEMNIFICATION. Each person who is or shall have been a member of
the Committee, or of the Board, or an officer of the Company to whom authority
was delegated in accordance with Article 4 shall be indemnified and held
harmless by the Company against and from any loss, cost, liability, or expense
that may be imposed upon or reasonably incurred by him or her in connection with
or resulting from any claim, action, suit, or proceeding to which he or she may
be a party or in which he or she may be involved by reason of any action taken
or failure to act under the Plan and against and from any and all amounts paid
by him or her in settlement thereof, with the Company's approval, or paid by him
or her in satisfaction of any judgment in any such action, suit, or proceeding
against him or her, provided he or she shall give the Company an opportunity, at
its own expense, to handle and defend the same before he or she undertakes to
handle and defend it on his or her own behalf, unless such loss, cost,
liability, or expense is a result of his or her own willful misconduct or except
as expressly provided by statute. The foregoing right of indemnification shall
not be exclusive of any other rights of indemnification to which such persons
may be entitled under the Company's charter or bylaws, as a matter of law, or
otherwise, or any power that the Company may have to indemnify them or hold them
harmless.

     The foregoing is hereby acknowledged as being the Genuine Parts Company
2006 Long-Term Incentive Plan as adopted by the Board on November 21, 2005 and
by the shareholders on April 17, 2006.

GENUINE PARTS COMPANY

By: /s/ Carol B. Yancey
    ---------------------------------
Its: Senior Vice President and
     Corporate SecretaryEX-10.1

 

EXHIBIT 10.1

EXECUTION COPY

EMPLOYMENT AGREEMENT

April 3, 2006

     The parties to this Employment Agreement (this “Agreement”) are Linn Operating,
Inc., a Delaware corporation (the “Company”) and Thomas A. Lopus (the
“Employee”). The parties desire to provide for the employment of the Employee as Senior
Vice President — Operations of the Company on the terms set forth herein effective as of the date
written above (the “Effective Date”). Linn Energy, LLC, a Delaware limited
liability company and the 100% parent of the Company (“Linn Energy”), is joining in this
agreement for the limited purposes of reflecting its agreement to the matters set forth herein as
to it, but such joinder is not intended to make Linn Energy the employer of the Employee for any
purpose.

     Accordingly, the parties, intending to be legally bound, agree as follows:

	1.	 	Position and Duties

     1.1 Employment; Titles; Reporting. The Company agrees to employ the Employee and the
Employee agrees to enter employment with the Company, upon the terms and subject to the conditions
provided under this Agreement. During the Employment Term (as defined in Section 2), the
Employee will serve the Company as an executive officer, and, solely for purposes of Section 16 of
the Securities Exchange Act of 1934, as amended (the “Exchange Act"), and Rule 3b-7 under the
Exchange Act, the Executive will be deemed an “executive officer” of Linn Energy. As of the
Effective Date, the Employee serves as the Senior Vice President — Operations of the Company. In
such capacity, the Employee will report to the Company’s President and Chief Executive Officer and
otherwise will be subject to the direction and control of the Board of Directors of the Company
(including any committee thereof, the “Board”), and, to the extent the Employee is deemed
an executive officer for purposes of Section 16 and Rule 3b-7 of the Exchange Act, the Employee
will be subject to the direction and control of the Board of Directors of Linn Energy. During the
Employment Term, the Employee will have such duties, responsibilities and authorities as may be
assigned to him by the Company’s President and Chief Executive Officer or the Board from time to
time and otherwise consistent with such position in a public company comparable to Linn Energy
which is engaged in natural gas and oil acquisition, development and production (including, but not
limited to, maintaining, to the extent applicable, compliance with the Sarbanes-Oxley Act of 2002
and related regulations and all other federal, state and local laws and regulations, as well as all
regulations and rules of any exchange or electronic 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 the business and affairs of the Company, will use his best efforts to
promote the Company’s interests and will perform his duties and responsibilities faithfully,
diligently and to the best of his ability, consistent with sound business practices. The Employee
may be required by the Board to provide services to, or otherwise serve as an officer or director
of, any direct or indirect subsidiary of the Company or to Linn Energy, as applicable. The
Employee will comply with the Company’s and Linn Energy’s policies, codes and procedures, as they
may be in effect from time to time, applicable to executive officers of the Company and Linn
Energy. Nevertheless, the Employee may, with the prior approval of the Board in each instance,
engage in such other business and charitable activities that do not violate Section 7,

 

 

create a conflict of interest or the appearance of a conflict of interest with the Company or
Linn Energy or materially interfere with the performance of his obligations to the Company or Linn
Energy under this Agreement.

     1.3 Place of Employment. The Employee will perform his duties under this Agreement at
the Company’s offices in Pittsburgh, Pennsylvania, with the likelihood of substantial business
travel.

2. Term of Employment. The term of the Employee’s employment by the Company under this Agreement
(the “Employment Term”) will commence on the Effective Date and will continue until
employment is terminated by either party under Section 5. The date on which the Employee’s
employment 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 rate of not less than $175,000 for
services rendered to the Company and any of its direct or indirect subsidiaries, payable in
accordance with the Company’s regular payroll practices. The Employee’s Base Salary will be
reviewed annually by the Board and may be adjusted upward in the Board’s sole discretion.

