Document:

EXHIBIT 10.3

 

NON-QUALIFIED STOCK OPTION AGREEMENT

PURSUANT TO THE

NBTY, INC.

YEAR 2008 STOCK OPTION PLAN

 

AGREEMENT
(“Agreement”), dated as of
          , 20    ,  by and between
NBTY, Inc., a Delaware corporation (the “Company”),
and                         
(the “Holder”).

 

Preliminary Statement

 

The
Compensation and Stock Option Committee of the Board of Directors of the
Company (the “Committee”) has granted this
non-qualified stock option (the “Option”) on
          , 20     (the “Grant Date”),
subject to the approval
of the NBTY, Inc. Year 2008 Stock Option Plan (as the same may be amended
from time to time, the “Plan”) by
the Company’s stockholders at the 2008 Annual Meeting of Stockholders
(including any adjournment thereof), to purchase the number of shares of the
Company’s common stock, $0.008 par value per share (the “Common
Stock”) set forth below to the Holder, as an eligible employee or director of the Company
or a subsidiary.  If the stockholders of
the Company do not approve the Plan at the 2008 Annual Meeting of Stockholders,
the Option will be null and void.  Unless
otherwise indicated, any capitalized term used but not defined herein shall
have the meaning ascribed to such term in the Plan.  A copy of the Plan as in effect on the date
hereof has been delivered to the Holder. 
By signing and returning this Agreement, the Holder acknowledges having
received and read a copy of the Plan as in effect on the date hereof and agrees
to comply with the Plan, this Agreement and all applicable laws and regulations.

 

Accordingly,
the parties hereto agree as follows:

 

1.             Grant of Option.  Subject in all respects to the Plan and the
terms and conditions set forth herein and therein, the Holder is hereby granted
an option to purchase from the Company •
shares of Common Stock, at a price per share of $• (the “Option Price”), which may not be less
than Fair Market Value on the Grant Date.

 

2.             Tax Status.  No part of the Option is intended to qualify
as an “incentive stock option” under Section 422 of the Internal Revenue
Code of 1986, as amended (the “Code”).

 

3.             Vesting and Exercise.

 

(a)           Except
as set forth in subsection (b) below, the Option shall vest and become
exercisable in installments as provided below, which shall be cumulative.  To the extent that the Option has become
vested and exercisable as provided below, the Option thereafter may be
exercised in accordance with Section 4.  Upon expiration of the Option, the Option
shall be canceled and no longer exercisable.

 

 

                                The
following table indicates each date upon which the Holder shall be vested and
entitled to exercise the Option with respect to the percentage of the shares of
Common Stock indicated beside such date, provided that the Holder has not had a
termination of employment (or, if the Holder is an outside director, a
termination in board service) (a “Termination”)
with the Company or any of its subsidiaries at any time prior to such date
(each of the dates set forth below being herein called a “Vesting
Date”):

 

	
  Vesting Date

  	
   

  	
  Total 

  Percentage Vested

  
	
  1st
  Anniversary of Grant Date

  	
   

  	
  0%

  
	
  2nd
  Anniversary of Grant Date

  	
   

  	
  331/3%

  
	
  3rd
  Anniversary of Grant Date

  	
   

  	
  662/3%

  
	
  4th Anniversary of Grant Date

  	
   

  	
  100%

  

 

There
shall be no proportionate or partial vesting in the periods prior to each
Vesting Date and all vesting shall occur only on the appropriate Vesting Date.

 

(b)           Upon
the occurrence of a Change in Control (as defined in Exhibit A hereto),
the Option shall immediately become exercisable with respect to all shares of
Common Stock subject thereto.

 

