SEPARATION AGREEMENTTermination Severance Agreement |
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Exhibit 10.3
SEPARATION AGREEMENT
This SEPARATION AGREEMENT (this “ Agreement ”) is entered into by and between Linn Operating, Inc., a Delaware corporation (the “ Company ”), and Lisa D. Anderson (the “ Employee ”) (the Company and Employee are collectively referred to herein as the “ Parties ”) effective as of June 11, 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 July 7, 2006 (the “ Employment Agreement ”); and
WHEREAS, Employee’s employment will be terminated without Cause, as defined in the Employment Agreement, effective May 31, 2008; and
WHEREAS the Employment Agreement contemplates the Employee’s receipt of certain severance benefits upon the termination of her employment without Cause, provided that she 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 to change to a limited extent the timing and form of severance payments and to provide for additional benefits to the Employee upon her termination, which changes are intended to comply with the applicable requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “ Code ”), the final regulations thereunder and the transitional relief.
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. Employee’s Employment. Employee will cease to be employed by the Company effective May 31, 2008 (the “Termination Date”). The Parties agree that such termination will be deemed without Cause and that all notice provisions of Section 5.4 of the Employment Agreement are waived.
2. 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 and form of the Employee’s receipt of those benefits. Accordingly, if Employee executes (and does not revoke) this Agreement, and has satisfied all of the other terms and conditions set forth in this Agreement, the Company will provide Employee the following:
(a) the Company shall pay to the Employee One Hundred Seven Thousand, Four Hundred Ninety-Nine Dollars and Ninety-Six Cents ($107,499.96) on December 15, 2008;
(b) the Company shall pay to the Employee Three Hundred Twenty-Two Thousand Four Hundred Ninety-Nine Dollars and Eighty-Eight Cents ($322,499.88) on the first regular payday in January 2009;
(c) beginning on the Termination 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, the Company shall reimburse Employee for her 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 on or after December 15, 2008 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 November 30, 2008. Thereafter, reimbursement payments pursuant to this paragraph shall be made on a monthly basis provided that Employee remains entitled to reimbursements hereunder.
For all purposes of this Agreement and the Employment Agreement, the Termination Date shall occur on May 31, 2008 when the Employee incurred 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 the final regulations promulgated thereunder. The Parties recognize that by performing its obligations pursuant to this Section 2, 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.
3. Payments of Accrued Base Salary, Vacation, Reimbursements and Bonuses.
(a) The Company shall pay to Employee all of the accrued but unpaid Base Salary and Vacation that she 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 (30) 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 her under the Employment Agreement and that she 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.
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(d) The Parties recognize that by performing its obligations pursuant to this Section 3, the Company will satisfy all of its obligations under Section 6.4(a)(i) of the Employment Agreement.
4. Incentive Plan Rights.
The Parties recognize that a termination without Cause will entitle Employee to certain rights under option agreements and restricted unit agreements which she 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.
5. Outplacement Services. To facilitate finding future employment, the Company will provide Employee outplacement services through Challenger, Gray & Christmas, Inc. for a period of six (6) months following the Effective Date of this Agreement.
6. Attorneys’ Fees . The Company agrees to reimburse Employee for attorneys’ fees incurred by Employee to review this Agreement; however, such fees shall not exceed One Thousand Five Hundred Dollars ($1,500.00).
7. Additional Payments . In addition to the payments and benefits specified in Sections 2 through 5 above, the Company shall pay to the Employee as soon as practicable upon execution of this agreement, but in any event not later than June 30, 2008 a payment equal to Seventy-Two Thousand ($72,000.00). Such payment is made outside of the Employment Agreement and is in recognition of the Employee’s agreement to cooperate fully with the Company to ensure a smooth transition to the new Chief Accounting Officer and to assist him in becoming familiar with the Company’s financial operations and answering any questions he may have.
8. Employee’s Release . Employee hereby releases, discharges and forever acquits the Company, Linn Energy, LLC and their respective affiliates and subsidiaries and the past, present and future stockholders, members, partners, directors, managers, employees, agents, attorneys, heirs, legal representatives, successors and assigns of the foregoing, in their personal and representative capacities (collectively, the “Company Parties” ), from liability for, and hereby waives, any and all claims, damages, or causes of action of any kind related to Employee’s employment with any Company Party, the termination of such employment, and any other acts or omissions related to any matter on or prior to the date of this Agreement including without limitation any alleged violation through the date of this Agreement of: (a) the Age Discrimination in Employment Act of 1967, as amended; (b) Title VII of the Civil Rights Act of 1964, as amended; (c) the Civil Rights Act of 1991; (d) Section 1981 through 1988 of Title 42 of the United States Code, as amended; (e) Employee Retirement Income Security Act of 1974, as amended; (vi) the Immigration Reform Control Act, as amended; (f) the Americans with Disabilities Act of 1990, as amended; (g) the National Labor Relations Act, as amended; (h) the Occupational Safety and Health Act, as amended; (i) the Family and Medical Leave Act of 1993; (j) any state anti-discrimination law; (k) any state wage and hour law; (l) any other local, state or federal law, regulation or ordinance; (m) any public policy, contract, tort, or common law claim; (n) any allegation for costs,
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fees, or other expenses including attorneys’ fees incurred in these matters; (o) any and all rights, benefits or claims Employee may have under any employment contract, incentive compensation plan or stock option plan with any Company Party or to any ownership interest in any Company Party except as expressly provided in the Separat |
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