     3.2 Annual Bonus Compensation. For the Company’s fiscal year ending December 31,
2006, the Employee will be entitled to receive a guaranteed bonus (“Guaranteed Bonus”) payment of
not less than $125,000. Thereafter, during the Employment Term, the Employee will be entitled to
receive incentive compensation in such amounts and at such times as the Board may determine in its
sole discretion to award to him under any incentive compensation or other bonus plan or
arrangement as may be established by the Board from time to time (collectively, the “Employee
Bonus Plan”). Any additional incentive compensation payable under any Employee Bonus Plan
will be referred to in the aggregate in this Agreement as the Employee’s “Bonus.”

     3.3 Long-Term Incentive Compensation.

          (a) Unit Options. As of the Effective Date, the Employee will receive an award of
non-qualified options to purchase up to 50,000 Units of Linn Energy at a per share exercise price
equal to the fair market value of a Unit as of the date of grant, which shall be awarded under the
terms of the Linn Energy, LLC Long Term Incentive Plan or any successor plan, as it may be in
effect from time to time (the “Incentive Plan”), and subject to a service-based 3-year vesting
schedule and such other terms and conditions set forth in the applicable option agreement. In
addition, the Employee will receive a second award of non-qualified options to purchase up to
25,000 Units of Linn Energy at a per share exercise price equal to the fair market value of a Unit
as of the date of grant, which shall be awarded under the terms of the Incentive Plan, and subject
to a performance-based 3-year vesting schedule and such other terms and conditions set forth in the
applicable option agreement.

          (b) Restricted Units. As of the Effective Date, the Employee will receive a
restricted Unit award in the amount of 20,000 Units of Linn Energy, which shall be awarded under
the terms of the Incentive Plan, and subject to a performance-based 3-year vesting schedule and
such other terms and conditions set forth in the applicable restricted unit agreement.

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     (c) Future Awards. In addition to the above long-term incentive compensation awards,
awards of Unit options, Unit grants, restricted Units and/or other forms of equity-based
compensation to the Employee on or after the Effective Date may be made from time to time during
the Employment Term by the Board in its sole discretion, whose decision will be based upon
performance and award guidelines for executive officers of the Company and Linn Energy established
periodically by the Board in its sole discretion.

4. Expenses and Other Benefits.

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

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

     4.3 Other Employee Benefits. In addition to the foregoing, during the Employment
Term, the Employee will be entitled to participate in and to receive benefits as a senior
executive under all of the Company’s employee benefit plans, programs and arrangements available
to senior executives, subject to the eligibility criteria and other terms and conditions thereof,
as such plans, programs and arrangements may be duly amended, terminated, approved or adopted by
the Board from time to time.

5. Termination of Employment.

     5.1 Death. The Employee’s employment under 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 this
Agreement at any time with or without Cause (as defined below).

     (b) Definition of Cause. For purposes of this Agreement, the Company will have
“Cause” to terminate the Employee’s employment under this Agreement by reason of any
of the following: (i) the Employee’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; (ii) the Employee’s repeated
intoxication by alcohol or drugs during the performance of his duties; (iii) malfeasance in
the conduct of Employee’s duties, including, but not limited to, (A) willful and intentional
misuse or diversion of any of the funds of Linn Energy or its direct or indirect
subsidiaries, (B) embezzlement or (C) fraudulent or willful and material misrepresentations
or concealments on any written reports submitted to any of Linn Energy or its direct or
indirect subsidiaries; (iv) the Employee’s material failure to

-3-

 

perform the duties of the Employee’s employment consistent with Employee’s position,
expressly including the provisions of this Agreement, or material failure to follow or
comply with the reasonable and lawful written directives of the Board; (v) a material breach
of this Agreement; or (vi) a material breach by the Employee of written policies of the
Company concerning employee discrimination or harassment.

     (c) Notice and Cure Opportunity in Certain Circumstances. The Employee may be afforded
a reasonable opportunity to cure any act or omission that would otherwise constitute “Cause”
hereunder according to the following terms: The Board will give the Employee written notice
stating with reasonable specificity the nature of the circumstances determined by the Board
in good faith to constitute “Cause.” If, in the good faith judgment of the Board, the
alleged breach is reasonably susceptible to cure, the Employee will have fifteen (15) days
from his receipt of such notice to effect the cure of such circumstances or such breach to
the good faith satisfaction of the Board. The Board will state whether the Employee will
have such an opportunity to cure in the initial notice of “Cause” referred to above. If, in
the good faith judgment of the Board the alleged breach is not reasonably susceptible to
cure, or such circumstances or breach have not been satisfactorily cured within such fifteen
(15) day cure period, such breach will thereupon constitute “Cause” hereunder.

     5.3 Termination by the Employee.

     (a) Terminable at Will. The Employee may terminate his employment under this Agreement
at any time with or without Good Reason (as defined below).

