Linn Energy, LLC DEF 14A
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
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LINN
ENERGY, LLC
600 Travis, Suite 7000
Houston, Texas 77002
NOTICE OF SPECIAL MEETING OF
UNITHOLDERS
To Be Held on Thursday,
April 5, 2007
Dear Unitholders:
You are cordially invited to attend a Special Meeting of
Unitholders (the Special Meeting) of Linn Energy,
LLC, a Delaware limited liability company (Linn
Energy), which will be held on Thursday, April 5,
2007, at 10:00 a.m., Central Standard Time, at
600 Travis, Suite 7000, Houston, Texas 77002. The
Special Meeting will be held to vote upon (a) a change in
the terms of our Class C Units to provide that each
Class C Unit will automatically convert into one of our
Units and (b) the issuance of 7,465,946 Units upon such
conversion (the Class C Conversion and Issuance
Proposal). Our board of directors unanimously recommends
that the unitholders approve the Class C Conversion and
Issuance Proposal.
We are submitting the Class C Conversion Proposal and
Issuance Proposal to you as a result of our sale of 7,465,946
Class C Units at $25.06 per Class C Unit to
certain institutional investors. The sales price of the
Class C Units was determined through negotiations with the
institutional investors. We used the proceeds from the sale of
the Class C Units to partially finance the acquisitions of
certain oil and natural gas properties and related assets from
an entity controlled by Stallion Energy LLC (the Stallion
Acquisition). Concurrently with their acquisition of
Class C Units on February 1, 2007, the institutional
investors purchased 6,650,144 Units at $26.00 per Unit, the
proceeds of which were also used to partially finance the
Stallion Acquisition.
We chose to include issuance of Class C units in financing the
Stallion Acquisition because this form of financing provided
timely access to the requisite equity capital at prices that we
believe were competitive. Alternative sources of equity could
have potentially been obtained, but at a risk of delaying
completion of the Stallion Acquisition. For example, to have
issued all the equity capital in the form of Units would have
required a unitholder vote prior to such issuance under the
NASDAQ Marketplace Rules and thereby delayed completion of the
transaction. Any delay in consummating the Stallion Acquisition
would have subjected the transaction to risk of competing
bidders or other risks to the successful consummation of the
transaction. The institutional investors agreed to accept
Class C Units in lieu of additional Units, provided we ask
unitholders to approve the conversion of the Class C Units
into Units no later than June 30, 2007. We are now asking
you for this approval.
If our unitholders approve the proposal, then the Class C
Units will convert automatically into an equal number of Units.
If our unitholders do not approve the proposal, then the
Class C Units will continue to receive from us 115% of the
per Unit distributions paid on the Units, reducing the amount of
cash available for distribution on the Units. The failure to
approve the proposal would have no impact to the 6,650,144 Units
issued to the institutional investors, the listing of these
Units on The NASDAQ Global Market or our issuance of 7,465,946
Class C Units.
We urge you to read the accompanying Proxy Statement carefully
as it sets forth important information about the Class C
Conversion and Issuance Proposal and the Special Meeting.
Adoption of the Class C Conversion and Issuance Proposal
requires the affirmative vote of a majority of the votes
entitled to be cast on such proposal at the Special Meeting by
holders of Units, provided that the total votes cast represent
over 50% in interest of all outstanding Units.
Only holders of record of Units at the close of business on
February 27, 2007 are entitled to receive notice of and to
vote at the Special Meeting or any adjournments or postponement
thereof. Units purchased by the institutional investors
simultaneously with the Class C Units are not entitled to
vote on the Class C Conversion and Issuance Proposal
according to the rules of The NASDAQ Global Market. A list of
our holders will be available for examination at the Special
Meeting and at Linn Energys office at least ten days prior
to the Special Meeting.
By Order of the Board of Directors,
Roland P. Keddie
Secretary
Houston, Texas
March 5, 2007
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE
MEETING, PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD IN
THE ENCLOSED POSTAGE-PAID RETURN ENVELOPE AS PROMPTLY AS
POSSIBLE. IF YOU ATTEND THE MEETING AND SO DESIRE, YOU MAY
WITHDRAW YOUR PROXY AND VOTE IN PERSON.
