Exhibit 10.62

 

FORM OF CONSOL ENERGY INC.

NONQUALIFIED STOCK OPTION AGREEMENT

 

CONSOL Energy Inc.

 

Equity Incentive Plan

 

Non-Qualified Stock Option Agreement

 

Vesting Over Four Years

 

CONSOL Energy Inc. hereby grants an option to purchase shares of its Common
Stock to the optionee named below. The terms and conditions of the option are
set forth in this cover sheet and in the attachment (together, the “Agreement”)
and in the CONSOL Energy Inc. Equity Incentive Plan (“Plan”), the terms of which
are incorporated herein by reference. To the extent the terms and conditions set
forth on this cover sheet or the attachment differ in any way from the terms set
forth in the Plan, the terms of the Plan shall govern.

 

Date of Option Grant   : Name of Optionee   : Optionee’s Soc. Sec. No.   : No.
of Shares of Common Stock Covered by Option   : Exercise Price Per Share   :
Vesting Start Date   :

 

By signing this cover sheet, you agree to all of the terms and conditions of the
Agreement and the Plan, a copy of which may be obtained from Human Resources.

 

Optionee Signature:  

 

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

CONSOL Energy Inc.:  

 

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

   

J. Brett Harvey

President and Chief Executive Officer

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

FORM OF CONSOL ENERGY INC.

 

NONQUALIFIED STOCK OPTION AGREEMENT

 

1. Nonqualified Stock Option. The Option granted is intended to be a
Non-Qualified Stock Option and not an Incentive Stock Option under section 422
of the Internal Revenue Code.

 

2. Vesting. Subject to Section 4 hereof, one-fourth of the Option shall become
exercisable as of the first anniversary of the Date of Option Grant (“Grant
Date”) and an additional one-fourth of the Option shall become exercisable on
each of the second, third and fourth anniversaries Grant Date. At any time, the
Vested Portion of the Option means that portion which (i) shall have become
exercisable pursuant to the terms of this Agreement and (ii) shall not have been
previously exercised.

 

3. Exercise of Option.

 

(a) Subject to the provisions of the Plan and this Agreement (including Section
4 hereof), the Optionee may exercise all or any part of the Vested Portion of
the Option at any time prior to the tenth anniversary of the Grant Date (the
Expiration Date ); provided that the Option may be exercised with respect to
whole Shares only. In no event shall the Option be exercisable on or after the
Expiration Date.

 

(b) To the extent set forth in subparagraph (a) above, the Option may be
exercised by delivering to the Company at its principal office, or to such other
location designated by the Company, written notice of intent to exercise. Such
notice shall specify the number of Shares for which the Option is being
exercised and shall be accompanied by payment in full, or adequate provision
therefor, of the Exercise Price, and any applicable withholding tax and fees.
The payment of the Exercise Price shall be made (i) in cash or (ii) by certified
check or bank draft payable to the order of the Company or (iii) by personal
check payable to the order of the Company or (iv) by tendering Shares, actually
or constructively, which have been owned by the Optionee for at least six months
(and which are not subject to any pledge or other security interest) or (v) by a
combination of the foregoing, provided that the combined value of all cash and
cash equivalents and the Fair Market Value of any such Shares so tendered to the
Company as of the date of such tender is at least equal to the Exercise Price.
The Optionee may elect to pay all or any portion of the Exercise Price by having
Shares with a Fair Market Value on the date of exercise equal to the Exercise
Price withheld by the Company or sold by a broker-dealer. The Optionee may elect
to sell all Shares to cover Option costs, taxes, and fees. Remaining funds will
be issued to Optionee. The payment of withholding tax shall be subject to
Section 8 of this Agreement.

 

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

(c) Notwithstanding any other provision of the Plan or this Agreement to the
contrary, no Option may be exercised prior to the completion of any registration
or qualification of such Option or the Shares under applicable state and federal
securities or other laws, or under any ruling or regulation of any government
body or national securities exchange, that the Board shall in its sole
discretion determine to be necessary or advisable.