     (b) Notice and Cure Opportunity. If such termination is with Good Reason, the Employee
will give the Company written notice, which will identify with reasonable specificity the
grounds for the Employee’s resignation and provide the Company with fifteen (15) days from
the day such notice is given to cure the alleged grounds for resignation contained in the
notice. A termination will not be for Good Reason if such notice is given by the Employee
to the Company more than thirty (30) days after the occurrence of the event that the
Employee alleges is Good Reason for his termination hereunder.

     (c) Definition of Good Reason. For purposes of this Agreement, “Good Reason”
will mean any of the following to which the Employee will not consent in writing: (a) a
reduction in the Employee’s Base Salary, or (b) a relocation within two (2) years from the
Effective Date of this Agreement of the Employee’s primary place of employment to a location
more than 50 miles from Pittsburgh, Pennsylvania. Additionally, the parties acknowledge the
possibility of changes in duties and responsibilities associated with the anticipated growth
in the business and operations of the Company. In that regard, it is contemplated that
Employee and the President of the Company or any successor thereto would mutually agree on a
job description and the responsibilities of Employee, and it shall constitute Good Reason in
the absence of such agreement following the reasonable good faith efforts of the parties.

     5.4 Notice of Termination. Any termination of the Employee’s employment by the
Company or by the Employee during the Employment Term (other than termination pursuant to
Section 5.1) will be communicated by written Notice of Termination to the other party
hereto in accordance with Section 8.7. For purposes of this Agreement, a “Notice of
Termination” means a written notice that (a) indicates the specific termination provision in
this Agreement relied

-4-

 

upon, (b) to the extent applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Employee’s employment under the
provision so indicated, and (c) if the Termination Date (as defined herein) is other than the date
of receipt of such notice, specifies the Termination Date (which Termination Date will be not more
than thirty (30) days after the giving of such notice).

     5.5 Disability. If the Company determines in good faith that the Disability (as
defined herein) of the Employee has occurred during the Employment Term, it may, without breaching
this Agreement, give to the Employee written notice in accordance with Section 5.4 of its
intention to terminate the Employee’s employment. In such event, the Employee’s employment with
the Company will terminate effective on the fifteenth (15th) day after receipt of such
notice by the Employee (the “Disability Effective Date”), provided that, within the fifteen
(15) days after such receipt, the Employee will not have returned to full-time performance of the
Employee’s duties. “Disability” means the determination by a physician selected by the
Company that the Employee has been unable to perform substantially the Employee’s usual and
customary duties under this Agreement 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. At any time and from time to
time, upon reasonable request therefor by the Company, the Employee will submit to reasonable
medical examination for the purpose of determining the existence, nature and extent of any such
disability.

6. Compensation of the Employee upon Termination.

     6.1 Death. If the Employee’s employment under this Agreement is terminated by reason
of his death, the Company will pay to the person or persons designated by the Employee for that
purpose in a notice filed with the Company, or, if no such person will have been so designated, to
his estate, the amount of (a) the Employee’s accrued but unpaid Base Salary through the Termination
Date paid in a lump sum within thirty (30) days following the Termination Date, (b) with respect to
any Termination Date on or after January 1, 2007 by reason of Employee’s death, any accrued but
unpaid Bonus, which Bonus will be payable at such time as the bonuses of other executive officers
of the Company are payable, (c) with respect to any Termination Date on or before December 31, 2006
by reason of Employee’s death, a cash amount equal to the Employee’s pro-rata Guaranteed 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 executive officers of the Company, and (d) any other amounts that may be
reimbursable by the Company to the Employee as expressly provided under this Agreement paid in a
lump sum within thirty (30) days following the Termination Date, and the Company thereafter will
have no further obligation to the Employee under this Agreement, other than for payment of any
amounts accrued and vested under any employee benefit plans or programs of the Company and any
payments or benefits required to be made or provided under applicable law. Without limiting the
generality of the foregoing, any rights the Employee’s beneficiary may have to the proceeds of any
life insurance arrangement set forth in Section 4.3 will be in lieu of any special
entitlement to severance pay or benefits upon the Employee’s death.

     6.2 Disability. In the event of the Employee’s termination by reason of Disability
pursuant to Section 5.5, the Employee will continue to receive his Base Salary and
participate in applicable employee 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 amount of any disability income payments provided to the Employee under
any Company disability policy or program funded by the Company, and will receive (a) the Employee’s

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accrued but unpaid Base Salary through the Termination Date paid in a lump sum within thirty
(30) days following the Termination Date, (b) with respect to any Termination Date on or after
January 1, 2007 by reason of Employee’s Disability, any accrued but unpaid Bonus, which Bonus will
be payable at such time as the bonuses of other executive officers of the Company are payable, (c)
with respect to any Termination Date on or before December 31, 2006 by reason of Employee’s
Disability, a cash amount equal to the Employee’s pro-rata Guaranteed 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 executive officers of the Company, and (d) any other amounts that may be reimbursable by the
Company to the Employee as expressly provided under this Agreement paid in a lump sum within thirty
(30) days following the Termination Date, and the Company thereafter will have no further
obligation to the Employee under this Agreement, other than for payment of any amounts accrued and
vested under any employee benefit plans or programs of the Company and any payments or benefits
required to be made or provided under applicable law.