TABLE OF CONTENTS
LINN
ENERGY, LLC
600 Travis, Suite 7000
Houston, Texas 77002
PROXY
STATEMENT
Special Meeting of Unitholders
To Be Held on Thursday, April 5, 2007
This Proxy Statement, which was first mailed to our unitholders
on March 5, 2007 is being furnished to you in connection
with the solicitation of proxies by and on behalf of our board
of directors for use at a Special Meeting of Unitholders (the
Special Meeting) or at any adjournments or
postponements thereof. The Special Meeting will be held on
Thursday, April 5, 2007, at 10:00 a.m., Central
Standard Time, at 600 Travis, Suite 7000, Houston,
Texas 77002. Only holders of record of Units at the close of
business on February 27, 2007 (the Record Date)
are entitled to notice of, and are entitled to vote at, the
Special Meeting and any adjournments or postponement thereof,
unless such adjournment or postponement is for more than
45 days, in which event we will set a new record date.
Units purchased simultaneously with our Class C Units are
not entitled to vote on the Class C Conversion and Issuance
Proposal (as defined herein) according to the rules of The
NASDAQ Global Market. Unless the context requires otherwise, the
terms our, we, us and
similar terms refer to Linn Energy, LLC, together with its
consolidated subsidiaries.
Proposal
At the Special Meeting of Unitholders, we are asking our
Unitholders to consider and act upon a proposal to:
(a) change the terms of our Class C Units to provide
that each Class C Unit will convert automatically into one
of our Units and (b) issue 7,465,946 Units upon such
conversion (the Class C Conversion and Issuance
Proposal).
Quorum
Required
The presence, in person or by proxy, of the holders as of the
Record Date of a majority of our outstanding Units is necessary
to constitute a quorum for purposes of voting on the
Class C Conversion and Issuance Proposal at the Special
Meeting. Withheld votes will count as present for purposes of
establishing a quorum on the proposals.
How to
Vote
You may vote in person at the Special Meeting or by proxy. Even
if you plan to attend the Special Meeting, we encourage you to
complete, sign and return your proxy card in advance of the
Special Meeting. If you plan to attend the Special Meeting and
wish to vote in person, then we will give you a ballot at the
meeting. However, if your Units are held in the name of a
broker, then you must obtain from the brokerage firm an account
statement, letter or other evidence satisfactory to us of your
beneficial ownership of the Units. Please mail your completed,
signed and dated proxy card in the enclosed postage-paid return
envelope as soon as possible so that your Units may be
represented at the Special Meeting.
Revoking
Your Proxy
You may revoke your proxy before it is voted at the Special
Meeting as follows: (i) by delivering, before or at the
Special Meeting, a new proxy with a later date; (ii) by
delivering, on or before the business day prior to the Special
Meeting, a notice of revocation to our Secretary at the address
set forth in the notice of the Special Meeting; (iii) by
attending the Special Meeting in person and voting, although
your attendance at the Special Meeting, without actually voting,
will not by itself revoke a previously granted proxy; or
(iv) if you have instructed a broker to vote your Units,
then you must follow the directions received from your broker to
change those instructions.
Outstanding
Units Held on Record Date
As of the Record Date, there were 50,252,519 Units outstanding.
Of the 50,252,519 Units outstanding as of the Record Date,
6,650,144 Units are not entitled to vote on the Class C
Conversion and Issuance Proposal.
Units
Owned by Our Affiliates as of the Record Date
As of the Record Date: (i) Quantum Energy
Partners II, LP; and (ii) our directors and executive
officers collectively held 15,705,563 Units.
In conjunction with the sale of Class C Units and Units to
the institutional investors, Quantum Energy Partners II,
LP, Michael C. Linn, Mark E. Ellis, Kolja Rockov, Lisa D.
Anderson and Roland P. Keddie entered into a voting agreement
(the Voting Agreement), pursuant to which they
agreed to vote all of the Units beneficially owned by them in
favor of the conversion of the Class C Units into Units at
any meeting of the unitholders convened to consider and vote
upon the conversion of Class C Units to Units. Quantum
Energy Partners II, LP, Michael C. Linn, Mark E. Ellis,
Kolja Rockov, Lisa D. Anderson and Roland P. Keddie collectively
held 15,595,313 as of the Record Date, representing
approximately 35.8% of the outstanding Units (excluding the
6,650,144 Units at $26.00 per Unit purchased by institutional
investors in the February 1, 2007 private placement) as of
the Record Date.