4.             Method of Exercise; Issuance of Shares.  (a)  Subject to the provisions of Section 3
and Section 5, to the extent vested, the Option may be exercised,
in whole or in part, at any time or from time to time prior to the expiration
or the earlier termination of the Option as provided herein, by giving written
notice of exercise to the Company, in form and substance satisfactory to
counsel for the Company, specifying the number of shares of Common Stock to be
purchased.  Such notice shall be
accompanied by payment in full of the Option Price multiplied by the number of
shares of Common Stock underlying the portion of the Option exercised as
follows: (i) in cash or by check, bank draft or money order payable to the
order of the Company; (ii) solely to the extent permitted by applicable
law, if the Common Stock is traded on a national securities exchange or quoted
on a national quotation system sponsored by the National Association of
Securities Dealers, and the Committee authorizes, through a “cashless exercise”
procedure whereby the Holder delivers irrevocable instructions to a broker
acceptable to the Committee to deliver promptly to the Company an amount in
cash equal to the purchase price; (iii) by the relinquishment of a portion
of the Option or by payment in full or in part in the form of Common Stock
which, solely to the extent necessary to avoid adverse accounting consequences
for the Company, have been owned by the Holder for a period of at least six
months (and for which the Holder has good title free and clear of any liens and
encumbrances) based on the Fair Market Value of the Common Stock on the payment
date as determined by the Committee, in its sole discretion; (iv) by any 

 

2

 

combination of the foregoing; or (v) any other means expressly
authorized by the Committee.

 

(b)           As
promptly as is practicable after the receipt of a written notice of exercise to
the Company, in form and substance satisfactory to counsel for the Company,
payment of the Option Price and satisfaction of applicable withholding
requirements, the Company shall issue the shares of Common Stock registered in
the name of the Holder, Holder’s authorized assignee, or Holder’s legal
representative, and shall deliver certificates representing the shares of
Common Stock with the appropriate legends affixed thereto.  The Company may postpone such delivery until
it receives satisfactory proof that the issuance of such shares of Common Stock
will not violate any of the provisions of the Securities Act of 1933, as
amended, or the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), or the requirements
of applicable state law relating to authorization, issuance or sale of
securities, or until there has been compliance with the provisions of such acts
or rules.  The Holder understands that
the Company is under no obligation to register or qualify the shares of Common
Stock with the Securities and Exchange Commission, any state securities
commission or any stock exchange to effect such compliance.

 

5.             Option Term.  The term of the Option shall be 10 years
after the Grant Date and the Option shall expire at 5:00 p.m. (Eastern
Time) on the 10th anniversary of the Grant Date, subject to earlier termination
in the event of the Holder’s Termination with the Company and its subsidiaries
as specified in Section 6.

 

6.             Termination.  Subject to Section 5 and the
terms of the Plan and this Agreement, the Option shall remain exercisable as
follows:

 

(a)           In
the event of the Holder’s Termination by reason of death or disability (as
defined in Section 22(e)(3) of the Code), the Option, to the extent
vested at the time of the Holder’s Termination, shall remain exercisable until
the earlier of (i) one year from the date of such Termination or (ii) the
expiration of the stated term of the Option pursuant to Section 5
hereof.

 

(b)           In
the event of the Holder’s involuntary Termination without “cause” (as
determined by the Committee consistent with the provisions of Section 16
of the Plan), the Option, to the extent vested at the time of the Holder’s
Termination, shall remain exercisable until the earlier of (i) three
months from the date of such Termination or (ii) the expiration of the
stated term of the Option pursuant to Section 5 hereof.

 

(c)           In
the event of the Holder’s voluntary Termination (other than a voluntary
termination described in Section 6(d) below), the Option, to the
extent vested at the time of the Holder’s Termination, shall remain exercisable
until the earlier of (i) 30 days from the date of such Termination or (ii) the
expiration of the stated term of the Option pursuant to Section 5
hereof.

 

(d)           In
the event of the Holder’s Termination for “cause” or in the event of the Holder’s
voluntary Termination within 90 days after an event that would be 

 

3

 

grounds for a Termination for “cause”, the Holder’s entire Option
(whether or not vested) shall be forfeited and canceled in its entirety upon
such Termination.

 

(e)           Any
portion of the Option that is not vested as of the date of the Holder’s
Termination for any reason shall terminate and expire as of the date of such
Termination.