     6.3 By the Company for Cause or the Employee Without Good Reason. If the Employee’s
employment is terminated by the Company for Cause, or if the Employee terminates his employment
other than for Good Reason, the Employee will receive (a) the Employee’s accrued but unpaid Base
Salary through the Termination Date paid in a lump sum within thirty (30) days following the
Termination Date, (b) any accrued but unpaid Bonus, which Bonus will be payable at such time as the
bonuses of other executive officers of the Company are payable, and (c) any other amounts that may
be reimbursable by the Company to the Employee as expressly provided under this Agreement paid in a
lump sum within thirty (30) days following the Termination Date, and the Company thereafter will
have no further obligation to the Employee under this Agreement, other than for payment of any
amounts accrued and vested under any employee benefit plans or programs of the Company and any
payments or benefits required to be made or provided under applicable law.

6.4 By the Employee for Good Reason or the Company 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 of Control (as defined below) the Company terminates the
Employee’s employment without Cause, or the Employee terminates his employment for Good
Reason, then the Employee will be entitled to the following benefits (the “Severance
Benefits”):

     (i) an amount equal to (a) the Employee’s accrued but unpaid Base Salary
through the Termination Date paid in a lump sum within thirty (30) days following
the Termination Date, (b) with respect to any Termination Date on or after January
1, 2007 by the Employee for Good 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
executive officers of the Company are payable, (c) any other amounts that may be
reimbursable by the Company to the Employee as expressly provided under this
Agreement paid in a lump sum within thirty (30) days following the Termination Date;

     (ii) with respect to any termination event described in this paragraph (a) of
Section 6.4: (A) occurring after the Effective Date and prior to the first
anniversary date thereof, twelve (12) monthly payments, and (B) occurring on or
after the first anniversary of the Effective Date, twenty-four (24) monthly

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payments, in either case in an amount equal to one-twelfth (1/12) of the
Employee’s annual Base Salary at the highest rate in effect at any time during the
thirty-six (36)-month period prior to the Termination Date, commencing with the
calendar month immediately following the calendar month in which the Termination
Date occurs;

     (iii) With respect to any Termination Date on or before December 31, 2006 by
the Employee for Good Reason or by the Company without Cause, a cash amount equal to
the Employee’s pro-rata Guaranteed 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
executive officers of the Company; and

     (iv) the Company will pay the full cost of the Employee’s COBRA continuation
coverage for such period, as such coverage is required to be continued under
applicable law; provided, however, that, notwithstanding the foregoing, the benefits
described in this Section 6.4(a)(iv) may be discontinued prior to the end of
the period provided in this subsection (iv) to the extent, but only to the extent,
that the Employee receives substantially similar benefits from a subsequent employer
(“COBRA Benefit”).

     (b) Change of Control Benefits. Subject to 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 employment without Cause, or the Employee terminates his
employment for Good Reason (an “Eligible Termination”), then, in lieu of the Severance
Benefits under Section 6.4(a), the Employee will be entitled to benefits (the
“Change of Control Benefits”) identical to those set forth in Section 6.4(a)
except that the amount described in clause (ii) will be paid in a lump sum within thirty
(30) days following the Termination Date and will be equal to: (A) twelve (12) monthly
payments with respect to any Eligible Termination occurring after the Effective Date and
prior to the first anniversary date thereof, and (B) with respect to any Eligible
Termination occurring on or after the first anniversary date of the Effective Date and prior
to the second anniversary date thereof, an additional twelve (12) monthly payments if Linn
Energy’s annualized distribution rate at the time of such Change of Control is at least
$2.30 per unit, and (C) with respect to any Eligible Termination occurring on or after the
second anniversary date of the Effective Date and before December 31, 2009, an additional
twenty-four (24) monthly payments if Linn Energy’s annualized distribution rate at the time
of such Change of Control is at least $2.76 per unit, and (D) with respect to any Eligible
Termination occurring on or after December 31, 2009, the maximum number of monthly payments
Employee would have been entitled to pursuant to the performance measures in the immediately
preceding subparagraphs (B) or (C) had such Eligible Termination occurred within the
applicable time periods set forth therein. In no event shall the total number of monthly
payments payable under this Section 6.4(b) exceed thirty-six (36) months. For purposes of
the performance measures set forth in this Section 6.4(b), the Company’s Board of Directors
or any committee thereof shall have discretion to make equitable adjustments to such
measures to reflect any distribution (whether in the form of cash, units, other securities,
or other property), recapitalization, split, reverse split, reorganization, merger,
consolidation, split up, spin-off, combination, repurchase or exchange of units or other
securities of Linn Energy, issuance of warrants or other rights to purchase units or other
securities of Linn Energy or other similar transaction or event that affects the performance
measures such that an adjustment is determined to be appropriate.

