UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported): November 22, 2006
Linn Energy, LLC
(Exact name of registrant as specified in its charter)
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Delaware
(State or other jurisdiction of
incorporation)
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000-51719
(Commission
File Number)
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65-1177591
(IRS Employer
Identification No.) |
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600 Travis, Suite 7000
Houston, Texas
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77002 |
| (Address of principal executive offices)
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(Zip Code) |
Registrant’s
telephone number, including area code: (713) 223-0880
NOT APPLICABLE
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
Item 5.02
Departure of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain Officers.
On November 28, 2006, Linn Energy, LLC (the “Company”) announced the appointment of
Mark E. Ellis, 50, as Executive Vice President and Chief Operating
Officer. Prior to joining the Company, Mr. Ellis was President of the
Lower 48 Region for ConocoPhillips. From October,
2004 to April, 2006, Mr.
Ellis served as Senior Vice President of North American Production
for Burlington Resources Inc. and
from November, 2000 to October,
2004, Mr. Ellis served as President of Burlington Resources Canada Ltd. A copy of the
press release announcing Mr. Ellis’ appointment is attached to this Report as Exhibit 99.1 and is
incorporated into this Item 5.02 by reference.
On November 22, 2006, in connection with Mr. Ellis’ appointment, the Company and Linn
Operating, Inc. (“Linn Operating”), a wholly owned subsidiary of the Company, entered into
an employment agreement (the “Employment Agreement”) with Mr. Ellis, effective December 18,
2006 (the “Effective Date”). The Employment Agreement provides for an annual base salary
of not less than: (i) $250,000 for 2007 and (ii) $300,000 for 2008, in each case subject to annual
increase, and a one-time bonus of $250,000, payable within five business days after January 1,
2007. Mr. Ellis is also entitled to receive a guaranteed bonus (“Guaranteed Bonus”) of not less
than 100% of his then current annual base salary with respect to the fiscal year ending December
31, 2007 and December 31, 2008. Thereafter, he will be eligible for incentive compensation payable
at the discretion of the Company’s board of directors. Mr. Ellis also is entitled to receive:
(i) an option awarded under the Linn Energy, LLC Long Term Incentive Plan (the “Incentive
Plan”) as of the Effective Date to purchase 50,000 units at an exercise price equal to the fair
market value of the Company’s units on the date of grant, which are expected to vest one-third on
January 1, 2007, one-third on January 1, 2008, and the remaining one-third on January 1, 2009; and
(ii) a grant of 200,000 restricted units awarded under the Incentive Plan as of the Effective Date,
one-half of which are expected to vest on January 1, 2007, one-quarter of which are expected to
vest on January 1, 2008 and one-quarter of which are expected to vest on January 1, 2009. On the
first anniversary of the Effective Date, Mr. Ellis is also entitled to receive an option award
under the Incentive Plan to purchase 50,000 units at an exercise price equal to the fair market
value of the Company’s units on the date of grant, which are expected to vest one-third at the end
of each twelve-month period following the award. Not later than January 1, 2008, Mr. Ellis is also
entitled to receive a grant of 100,000 restricted units awarded under the Incentive Plan, which are
expected to vest one-third on January 1, 2008, one-third on January 1, 2009, and the remaining
one-third on January 1, 2010. The options and restricted units will vest in full upon a change of
control or a termination of Mr. Ellis’ employment by Linn Operating without cause, termination of
employment by Mr. Ellis with good reason or upon Mr. Ellis’ death or disability. The Company will
file Mr. Ellis’ option and restricted unit award agreements when they are available.
In the event of termination by Linn Operating other than for cause or termination by Mr. Ellis
for good reason, the Employment Agreement provides for severance payments, if prior to the first
anniversary of the Effective Date, in 12 monthly installments, and if on or after the second
anniversary of the Effective Date, in 24 monthly installments, in an amount equal to one-twelfth
(1/12th) of his highest base salary in effect at any time during the 36 months prior to the date of
termination (“Highest Base Salary”). In the event of termination by Linn Operating other
than for cause or termination by Mr. Ellis for good reason, on or prior to December 31, 2007, he
will also be entitled to a cash payment equal to his pro-rata Guaranteed Bonus.
If, within one year of a change of control, Linn Operating terminates his employment other
than for cause or Mr. Ellis terminates his employment for good reason, he will be entitled to
receive a lump-sum payment equal to his Highest Base Salary if prior to the first anniversary of
the Effective Date, and two times his Highest Base Salary if on or after the first anniversary of
the Effective Date.
The Employment Agreement prohibits Mr. Ellis from soliciting any of our employees or customers
as well as from competing directly with us for a period of one year following termination of
employment. The non-compete provision will not be applicable if Mr. Ellis is terminated within one
year of a change of control.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
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| Exhibit Number |
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Description |
| Exhibit 10.1
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Employment
Agreement, dated November 22, 2006
between Linn Operating, Inc. and Mark E. Ellis. |
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| Exhibit 99.1
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Press
Release dated November 28, 2006 announcing the appointment of Mark E.
Ellis as Executive Vice President and Chief Operating Officer. |