<PAGE>
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
CONSOL ENERGY INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
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Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
<PAGE>
CONSOL ENERGY INC.
300 Delaware Avenue
Suite 567
Wilmington, Delaware 19801-1622
Telephone 412.831.4000
----------------
October 25, 2000 Annual Meeting
----------------
Dear Shareholder:
You are cordially invited to attend CONSOL Energy's 2000 Annual Meeting on
Wednesday, October 25, 2000, at 11:00 a.m., local time, at Citigroup Center,
153 East 53rd Street, 14th Floor, New York, New York.
The enclosed Notice of Annual Meeting and Proxy Statement describe the
various matters to be acted upon during the meeting. In addition, there will be
a report on the state of CONSOL Energy's business and an opportunity for you to
express your views on subjects related to CONSOL Energy's operations.
You may vote your shares by telephone or by completing and returning the
enclosed proxy card or by using the internet at www.proxyvote.com. The proxy
card describes your voting options in more detail. If you need assistance,
please contact CONSOL Energy's Investor Relations Office. Our Annual Report to
Shareholders accompanies these enclosures.
The Annual Meeting gives us an opportunity to review results and discuss the
steps taken to assure a strong performance in the future. We are committed to
making CONSOL Energy Inc. a growing, profitable company that will generate
increased shareholder value. We appreciate your ownership of CONSOL Energy
Inc., and I hope you will be able to join us at this Annual Meeting.
Sincerely,
/s/ John L. Whitmire
John L. Whitmire
Chairman of the Board
<PAGE>
CONSOL ENERGY INC.
300 Delaware Avenue
Suite 567
Wilmington, DE 19801-1622
Telephone (412) 831-4000
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD OCTOBER 25, 2000
----------------
Notice is hereby given that the Annual Meeting of the shareholders of CONSOL
Energy Inc. will be held on October 25, 2000, at 11:00 a.m., Eastern Standard
Time, at Citigroup Center, 153 East 53rd Street, New York, New York, for the
following purposes:
1. To elect directors to hold office in accordance with the Bylaws of
CONSOL Energy Inc.;
2. To ratify the selection of Ernst & Young LLP as independent public
accountants for the fiscal year ending June 30, 2001; and
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The Board of Directors has fixed the close of business on September 12,
2000, as the record date for determining the shareholders entitled to notice of
and to vote at the meeting and any adjournment thereof.
If you do not expect to attend the Annual Meeting in person, please
complete, date and sign the enclosed proxy card and return it in the enclosed
envelope, which requires no additional postage if mailed in the United States.
Prompt response is helpful and your cooperation will be appreciated. If you
desire, you may vote by telephone or by using the internet at
www.proxyvote.com. If you attend the meeting, you may withdraw your proxy and
vote in person, if you so choose.
D. L. Fassio
/s/ D. L. Fassio
Vice President and Secretary
YOUR VOTE IS IMPORTANT. PLEASE MARK, SIGN, DATE AND MAIL THE ENCLOSED PROXY
CARD WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING. A RETURN ENVELOPE IS
ENCLOSED FOR YOUR CONVENIENCE. IF YOU RECEIVE MORE THAN ONE PROXY CARD, PLEASE
BE SURE TO COMPLETE AND RETURN EACH PROXY CARD.
<PAGE>
CONSOL ENERGY INC.
----------------
PROXY STATEMENT
----------------
September 20, 2000
The enclosed proxy is being solicited by the Board of Directors of CONSOL
Energy Inc. (CONSOL Energy or "Corporation") to be voted at the Annual Meeting
of Shareholders to be held October 25, 2000, at 11:00 a.m. local time at
Citigroup Center, 153 East 53rd Street, 14th Floor, New York, New York.
The specific proposals to be considered and voted upon at the Annual Meeting
are summarized in the Notice of Annual Meeting of Shareholders. Each Proposal
is described in more detail in this Proxy Statement.
Voting and Revocation of Proxies
The persons named as proxies on the accompanying proxy card have informed
CONSOL Energy of their intention, if no contrary instructions are given, to
vote the shares represented by such proxies in favor of the election as
directors of CONSOL Energy of those persons nominated in this Proxy Statement;
in favor of the selection of Ernst & Young LLP as independent certified public
accountants of CONSOL Energy for the fiscal year ending June 30, 2001; and in
accordance with their best judgment on any other matters which may come before
the meeting. The Board of Directors does not know of any business to be brought
before the Annual Meeting other than as indicated in the Notice.
Annual Report
CONSOL Energy's Annual Report to Shareholders containing financial
statements reflecting the financial position and results of the operations for
the fiscal year ended June 30, 2000, is being mailed to Shareholders together
with this Proxy Statement.
Record Date and Vote Required for Approval
The record date with respect to this solicitation is September 12, 2000. All
holders of record of CONSOL Energy Inc. Common Stock as of the close of
business on September 12, 2000 are entitled to vote at the meeting and any
adjournment thereof. As of September 12, 2000 the Corporation had 78,577,274
shares of Common Stock outstanding. Each share of stock is entitled to one
vote. A favorable vote of a majority of the shares of Common Stock voted in
person or by proxy at the meeting is required for the approval of each of the
proposals described in this Proxy Statement, assuming that a quorum is present.