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

     (i) The acquisition by any individual, entity or group (within the meaning of
Section 13(d) (3) or 14(d) (2) of the Exchange Act) (a “Person”) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 35% or more of either (A) the then-outstanding equity interests of
Linn Energy (the “Outstanding Linn Energy Equity”) or (B) the combined
voting power of the then-outstanding voting securities of Linn Energy entitled to
vote generally in the election of directors (the “Outstanding Linn Energy Voting
Securities”); provided, however, that, for purposes of this Section
6.4(c)(i), the following acquisitions will not constitute a Change of Control:
(A) any acquisition 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) any acquisition by any
corporation or other entity pursuant to a transaction that complies with Section
6.4(c)(iii)(A), Section 6.4(c)(iii)(B) or Section
6.4(c)(iii)(C);

     (ii) Any time at which individuals who, as of the date hereof, constitute the
Board (the “Incumbent Board”) cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election by Linn
Energy’s Unitholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board will be considered as though such individual
were a member of the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal of directors or
other actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board;

     (iii) Consummation of a reorganization, merger, statutory share exchange or
consolidation or similar corporate transaction involving Linn Energy or any of its
subsidiaries, a sale or other disposition of all or substantially all of the assets
of Linn Energy, or the acquisition of assets or equity interests of another entity
by Linn Energy or any of its subsidiaries (each, a “Business Combination”),
in each case unless, following such Business Combination, (A) all or substantially
all of the individuals and entities that were the beneficial owners of the
Outstanding Linn Energy Equity and the Outstanding Linn Energy Voting Securities
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 50% of the then-outstanding equity interests and the combined
voting power of the then-outstanding voting securities entitled to vote generally in
the election of directors, as the case may be, of the corporation resulting from
such Business Combination (including, without limitation, a corporation or other
entity that, as a result of such transaction, owns Linn Energy or all or
substantially all of Linn Energy’s assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership immediately
prior to such Business Combination of the Outstanding Linn Energy Equity and the
Outstanding Linn Energy Voting Securities, as the case may be, (B) no Person
(excluding any corporation resulting from such Business Combination or any employee
benefit plan (or related trust) of Linn Energy or such corporation or other entity
resulting from such Business Combination)

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beneficially owns, directly or indirectly, 35% or more of, respectively, the
then-outstanding equity interests of the corporation or other entity resulting from
such Business Combination or the combined voting power of the then-outstanding
voting securities of such corporation or other entity, except to the extent that
such ownership existed prior to the Business Combination, and (C) at least a
majority of the members of the board of directors of the corporation or equivalent
body of any other entity resulting from such Business Combination were members of
the Incumbent Board at the time of the execution of the initial agreement or of the
action 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 Control Benefits to which the Employee may otherwise be entitled under
Section 6.4(a) or Section 6.4(b), the Employee will execute a
release (the “Release”), which will include an affirmation of the
restrictive covenants set forth in Section 7 and a non-disparagement
provision, in a form and substance satisfactory to the Company, of any claims,
whether arising under federal, state or local statute, common law or otherwise,
against the Company and its direct or indirect subsidiaries which arise or may have
arisen on or before the date of the Release, other than any claims under this
Agreement or any rights to indemnification from the Company and its direct or
indirect subsidiaries pursuant to any provisions of the Company’s (or any of its
subsidiaries’) organizational documents or any directors and officers liability
insurance policies maintained by the Company. If the Employee fails or otherwise
refuses to execute a Release within a reasonable time after the Company’s request to
do so, and in all events prior to the date on which such benefits are to be first
paid to him, the Employee will not be entitled to any Severance Benefits or Change
of Control Benefits, as the case may be, or any other benefits provided under this
Agreement and the Company will have no further obligations with respect 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 a right to the payment of Severance Benefits under
Section 6.4(a) or Section 6.4(b), the Employee violates in any
material respect any of the covenants in Section 7 or as otherwise set forth
in the Release, the Employee will have no further right or claim to any payments or
other benefits to which the Employee may otherwise be entitled under Section
6.4(a) or Section 6.4(b) from and after the date on which the Employee
engages in such activities and the Company will have no further obligations with
respect to such payments or benefits, and the covenants in Section 7 will
nevertheless continue in full force and effect.

     6.5 Severance Benefits Not Includable for Employee Benefits Purposes. Except to the
extent the terms of any applicable benefit plan, policy or program provide otherwise, any benefit
programs of the Company that takes into account the Employee’s income will exclude any and all
Severance Benefits and Change of Control Benefits provided under this Agreement.

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     6.6 Exclusive Severance Benefits. The Severance Benefits payable under Section
6.4(a) or the Change of Control Benefits payable under Section 6.4(b), if they become
applicable under the terms of this Agreement, will be in lieu of any other severance or similar
benefits that would otherwise be payable under any other agreement, plan, program or policy of the
Company.