 

(d) Upon the Company’s determination that the Option has been validly exercised
as to any of the Shares, the Company shall issue or cause to be issued as
promptly as practicable certificates in the Optionee’s name for such Shares.
However, the Company shall not be liable to the Optionee for damages relating to
any delays in issuing the certificates or in the certificates themselves.

 

4. Termination of Employment.

 

(a) In the event that the Optionee’s employment with the Company is terminated
by the Company for Cause (or in the event that the Optionee breaches any of the
covenants set forth in Sections 9 and 10 below), the Option (whether vested or
unvested) shall be deemed canceled and forfeited in its entirety on the date of
the Optionee’s termination of employment or breach of covenant, as applicable.
In addition, any Option exercised during the six month period prior to such
termination of employment or breach of covenant, as applicable, shall be
rescinded. Within 10 days after receiving notice of a rescission, the Optionee
shall pay to the Company an amount in cash equal to the gain realized by the
Optionee upon exercise of the Option. Such notice may be given at any time
within one year from the date of such exercise.

 

(b) In the event that the Optionee’s employment with the Company is terminated
by the Optionee voluntarily or by the Company without Cause, the unvested
portion of the Option shall be deemed canceled and forfeited on the date of
Optionee’s termination of employment and the Vested Portion, if any, of the
Option as of the date of such termination shall remain exercisable for a period
of 90 days following such termination of employment, and shall thereafter be
deemed canceled and forfeited.

 

(c) Notwithstanding the provisions of Section 4 (b) concerning an employment
termination by the Company without Cause, in the event that the Optionee’s
employment with the Company is terminated by reason of a reduction in force, the
unvested portion of the Option shall vest in its entirety in accordance with
Section 2 of this Agreement and shall remain exercisable until the Expiration
Date. In the event of such an employment termination by reason of a reduction in
force, the provisions of Section 9 (a)(i) and (a)(ii) shall not apply.

 

(d) (i) In the event that the Optionee’s employment with the Company is
terminated by reason of an Early or Incapacity Retirement, as defined herein,
the Non-Vested Portion of the Option shall vest and become exercisable in its
entirety in accordance with Section 2 of this Agreement and shall remain
exercisable until the Expiration Date. An Early or Incapacity Retirement, for
purposes of this Agreement and this Section, shall only include those Early or
Incapacity Retirements which take effect on or after the date

 

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

the Optionee has reached the age of 55 and shall not include any Separation
Retirement, unless otherwise provided by the Board at the time of such
termination, regardless of whether or not the Optionee reaches the age of 55,
and shall not include any Normal Retirement. In the event that the Optionee’s
employment is terminated by reason of any Early or Incapacity Retirement that
does not satisfy the definitions of an Early or Incapacity Retirement as set
forth herein, the Non-Vested Portion of the Option shall be deemed cancelled and
forfeited on the effective date of the Optionee’s retirement and the Vested
Portion, if any, of the Option as of the effective date of such an Early or
Incapacity Retirement shall remain exercisable for a period of 90 days following
the effective date of such Retirement, and thereafter be deemed cancelled and
forfeited.

 

(ii) In the event that the Optionee’s employment with the Company is terminated
by reason of death, the Non-Vested Portion of the Option shall vest in its
entirety immediately upon the date of the Optionee’s death, shall become a
Vested Portion of the Option and shall remain exercisable for the lesser of a
period of three years following death or until the Expiration Date, and shall
thereafter be deemed cancelled and forfeited.

 

(iii) In the event that Optionee’s employment with the Company is terminated by
reason of a Normal Retirement, the Non-Vested Portion of the Option shall vest
in its entirety on the effective date of the Optionee’s retirement and shall
become a Vested Portion of the Option and shall remain exercisable until the
Expiration Date, and shall thereafter be deemed cancelled and forfeited.