Abstentions and broker non- votes are not counted in the calculation of the
vote, although they will be considered present for quorum purposes.
Revocation of Proxy
A proxy may be revoked by a shareholder at any time prior to its being
voted. If a proxy is properly executed and is not revoked by the shareholder,
the shares it represents will be voted at the meeting in accordance with the
instructions from the shareholder. If the proxy card is signed and returned
without specifying choices, the shares will be voted in accordance with the
recommendations of the Board of Directors. In lieu of returning signed proxy
cards, holders of record can properly execute proxies by calling a specially
designated telephone number described on the enclosed proxy card. Attendance at
the meeting without a request to revoke a proxy will not effectively revoke a
previously executed and delivered proxy.
1
<PAGE>
The proxy also serves as the voting instruction for the trustees who hold
shares of record for participants in the CONSOL Inc. Investment Plan for
Salaried Employees. If proxies representing shares in this plan are not
received by mail or telephone, those shares will be voted at the discretion of
the trustee.
Proxy Solicitation
All costs relating to the solicitation of proxies will be borne by CONSOL
Energy. Corporate Investor Communications, Inc., has been retained by CONSOL
Energy to aid in the solicitation of proxies, at an estimated cost of $4,000
plus reimbursement of out-of-pocket expenses. Proxies may also be solicited by
officers, directors and employees personally, by mail, or by telephone,
facsimile transmission or other electronic means. On request, CONSOL Energy
will pay brokers and other persons holding shares of stock in their names or in
those of their nominees for their reasonable expenses in sending soliciting
material to, and seeking instructions from, their principals.
Secrecy in Voting
As a matter of policy, proxies, ballots and voting tabulations that identify
individual shareholders are held confidential by CONSOL Energy. Such documents
are available for examination only by the inspectors of election and certain
employees associated with tabulation of the vote. The identity of the vote of
any shareholder is not disclosed except as may be necessary to meet legal
requirements.
CONSOL Energy will provide to any shareholder, without charge and upon the
written request of the shareholder, a copy (without exhibits, unless otherwise
requested) of CONSOL Energy's Annual Report on Form 10-K as filed with the
United States Securities and Exchange Commission for CONSOL Energy's fiscal
year ended June 30, 2000. Any such request should be directed to CONSOL Energy
Inc., Investor Relations Department, 1800 Washington Road, Pittsburgh, PA
15241. Neither the Annual Report on Form 10-K nor the Annual Report to
Shareholders is part of the proxy solicitation materials.
GENERAL INFORMATION
The Board of Directors and Its Committees
The Board of Directors
The Board of Directors is currently comprised of seven members. Those
members are J. L. Whitmire, J. B. Harvey, P. W. Baxter, Berthold Bonekamp,
Bernd Jobst Breloer, Dr. Rolf Zimmermann and Ulrich Weber. B. R. Brown resigned
as a director effective February 1, 2000. Dr. Dieter Henning resigned as a
director of CONSOL Energy on November 16, 1999. Ulrich Weber was elected as a
director on March 31, 2000. The CONSOL Energy Board held four regular meetings
in the fiscal year ending June 30, 2000. Each director attended 100% of the
total number of meetings held by the Board and of each of its Committees on
which each director served. The Board has standing committees which meet
periodically. Actions taken by such committees are reported to the full Board.
Executive Committee
The Executive Committee is composed of directors of CONSOL Energy. The
Executive Committee has all the powers of the Board of Directors to the extent
permitted by law and can exercise such powers and can address matters which
arise between meetings of the Board of Directors. The Executive Committee also
recommends to the Board of Directors nominees for election as Directors at the
Annual Meeting of Shareholders or appointment as Directors of the Corporation
in the event of any vacancy. The members of the Executive Committee are J. L.
Whitmire, J. B. Harvey, and Berthold Bonekamp. During the fiscal year ended
June 30, 2000, the Executive Committee held five meetings and acted once by
written consent.
2
<PAGE>
Audit Committee
The Audit Committee is responsible for providing assistance to the Board of
Directors in fulfilling its legal and fiduciary obligations with respect to
matters involving the accounting, financial reporting, internal control and
compliance functions of the Corporation and its subsidiaries. The Audit
Committee, which currently consists of two directors, employs independent
accountants, subject to shareholder ratification, to audit the financial
statements of CONSOL Energy and its subsidiaries and perform other assigned
duties. Further, the Committee provides general oversight with respect to the
accounting principles employed in financial reporting and the adequacy of
CONSOL Energy's internal controls. In discharging its responsibilities, the
Committee is entitled to rely on the reports, findings and representations of
the Corporation's auditors, legal counsel, and responsible officers. The
members of the Audit Committee are P. W. Baxter and J. L. Whitmire. The Audit
Committee met four times during the fiscal year ended June 30, 2000 and acted
once by written consent.