     6.7 Additional Provisions Regarding Payments Under This Agreement. Notwithstanding
anything in this Agreement to the contrary, in the event that any benefits payable or otherwise
provided under this Agreement would be

     (a) subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of
1986, as amended (the “Code”), (such excise tax referred to in this Agreement as the
“Excise Tax”), then the Board may, in its sole discretion, provide for the payment
of, or otherwise reimburse the Employee for, an amount up to such Excise Tax and any related
taxes, fees or penalties thereon as the Board may consider to be customary and appropriate
for a comparable public company; or

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

7. Restrictive Covenants.

     7.1 Confidential Information. The Employee hereby acknowledges that in connection
with his employment by the Company 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 has been or is made, developed or
compiled by the Employee or otherwise has been or is made available to him) regarding the business
and operations of the Company and its subsidiaries or affiliates. The Employee further
acknowledges that such Confidential Information is unique, valuable, considered trade secrets and
deemed proprietary by the Company. For purposes of this Agreement, “Confidential
Information” includes, without limitation, any information heretofore or hereafter acquired,
developed or used by any of the Company, Linn Energy or their direct or indirect subsidiaries
relating to Business Opportunities or Intellectual Property or other geological, geophysical,
economic, financial or management aspects of the business, operations, properties or prospects of
the Company, Linn Energy or their direct or indirect subsidiaries, whether oral or in written form.
The Employee agrees that all Confidential Information is and will remain the property of the
Company, Linn Energy or their direct or indirect subsidiaries, as the case may be. The Employee
further agrees, except for disclosures occurring in the good faith performance of his duties for
the Company, Linn Energy or their direct or indirect subsidiaries, during the Employment Term and
for a period of two (2) years after the Termination Date, to hold in the strictest confidence all
Confidential Information, and not to, directly or indirectly, duplicate, sell, use, lease,
commercialize, disclose or otherwise divulge to any person or entity any portion of the
Confidential Information or use any Confidential Information for his own benefit or profit or allow
any person, entity or third party, other than the Company, Linn Energy or their direct or indirect
subsidiaries and authorized executives of the same, to use or otherwise gain access to any
Confidential Information. The Employee will have no obligation under this Agreement with respect
to any information that

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becomes generally available to the public other than as a result of a disclosure by the
Employee or his agent or other representative or becomes available to the Employee on a
non-confidential basis from a source other than the Company, Linn Energy or their direct or
indirect subsidiaries. Further, the Employee will have no obligation under this Agreement to keep
confidential any of the Confidential Information to the extent that a disclosure of it is required
by law or is consented to by the Company or Linn Energy; provided, however, that if and when such a
disclosure is required by law, the Employee promptly will provide the Company with notice of such
requirement, so that the Company may seek an appropriate protective order.

     7.2 Return of Property. Employee agrees to deliver promptly to the Company, upon
termination of his employment hereunder, or at any other time when the Company so requests, all
documents relating to the business of the Company, Linn Energy or their direct or indirect
subsidiaries, including without limitation: all geological and geophysical 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,
electric logs, core data, pressure data, lease files, well files and records, land files,
abstracts, title opinions, title or curative matters, contract files, notes, records, drawings,
manuals, correspondence, financial and accounting information, 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 the Company,
Linn Energy or their direct or indirect subsidiaries and all copies thereof and therefrom;
provided, however, that the Employee will be permitted to retain copies of any documents or
materials of a personal nature or otherwise related to the Employee’s rights under this Agreement.

     7.3 Non-Compete Obligations.

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

     (i) the Employee will not, other than through the Company, engage or
participate in any manner, whether directly or indirectly through 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 any business or activity which is engaged
in leasing, acquiring, exploring, producing, gathering or marketing hydrocarbons and
related products; and

     (ii) all investments made by the Employee (whether in his own name or in the
name of any family members or other nominees or made by the Employee’s controlled
affiliates), which relate to the leasing, acquisition, exploration, production,
gathering or marketing of hydrocarbons and related products will be made solely
through the Company; and the Employee will not (directly or indirectly through any
family members or other persons), and will not permit any of his controlled
affiliates to: (A) invest or otherwise participate alongside the Company or its
direct or indirect subsidiaries in any Business Opportunities, or (B) invest or
otherwise participate in any business or activity relating to a Business
Opportunity, regardless of whether any of the Company or its direct or indirect
subsidiaries ultimately participates in such business or activity, in either case,
except through the Company.

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     (b) Non-Compete Obligations After Termination Date. The Employee agrees that the
Employee will not engage or participate in any manner, whether directly or indirectly
through any family member or other person 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:

     (i) during the one-year period following the Termination Date, in any business
or activity which is engaged in leasing, acquiring, exploring, producing, gathering
or marketing hydrocarbons and related products within (A) any county or parish in
which the Company owns any oil and gas interests or conducts operations on the
Termination Date or in which the Company has owned any oil and gas interests or
conducted operations at any time during the six months immediately preceding the
Termination Date or (B) any county or parish adjacent to any county or parish
described in clause (A); and

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

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

     7.4 Non-Solicitation. During the Employment Term and for a period of twenty-four (24)
months after the Termination Date, the Employee will not, whether for his own account or for the
account of any other Person (other than the Company or its direct or indirect subsidiaries),
intentionally solicit, endeavor to entice away from the Company or its direct or indirect
subsidiaries, or otherwise interfere with the relationship of the Company or its direct or indirect
subsidiaries with, (a) any person who is employed by the Company or its direct or

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indirect subsidiaries (including any independent sales representatives or organizations), or
(b) any client or customer of the Company or its direct or indirect subsidiaries.