 

7.             Change in Control.  Notwithstanding the provisions of Section 14
of the Plan, in the event of a Change in Control, the Option shall be
treated, to the extent determined by the Committee to be
permitted under Section 409A of the Code, in accordance with one of
the following methods as determined by the Committee in its sole discretion: (i) the Option may be cancelled for fair value (as determined in the
sole discretion of the Committee) which, may equal the excess, if any, of the
value of the consideration to be paid in the Change in Control transaction to
holders of the same number of shares of Common Stock over the aggregate exercise
price of the Option; (ii) a new award may be issued in substitution of the
Option that will substantially preserve the otherwise applicable terms of the
Option, as determined by the Committee in its sole discretion; or (iii) for
a period of at least 20 days prior to the Change in Control, the Option may be
exercisable as to all shares of Common Stock subject thereto (but any such
exercise will be contingent upon and subject to the occurrence of the Change in
Control and if the Change in Control does not take place within a specified
period after giving such notice for any reason whatsoever, the exercise will be
null and void) and any portion of the Option not exercised prior to the consummation
of the Change in Control will terminate and be of no further force and effect
as of the consummation of the Change in Control.  For the avoidance of doubt, in the event of a
Change in Control, the Committee may, in its sole discretion, terminate the
Option if the exercise price is equal to or exceeds the per share value of the
consideration to be paid in the Change in Control transaction without payment
of consideration therefor.

 

8.             Restriction on Transfer of Option.  No part of the Option shall be anticipated,
alienated, attached, sold, assigned, pledged, encumbered, charged, hypothecated
or otherwise transferred other than by will or by the laws of descent and
distribution.  During the lifetime of the
Holder, the Option may be exercised only by the Holder or the Holder’s guardian
or legal representative.  The Option
shall not be subject to levy by reason of any execution, attachment or similar
process.  Upon any attempt to anticipate,
alienate, attach, sell, assign, pledge, encumber, charge, hypothecate or
otherwise transfer the Option or in the event of any levy upon the Option by
reason of any execution, attachment or similar process contrary to the
provisions hereof, the Option shall immediately and automatically become null
and void.

 

9.             Rights as a Stockholder; Adjustments.  (a)  The Holder shall have no rights as
a stockholder with respect to any shares of Common Stock covered by the Option
unless and until the Holder has become the holder of record of such
shares.  No adjustments shall be made to
the Option, the shares of Common Stock covered by the Option or the Option
Price for dividends in cash or other property, distributions or other rights in
respect of any such shares, except as otherwise may be specifically provided
for 

 

4

 

in the Plan.  No shares of Common
Stock shall be issued unless and until payment therefor has been made or
provided.

 

(b)           The
Committee will adjust the terms of the Option (including, without limitation,
the number of shares of Common Stock subject to the Option, the type of property
to which the Option relates and the Option Price), in such manner as it deems
appropriate (including, without limitation, by payment of cash) to prevent the
enlargement or dilution of rights, or otherwise as it deems appropriate, for
any increase or decrease in the number of issued shares of Common Stock (or
issuance of shares of stock other than shares of Common Stock) resulting from a
recapitalization, stock split, reverse stock split, stock dividend, spinoff,
splitup, combination, reclassification or exchange of shares of Common Stock,
merger, consolidation, rights offering, separation, reorganization or
liquidation, or any other change in the corporate structure or shares of the
Company, including any extraordinary dividend or extraordinary distribution.  After any adjustment made pursuant to this Section 9(b),
the number of shares of Common Stock subject to the Option will be rounded down
to the nearest whole number.

 

10.           Provisions of Plan Control.  This Agreement is subject to all the terms,
conditions and provisions of the Plan, including, without limitation, the
amendment provisions thereof, and to such rules, regulations and
interpretations relating to the Plan as may be adopted by the Committee and as
may be in effect from time to time.  The Plan
is incorporated herein by reference.  If
and to the extent that this Agreement conflicts or is inconsistent with the
terms, conditions and provisions of the Plan, the Plan shall control, and this
Agreement shall be deemed to be modified accordingly.  This Agreement contains the entire
understanding of the parties with respect to the subject matter hereof and
supersedes any prior agreements between the Company and the Holder with respect
to the subject matter hereof.

 

11.           Notices.  Any notice or communication given hereunder
(each a “Notice”) shall be
in writing and shall be sent by personal delivery, by courier or by United
States mail (registered or certified mail, postage prepaid and return receipt
requested), to the appropriate party at the address set forth below:

 

If to the Company, to:

 

NBTY, Inc.

90
Orville Drive

Bohemia,
New York 11716

Attention:  General Counsel

 

If to the Holder, to:  the address for the Holder on file with the
Company;

 

or
such other address or to the attention of such other person as a party shall
have specified by prior Notice to the other party.  Each Notice will be deemed given and
effective upon actual receipt (or refusal of receipt).