Additionally, pursuant to the agreement among us and the
institutional investors regarding the purchase of the
Class C Units (the Class C and Unit Purchase
Agreement), each of the institutional investors agreed to
vote all of its Units, with the exception of the 6,650,144 Units
purchased in the private placement, which are not entitled to
vote according to the rules of The NASDAQ Global Market, in
favor of the conversion of the Class C Units into Units.
For additional copies of this Proxy Statement or proxy cards
or if you have any questions about the Special Meeting, please
contact Georgeson Inc., our proxy solicitor, at 17 State Street,
New York, New York 10004. Banks and brokerage firms, please call
212-440-9800.
Unitholders, please call Toll-Free
1-866-785-7361.
2
QUESTIONS
AND ANSWERS
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WHAT IS THE PURPOSE OF THE SPECIAL MEETING? |
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The purpose of the Special Meeting is for our unitholders to
consider and act upon a proposal to approve (a) a change in
the terms of our Class C Units to provide that each
Class C Unit will automatically convert into one of our
Units and (b) the issuance of additional Units upon such
conversion. Upon approval of this proposal, each of the
7,465,946 Class C Units will convert into one Unit totaling
7,465,946 Units. We refer to this proposal in this proxy
statement as the Class C Conversion and Issuance Proposal. |
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We are submitting the Class C Conversion Proposal and
Issuance Proposal to you as a result of our sale of 7,465,946
Class C Units at $25.06 per Unit to certain
institutional investors. The sales price of the Class C
Units was determined through negotiations with the institutional
investors. We used the proceeds from the sale of the
Class C Units to partially finance the acquisitions of
certain oil and natural gas properties and related assets from
an entity controlled by Stallion Energy LLC (the Stallion
Acquisition). Concurrently with their acquisition of
Class C Units on February 1, 2007, the institutional
investors purchased 6,650,144 Units at $26.00 per Unit, the
proceeds of which were also used to partially finance the
Stallion Acquisition. |
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We chose to include issuance of Class C units in financing the
Stallion Acquisition because this form of financing provided
timely access to the requisite equity capital at prices that we
believe were competitive. Alternative sources of equity could
have potentially been obtained, but at a risk of delaying
completion of the Stallion Acquisition. For example, to have
issued all the equity capital in the form of Units would have
required a unitholder vote prior to such issuance under the
NASDAQ Marketplace Rules and thereby delayed completion of the
transaction. Any delay in consummating the Stallion Acquisition
would have subjected the transaction to risk of competing
bidders or other risks to the successful consummation of the
transaction. The institutional investors agreed to accept
Class C Units in lieu of additional Units, provided we ask
unitholders to approve the conversion of the Class C Units
into Units no later than June 30, 2007. We are now asking
you for this approval. |
Class C
Conversion and Issuance Proposal
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WHAT HAPPENS IF THE REQUIRED APPROVAL FOR THE CLASS C
CONVERSION AND ISSUANCE PROPOSAL IS OBTAINED? |
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Each outstanding Class C Unit will be converted
automatically into one Unit upon approval and the new Units will
be issued and listed on The NASDAQ Global Market. For purposes
of future distributions, former Class C unitholders will
become unitholders and will no longer be entitled to 115% of per
Unit distributions. The voting power of each Unit will be
decreased due to the conversion of nonvoting Class C Units
to voting Units. |
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WHAT HAPPENS IF THE REQUIRED APPROVAL FOR THE CLASS C
CONVERSION AND ISSUANCE PROPOSAL IS NOT OBTAINED? |
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If our unitholders do not approve the conversion of Class C
Units to Units, each Class C Unit will continue to receive
115% of the amount of distributions paid on each Unit. This
distribution reduces the amount of cash available for
distribution to unitholders. Upon written notice from the
parties holding a majority of the Class C Units, a second
vote will occur to consider conversion of Class C Units to
Units. If approval is not obtained at the second vote, the
proposal to convert Class C Units to Units will be voted
upon at no more than two subsequent annual meetings of our
unitholders. |
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WHAT VOTE IS REQUIRED TO APPROVE THE CLASS C CONVERSION
AND ISSUANCE PROPOSAL? |
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Adoption of the Class C Conversion and Issuance Proposal
requires the affirmative vote of a majority of the votes cast at
the Special Meeting by holders of Units, provided that the total
votes cast represent over 50% in interest of all Units entitled
to vote at the Special Meeting with respect to the Class C
Conversion and Issuance Proposal. The 6,650,144 Units purchased
by the institutional investors simultaneously with the
Class C Units are not entitled to vote on the Class C
Conversion and Issuance Proposal according to the rules of The
NASDAQ Global Market. A properly executed proxy submitted
without instructions on how to vote will be voted FOR this
proposal, unless your proxy is properly revoked. A properly
executed proxy submitted and |
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marked ABSTAIN with respect to any matter will not
be voted, although it will be counted for purposes of
determining the existence of a quorum. |
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In conjunction with the sale of Class C Units and Units to
the institutional investors, Quantum Energy Partners II,
LP, Michael C. Linn, Mark E. Ellis, Kolja Rockov, Lisa D.