Compensation Committee
The Compensation Committee, which currently consists of two directors, is
responsible for establishing executive compensation policies consistent with
corporate objectives and shareholder interests. Members of the Compensation
Committee are J. L. Whitmire and P. W. Baxter. The Committee has responsibility
for recommending to the Board of Directors levels of compensation for the
President and other executive officers, including salary as well as variable
compensation, and stock options and otherwise takes action regarding the
adoption or amendment of employee benefit, bonus, incentive compensation or
similar plans and is responsible for their oversight or administration. No
member of the Committee may be an officer or employee of CONSOL Energy or any
of its subsidiaries. The Compensation Committee met three times during the
fiscal year ended June 30, 2000.
Compensation of Directors
Members of the Board of Directors who are employees of CONSOL Energy or any
of its subsidiaries are not compensated for service on the Board of Directors
or on any of its committees. Members of the Board, other than Mr. Whitmire, who
are not employees of CONSOL Energy or any of its subsidiaries receive an annual
Board membership fee of $30,000; an attendance fee of $2,000 for each meeting
of the Board of Directors; an attendance fee of $1,000 for each meeting of any
committee of the Board of Directors upon which they serve and, if Chairman of a
committee, an annual fee of $2,000; and, in accordance with the terms of the
Corporation's Equity Incentive Plan, an initial stock option grant of 4,000
shares and, thereafter, an annual grant of stock options to acquire 2,000
shares.
Plans for Directors
Under the terms of the Equity Incentive Plan, any director may defer all or
part of the payment of Board and committee fees in the form of cash or stock
units until a specified year, until ceasing to be a CONSOL Energy director or
until death. Annual stock grants may also be deferred but only as stock units.
Interest equivalents accrue on payments deferred in the form of cash and
dividend equivalents accrue on payments deferred in the form of stock units.
Beneficial Ownership of Securities
Principal Shareholders
As of September 12, 2000, RWE A.G. beneficially owned an aggregate of
57,997,357 shares of CONSOL Energy's common stock, or 73.8% of 78,577,274
shares outstanding at that time.
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<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
CONSOL Energy's directors and executive officers are required under the
Securities Exchange Act of 1934 to file reports of ownership and changes in
ownership of CONSOL Energy Inc. Common Stock with the Securities and Exchange
Commission and the New York Stock Exchange. During fiscal year ending June 30,
2000, all such reports due were filed.
The following table sets forth at August 1, 2000 information with respect
to beneficial ownership by (i) beneficial owners of more than five percent of
CONSOL Energy's Common Stock known by the Corporation, based upon information
filed with the Securities and Exchange Commission, (ii) each director, (iii)
each nominee for director, (iv) each executive officer named in the Summary
Compensation table set forth below and (v) all directors and executive
officers of the Corporation as a group. The shares identified as beneficially
owned by RWE A.G. are shares held of record by Rheinbraun A.G. and Rheinbraun
U.S. GmbH, direct and indirect wholly owned subsidiaries of RWE A.G. RWE A.G.
is a publicly held company in Germany. The address of the directors and
executive officers of CONSOL Energy is c/o CONSOL Inc. 1800 Washington Road,
Pittsburgh, PA 15241.
<TABLE>
<CAPTION>
Amount and
Nature of
Beneficial
Name and Address Ownership/1/ Percent
---------------- ------------ ------------
<S> <C> <C>
RWE A.G............................................... 57,997,357 73.8%
Opernplatz 1
45128 Essen, Germany
The Income Fund of.................................... 4,449,300 7.6%
America and Capital Research
and Management Group
333 Hope Street
Los Angeles, CA 90071
J. Brett Harvey/2/ ................................... 41,907 --
Ronald E. Smith/2/ ................................... 11,513 --
Ronald J. FlorJancic/2/ .............................. 15,398 --
Dr. Rolf Zimmermann/2/ ............................... 12,500 --
M. F. Nemser/2/ ...................................... 45,169 --
D. R. Baker/2/ ....................................... 659 --
John L. Whitmire...................................... 22,316 --
Berthold Bonekamp/2/ ................................. 1,333 --
Bernd Breloer/2/ ..................................... 1,333 --
P. W. Baxter/2/ ...................................... 1,333 --
Ulrich Weber/2/ ...................................... 0 --
All Directors and Executive Officers as a group/2/ ... 153,461 less than 1%
</TABLE>
--------
/1/Except as otherwise indicated, the named person has the sole voting and
investment powers with respect to the shares of CONSOL Energy Common Stock
set forth opposite such person's name.
/2/Does not include shares of the Corporation's Common Stock subject to stock
options which will become exercisable in increments in future years in the
following amounts; Mr. Breloer, 2,667; Mr. Bonekamp, 2,667; Mr. Baxter,
2,667; Mr. Weber, 4,000; Mr. Smith, 33,000; Mr. Nemser, 33,000; Dr.
Zimmermann, 37,500; Mr. FlorJancic, 45,000; Mr. Harvey, 90,000; and Mr.
Baker, 60,000.
4
<PAGE>
PROPOSALS FOR CONSIDERATION AT ANNUAL MEETING
Proposal No. 1
NOMINATIONS FOR ELECTION OF DIRECTORS
The nominees for election as directors are identified as follows. All
nominees are now members of the Board of Directors. If any nominee should for
any reason become unable to serve, the shares represented by all valid proxies
will be voted for the election of such other person as the Board of Directors
may designate following recommendation by the Executive Committee, or the Board
may reduce the number of directors to eliminate the vacancy.