 

12.           No Obligation to Continue Service.  This Agreement is not an
agreement of employment or retention. 
This Agreement does not guarantee that the Company or its 

 

5

 

subsidiaries will employ,
retain or continue to employ or retain the Holder during the entire term of
this Agreement (or any portion thereof), including but not limited to any
period during which the Option is outstanding, nor does it modify in any
respect the Company’s or its subsidiaries’ right to terminate or modify the
Holder’s employment or retention or compensation.

 

13.           Governing Law.  All questions concerning the construction,
validity and interpretation of this Agreement will be governed by, and
construed in accordance with, the domestic laws of the State of Delaware,
without giving effect to any choice of law or conflict of law provision or rule (whether
of the State of Delaware or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of Delaware.

 

14.           Waiver of Jury Trial.  THE HOLDER WAIVES ANY RIGHT IT MAY HAVE
TO TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT OR THE PLAN.

 

15.           Choice of Forum.

 

(a)           Jurisdiction.  The Company and the Holder, as a condition to
the Holder’s receipt of the Option, hereby irrevocably submit to the exclusive
jurisdiction of any state or federal court located in Suffolk County, New York
over any suit, action or proceeding arising out of or relating to or concerning
the Plan or this Agreement.  The Company
and the Holder, as a condition to the Holder’s receipt of the Option,
acknowledge that the forum designated by this Section 15(a) has a
reasonable relation to the Plan and this Agreement and to the relationship
between the Holder and the Company. 
Notwithstanding the foregoing, nothing herein shall preclude the Company
from bringing any action or proceeding in any other court for the purpose of
enforcing the provisions of Section 15.

 

(b)           Acceptance of Jurisdiction.  The agreement by the Company and the Holder
as to forum is independent of the law that may be applied in the action, and
the Company and the Holder, as a condition to the Holder’s receipt of the
Option, (i) agree to such forum even if the forum may under applicable law
choose to apply non-forum law, (ii) hereby waive, to the fullest extent
permitted by applicable law, any objection which the Company or the Holder now
or hereafter may have to personal jurisdiction or to the laying of venue of any
such suit, action or proceeding in any court referred to in Section 15(a),
(iii) undertake not to commence any action arising out of or relating to
or concerning the Plan or this Agreement in any forum other than the forum
described in this Section 15 and (iv) agree that, to the
fullest extent permitted by applicable law, a final and non-appealable judgment
in any such suit, action or proceeding in any such court shall be conclusive
and binding upon the Company and the Holder.

 

(c)           Service of Process.  The Holder, as a condition to the Holder’s
receipt of the Option, hereby irrevocably appoints the General Counsel of the
Company 

 

6

 

as the Holder’s agent for service of process in connection with any
action, suit or proceeding arising out of or relating to or concerning the Plan
or this Agreement, who shall promptly advise the Holder of any such service of
process.

 

(d)           Confidentiality.  The Holder, as a condition to the Holder’s
receipt of the Option, agrees to keep confidential the existence of, and any
information concerning, a dispute, controversy or claim described in Section 15,
except that the Holder may disclose information concerning such dispute,
controversy or claim to the court that is considering such dispute, controversy
or claim or to the Holder’s legal counsel (provided that such counsel agrees
not to disclose any such information other than as necessary to the prosecution
or defense of the dispute, controversy or claim).

 

16.           Counterparts.  This Agreement may be executed with
counterpart signature pages or in separate counterparts, each of which
shall be an original and all of which taken together shall constitute one and
the same agreement.

 

                IN WITNESS WHEREOF, the parties have executed this Agreement
on the date and year first above written.

 

	
  HOLDER 

  	
  NBTY, INC. 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
   

  
	
  [Name]

  	
   

  	
  Name: 

  
	
   

  	
   

  	
  Title

  

 

 

7

 

Exhibit A

 

Definition of Change in Control

 

A
“Change in Control” means the happening of any of the following:

 

                (a)           the members of the Board of Directors of the Company (the “Board”) at the beginning of any
consecutive twenty-four calendar month period, but not including any period
prior to February 1, 2008 (the “Incumbent Directors”),
cease for any reason other than due to death or such director’s desire to not
stand for re-election to the Board to constitute at least a majority of the
members of the Board; provided that any director whose election, or nomination
for election by the Company’s stockholders, was approved by a vote of at least
a majority of the members of the Board then still in office who were members of
the Board at the beginning of such twenty-four calendar month period will be
deemed an Incumbent Director;