Anderson and Roland P. Keddie entered into a voting agreement
(the Unitholder Voting Agreement), pursuant to which
they agreed to vote all of the Units beneficially owned by them
in favor of the conversion of the Class C Units into Units
at any meeting of the unitholders convened to consider and vote
upon the conversion of Class C Units to Units. Quantum
Energy Partners II, LP, Michael C. Linn, Mark E. Ellis,
Kolja Rockov, Lisa D. Anderson and Roland P. Keddie collectively
held 15,595,313 Units as of the Record Date, representing
approximately 35.8% of the outstanding Units (excluding the
6,650,144 Units purchased by institutional investors in the
February 1,2007 private placement) as of the Record Date. |
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Additionally, pursuant to the Class C and Unit Purchase
Agreement, each of the institutional investors agreed to vote
all of its Units, with the exception of the purchased Units
which are not entitled to vote according to the rules of The
NASDAQ Global Market, in favor of the conversion of the
Class C Units into Units. |
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WHAT ARE THE MATERIAL DIFFERENCES BETWEEN THE UNITS AND
CLASS C UNITS? |
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There are three material differences between the Units and the
Class C Units. |
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First, the Units receive distributions of available cash from
operating surplus in an amount equal to the quarterly
distribution,which amount was $0.52 per Unit with respect
to the fourth quarter of 2006. Each Class C Unit has the
right to share in distributions on a pro rata basis with the
Units, with the amount of any distributions on such Class C
Unit equaling 115% of the quarterly cash distribution amount
payable on each Unit.
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Second, the Class C Units are non-voting. Unitholders
holding Units have the right to vote their Units with respect to
the election of our board of directors, certain amendments of
our limited liability company agreement, the merger of our
company or the sale of all or substantially all of our assets,
and the dissolution of our company.
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Third, the Units have a liquidation preference over the
Class C Units, which means if we liquidate, then we will
allocate gain and loss to entitle the holders of Units a
preference over the holders of Class C Units to the extent
required to permit the unitholders to receive their unrecovered
initial Unit price, plus the initial quarterly distribution for
the quarter during which liquidation occurs, plus any arrearages.
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The
Special Meeting; Voting
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WHO IS SOLICITING MY PROXY? |
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We are sending you this Proxy Statement in connection with our
solicitation of proxies for use at our Special Meeting of
unitholders. Certain directors, officers and employees of Linn
Energy and Georgeson Inc. may also solicit proxies on our behalf
by mail, phone, fax or in person. You may obtain additional
information regarding this Special Meeting from Georgeson Inc.
as follows: 17 State Street, New York, New York 10004. Banks and
brokerage firms, please call
212-440-9800.