The following material contains information concerning the nominees,
including their recent employment, positions with CONSOL Energy, other
directorships, and age as of the date of the 2000 Annual Meeting.
John L. Whitmire, Chairman of the Board of Directors, CONSOL Energy Inc. and
CONSOL Inc., age 59, has served as Chairman of the Board of Directors of CONSOL
Energy Inc. and CONSOL Inc. since March 3, 1999. Prior to his election, Mr.
Whitmire was the Chairman of the Board and Chief Executive Officer of Union
Texas Petroleum Holdings, Inc., a position that he held from January 1996 until
September 1998 when Union Texas Petroleum was acquired by ARCO. Before joining
Union Texas Petroleum, Mr. Whitmire served for more than 30 years in various
executive capacities with Phillips Petroleum Company, including Executive Vice
President--Exploration and Production, and as a Director from January 1994 to
January 1996. Mr. Whitmire is a Director of the National Audubon Society,
Thermon Industries and Global Marine, Inc. Mr. Whitmire received a bachelor of
science degree in Mechanical Engineering from New Mexico State University.
J. Brett Harvey, Director and President and Chief Executive Officer, CONSOL
Energy Inc. and CONSOL Inc., age 50, has been President and Chief Executive
Officer and a Director of CONSOL Energy Inc. and CONSOL Inc. since January
1998. Prior to joining CONSOL Energy Inc., Mr. Harvey served as the President
and Chief Executive Officer of PacifiCorp Energy Inc., a subsidiary of
PacifiCorp from March 1995 until January 1998. Between January 1993 and January
1998 Mr. Harvey was also President and Chief Executive Officer of Interwest
Mining Company and Vice President PacifiCorp Fuels from November 1994 until
January 1998. Mr. Harvey is a member of the Board of Directors of the National
Mining Association, the National Coal Council, and the Utah Mining Association.
He received a bachelor's degree in Mining Engineering from the University of
Utah. He is a former Director of the Wasatch Crest Mutual Insurance Company and
has served on the Construction Board of the College of Eastern Utah.
Philip W. Baxter, Director, CONSOL Energy Inc. and CONSOL Inc., age 52, was
elected to the Board of Directors of CONSOL Energy Inc. on August 1, 1999, and
to the Board of Directors of CONSOL Inc. on August 12, 1999. Mr. Baxter is a
former Chief Financial Officer and Executive Vice President of the Tulsa-based
energy conglomerate Mapco Inc., which merged with The Williams Company in March
1998. Prior to his 18 year career at Mapco, he held a number of financial
positions with Williams Energy Company, a subsidiary of The Williams Company.
Currently, Mr. Baxter volunteers as the executive business administrator of a
Tulsa Methodist church. He is also a director for Gilcrese Museum and a board
member of The Nature Conservancy. He received a bachelor's degree in Business
Administration from the University of Oklahoma in 1970 where he majored in
finance and economics.
Berthold Bonekamp, Director, CONSOL Energy Inc. and CONSOL Inc., age 50, has
served on the Board of Directors of CONSOL Energy Inc. and of CONSOL Inc. since
July 1998. He started at the Accounting Department of Rheinbraun A.G. in 1981.
He held a variety of positions in the Rheinbraun Accounting Department and was
promoted to Vice President and Division Head--Corporate Development,
Organization and Information Processing in 1994. From 1995 to 1998 he served as
Chairman of the Executive Board and Chief Executive Officer of RV Rheinbraun
Handel und Dienstleistungen GmbH, Cologne, the trading and logistic services
branch of the Rheinbraun group. In 1998 he became a member of the Executive
Board of Rheinbraun A.G., where he served as Executive Vice President--
International Operations. In October 1998, he became Chairman of the Executive
Board and Chief Executive Officer of Rheinbraun A.G. Mr. Bonekamp holds a
Mechanical Engineering degree from the Muenster College of Applied Science and
holds a master's degree in Business Administration (Diplom-Kaufmann) from
Muenster University in Germany.
5
<PAGE>
Bernd Jobst Breloer, Director, CONSOL Energy Inc. and CONSOL Inc., age 57,
has served on the Board of Directors of CONSOL Energy Inc. and of CONSOL Inc.
since September 1998. Mr. Breloer has held various executive positions in the
RWE A.G. group's nuclear division. From 1988 to 1992 he served as Chairman of
the Executive Board and as Chief Executive Officer of Nukem GmbH, the group's
nuclear fuel cycle services entity. In 1993, he joined Rheinbraun A.G., where
he became a member of the Executive Board with responsibility for the Finance
and Accounting Division. Mr. Breloer holds a master's degree in Business
Administration (Diplom-Kaufmann) from Muenster University in Germany.
Dr. Rolf Zimmermann, Executive Vice President of CONSOL Energy Inc. and
CONSOL Inc. and Director, CONSOL Energy Inc. and CONSOL Inc., age 56, has been
Executive Vice President of CONSOL Inc. since January 1999 and of CONSOL Energy
Inc. since February 1999. He has been on the Board of Directors of CONSOL
Energy Inc. and of CONSOL Inc. since November 1993. In 1973, he served in the
Corporate Planning Department of the oil refinery subsidiary of Rheinbraun A.G.