 

5. Change in Control. Upon a Change in Control of the Company, the unvested
portion of the Option shall vest and remain exercisable for the lesser of a one
year period or until the Expiration Date. In the event that any benefits under
this Agreement, either alone or together with any other payments or benefits
otherwise owed to the Optionee by the Company on or after a Change in Control
would, in the Company’s good faith opinion, be deemed under Section 280G of the
Code, or any successor provision, to be parachute payments, the benefits under
this Agreement shall be reduced to the extent necessary in the Company’s good
faith opinion so that no portion of the benefits provided herein shall be
considered excess parachute payments under Section 280G of the Code or any
successor provision. The Company’s good faith opinion shall be conclusive and
binding upon the Optionee.

 

6. No Right to Continued Employment: No Rights as a Shareholder. Neither the
Plan nor this Agreement shall confer on the Optionee any right to continued
employment with the Company. The Optionee shall not have any rights as a
shareholder with respect to any Shares subject to the Option prior to the date
of exercise of the Option.

 

7. Transferability. The Option is nontransferable and may not be assigned,
alienated, pledged, attached, sold or otherwise transferred or encumbered by the
Optionee, except by will or the laws of descent and distribution. No transfer of
the Option shall be effective to bind the Company unless the Company shall have
been furnished with written notice thereof and a

 

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

copy of such evidence as the Board may deem necessary to establish the validity
of the transfer and the acceptance by the transferee of the terms and conditions
hereof.

 

8. Withholding. The Optionee agrees to make appropriate arrangements with the
Company for satisfaction of any applicable federal, state, local or foreign tax
withholding requirements or like requirements, including the payment to the
Company at the time of any exercise of the Option of all such taxes and
requirements, and the Company shall have the right and is hereby authorized to
withhold from the Shares transferable to the Optionee upon any exercise of the
Option or from any other compensation or other amount owing to the Optionee such
amount (in cash, Shares or other property, as the case may be) as may be
necessary in the opinion of the Company to satisfy all such taxes and
requirements.

 

9. Non-Competition.

 

(a) The Optionee acknowledges and recognizes the highly competitive nature of
the business of the Company and its Affiliates and accordingly agrees that
during the term of the Optionee’s employment and for a period of two years after
the termination thereof:

 

(i) The Optionee will not directly or indirectly engage in any business which is
in competition with any line of business conducted by the Company or any of its
Affiliates, including, but not limited to, where such engagement is as an
officer, director, proprietor, employee, partner, investor (other than as a
holder of less than 1% of the outstanding capital stock of a publicly traded
corporation), consultant, advisor, agent or sales representative, in any
geographic region in which the Company or any of its Affiliates conducted any
such competing line of business;

 

(ii) The Optionee will not perform or solicit the performance of services for
any customer or client of the Company or any of its Affiliates;

 

(iii) The Optionee will not directly or indirectly induce any employee of the
Company or any of its Affiliates to (1) engage in any activity or conduct which
is prohibited pursuant to this Section 9(a), or (2) terminate such employee’s
employment with the Company or any of its Affiliates. Moreover, the Optionee
will not directly or indirectly employ or offer employment (in connection with
any business which is in competition with any line of business conducted by the
Company or any of its Affiliates) to any person who was employed by the Company
or any of its Affiliates unless such person shall have ceased to be employed by
the Company or any of its Affiliates for a period of at least 12 months; and

 

(iv) The Optionee will not directly or indirectly assist others in engaging in
any of the activities, which are prohibited under Subparagraphs (i) - (iii)
above.

 

(b) It is expressly understood and agreed that although the Optionee and the
Company consider the restrictions contained in this Section 9 to be reasonable,
if a final judicial determination is made by a court of competent jurisdiction
that the time or territory or any other restriction contained in this Agreement
is an unenforceable restriction against the Optionee,

 

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

the provisions of this Agreement shall not be rendered void but shall be deemed
amended to apply as to such maximum time and territory and to such maximum
extent as such court may judicially determine or indicate to be enforceable.
Alternatively, if any court of competent jurisdiction finds that any restriction
contained in this Agreement is unenforceable, and such restriction cannot be
amended so as to make it enforceable, such finding shall not affect the
enforceability of any of the other restrictions contained herein.