Unitholders, please call Toll-Free 1-866-785-7361. |
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WHEN AND WHERE IS THE SPECIAL MEETING? |
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The Special Meeting will be held on Thursday, April 5,
2007, at 10:00 a.m., Central Standard Time, at
600 Travis, Suite 7000, Houston, Texas 77002. |
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WHO IS ENTITLED TO VOTE AT THE SPECIAL MEETING? |
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Only holders of record of Units at the close of business on the
Record Date are entitled to notice of, and to vote at, the
Special Meeting. The 6,650,144 Units purchased by the
institutional investors simultaneously with the Class C
Units are not entitled to vote on the Class C Conversion
and Issuance Proposal according to the rules of The NASDAQ
Global Market. |
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HOW DO I VOTE? |
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After you read and carefully consider the information contained
in this Proxy Statement, please mail your completed, signed and
dated proxy card in the enclosed postage-paid return envelope as
soon as possible so that your Units may be represented at the
Special Meeting. You may also vote by attending the Special
Meeting and voting your Units in person. Even if you plan to
attend the Special Meeting, your plans may change, so it is a
good idea to complete, sign and return your proxy card or vote
by otherwise following the instructions on the proxy card in
advance of the Special Meeting. |
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MAY I CHANGE MY VOTE AFTER RETURNING A PROXY CARD? |
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Yes. To change your vote after you have submitted your proxy
card, send in a later dated, signed proxy card to us or attend
the Special Meeting and vote in person. You may also revoke your
proxy by sending in a notice of revocation to our Secretary at
the address set forth in the notice of the Special Meeting.
Please note that attendance at the Special Meeting will not by
itself revoke a previously granted proxy. |
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HOW DO I VOTE MY UNITS IF THEY ARE HELD IN STREET
NAME? |
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Your broker will not vote your Units unless you provide
instructions on how to vote. Please contact your broker if you
have not received a request for voting instructions. If you have
instructed your broker to vote your Units and wish to change
those instructions before the vote at the Special Meeting, then
you must follow the directions received from your broker. |
5
PROPOSAL
CLASS C CONVERSION AND ISSUANCE PROPOSAL
Background
We are submitting the Class C Conversion Proposal and
Issuance Proposal to you as a result of our sale of 7,465,946
Class C Units at $25.06 per Unit to certain
institutional investors. The sales price of the Class C
Units was determined through negotiations with the institutional
investors. We used the proceeds from the sale of the
Class C Units to partially finance the Stallion
Acquisition. Concurrently with their acquisition of Class C
Units on February 1, 2007, the institutional investors
purchased 6,650,144 Units at $26.00 per Unit, the proceeds of
which were also used to partially finance the Stallion
Acquisition.
We chose to include issuance of Class C units in financing the
Stallion Acquisition because this form of financing provided
timely access to the requisite equity capital at prices that we
believe were competitive. Alternative sources of equity could
have potentially been obtained, but at a risk of delaying
completion of the Stallion Acquisition. For example, to have
issued all the equity capital in the form of Units would have
required a unitholder vote prior to such issuance under the
NASDAQ Marketplace Rules and thereby delayed completion of the
transaction. Any delay in consummating the Stallion Acquisition
would have subjected the transaction to risk of competing
bidders or other risks to the successful consummation of the
transaction. The institutional investors agreed to accept
Class C Units in lieu of additional Units, provided we ask
unitholders to approve the conversion of the Class C Units
into Units no later than June 30, 2007. We are now asking
you for this approval.
The
Proposal
At the Special Meeting, our unitholders will consider and act
upon a proposal to approve: (a) a change in the terms of
our 7,465,946 Class C Units to provide that each
Class C Unit will convert automatically into one Unit
effective upon such approval and (b) our issuance of
7,465,946 Units upon conversion of the Class C Units.
Effects
of Approval
If our unitholders approve the conversion of Class C Units
at the Special Meeting, each outstanding Class C Unit will
convert automatically into one Unit upon approval and will be
listed on The NASDAQ Global Market. For purposes of future
distributions, former Class C unitholders will become
unitholders and will no longer be entitled to 115% of per Unit
distributions. The voting power of each Unit will be decreased
due to the conversion of nonvoting Class C Units to voting
Units.