 

                (b)           any “person”, including a “group” (as such terms are used
in Sections 13(d) and 14(d) of the Exchange Act), but excluding the
Company, any of its affiliates or any employee benefit plan of the Company is
or becomes after February 1, 2008 a “beneficial owner” (as such term is
used in Section 13(d) and 14 of the Exchange Act) directly or
indirectly of securities of the Company (not including in the securities
beneficially owned by such person any securities acquired directly from the
Company) representing 25% or more of the combined voting power of the Company’s
then outstanding securities (the “Company Voting Securities”);
provided, however, such event will not be deemed to be a Change
in Control if it qualifies as a Non-Qualifying Transaction as defined in clause
(c) below;

 

                (c)           the consummation of a merger, consolidation, statutory
share exchange or similar form of corporate transaction involving the Company
or any of its subsidiaries that requires the approval of the Company’s
stockholders, whether for such transaction or the issuance of securities in the
transaction (a “Business Combination”),
unless immediately following such Business Combination:  (A) more than 50% of the total voting
power of (x) the corporation resulting from such Business Combination (the
“Surviving Corporation”), or (y) if
applicable, the ultimate parent corporation that directly or indirectly has
beneficial ownership of at least 95% of the voting securities eligible to elect
directors of the Surviving Corporation (the “Parent
Corporation”), is represented by Company Voting Securities that
were outstanding immediately prior to such Business Combination (or, if
applicable, is represented by shares into which such Company Voting Securities
were converted pursuant to such Business Combination), and such voting power
among the holders thereof is in substantially the same proportion as the voting
power of such Company Voting Securities among the holders thereof immediately
prior to the Business Combination, (B) no person (other than any employee
benefit plan (or related trust) sponsored or maintained by the Surviving
Corporation or the Parent Corporation), is or becomes the beneficial owner,
directly or indirectly, of 25% 

 

 

or
more of the total voting power of the outstanding voting securities eligible to
elect directors of the Parent Corporation (or, if there is no Parent
Corporation, the Surviving Corporation) and (C) at least a majority of the
members of the board of directors of the Parent Corporation (or, if there is no
Parent Corporation, the Surviving Corporation) following the consummation of
the Business Combination were Incumbent Directors at the time of the Board’s
approval of the execution of the initial agreement providing for such Business
Combination (any Business Combination which satisfies all of the criteria
specified in (A), (B) and (C) above will be deemed to be a “Non-Qualifying Transaction”); or

 

                (d)           the stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company or the consummation of a sale of all
or substantially all of the Company’s assets to a person that is not controlled
by the Company.

 

 

A-2Exhibit 10.4

 

LINN ENERGY, LLC

LONG-TERM INCENTIVE PLAN

FORM OF EXECUTIVE
OPTION AGREEMENT

 

This option
agreement (“Option Agreement”)
is made and entered into effective as of [Grant Date], (the “Grant Date”) by and between LINN
ENERGY, LLC, a Delaware limited liability company (together with its
subsidiaries, the “Company”),
and [Executive] (“Participant”).

 

WHEREAS,
the Company considers it to be in its best interest that Participant be given a
proprietary interest in the Company and an added incentive to advance the
interests of the Company; and

 

WHEREAS,
the Company desires to accomplish such objectives by affording Participant an
option to purchase Units pursuant to the Linn Energy, LLC Long-Term Incentive
Plan, which is attached hereto as Appendix A and incorporated by reference
herein (the “Plan”).
Unless otherwise defined herein, capitalized terms shall have the meaning given
such terns in the Plan.

 

NOW,
THEREFORE, in consideration of the mutual agreements
hereinafter set forth, the parties hereby agree as follows:

 

1.             Grant of Option.  The Company
hereby grants to Participant an option (the “Option”) to purchase all or any part of an aggregate of
[                ]
Units, under and subject to the terms and conditions of this Option Agreement
and the Plan.

 

2.             Purchase Price.  The purchase price for each Unit to be purchased hereunder shall be $
[            ] (the
“Exercise Price”).

