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SEPARATION AGREEMENT

Termination Severance Agreement

SEPARATION AGREEMENT | Document Parties: LINN ENERGY, LLC | Linn Operating, Inc You are currently viewing:
This Termination Severance Agreement involves

LINN ENERGY, LLC | Linn Operating, Inc

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Title: SEPARATION AGREEMENT
Governing Law: Pennsylvania     Date: 8/7/2008
Industry: Oil and Gas Operations     Sector: Energy

SEPARATION AGREEMENT, Parties: linn energy  llc , linn operating  inc
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Exhibit 10.4

 

SEPARATION AGREEMENT

 

This   SEPARATION AGREEMENT (this “ Agreement ”) is entered into by and between Linn Operating, Inc.,   a Delaware corporation (the “ Company ”), and Thomas A. Lopus   (the “ Employee ”) (the Company and Employee are collectively referred to herein as the “ Parties ”) effective as of May 8, 2008 (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 purpose 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 Employee for any purpose.

 

WHEREAS , Employee is currently employed by the Company pursuant to an Employment Agreement dated April 3, 2006 (the “ Employment Agreement ”); and

 

WHEREAS, Linn Energy has agreed to sell certain assets to XTO Energy Inc. (“ XTO ”) (which such transaction is referred to as the “ XTO Transaction ”); and

 

WHEREAS the Parties wish for Employee to continue his employment with the Company, pursuant to the terms of the Employment Agreement as modified herein, until the closing of the XTO Transaction; and

 

WHEREAS the Parties anticipate that upon the closing of the XTO Transaction,  Employee’s employment will be terminated without Cause, as defined in the Employment Agreement; and

 

WHEREAS the Employment Agreement contemplates the Employee’s receipt of certain severance benefits upon the termination of his employment without Cause, provided that he reaffirms certain provisions of the Employment Agreement and enters into a release of claims with the Company; and

 

WHEREAS the Parties wish to amend the Employment Agreement in order to specify the timing of severance payments and benefits to be provided to Employee upon a termination without Cause, which changes are intended to cause the Employment Agreement to comply with the applicable requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “ Code ”).

 

NOW , THEREFORE, in consideration of the promises and benefits set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by Employee and the Company, the Parties agree as follows:

 

                1.            Continued Employment Through the Closing of the XTO Transaction.   The Parties agree that Employee will continue his employment with the Company, pursuant to the terms of the Employment Agreement as modified herein, until the earlier of: (i) the Closing Date, as defined in the Asset Purchase and Sale Agreement – Appalachia Region dated April 13, 2008, between the Company, Linn Energy Holdings, LLC, Penn West Pipeline, LLC and XTO (the “ Closing Date ”); or (ii) September 1, 2008.  The continued employment referenced in this paragraph may be subject to earlier termination by the Company pursuant to the terms of Sections 5.1, 5.2(a), 5.2(b) or 5.5 of the Employment Agreement, but may not be terminated prior to the period referenced in the first sentence of this paragraph for any other reason.  For the avoidance of doubt, the Parties expressly agree that Employee may not terminate his employment with the

 

 

 

 


 

 

Company prior to the period referenced in the first sentence of this paragraph and that Section 5.3 of the Employment Agreement is hereby superseded in its entirety.

 

2.             Additional Payment.    Provided that Employee either (i) remains employed by the Company until the earlier of the Closing Date or September 1, 2008, or (ii) his employment is involuntarily terminated by the Company prior to the earlier of the Closing Date or September 1, 2008 other than for Cause, and provided that Employee executes (and does not revoke) a Release in the form attached as Exhibit A, the Company shall provide Employee with a one-time, lump sum payment of $15,416.67, payable on or before the thirtieth (30 th ) business day after the Termination Date (as defined in the Employment Agreement), in lieu of any bonus payment to which Employee might otherwise claim to be entitled for the Company’s fiscal year ending December 31, 2008.

 

3.             Termination of Employment .   Unless earlier terminated pursuant to Section 5 of the Employment Agreement, Employee’s employment with the Company shall terminate on the earlier of: (i) the Closing Date; or (ii) September 1, 2008. The Parties agree that such termination will be deemed without Cause so long as it occurs on the earlier of: (i) the Closing Date; or (ii) September 1, 2008, and that all notice provisions of Section 5.4 of the Employment Agreement are waived in the event of such a termination.