Effects
of Failure to Approve
Each Class C Unit currently is entitled to receive 115% of
the amount of distributions paid on each Unit. If our
unitholders do not approve the conversion of Class C Units
to Units, each Class C Unit will continue to receive 115%
of the amount of distributions paid on each Unit. This
distribution reduces the amount of cash available for
unitholders. Upon written notice from the parties holding a
majority of the Class C Units, a second vote will occur to
consider conversion of Class C Units to Units. If approval
is not obtained pursuant to the second vote, the proposal to
convert Class C Units to Units will be voted upon at no
more than two subsequent annual meetings of our unitholders.
The 115% distribution terminates if at any time there are no
longer any Class C Units outstanding, which would occur
upon the automatic conversion of the Class C Units into
Units either (1) upon receipt of approval of the
Class C Conversion and Issuance Proposal, whether at this
Special Meeting or a subsequent meeting, or (2) if at any
time unitholder approval is no longer required under the Nasdaq
Marketplace Rules as a condition to the listing on the Nasdaq of
the Units that would be issued upon such conversion.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT
UNITHOLDERS VOTE FOR APPROVAL OF THE
CLASS C CONVERSION AND ISSUANCE PROPOSAL.
6
Reasons
for Board of Directors Recommendation
Our board of directors believes that the Class C Conversion
and Issuance Proposal is in the best interests of our company
and our unitholders and should be approved for the following
reasons:
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If our unitholders fail to approve the Class C Conversion
and Issuance Proposal, each class C Unit will continue to
be entitled to receive 115% of the amount of distributions paid
on each Unit. This would reduce the amount of cash available to
be distributed to the unitholders holding Units.
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Issuance of all the requisite equity capital in the form of
Units would have required a unitholder vote prior to such
issuance under the NASDAQ Marketplace Rules and thereby delayed
the repayment of indebtedness. Any delay in the repayment of
indebtedness would have caused us to continue to incur interest
expense at a rate higher than the cost of issuing the
Class C Units. The institutional investors agreed to accept
Class C Units in lieu of additional Units, provided we ask
unitholders to approve the conversion of the Class C Units
into Units no later than June 30, 2007. We are now asking
you for this approval.
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If our unitholders fail to approve the Class C Conversion
and Issuance Proposal at this Special Meeting, we have agreed to
solicit our unitholders again at a subsequent Special Meeting.
Any subsequent solicitation would result in additional costs and
expenses to us and would decrease the amount of cash available
to be distributed to our unitholders.
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7
INTERESTS
OF CERTAIN PERSONS
In considering the recommendation of our board of directors to
approve the Class C Conversion and Issuance Proposal, you
should be aware that if the Class C Conversion and Issuance
Proposal is approved at our Special Meeting, the Class C
Unitholders will receive Units. The Units will be listed on The
NASDAQ Global Market and will therefore be a more liquid
security than the Class C Units. Our other unitholders will
not receive any additional securities or other consideration if
the Class C Conversion and Issuance Proposal is approved.
You should also be aware that, upon conversion of the
Class C Units to Units, Quantum Energy Partners II LP
will own 17.6% of our outstanding Units, Michael C. Linn will
own 7.3% of our outstanding Units and, based on our internal
records, Lehman Brothers MLP Partners, L.P. will own 7.3% of our
outstanding Units.
DESCRIPTION
OF UNITS
Units
The Units represent limited liability company interests in us.
The holders of Units are entitled to participate in
distributions and exercise the rights or privileges available to
unitholders under our limited liability company agreement.
The Units currently receive distributions of available cash from
operating surplus in an amount equal to the quarterly
distribution, which amount was $0.52 per Unit with respect
to the fourth quarter of 2006. The amount of available cash, if
any, at the end of any quarter may be greater or less than the
current aggregate quarterly distribution to be distributed on
all units.
Unitholders have the right to vote with respect to the election
of our board of directors, certain amendments of our limited
liability company agreement, the merger of our company or the
sale of all or substantially all of our assets, and the
dissolution of our company.
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Dissolution
and Liquidation
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If we liquidate, we will allocate gain and loss to entitle the
holders of Units a preference over the holders of Class C
Units to the extent required to permit the unitholders to
receive their unrecovered initial Unit price, plus the initial
quarterly distribution for the quarter during which liquidation
occurs, plus any arrearages.
Holders of Units are not entitled to preemptive rights with
respect to issuances of additional securities by us.