He became Vice President and head of supply in 1985. He joined Rheinbraun A.G.
in 1989 and was head of the Corporate Structure and Internal Audit Department
until 1990. From 1990 to 1991, he was a member of the management board of a
consulting firm established to prepare for the privatization of the East German
lignite industry. In 1992, he became Senior Vice President of Rheinbraun A.G.
and head of the Business Development, Corporate Structure and Information
Processing Division. Mr. Zimmermann received a master's degree (Diplom-
Volkswirt) in Economics from Bonn University and holds a doctor's degree (Dr.
rer.pol.) in Economics from Cologne University in Germany.
Ulrich Weber, Director, age 50, was elected to the Board of Directors of
CONSOL Energy Inc. on March 31, 2000. He has been Executive Board Member--Human
Resources of Rheinbraun A.G. since July 1, 1998. From July 1, 1997 until June
30, 1998 he was Vice-Chairman of the Executive Board of CUBIS AG, Essen,
Germany and served as a board member from April 1, 1993 through June 30, 1997.
Beginning January 1, 1990 he was a member of the Board of Management of
Deutsche Montan Technologie e.V, Bochum/Essen Germany until March 31, 1993.
During 1989, Mr. Weber was a member of the Board of Management of Westfalische
Berggewerkschaftskasse (WBK) and before that time served as the Head of the
Office of Board of Management/Law of WBK, Chancellor of the College of Mining.
Mr. Weber is a graduate of Law from the University of Cologne.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE
"FOR" THE ABOVE NAMED NOMINEES FOR BOARD OF DIRECTORS.
EXECUTIVE COMPENSATION AND STOCK OPTION INFORMATION
Compensation Committee Report
The Compensation Committee of the Board of Directors is responsible for
administering the Equity Incentive Plan and reviewing and making decisions with
respect to the compensation of executive officers and key executives of CONSOL
Energy and its subsidiaries. The Compensation Committee was appointed in August
1999 in connection with and shortly after the Initial Public Offering of CONSOL
Energy was completed, with Messrs. Whitmire and Baxter as members. Prior to the
completion of the Initial Public Offering, compensation for CONSOL Energy and
its subsidiaries' executive officers was set by the Executive Committee and
Board of Directors of CONSOL Energy Inc.
The following is the Compensation Committee's report to shareholders on the
Corporation's executive compensation policies with respect to compensation
reported for fiscal year ended June 30, 2000. In accordance with the rules of
the Securities and Exchange Commission, this report shall not be incorporated
by reference into any of the Corporation's future filings made under the
Securities Exchange Act of 1934 or under the
6
<PAGE>
Securities Act of 1933, and shall not be deemed to be soliciting material or
to be filed under the Securities Act of 1933.
Compensation Committee Report on Executive Compensation
Key compensation-related responsibilities of the Compensation Committee
("Committee") of the Board of Directors ("Board"):
. Oversees CONSOL Energy's employee benefit and compensation plans,
policies and practices;
. Recommends to the Board or takes other action regarding the adoption or
amendment of employee benefit compensation plans;
. Conducts regular, comprehensive reviews of the Corporation's executive
compensation program; and
. Establishes the annual compensation of the Corporation's executive
officers.
. For the fiscal year ended June 30, 2000, the Committee's activity
focused on the key elements of the total direct compensation program for
executive officers, the adoption of the Long Term Incentive Performance
Unit Plan, the adoption of a Short-Term Incentive Plan design including
eligibility, minimum thresholds, target objectives, target results,
target payout groups, their respective percentage targets and the payout
formula and the adoption of earnings per share, share price and
operating cash flow as performance measurements for the next fiscal
year, and the authorization of additional grants of stock options.
How the Committee functions:
. The Committee uses compensation data for a peer group of selected mining
and energy companies which compete in markets served by the Corporation
("Peer Group"). The Peer Group is used by the Committee as a primary
basis for performance and compensation comparison purposes when making
key compensation-related decisions.
. The Committee has been assisted by:
. An independent compensation consultant retained by the Corporation;
and
. The Corporation's internal support staffs.
The Corporation's executive compensation program is designed to:
. Attract, motivate and retain executive officers who can make significant
contributions to the Corporation's long-term success.
. Align the interests of executive officers with those of shareholders;
and
. Place a portion of an executive officer's total compensation at risk by
tying it to the Corporation's financial performance.
The three primary components of the Corporation's executive compensation
programs are: base salary, annual incentive awards, and long-term incentive
awards:
Base Salary
. Base salaries are generally targeted at the middle of the competitive
marketplace.
. The "market rate" for an executive position is determined through an
assessment by the Corporation's human resources personnel. This
assessment considers relevant industry salary practices, the position's
complexity and level of responsibility, its importance to the
Corporation in relation to other executive positions, and the
competitiveness of an executive's total compensation.
7
<PAGE>
. Subject to the Committee's approval, the level of an executive officer's
base pay is determined on the basis of:
. Relevant comparative compensation data; and
. The Chief Executive Officer's assessment of the executive's
performance, experience, demonstrated leadership, job knowledge and
management skills.
