Exhibit 10.3
Form of Restricted Stock Unit Contract
(Not Transferable)
     This Contract, by and between Arch Coal, Inc., a Delaware corporation (the
“Company”), and [Participant Name] (the “Participant”), is made and entered into
as a separate inducement in connection with the Participant’s employment and not
in lieu of any salary or other compensation for the Participant’s services,
pursuant to which the company has awarded, x,xxx restricted stock units
(“Units”) to the Participant, subject to the provisions of the Arch Coal, Inc.
1997 Stock Incentive Plan, as amended from time to time (the “Plan”), a copy of
which has been provided to the Participant, and to the terms and conditions set
forth below, which constitute the entire understanding between the Company and
the Participant with respect to this Contract.
     This Contract is executed as of February 21, 2008.

              Arch Coal, Inc.
 
       
 
  By:    
 
       
 
      Sheila B. Feldman
 
      Vice President — Human Resources
 
       
 
  By:    
 
       
 
      Name
 
      “Participant”

 

--------------------------------------------------------------------------------

 

Terms and Conditions of Restricted Stock Unit Contract

1.   Definitions. Capitalized terms, not otherwise defined herein shall have the
same meanings set forth in the Plan.

2.   Vesting Dates. The Units will vest in equal ratable amounts on February 21,
2011 and February 21, 2012 (each, a “Vesting Date”).

3.   Issuance of Shares of Stock. Subject to the provisions of this Contract,
and unless deferred by the Participant, the Company shall issue to the
Participant as soon as practicable following each Vesting Date, a number of
whole shares of Stock equal to the number of Units vesting on such date. Such
shares of Stock shall not be subject to any restriction on transfer other than
any such restriction as may be required pursuant to Section 9, or any applicable
law, rule or regulation.

4.   Non-transferable. The Participant agrees that the Units may not be sold,
assigned, transferred, pledged, hypothecated, or otherwise disposed of.

5.   Change of Control. The units will vest automatically and without any
further action on the part of the Company or the Participant immediately
following any Change of Control.

6.   Sale of Subsidiary. The units will vest automatically and without any
further action on the part of the Company or the Participant if the Participant
is employed by a Subsidiary of the Company immediately following the sale or
disposition of such Subsidiary by the Company; provided, however, that the
Participant was not offered another position with the Company, which includes
substantially equivalent salary, benefits, duties and responsibilities as the
Participant’s last position.

7.   Tax Withholding. The Participant hereby authorizes withholding from payroll
and any other amounts payable to the Participant, and otherwise agrees to make
adequate provision for, any sums required to satisfy the federal, state, local
and foreign tax withholding obligations of the Company, if any, which arise in
connection with the Units or the issuance of shares of Stock upon vesting
thereof. The Company shall have no obligation to deliver shares of Stock until
the tax withholding obligations of the Company have been satisfied by the
Participant.

8.   Certificate Registration. The certificate for the shares of Stock issuable
upon vesting of the Units shall be registered in the name of the Participant,
or, if applicable, in the names of the heirs of the Participant.

9.   Restrictions on Issuance of Shares. The issuance of shares of Stock upon
vesting of the Units shall be subject to compliance with all applicable
requirements of federal, state or foreign law with respect to such securities.
No shares of Stock may be issued hereunder if the issuance of such shares would
constitute a violation of any applicable federal, state or foreign securities
laws or other law or regulations or the requirements of any stock exchange or
market system upon which the Stock may then be listed. The inability of the
Company to obtain from any regulatory body having jurisdiction the authority, if
any, deemed by the Company’s legal counsel to be necessary to the lawful
issuance and sale of any shares subject to the Units shall relieve the Company
of any liability in respect of the failure to issue or sell such shares as to
which such requisite authority shall not have been obtained. As a condition to
issuance of the shares of Stock upon vesting of the Units, the Company may
require the Participant to satisfy any qualifications that may be necessary or
appropriate, to evidence compliance with any applicable law or regulation and to
make any representation or warranty with respect thereto as may be requested by
the Company.

10.   Fractional Shares. The Company shall not be required to issue fractional
shares upon the vesting of the Units.

11.   Termination of Employment. The Participant agrees that, upon his or her
termination from the Company and its Subsidiaries for any reason (including
Retirement, death or Disability) prior to the dates on which the Units vest, the
Participant shall forfeit any and all rights he or she may have under this
Contract or the Plan to any unvested Units on the Date of Termination.

 

--------------------------------------------------------------------------------

 

12.   Stockholder Rights. Unless and until such time as the Participant forfeits
his or her rights under this Contract in accordance with paragraph 11, the
Participant shall be entitled to receive payment, in cash, of an amount equal to
the dividends declared and paid from time to time on a share of Stock for each
Unit then held by the Participant. Except as provided in the preceding sentence,
the Participant shall have no other rights of a common stockholder of the
Company, including the right to vote such stock at any meeting of the common
stockholders of the Company as a result of his or her ownership of Units.

13.   Adjustments. The Units shall automatically and without any further action
on the part of the Company or the Participant be adjusted if and to the extent
that the Stock underlying the Units becomes subject to a stock dividend, stock
split, recapitalization, merger, consolidation, reorganization or other event.

14.   Personnel & Compensation Committee Actions. The Personnel & Compensation
Committee (the “Committee”) of the Company’s Board of Directors may, in its
discretion, remove, modify or accelerate the vesting schedule with respect to
the Units under such circumstances as the Committee, in its discretion, shall
determine, subject however to the terms of the Plan.

15.   Effect of Award on Employment. Nothing in this Contract shall be construed
as an agreement for the continued employment of the Participant, and Company
shall have the right to terminate the employment of the Participant at any time
for any reason, with or without cause.

16.   Further Assurances. Each of the parties hereto agrees to execute and
deliver all consents and other instruments and take all other actions deemed
necessary or desirable by counsel for the Company to carry out each provision of
this Contract and the Plan.

17.   Governing Law. The validity, interpretation, performance and enforcement
of this Contract shall be governed by the laws of the State of Delaware,
determined without regard to its conflict of law provisions.

18.   Plan Governs. This Contract has been executed pursuant to the Plan, and
each and every provision of this Contract shall be subject to the provisions of
such Plan and, except as otherwise provided herein, the terms therein shall
govern this Contract. In the event of any conflict between the terms of this
Contract and any other documents or materials provided to the Participant, the
terms of this Contract.