We amended our limited liability company agreement in connection
with the private placement to create a new series of units
designated as Class C Units. The Class C Units,
together with our Units, represent membership interests in us.
Unlike the Units, the Class C Units are not publicly traded.
Upon approval of the Class C Conversion and Issuance
Proposal, each Class C Unit will convert automatically into
one Unit and none of the Class C Units will remain
outstanding. If unitholder approval is not received, then each
Class C Unit will remain outstanding and will continue to
receive distributions of 115% of the amount of distributions
paid on each Unit.
8
Each Class C Unit has the right to share in distributions
on a pro rata basis with the Units, with the amount of any
distributions on such Class C Unit equaling 115% of the
quarterly cash distribution amount payable on each Unit.
Class C Units are non-voting except that the Class C
Units shall be entitled to vote as a separate class on any
matter that adversely affects the rights or preferences of the
Class C Units in relation to other classes of interests or
as required by law. The approval of a majority of the
Class C Units shall be required to approve any matter upon
which the holders of Class C Units are entitled to vote.
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Dissolution
and Liquidation
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If we liquidate, we will allocate gain and loss to entitle the
holders of Units a preference over the holders of Class C
Units to the extent required to permit the unitholders to
receive their unrecovered initial Unit price, plus the initial
quarterly distribution for the quarter during which liquidation
occurs, plus any arrearages for the unitholders.
Holders of Class C Units, like holders of Units, are not
entitled to preemptive rights with respect to issuances of
additional securities by us.
SOLICITATION
AND MAILING OF PROXIES
The expense of preparing, printing and mailing this Proxy
Statement and the proxies solicited hereby will be borne by us.
In addition to the use of the mail, proxies may be solicited by
our representatives in person or by telephone, electronic mail
or facsimile transmission. These representatives will not be
additionally compensated for such solicitation, but may be
reimbursed for
out-of-pocket
expenses incurred in connection therewith. If undertaken, we
expect the expenses of such solicitation by our representatives
to be nominal. We will also request brokerage firms, banks,
nominees, custodians and fiduciaries to forward proxy materials
to the beneficial owners of our Units as of the Record Date and
will provide reimbursement for the cost of forwarding the proxy
materials in accordance with customary practice.
We have retained Georgeson Inc. to aid in the solicitation of
proxies, for which we will pay approximately $8,500, plus
certain other fees and out of pocket expenses, for all of these
solicitation services. Your cooperation in promptly signing and
returning the enclosed proxy card will help to avoid additional
expense. If a unitholder wishes to give such holders proxy
to someone other than the names appearing in the proxy card, the
names appearing in the proxy card must be crossed out and the
name of another individual or individuals (not more than three)
inserted. The signed card must be presented at the Special
Meeting by the individual or individuals representing such
unitholder.
If a unitholder wishes to give such holders proxy to
someone other than the names appearing in the proxy card, the
names appearing in the proxy card must be crossed out and the
name of another individual or individuals (not more than three)
inserted. The signed card must be presented at the Special
Meeting by the individual or individuals representing such
unitholder.
As a matter of policy, proxies, ballots, and voting tabulations
that identify individual unitholders are kept private by us.
Such documents are available for examination only by the
inspectors of election and certain personnel associated with
processing proxy cards and tabulating the vote. The vote of any
unitholder is not disclosed except as necessary to meet legal
requirements.
WHERE YOU
CAN FIND MORE INFORMATION ABOUT US
We file annual, quarterly and current reports and Proxy
Statements with the SEC. Our SEC filings are available to the
public via the internet at the SECs website at
www.sec.gov. You may also read and copy any document
that we file with the SEC at the SECs public reference
room at Judiciary Plaza, 450 Fifth Street, Washington, D.C.
20549.
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You can call the SEC at
1-800-SEC-0330
for further information on the public reference room and its
copy charges. We maintain a website at
www.linnenergy.com, where we post our SEC filings.
You may also request a copy of our filings, without charge, by
calling our Investor Relations at
(281) 605-4110
or write to Investor Relations, 600 Travis, Suite 7000,
Houston, Texas 77002.
If you would like to request documents from us, please do so at
least five business days before the date of the Special Meeting
in order to receive timely delivery of the documents before the
Special Meeting.