 

3.             Vesting and Option Period.  Participant may exercise the Option in whole or in part.  Except as otherwise provided herein, the
Option shall become vested and exercisable with respect to one third (1/3) of
the covered Units on January 19,
[              ],
with respect to an additional one third (1/3) of the covered Units on January 19,
[              ]
and with respect to the final one third (1/3) of the covered Units on January 19,
[              ].  Prior to such time, no portion of the Option
shall be exercisable unless its exercisability is accelerated as provided in this
Option Agreement or the Plan.  Except as
provided otherwise in this Option Agreement or the Plan, the Option, to the
extent not theretofore exercised, shall terminate on the expiration of ten (10) years
from the date of grant of the Option; provided, however, that upon the
termination Participant’s service relationship with the Company for any reason
other than (a) the death of the Participant or (b) termination of the
Participant’s service relationship with the Company as a result of a Change of
Control, Participant may, until the earlier of (i) 90 days from the date
of such termination or (ii) the expiration of the Option in accordance
with this Section 3, exercise the Option, to the extent such Option had
vested immediately prior to such termination and, thereafter, the Option shall,
to the extent not previously exercised, automatically terminate and become null
and void.

 

 

4.             Method of Exercise and
Payment.  To the extent that the Option has become exercisable, the Option may be
exercised from time to time by written notice to General Counsel, in substantially
the form attached hereto as Appendix B or such other form as may be approved
from time to time by the Committee, accompanied by the aggregate Exercise Price
for the Units to be purchased and any required tax withholding amount as may be
determined in the discretion of General Counsel.  The Exercise Price and any withholding shall
be payable in cash, by certified check, by bank check or other means provided
for in the Plan and approved by the Committee, including without limitation by
cashless-broker exercise or the withholding of Units upon the exercise of the
Option.

 

5.             General Restrictions.  Subject to
the terms of this Option Agreement and the Plan, the Option may be exercised at
any time, and from time to time, in whole or in part, until the termination
thereof as set forth herein, or until all Units covered by the Option shall
have been purchased, whichever first occurs. 
The Option shall not be assignable or transferable except as expressly
provided by the Committee.

 

6.             Termination
by Company other than for Cause.  Upon the termination by the Company of Participant’s
service relationship with the Company other than for Cause (as defined herein
and as determined by the Committee in its sole discretion), the Option granted
hereby shall automatically and immediately vest in full.  “Cause”
shall mean (a) Participant’s conviction of, or plea of nolo contendere to, any felony, any
crime or offense causing substantial harm to the Company (whether or not for
personal gain) or involving acts of theft, fraud, embezzlement, moral turpitude
or similar conduct; (b) Participant’s repeated intoxication by alcohol or
drugs during the performance of his or her duties; (c) malfeasance in the
conduct of Participant’s duties, including, but not limited to, (i) willful
and intentional misuse or diversion of any Company funds, (ii) embezzlement
or (iii) fraudulent or willful and material misrepresentations or
concealments on any written reports submitted to the Company; (d) Participant’s
material failure to perform the duties of Participant’s employment or service
relationship consistent with Participant’s position or material failure to
follow or comply with the reasonable and lawful written directives of the Board
of the Company; or (e) a material breach by Participant of the written
policies of the Company concerning employee discrimination or harassment.

 

7.             Termination
by Participant with Good Reason.  Upon the termination by Participant of Participant’s
service relationship with the Company with Good Reason (as defined herein), the
Option granted hereby shall automatically and immediately vest in full.  “Good
Reason” shall mean any of the following to which Participant does
not consent in writing: (a) a reduction in Participant’s base salary; (b) a
relocation of Participant’s primary place of employment to a location more than
50 miles from [Houston, Texas]/[Pittsburgh, Pennsylvania]; or (c) any
material reduction in Participant’s title, authority or responsibilities as
[Title] of the Company.

 

8.             Death or Disability.  In the case of termination of Participant’s service relationship with the
Company due to death or Disability (as defined herein), the Option granted
hereby shall automatically and immediately vest in full.  “Disability”
shall mean the determination by a physician selected by the Company that
Participant has been unable to perform substantially Participant’s usual and
customary duties for a period of at least one 

 

2

 

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.  In the case of termination of Participant’s
service relationship with the Company due to death or Disability, Participant
or Participant’s estate (or any person who acquired the right to exercise such
Option by bequest or inheritance or otherwise by reason of Participant’s death
or by reason of Participant’s Disability) may, until the earlier of (a) one
year after the date of death or (b) the expiration of the Option in
accordance with Section 3, exercise the Option and, thereafter, the Option
shall, to the extent not previously exercised, automatically terminate and
become null and void.

