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Recently cooperative diversity has received a lot of attention as an effective and low-cost technique to combat multipath fading and enhance transmission reliability. However, many existing cooperative protocols suffer some loss of ergodic capacity due to the extra bandwidth resource consumed by relay transmission. Motivated by such a fact, network coding, a technique well known for its capability to increase system throughput, is proposed in this paper to be combined with cooperative diversity for uplink transmissions. The dynamic nature of multipath propagation has been efficiently utilized by applying a distributed strategy of relay selection. Two kinds of information-theoretic metrics, outage and ergodic capacities, are developed for the proposed transmission scheme to assist performance evaluation. The developed analytical results, shown to fit well with Monte-Carlo simulation, demonstrate that the proposed protocol can achieve better system robustness and larger system throughput simultaneously than comparable schemes.