 

10. Confidential Information and Trade Secrets. The Optionee and the Company
agree that certain materials, including, but not limited to, information, data
and other materials relating to customers, development programs, costs,
marketing, trading, investment, sales activities, promotion, credit and
financial data, manufacturing processes, financing methods, plans or the
business and affairs of the Company and its Affiliates, constitute proprietary
confidential information and trade secrets. Accordingly, the Optionee will not
at any time during or after the Optionee’s employment with the Company disclose
or use for the Optionee’s own benefit or purposes or the benefit or purposes of
any other person, firm, partnership, joint venture, association, corporation or
other business organization, entity or enterprise other than the Company and any
of its Affiliates, any proprietary confidential information or trade secrets,
provided that the foregoing shall not apply to information which is not unique
to the Company or any of its Affiliates or which is generally known to the
industry or the public other than as a result of the Optionee’s breach of this
covenant. The Optionee agrees that upon termination of employment with the
Company for any reason, the Optionee will immediately return to the Company all
memoranda, books, papers, plans, information, letters and other data, and all
copies thereof or therefrom, which in any way relate to the business of the
Company and its Affiliates, except that the Optionee may retain personal notes,
notebooks and diaries. The Optionee further agrees that the Optionee will not
retain or use for the Optionee’s account at any time any trade names, trademark
or other proprietary business designation used or owned in connection with the
business of the Company or any of its Affiliates.

 

11. Remedies. The Optionee acknowledges that a violation or attempted violation
on the Optionee’s part of Sections 9 and 10 will cause irreparable damage to the
Company, and the Optionee therefore agrees that the Company shall be entitled as
a matter of right to an injunction, out of any court of competent jurisdiction,
restraining any violation or further violation of such promises by the Optionee
or the Optionee’s employees, partners or agents. The Optionee agrees that such
right to an injunction is cumulative and in addition to whatever other remedies
the Company may have under law or equity.

 

12. Failure to Enforce Not A Waiver. The failure of the Company to enforce at
any time any provision of this Agreement shall in no way be construed to be a
waiver of such provision or of any other provision hereof.

 

13. Securities Laws. Upon the acquisition of any Shares pursuant to the exercise
of the Option, the Optionee or the Optionee’s transferee, if applicable, will
make or enter into such written representations, warranties and agreements as
the Company may reasonably request in order to comply with applicable securities
laws, with this Agreement, or as the Company otherwise deems necessary or
advisable.

 

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

14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to the
conflicts of laws provisions thereof.

 

15. Amendments. This Agreement may be amended or modified at any time by an
instrument in writing signed by the parties hereto.

 

16. Notices. Any notice, request, instruction or other document given under this
Agreement shall be in writing and shall be addressed and delivered, in the case
of the Company, to the Secretary of the Company at the principal office of the
Company and, in the case of the Optionee, to the Optionee’s address as shown in
the records of the Company or to such other address as may be designated in
writing by either party.

 

17. Award Subject to Plan; Amendments to Award. This Award is subject to the
Plan. The terms and provisions of the Plan as it may be amended from time to
time are hereby incorporated herein by reference. In the event of a conflict
between any term or provision contained herein and a term or provision of the
Plan, the applicable terms and provisions of the Agreement will govern and
prevail.

 

18. Lapse of Offer. Any failure of the Optionee to sign and return this
Agreement to the Vice President Human Resources within 60 days of the Date of
Option Grant will result in revocation of this Option offer and all provisions
of this Agreement will expire and will be cancelled and forfeited.

 

19. Entire Agreement. This Agreement and the Plan are intended to be the final,
complete, and exclusive statement of the terms of the agreement between Optionee
and the Company with regard to the subject matter of this Agreement. This
Agreement and the Plan supersede all other prior agreements, communications, and
statements, whether written or oral, express or implied, pertaining to that
subject matter. This Agreement and the Plan may not be contradicted by evidence
of any prior or contemporaneous statements or agreements, oral or written, and
may not be explained or supplemented by evidence of consistent additional terms.

 

By signing the cover sheet of this Agreement, you agree to all of the terms and
conditions described above and in the Plan.