Document:

EX-10.1

2010 Key Employee Incentive Plan:

Executive

Bonus Target:

	 	 	 
	Functional VP Target:

	 	27% of Base Salary at Plan
	Corporate VP Target:

	 	39% of Base Salary at Plan
	CEO Bonus Target:

	 	58% of Base Salary at Plan

Bonus Payout Variables:

The bonus pool will be based on ten percent (10%) of “non-GAAP Profit Before Tax (PBT)” if
achievement is more than 70% of planned “non-GAAP PBT”, and the bonus pool will be based on five
percent (5%) of “non-GAAP PBT” if achievement is between 50% and 70% of planned “non-GAAP PBT”.
“Non-GAAP PBT” is defined by the annual operating plan. For the purposes of calculating the
Incentive Plan bonus pool for FY 2010, the following items will be excluded from the “GAAP PBT”
calculation to determine “non-GAAP PBT”: (1) stock based compensation, (2) restructuring expenses,
(3) Pigeon Point amortization of intangibles and retention bonuses, and (4) additional costs
associated with the CEO search and any duplicate compensation (the new CEO in FY 2010). The
Compensation Committee may, at its discretion, adjust the calculation of “non-GAAP PBT” (for the
purpose of calculating Incentive Plan bonuses) either up or down due to an extraordinary event.
Such adjustment will only be made after due consideration of the cause of the event and the degree
of management influence over the event.

CEO Discretionary Factor:

After weighting the bonus award the CEO has the discretion to modify the bonus to reflect the
Executive’s individual performance. The allocated bonus amount may be increased by up to 120% or
reduced by any percentage up to a 100% reduction, as long as the total amount paid to the
executives as a group is not exceeded.

Threshold for Payout

No bonuses shall be paid if the “non-GAAP PBT” (as defined above) is less than 50% of planned
“non-GAAP PBT” as defined above.

Eligibility:

Executives must be employed on the date of bonus payment to be eligible for the Incentive Bonus
payment. Any Executive on Leave of Absence over 12 weeks during the fiscal year will have
pro-rated eligibility.

Maximum Payout:

The total bonus payments under all Key Employee Incentive Plans may not exceed 10% of “non-GAAP
PBT” as defined in this document.exhibit4-1.htm

Exhibit 4.1

 

LINN ENERGY, LLC

 

LINN ENERGY FINANCE CORP.

 

and

 

the GUARANTORS named herein

 

____________________________

 

97⁄8% SENIOR NOTES DUE 2018

 

____________________________

 

 

FIRST SUPPLEMENTAL INDENTURE

 

DATED AS OF JULY 2, 2010

 

____________________________

 

U.S. BANK NATIONAL ASSOCIATION,

 

As Trustee

 

 

____________________________

 

HOU01:1158069

  

  

  

This FIRST SUPPLEMENTAL INDENTURE, dated as of July 2, 2010 (this “Supplemental Indenture”) is among Linn Energy, LLC, a Delaware limited liability company (the “Company”), Linn Energy Finance Corp., a Delaware corporation (“Finance Corp.” and, together with the Company, the “Issuers”), the Guarantors listed on the signature pages hereto (the “Guarantors”) and U.S. Bank National Association, a national banking association, as trustee (the “Trustee”).

 

RECITALS

 

WHEREAS, the Issuers, the Guarantors (other than the New Subsidiaries (as defined below)) and the Trustee entered into an Indenture dated as of June 27, 2008 (the “Indenture”), relating to the Issuers’ 97⁄8% Senior Notes due 2018 (the “Notes”); and

 

WHEREAS, the Company has acquired four new indirect wholly-owned subsidiaries, Linn Exploration & Production Michigan Midstream LLC, a Delaware limited liability company (“Linn Midstream”), Linn Exploration & Production Michigan LLC, a Delaware limited liability company (“Linn Michigan”), Linn Gas Processing MI LLC, a Delaware limited liability company (“Linn Gas Processing”), and Linn Midwest Energy LLC, a Delaware limited liability company (“Linn Midwest” and, together with Linn Midstream, Linn Michigan and Linn Gas Processing, the “New Subsidiaries”); and

 

WHEREAS, Section 4.13 of the Indenture provides that under certain circumstances each Restricted Subsidiary shall become a guarantor by executing and delivering to the Trustee a supplemental indenture; and

 

WHEREAS, the Issuers have requested that a particular provision in Section 4.07 of the Indenture be modified in the manner provided in this Supplemental Indenture to conform the text of such provision to the description of such provision in the “Description of Notes” contained in the Offering Memorandum; and

 

WHEREAS, Section 9.01(g) of the Indenture provides that, without the consent of any Holder of a Note, the Issuers, the Guarantors and the Trustee may amend or supplement the Indenture to add any additional Guarantor with respect to the Notes; and

