|
Exhibit
10.26
CONSOL ENERGY
INC.
EMPLOYEE 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, as amended (the “ Code
”) (capitalized terms not otherwise defined herein shall have
the meaning ascribed to them in the Plan or the cover sheet to
which this Agreement is attached).
2. Vesting. Subject to
Section 4 hereof, one-third of the Option shall vest and
become exercisable as of the first anniversary of the Date of
Option Grant (“ Grant Date ”) and an additional
one-third of the Option shall vest and become exercisable on each
of the second and third anniversaries of the Grant Date. For
purposes of this Agreement, the term “ Vested Portion
” of the Option means that portion which: (i) shall have
become exercisable pursuant to the terms of this Agreement;
(ii) shall not have been previously exercised; and
(iii) shall not have expired, been forfeited or otherwise
canceled in accordance with the terms hereof or the Plan. For
purposes of this Agreement, the term “ Non-Vested
Portion ” of the Option means that portion of the Option
that is not vested or exercisable and which has not otherwise
expired, been forfeited or canceled in accordance with the terms
hereof or the Plan.
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 aggregate Exercise
Price Per Share (“ Exercise Price ”), and any
applicable withholding tax and fees. The payment of the Exercise
Price shall be made: (i) in cash; (ii) by certified check
or bank draft payable to the order of the Company; (iii) by
personal check payable to the order of the Company; (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. Subject to the preceding sentence, the Optionee may
elect to sell all Shares to cover Option costs, taxes, and fees,
and any 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
1
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 (including any
Affiliate) is terminated 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 (including any
Affiliate) is terminated by the Optionee voluntarily, due to
Disability or by the Company without Cause, the Non-Vested 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 the lesser of (i) a period of 90 days
following such termination of employment or (ii) until the
Expiration Date, and, in either event, the Vested Portion 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 (including any
Affiliate) is terminated by reason of a reduction in force as
specified and implemented by the Company, the Non-Vested Portion of
the Option shall continue to vest and become exercisable in
accordance with the schedule established under Section 2 of
this Agreement and the Option 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 subparagraphs
9(a)(i) and (a)(ii) shall not apply.
(d) (i) Notwithstanding the
provisions of Section 4(b) concerning a voluntary termination,
in the event that the Optionee’s employment with the Company
(including any Affiliate) is terminated by reason of an Early
Retirement or Incapacity Retirement, as defined herein, the
Non-Vested Portion of the Option shall continue to vest and become
exercisable in accordance with the schedule established under
Section 2 of this Agreement and the Option shall remain
exercisable until the Expiration Date. For purposes of this
Agreement and unless otherwise provided by the Board at the time of
such termination, the terms “ Early Retirement ”
and “ Incapacity Retirement ” shall have such
meanings ascribed to them in the CONSOL Energy Inc. Employee
Retirement Plan, as amended, or any successor plan thereto
applicable to the Optionee; provided, however, for purposes of this
Option the Optionee shall not be considered to have terminated
employment on account of “Early Retirement” unless the
Optionee shall also have reached the age of 55 as of the date of
termination and completed at least one year of continuous service
with the Company after the Effective Date of this
Program.
2
(ii) Notwithstanding the
provisions of Section 4(b) concerning a voluntary termination,
in the event that Optionee’s employment with the Company
(including any Affiliate) is terminated by reason of a Normal
Retirement, as defined herein, the Non-Vested Portion of the Option
shall vest in its entirety on the effective date of the
Optionee’s retirement and the Option shall remain exercisable
until the Expiration Date. For purposes of this Agreement and
unless otherwise provided by the Board at the time of such
termination, the term “ Normal Retirement ”
shall have
| 