Annual incentive awards
. For the fiscal year ended June 30, 2000, annual incentive awards were
made to the President and Chief Executive Officer and the other four
executive officers included in the compensation tables beginning on page
11 under the Short-Term Incentive Compensation Plan. Other eligible
executive officers also were paid under the same annual incentive award
plan.
. These cash awards are intended to provide a linkage among executive
performance, annual performance measures, and long-term shareholder
value.
How annual incentive awards are calculated under the Short-Term Incentive
Compensation Plan:
. The Short-Term Plan is designed to give the Committee the flexibility to
make annual incentive awards that are comparable to those found in the
marketplace in which the Corporation competes for executive talent. The
Short-Term Plan permits the payment of annual incentive awards that are
intended to qualify as deductible, performance-based compensation under
Section 162(m) of the Internal Revenue Code of 1986, as amended
("Code").
. Before the end of the quarter ended September 30, 1999, subject to
subsequent review, each participant was assigned a target incentive
award amount, calculated as the maximum percentage of the compensation
pool for that participant for the fiscal year ended June 30, 2000.
During the fourth quarter of the fiscal year ended June 30, 2000:
. The identity of the executive officers eligible to participate in the
Short-Term Plan was confirmed;
. The size of the compensation pool for the year, based upon financial
information supplied by the Corporation's officers, was computed and
certified; and
. The amount of the authorized incentive award to be paid to each
participant in the Short-Term Plan was certified, based on:
. the maximum percentage of the compensation pool assigned to a
participant; and
. an assessment for the fiscal year ended June 30, 2000 of an
individual executive's performance and that of the Corporation or
specified business units against certain criteria, and a subjective
evaluation of performance based on certain criteria.
Long-term incentive awards
. The Long-Term Incentive Compensation Plan is intended to focus the
efforts of executive officers on performance that will increase the
equity value of the Corporation for its shareholders.
How the compensation granted under the Long-Term Plan is determined:
. Awards under the Plan are based on achievement of performance targets
tied to operating earnings and cash flow.
. Awards have a three-year term and are payable, if performance is
attained, in the year following completion of the three-year term.
. The Target for the first year is the Corporation's earnings objective
for that year and for the second and third year are based on objectives
established in the Corporation's long-term business plan adopted before
the three-year period.
. If actual results for the three-year period average less than 80% of the
targets, then participants are not entitled to long-term incentive
payments. Achievement of the target entitles participants to receive the
base amount ($100 per unit awarded). Participants may receive up to 150%
of the base award, if actual results are as much as 150% of the targeted
results.
8
<PAGE>
Chief Executive Officer compensation
. With input from the Committee's independent compensation consultant, the
Committee decides matters affecting Mr. Harvey's compensation.
. The Committee considered:
. The Corporation's financial performance and Peer Group compensation
data; and
. Mr. Harvey's leadership, decision-making skills, experience,
knowledge, communication with the Board and strategic
recommendations, as well as the Corporation's positioning for future
performance.
. The Committee did not place any particular relative weight on one of
these factors over another, but the Corporation's financial
performance is generally given the most weight.
. The Committee's decisions regarding Mr. Harvey's compensation are
reported to and discussed with the Board.
. For fiscal year ended June 30, 2000, the Committee's decisions regarding
Mr. Harvey's compensation included the following:
. In March 2000, the Committee decided that Mr. Harvey's 2000 base
salary would be increased to $455,400, effective as of April 1,
2000.
. In deciding upon the size of Mr. Harvey's incentive award payment under
the Short-Term Plan, the Committee considered these significant
accomplishments, in addition to the Corporation's operating cash flow
and operating earnings achievements:
. CONSOL Energy met or exceeded consensus earnings estimates and
continued a transition to a more valuable revenue and business mix.
. CONSOL Energy implemented a number of strategic initiatives designed
to improve the risk and return characteristics of its businesses.
. The Committee recognized the Corporation's Common Stock performance,
. Before arriving at its final decision regarding the amount of Mr.
Harvey's annual incentive award, the Committee confirmed with its
independent compensation consultant that the Corporation's compensation
program is consistent with market place practices linking pay for
performance.
Conclusion:
. Based upon its review of the Corporation's executive compensation
program, the Committee has concluded that the program's basic structure
is appropriate, competitive and effective to serve the purposes for
which it was established.
MEMBERS OF THE COMMITTEE:
J. L. Whitmire, Chairman
P. W. Baxter
9
<PAGE>
The Officers
As of June 30, 2000, the names and ages of the principal executive officers
of CONSOL Energy and its subsidiaries are set forth below, together with the
positions held by each person in the Corporation.
<TABLE>
<CAPTION>
Served as an
Name and Age Position Officer Since
------------ -------- -------------
<C> <S> <C>
J. B. Harvey, 50 President and Chief Executive Officer 1998
Dr. R. Zimmermann, 56 Executive Vice President 1999
D. R. Baker, 50 Executive Vice President--Operations-- 1999
CONSOL Inc.
R. E. Smith, 51 Executive Vice President-- Engineering 1992
Services, Environmental Affairs &
Exploration--CONSOL Inc.
R. J. FlorJancic, 50 Executive Vice President--Marketing-- 1995
CONSOL Inc.