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

     For purposes of this Agreement, “Business Opportunities” means all business ideas,
prospects, proposals or other opportunities pertaining to the lease, acquisition, exploration,
production, gathering or marketing of hydrocarbons and related products and the exploration
potential of geographical areas on which hydrocarbon exploration prospects are located, which are
developed by the Employee during the Employment Term, or originated by any third party and brought
to the attention of the Employee during the Employment Term, together with information relating
thereto (including, without limitation, geological and seismic data and interpretations thereof,
whether in the form of maps, charts, logs, seismographs, calculations, summaries, memoranda,
opinions or other written or charted means).

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

     7.6 Injunctive Relief. The Employee acknowledges that a breach of any of the
covenants contained in this Section 7 may result in material, irreparable injury to the
Company for which there is no adequate remedy at law, that it will not be possible to measure
damages for such injuries precisely and that, in the event of such a breach or threat of breach,
the Company will be entitled to obtain a temporary restraining order and/or a preliminary or
permanent injunction restraining the Employee from engaging in activities prohibited by this
Section 7 or such other relief as may be 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 a preliminary or permanent injunction), the Employee agrees that a temporary
restraining order may be obtained ex parte.

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

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     7.8 Forfeiture Provision.

     (a) Detrimental Activities. If the Employee engages in any activity that violates any
covenant or restriction contained in this Section 7, in addition to any other remedy
the Company may have at law or in equity, (i) the Employee will be entitled to no further
payments or benefits from the Company under this Agreement or otherwise, except for any
payments or benefits required to be made or provided under applicable law, (ii) all
unexercised Unit options, restricted Units and other forms of equity compensation held by or
credited to the Employee will terminate effective as of the date on which the Employee
engages in that activity, unless terminated sooner by operation of another term or condition
of this Agreement or other applicable plans and agreements, and (iii) any exercise, payment
or delivery pursuant to any equity compensation award that occurred within one year prior to
the date on which the Employee engages in that activity may be rescinded within one year
after the first date that a majority of the members of the Board first became aware that the
Employee engaged in that activity. In the event of any such rescission, the Employee will
pay to the Company the amount of any gain realized or payment received as a result of the
rescinded exercise, payment or delivery, in such manner and on such terms and conditions as
may be required.

     (b) Right of Set-Off. The Employee consents to a deduction from any amounts the
Company owes the Employee from time to time (including amounts owed as wages or other
compensation, fringe benefits, or vacation pay, as well as any other amounts owed to the
Employee by the Company), to the extent of the amounts 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, if the Company does not recover by means of set-off the full amount the
Employee owes, calculated as set forth above, the Employee agrees to pay immediately the
unpaid balance to the Company. In the discretion of the Board, reasonable interest may be
assessed on the amounts owed, calculated from the later of (i) the date the Employee engages
in the prohibited activity and (ii) the applicable date of exercise, payment or delivery.

8. Miscellaneous.

     8.1 Assignment; Successors; Binding Agreement. This Agreement may not be assigned by
either party, whether by operation of law or otherwise, without the prior written consent of the
other party, except that any right, title or interest of the Company arising out of this Agreement
may be assigned to any corporation or entity controlling, controlled by, or under common control
with the Company, or succeeding to the business and substantially all of the assets of the Company
or any affiliates for which the Employee performs substantial services. Subject to the foregoing,
this Agreement will be binding upon and will inure to the benefit of the parties and their
respective heirs, legatees, devisees, personal representatives, successors and assigns.

     8.2 Modification and Waiver. Except as otherwise provided below, no provision of this
Agreement may be modified, waived, or discharged unless such waiver, modification or discharge is
duly approved by the Board and is agreed to in writing by the Employee and such officer(s) as may
be specifically authorized by the Board to effect it. No waiver 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, at any time, will constitute a waiver of similar or dissimilar terms or conditions
at that time or at any prior or subsequent time.

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     8.3 Entire Agreement. This Agreement embodies the entire understanding of the parties
hereof, and, upon the Effective Date, will supersede all other oral or written agreements or
understandings between them regarding the subject matter hereof. No agreement or representation,
oral or otherwise, express or implied, with respect to the subject matter of this Agreement, has
been made by either party which is not set forth expressly in this Agreement.

     8.4 Governing Law. The validity, interpretation, construction and performance of this
Agreement will be governed by the laws of the Commonwealth of Pennsylvania other than the conflict
of laws provision thereof.