 

WHEREAS, Section 9.01(j) of the Indenture provides that, without the consent of any Holder of a Note, the Issuers, the Guarantors and the Trustee may amend or supplement the Indenture to conform the text of the Indenture to any provision described in the “Description of Notes” contained in the Offering Memorandum; and

 

WHEREAS, all acts and things prescribed by the Indenture, by law and by the Certificate of Incorporation and the Bylaws (or comparable constituent documents) of the Issuers, of the Guarantors and of the Trustee necessary to make this Supplemental Indenture a valid instrument legally binding on the Issuers, the Guarantors and the Trustee, in accordance with its terms, have been duly done and performed;

 

NOW, THEREFORE, to comply with the provisions of the Indenture and in consideration of the above premises, the Issuers, the Guarantors and the Trustee covenant and agree for the equal and proportionate benefit of the respective Holders of the Notes as follows:

HOU01:1158069

  

  

  

Section 1.     Capitalized Terms.  Capitalized terms used herein without definition shall have the meanings ascribed to them in the Indenture.

 

Section 2.    Relation to Indenture.  This Supplemental Indenture is supplemental to the Indenture and does and shall be deemed to form a part of, and shall be construed in connection with and as part of, the Indenture for any and all purposes.

 

Section 3.     Effectiveness of Supplemental Indenture.  This Supplemental Indenture shall become effective immediately upon its execution and delivery by each of the Issuers, the Guarantors and the Trustee.

 

Section 4.    Guarantee of the Notes.  Each of the New Subsidiaries hereby agrees, by its execution of this Supplemental Indenture, (a) to guarantee, jointly and severally with the other Guarantors, the Obligations of the Issuers under the Notes on the terms and subject to the conditions set forth in Article 10 of the Indenture and (b) to be bound by all other provisions of the Indenture applicable to the Guarantors.

 

Section 5.     Amendment to Section 4.07.  The second sentence of the final paragraph of Section 4.07 is hereby amended and restated in its entirety to read as follows:

 

“The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $20.0 million, by an officer of the Company and, in the case of amounts over $20.0 million, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution.”

 

Section 6.    Ratification of Obligations.  Except as specifically modified herein, the Indenture and the Notes are in all respects ratified and confirmed (mutatis mutandis) and shall remain in full force and effect in accordance with their terms.

 

Section 7.    The Trustee.  Except as otherwise expressly provided herein, no duties, responsibilities or liabilities are assumed, or shall be construed to be assumed, by the Trustee by reason of this Supplemental Indenture.  This Supplemental Indenture is executed and accepted by the Trustee subject to all the terms and conditions set forth in the Indenture with the same force and effect as if those terms and conditions were repeated at length herein and made applicable to the Trustee with respect hereto.

 

Section 8.     Governing Law.  THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

Section 9.    Counterparts.  The parties may sign any number of copies of this Supplemental Indenture.  Each signed copy shall be an original, but all of such executed copies together shall represent the same agreement.

 

[Signatures on following pages]

HOU01:1158069

  

  

  

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, all as of the date first written above.

 

	
Issuers

	 
	 
	
Linn Energy, LLC

	 	 
	 	 
	
By:

	
/s/  David B. Rottino

	
    Name:

	
David B. Rottino

	
    Title:

	
Senior Vice President and Chief Accounting Officer

	  
	  
	
Linn Energy Finance Corp.

	 	 
	 	 
	
By:

	
/s/  David B. Rottino

	
    Name:

	
David B. Rottino

	
    Title:

	
Senior Vice President and Chief Accounting Officer

	  
	  
	
Guarantors

	 
	
Linn Operating, Inc.

	
Linn Energy Holdings, LLC

	
Penn West Pipeline, LLC

	
Mid-Continent Holdings I, LLC

	
Mid-Continent Holdings II, LLC

	
Mid-Continent I, LLC

	
Linn Gas Marketing, LLC

	
Mid-Continent II, LLC

	
Linn Exploration Midcontinent, LLC

	
Linn Exploration & Production Michigan Midstream LLC

	
Linn Exploration & Production Michigan LLC

	
Linn Gas Processing MI LLC

	
Linn Midwest Energy LLC

 

	
Each By:

	
/s/  David B. Rottino

	
    Name:

	
David B. Rottino

	
    Title:

	
Senior Vice President and Chief Accounting Officer

HOU01:1158069

  

  

  

	
Trustee

	 
	
U.S. Bank National Association, as Trustee

	 	 
	 	 
	
By:

	
/s/  Steven A. Finklea

	
  Name:

	
Steven A. Finklea, CCTS

	
  Title:

	
Vice President

 

HOU01:1158069

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