M. F. Nemser, 50/3/ Vice President and Treasurer 1992
W. J. Lyons, 51 Vice President and Controller 1995
D. L. Fassio, 53 Vice President and Secretary 1994
</TABLE>
--------
/3/ Left the Corporation effective August 1, 2000.
For the past five years, each of the above officers held the office shown,
except as follows:
Mr. Harvey has been President, Chief Executive Officer and a Director of
CONSOL Energy since January 1998. Prior to his current employment, he served as
the President and Chief Executive Officer of PacifiCorp Energy Inc., a
subsidiary of PacifiCorp. Between 1993 and 1995 Mr. Harvey was President and
Chief Executive Officer of both Interwest Mining Company and PacifiCorp Fuels.
Dr. R. Zimmermann has been Executive Vice President of CONSOL Inc. since
January 1999 and of CONSOL Energy Inc. since February 1999. He has been on the
Board of CONSOL Energy Inc. and of CONSOL Inc. since November 1993, where he
served as a representative of Rheinbraun A.G.
D. R. Baker has been Executive Vice President--Operations of CONSOL Inc.
since November 1, 1999. Prior to his current employment, he served since
January 1998 as President and Chief Executive Officer of Interwest Mining
Company, a subsidiary of PacifiCorp and Vice President--Fuels for PacifiCorp.
From 1987 until January 1998, Mr. Baker was Vice President--Operations for
Interwest.
R. E. Smith has been Executive Vice President--Engineering Services,
Environmental Affairs & Exploration of CONSOL Inc. since April 1, 1992. He was
Senior Vice President of Consolidation Coal Company from 1990 until April 1,
1992.
R. J. FlorJancic has been Executive Vice President--Marketing of CONSOL Inc.
since May 1995. He was Vice President--Supply and Distribution from January
1992 to December 1993 and Vice President--Sales from December 1993 to May 1995.
W. J. Lyons has been Vice President and Controller of CONSOL Energy Inc.
since January 1, 1995 and of CONSOL Inc. since January 1, 1995. Prior to
January 1, 1995, Mr. Lyons held the position of Assistant Controller for CONSOL
Inc. since January 1992 and as Manager of Accounting of Consolidation Coal
Company since October 1995.
D. L. Fassio has been Secretary of CONSOL Energy and Vice President, General
Counsel and Secretary of CONSOL Inc. since March 1994. He has been Vice
President of CONSOL Energy since November 1998.
10
<PAGE>
Executive Compensation
The following table discloses the compensation for Mr. Harvey and the other
four most highly compensated executive officers of CONSOL Energy or its
subsidiaries at fiscal year ended June 30, 2000 whose annual salary plus other
forms of compensation exceeded $100,000. The information provided for 1999
represents the period from January 1, 1999 through June 30, 1999. At June 30,
1999, CONSOL Energy converted to a fiscal year beginning July 1, 1999 to June
30, 2000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation ($) Long-Term Compensation
--------------------------------- -------------------------------------------
#
Securities
Restricted Underlying
Other Annual Stock Options/ LTIP All Other
Pincipal Position Year Salary Bonus Compensation Award (#) SARS Payments Compensation
----------------- ---- ------- ------- ------------ ---------- ---------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
J. Brett Harvey......... 2000 427,800 200,000 -- -- -- 347,100 9,900
President and 1999 207,000 500,097 -- -- 120,000 -- 4,800
Chief Executive 1998 390,000 149,050 132,125 -- -- -- 26,800
1997 -- -- -- -- -- -- --
Ronald J. FlorJancic.... 2000 235,720 88,900 -- -- -- 316,997 9,900
Executive Vice 1999 114,875 355,000 -- -- 60,000 280,000 4,800
President 1998 207,900 195,000 -- -- -- 186,150 9,600
1997 193,650 185,000 -- -- -- 75,000 9,600
Ronald E. Smith......... 2000 230,470 56,400 -- -- -- 161,980 9,900
Executive Vice 1999 108,600 145,000 -- -- 44,000 196,000 4,800
President 1998 211,150 132,000 -- -- -- 161,330 9,600
1997 205,650 120,000 -- -- -- 202,500 9,600
Rolf Zimmermann......... 2000 228,784 62,400 -- -- -- -- --
Executive Vice 1999 110,000 125,000 -- -- 50,000 -- --
President 1998 -- -- -- -- -- -- --
1997 -- -- -- -- -- -- --
Michael F. Nemser....... 2000 187,995 56,400 -- -- -- 115,700 9,900
Senior Vice 1999 92,460 253,000 -- -- 44,000 140,000 4,800
President and 1998 169,500 120,000 -- -- -- 99,280 9,600
Treasurer-- 1997 164,250 112,000 -- -- -- 45,000 9,600
</TABLE>
Long-Term Incentive Plan
Certain officers of CONSOL Energy and its subsidiaries participate in a
Long-Term Incentive Plan (LTIP) which is administered by the Vice President--
Human Resources of CONSOL Inc. The Board of Directors may adjust award targets
to reflect certain extraordinary events, including strategic restructuring and
new investments for capital expansion. The Board of Directors has the
discretion to terminate, suspend, withdraw or modify the LTIP in whole or in
part.