     8.5 Consent to Jurisdiction and Service of Process.

     (a) Section 7 Disputes. In the event of any dispute, controversy or claim between the
Company and the Employee arising out of or relating to the interpretation, application or
enforcement of the provisions of Section 7, the Company and the Employee agree and
consent to the personal jurisdiction of the state and local courts of Allegheny County,
Pennsylvania and/or the United States District Court for the Western District of
Pennsylvania for resolution of the dispute, controversy or claim, and that those courts, and
only those courts, will have jurisdiction to determine any dispute, controversy or claim
related to, arising under or in connection with Section 7 of this Agreement. The
Company and the Employee also agree that those courts are convenient forums for the parties
to any such dispute, controversy or claim and for any potential witnesses and that process
issued out of any such court or in accordance with the rules of practice of that court may
be served by mail or other forms of substituted service to the Company at the address of its
principal executive offices and to the Employee at his last known address as reflected in
the Company’s records.

     (b) Disputes Other Than Under Section 7. In the event of any dispute relating to this
Agreement, other than a dispute relating solely to Section 7, the parties will use
their best efforts to settle the dispute, claim, question, or disagreement. To this effect,
they will consult and negotiate with each other in good faith and, recognizing their mutual
interests, attempt to reach a just and equitable solution satisfactory to both parties. If
such a dispute cannot be settled through negotiation, the parties agree first to try in good
faith to settle the dispute by mediation administered by the American Arbitration
Association under its Commercial Mediation Rules before resorting to arbitration,
litigation, or some other dispute resolution procedure. If the parties do not reach such
solution through negotiation or mediation within a period of sixty (60) days, then, upon
notice by either party to the other, all disputes, claims, questions, or differences will be
finally settled by arbitration administered by the American Arbitration Association in
accordance with the provisions of its Commercial Arbitration Rules. The arbitrator will be
selected by agreement of the parties or, if they do not agree on an arbitrator within thirty
(30) days after either party has notified the other of his or its desire to have the
question settled by arbitration, then the arbitrator will be selected pursuant to the
procedures of the American Arbitration Association (the “AAA”) in Pittsburgh,
Pennsylvania. The determination reached in such arbitration will be final and binding on
all parties. Enforcement of the determination by such arbitrator may be sought in any court
of competent jurisdiction. Unless otherwise agreed by the parties, any such arbitration
will take place in Pittsburgh, Pennsylvania, and will be conducted in accordance with the
Commercial Arbitration Rules of the AAA.

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

     8.7 Notices. All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when (a) delivered by hand
(with written confirmation of receipt), (b) sent by facsimile (with written confirmation of
receipt), provided that a copy is mailed by registered mail, return receipt requested, or (c) when
received by the addressee, if sent by a nationally recognized overnight delivery service (receipt
requested), in each case to the appropriate addresses and facsimile numbers set forth below (or to
such other addresses and facsimile numbers as a party 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:

Thomas A. Lopus

110 Searight Drive

Baden, Pennsylvania 15005

Addresses may be changed by written notice sent to the other party at the last recorded address of
that party.

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

     8.9 Counterparts. This Agreement may be executed in one or more counterparts, each of
which will be deemed to be an original but all of which together will constitute one and the same
instrument.

     8.10 Headings. The headings used in this Agreement 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 the provisions of the Agreement, and all provisions of the Agreement will be construed as if no
headings had been used in the Agreement.

     8.11 Construction. As used in this Agreement, unless the context otherwise requires:
(a) the terms defined herein will have the meanings set forth herein for all purposes; (b)
references to “Section” are to a section hereof; (c) “include,” “includes” and “including” are
deemed to be followed by “without limitation” whether or not they are in fact followed by such
words or words of like import; (d) “writing,” “written” and comparable terms refer to printing,
typing, lithography and other means of reproducing words in a visible form; (e) “hereof,” “herein,”
“hereunder” and comparable terms refer to the entirety of this Agreement and not to any particular
section or other subdivision hereof or attachment hereto; (f) references to any

-16-

 

gender include references to all genders; and (g) references to any agreement or other
instrument or statute or regulation are referred to as amended or supplemented from time to time
(and, in the case of a statute or regulation, to any successor provision).

     8.12 Capacity; No Conflicts. The Employee represents and warrants to the Company
that: (i) he has full power, authority and capacity to execute and deliver this Agreement, and to
perform his obligations hereunder, (ii) such execution, delivery and performance will not (and with
the giving of notice or lapse of time, or both, would not) result in the breach of any agreement or
other obligation to which he is a party or is otherwise bound, and (iii) this Agreement is his
valid and binding obligation, enforceable in accordance with its terms.

[Signature page follows]

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     IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the Effective Date.

	 	 	 	 	 
	 	LINN OPERATING, INC.

 	 
	 	By:  	/s/ Michael C. Linn	 
	 	 	Name:  	Michael C. Linn 	 
	 	 	Title:  	President and Chief Executive Officer 	 
	 
	 
	 	EMPLOYEE

 	 	 
	 	/s/
Thomas A. Lopus 	 
	 	 	 	 
	 	Thomas A. Lopus 	 
	 

	 	 	 	 	 
	 	For the limited purposes set forth herein:

LINN ENERGY, LLC

 	 
	 	By:  	/s/ Michael C. Linn
 	 
	 	 	Name:  	Michael C. Linn 	 
	 	 	Title:  	President and Chief Executive Officer 	 
	 

-18-

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