 

4.             Severance Benefits.   The termination of Employee’s employment without Cause will qualify Employee for severance benefits pursuant to Sections 6.4(a)(ii) and (iv) of the Employment Agreement.  The Parties desire to amend the Employment Agreement’s provisions to specify the timing of Employee’s receipt of those benefits.  Accordingly, if Employee executes (and does not revoke) a Release in the form attached as Exhibit A, and has satisfied all of the other terms and conditions set forth in this Agreement, the Company will provide Employee the following:

 

 

(a)

beginning on the Payment Date, the Company shall pay to Employee twenty- four (24) monthly payments of $15,416.67, which payments each represent one-twelfth (1/12) of Employee’s annual Base Salary at the highest rate in effect during the thirty-six (36) month period prior to the Termination Date.

 

 

(b)

beginning on the Payment Date, if Employee is eligible for continuation insurance coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) and has timely elected COBRA continuation coverage under the applicable group health plan of the Company, then with respect to the period beginning on the Termination Date and continuing through the earlier of the end of the period for which Employee is eligible by law to receive COBRA continuation coverage under the Company’s group health plan and 24 months from the Termination Date, the Company shall reimburse Employee for his costs for such continuation coverage.  In order to receive such reimbursement, Employee must not be eligible for substantially similar benefits under the group health plan of any other employer.  The first reimbursement shall be made on the Payment Date and the amount of such first reimbursement shall include all costs of COBRA continuation coverage for which Employee is entitled to reimbursement hereunder for the period beginning on the Termination Date and ending on the Payment Date.  Thereafter, reimbursement payments pursuant to this paragraph shall be made

 

 

 


 

 

on a monthly basis provided that Employee remains entitled to reimbursements hereunder.

 

The “ Payment Date ,” as used herein, means the date that is six months after the Termination Date.  For all purposes of this Agreement and the Employment Agreement, the Termination Date shall occur when Employee incurs a “separation from service” with the Company within the meaning of Section 409A(2)(A)(i) of the Internal Revenue Code of 1986, as amended, and applicable administrative guidance issued thereunder.  The Parties recognize that by performing its obligations pursuant to this Section 4, the Company will satisfy all of its obligations under Sections 6.4(a)(ii) and (iv) of the Employment Agreement.  The Parties further agree that all of the Company’s obligations with regard to Severance Benefits set forth in Sections 6.4(a)(ii) and (iv) of the Employment Agreement are superseded in their entirety by the provisions of this Agreement.

 

5.             Payments of Accrued Base Salary, Reimbursements and Bonuses.

 

(a)           The Company shall pay to Employee all of the accrued but unpaid Base Salary that he has earned through the Termination Date.  Such payment will be made no later than the next regular payday following the Termination Date on which Employee’s Base Salary would otherwise have been due and payable if not for the termination of Employee’s employment.

 

(b)           Within thirty days of the Termination Date, the Company shall reimburse Employee for all expenses described in Section 4.1 of the Employment Agreement for which Employee has submitted timely receipts prior to the Termination Date.

 

(c)           The Parties recognize that Employee has been paid all accrued bonuses owed to him under the Employment Agreement and that he will earn no additional bonus, whether in whole or in part, pursuant to the Employee Bonus Plan for the Company’s fiscal year ending December 31, 2008.

 

(d)           The Parties recognize that by performing its obligations pursuant to this Section 5, the Company will satisfy all of its obligations under Section 6.4(a)(i) of the Employment Agreement.  The Parties further agree that all of the Company’s obligations with regard to Severance Benefits set forth in Section 6.4(a)(i) of the Employment Agreement are superseded in their entirety by the provisions of this Agreement.

 

6.           Incentive Plan Rights.

 

(a)           The Parties recognize that a termination without Cause will entitle Employee to certain rights under option agreements and restricted unit agreements which he has previously entered and which have been awarded under the terms of the Linn Energy, LLC Long Term Incentive Plan or any successor plan (the “ Incentive Plan ”).  Employee’s rights under those agreements will be governed by the terms and conditions of the applicable agreements and the Incentive Plan.

 

(b)           The Parties recognize that the Compensation Committee of the Board of Directors of Linn Energy has recommended that Employee be granted an award of 6,800 restricted Units (as defined in the Incentive Plan) under the terms of the Incentive Plan,

 

 

 

 


 

 

which such award shall be granted promptly following, and conditioned upon, the approval by the Unit holders of Linn Energy of an increase in the maximum number of Units subject to awards under the Incentive Plan.  The Parties recognize that Employee’s rights regarding such an award will be governed by the terms and conditions of the applicable restricted unit agreement and Incentive Plan, if applicable.  In the event that such approval is not obtained by the Payment Date, if employee executes (and does not revoke) a Release in the form attached as Exhibit A, and has satisfied all the other terms and conditions set forth in this Agreement, on the Payment Date, the


 
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