You should rely only on the information contained in this Proxy
Statement to vote your Units at the Special Meeting. We have not
authorized anyone to provide you with information that is
different from what is contained in this Proxy Statement.
The information contained in this document speaks only as of the
date indicated on the cover of this document unless the
information specifically indicates that another date applies.
OTHER
MATTERS FOR THE SPECIAL MEETING
As of the date of this Proxy Statement, our board of directors
knows of no matters to be acted upon at the Special Meeting
other than the proposal included in the accompanying notice and
described in this Proxy Statement. If any other matter requiring
a vote of unitholders arises, including a question of adjourning
the Special Meeting, the persons named as proxies in the
accompanying proxy card will have the discretion to vote thereon
according to their best judgment of what they consider to be in
the best interests of our company. The accompanying proxy card
confers discretionary authority to take action with respect to
any additional matters that may come before the Special Meeting
or any adjournment or postponement thereof.
By Order of the Board of Directors,
Roland P. Keddie
Secretary
Houston, Texas
March 5, 2007
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Proxy Linn Energy, LLC
PROXY FOR SPECIAL MEETING OF UNITHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Michael C. Linn and Kolja Rockov, and each of them, with or without the other, proxies, with full power of substitution, to
vote all units that the undersigned is entitled to vote at the 2007
Special Meeting of Unitholders of Linn Energy, LLC (the
Company), to be held on Thursday,
April 5, 2007, at 10:00 a.m., Central Standard Time, at
600 Travis, Suite 7000, Houston, Texas 77002, and all adjournments and
postponements thereof as follows:
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To change the terms of Class C
Units to provide that each Class C Unit will automatically convert into one Unit and to issue additional Units upon such conversion. |
This Proxy is revocable and will be voted as you specify on the reverse side hereof.
If no specification is made with regard to the proposal, this
Proxy will be voted FOR the proposal. Receipt of the Notice of the Special Meeting and the related Proxy Statement is hereby acknowledged.
FOR CERTAIN IMPORTANT VOTING RESTRICTIONS
AND LIMITATIONS, PLEASE READ THE REVERSE SIDE OF THIS PROXY CARD BEFORE YOU VOTE YOUR UNITS ON THE PROPOSAL.
(continued on reverse side)
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Linn Energy, LLC
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(BAR CODE) |
MR A SAMPLE
DESIGNATION (IF ANY)
ADD 1
ADD 2 000004
ADD 3
ADD 4 Least
Address Line
ADD 5
ADD 6
(BAR CODE)
000000000.000 ext
000000000.000 ext
000000000.000 ext
000000000.000 ext
000000000.000 ext
000000000.000 ext
000000000.000 ext
C 1234567890 JNT
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(BAR CODE) |
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x |
Using a black ink pen, mark your
votes with an X as shown in the example. Please do not write outside
the designated areas. |
Special Meeting Proxy Card
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VOTING RESTRICTIONS AND LIMITATIONS:
IF YOU ARE THE HOLDER OF UNITS PURCHASED SIMULTANEOUSLY
WITH CLASS C UNITS ON FEBRUARY 1, 2007, THEN YOUR EXECUTION OF THIS PROXY
CARD WILL INDICATE YOUR VOTE OF UNITS OTHER THAN THOSE PURCHASED
SIMULTANEOUSLY WITH THE CLASS C UNITS, HELD BY YOU ON THE RECORD DATE
WITH RESPECT TO THE PROPOSAL. |
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A
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Proposal |
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The Board of Directors
unanimously recommends that unitholders vote
FOR approval of the Proposal. |
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For
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Against
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Abstain |
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1.
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Class C Conversion and Issuance Proposal (as defined in Proxy Statement).
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B |
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Non-Voting Items |
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Change of Address
Please print new address below. |
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C |
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Authorized
Signatures. This section must be completed for your vote to be counted. |
Please sign exactly as
name(s) appear hereon. When signing as attorney, executor,
administrator, corporate officer, trustee, guardian, or custodian, please give full title.
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Date (mm/dd/yyyy) |
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Signature 1 Please keep signature within the box
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Signature 2 Please keep signature within the box |
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/ / |
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0113611 |
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3UPX
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COY |
001CD40001 00NEYB