 

9.             Change
of  Control.  Notwithstanding anything in the Plan to the
contrary, in the event of a Change of Control (as defined in the Employment
Agreement), the Option granted hereby shall automatically and immediately vest
in full.  In the event of the termination
of Participant’s service relationship with the Company as a result of a Change
of Control, the Participant may, until the earlier of (a) one year after
the date of such termination or (b) the expiration of the Option in
accordance with Section 3, exercise the Option and, thereafter, the Option
shall, to the extent not previously exercised, automatically terminate and
become null and void.

 

10.          Termination
by Company for Cause or by Participant without Good Reason.  In the case of (a) termination by the Company of Participant’s
service relationship with the Company for Cause or (b) termination by
Participant of Participant’s service relationship with the Company without Good
Reason and other than due to Participant’s death or disability, Participant
shall immediately forfeit all rights with respect to any unvested
Options..  Participant hereby agrees to
undertake any action and execute any document, instrument or papers reasonably
requested by the Company to effect such forfeiture of the Option resulting from
any such termination.

 

11.          Rights as a Unitholder.  Participant, or a transferee of the Option, shall have no rights as a
holder of a membership interest in the Company except as to any Units actually
purchased pursuant to the exercise of the Option.

 

12.          Plan Controlling Document.  Participant agrees that the Plan is the controlling instrument and that
to the extent there is any conflict between the terms of the Plan and this
Option Agreement, the Plan shall control and be the governing document.

 

13.          Limited Liability Company
Agreement.  As a condition to the exercise of the Option,
Participant agrees to be bound by all applicable provisions of the Company’s
limited liability company agreement, as it may be amended from time to time.

 

14.          Taxes.  The Company and any affiliate thereof are authorized to withhold from any
payment relating to the Option, or any payroll or other payment to Participant,
amounts of withholding and other taxes due or potentially payable in connection
with the exercise of the Option, and to take such other action as the Committee
may deem advisable to enable the Company, any affiliate, and Participant to
satisfy obligations for the payment of withholding taxes and other tax
obligations relating to the Option.  This
authority shall include authority to withhold or receive Units or other
property and to make cash payments in respect thereof in 

 

3

 

satisfaction of Participant’s tax obligations, either on a mandatory or
elective basis in the discretion of the Committee.

 

15.          Issuance of Units.  The Company shall not be obligated to issue any Units pursuant to the
Option at any time when the Units covered by such Option have not been
registered under the Securities Act of 1933, as amended, and such other state
and federal laws, rules or regulations as the Company or the Committee
deems applicable and, in the opinion of legal counsel for the Company, there is
no exemption from the registration requirements of such laws, rules or regulations
available for the issuance and sale of such Units.

 

16.          Notices.  Any notices given in connection with this Option Agreement shall, if
issued to Participant, be delivered to Participant’s current address on file
with the Company, or if issued to the Company, be delivered to the Company’s
principal offices.

 

17.          Execution of Receipts and
Releases.  Any payment of cash or any issuance or transfer of
Units or other property to Participant, or to Participant’s legal
representatives, heirs, legatees or distributees, in accordance with the
provisions hereof, shall, to the extent thereof, be in full satisfaction of all
claims of such persons hereunder.  The
Company may require Participant or Participant’s legal representatives, heirs,
legatees or distributees, as a condition precedent to such payment or issuance,
to execute a release and receipt therefor in such form as it shall determine.

 

18.          Successors.  This Option Agreement shall be binding upon Participant, Participant’s
legal representatives, heirs, legatees and distributees, and upon the Company,
its successors and assigns.

 

[Remainder of this Page Intentionally
Left Blank]

 

4

 

IN WITNESS WHEREOF, the parties
hereto have executed this Option Agreement to be effective as of the day and
year first above written.

 

	
   

  	
  LINN
  ENERGY, LLC

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name: 

  	
  [                                     ]

  	
   

  
	
   

  	
  Title:

  	
  [                                     ]

  	
   

  
						

 

 

	
   

  	
  PARTICIPANT:

  	
   

  
	
   

  	
   

  

 

5

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