Awards under the LTIP are based on CONSOL Energy's results of operations.
Performance targets are tied to operating earnings and cash flow measures.
Awards are granted in units, each of which has a nominal value of $100. The
awards have a three-year term and are payable in the year after the term. The
target for the first year is the profit objective of CONSOL Energy for that
year. Years two and three are based upon targets stated in CONSOL Energy's
long-term business plan in place prior to the beginning of the award cycle.
Awards may vary from 0% to 150% of the nominal value of the unit depending upon
the targeted results of operations for CONSOL Energy. For example, if the
results of operations average 100% of the target for the
11
<PAGE>
relevant period, each unit would have a value of $100. If the results of
operations average less than 80% of the target for the relevant period, each
unit would have a value of $0. If the results of operations average 150% or
more of the target for the relevant period, each unit would have a value of
$150. A recipient may elect to receive payment when an award is earned or may
defer the payment of such award. Deferred awards accrue compounded interest at
an annual rate equal to Moody's AAA 10-year municipal bond rate.
The following table provides certain information with respect to awards
granted to Mr. Harvey and the other four most highly compensated executive
officers during the fiscal year ending June 30, 2000.
Long-Term Incentive Plan Table
(1998-2000 Cycle)
<TABLE>
<CAPTION>
Number
of Period Until Threshold Target Maximum
Name Units Payout (Years) $ $ $
---- ------ -------------- --------- -------- --------
<S> <C> <C> <C> <C> <C>
J. Brett Harvey............... 4000 7/2002 0/unit 100/unit 150/unit
Ronald J. FlorJancic.......... 1850 7/2002 0/unit 100/unit 150/unit
Ronald E. Smith............... 1700 7/2002 0/unit 100/unit 150/unit
Rolf Zimmermann............... 1550 7/2002 0/unit 100/unit 150/unit
Michael F. Nemser............. 1000 7/2002 0/unit 100/unit 150/unit
</TABLE>
Stock Option Grants
In 1999, the Board of Directors of CONSOL Energy granted to certain
employees nonqualified stock options to acquire an aggregate of 844,000 shares
of common stock at an exercise price equal to $16.00, the price offered to the
public in CONSOL Energy's Initial Public Offering. These nonqualified stock
options become exercisable in increments beginning in May 2000. During the
fiscal year ended June 30, 2000, no nonqualified stock options were granted to
Mr. Harvey or the other four most highly compensated officers of the
Corporation.
Stock Options
The following table sets forth the number of aggregated stock options or
stock appreciation rights which became exercisable or which were unexercisable
for the five most highly compensated executive officers of CONSOL Energy or its
subsidiaries at June 30, 2000.
Aggregated Option/SAR Exercises in Last Fiscal Year
and Fiscal Year-End Option/SAR Values
<TABLE>
<CAPTION>
(d) (e)
(b) Number of Securities Value of Unexercised
Number of Underlying Unexercised in-the-Money
Securities (c) Options/SARs at Options/SARs at
Underlying Value Fiscal Year Ended (#) Fiscal Year-End ($)
(a) Options/SARs Realized ------------------------- ---------------------------
Name Exercised ($) Exercisable Unexercisable Exercisable Unexecisable/1/
----- ------------ -------- ----------- ------------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C>
J. Brett Harvey......... -- -- 30,000 90,000 $ 0 $ 0
Ronald J. FlorJancic.... -- -- 15,000 45,000 $ 0 $ 0
Ronald E. Smith......... -- -- 11,000 33,000 $ 0 $ 0
Rolf Zimmermann......... -- -- 12,500 37,500 $ 0 $ 0
Michael F. Nemser....... -- -- 11,000 33,000 $ 0 $ 0
</TABLE>
--------
/1/Calculated on the basis of the closing sale price of $15.14 per share on
June 30, 2000 less the exercise price.
Retirement Benefits
Retirement benefits for CONSOL Energy Inc. employees under the Pension and
Retirement Plan are based on an employee's years of service and average monthly
pay during the employee's three highest-paid years.
12
<PAGE>
"Average monthly pay" for this purpose includes regular compensation and 100%
of annual variable compensation payments, but excludes other bonuses and
compensation in excess of limits imposed by the Internal Revenue Code. The
Internal Revenue Code limits the amount of annual benefits which may be payable
from the pension trust. Retirement benefits provided under the pension plan in
excess of these limitations are paid from the Corporation's general revenues
under separate, nonfunded pension restoration plans.
Pension Plan Table
<TABLE>
<CAPTION>
Years of Service
-----------------------------------------------------------------------------
Remuneration 15 20 25 30
------------ -------- -------- -------- --------
<S> <C> <C> <C> <C>
$ 90,000 $ 17,894 $ 23,857 $ 29,821 $ 35,785
145,000 31,092 41,457 51,821 62,185
200,000 44,294 59,057 73,821 88,585
255,000 57,492 76,657 95,821 114,985
310,000 70,692 94,257 117,821 141,385
365,000 83,892 111,857 139,821 167,785
420,000 97,092 129,457 161,821 194,185
530,000 123,492 164,657 246,618 287,721
640,000 149,892 197,857 299,418 349,321
750,000 176,292 235,057 352,218 410,921
</TABLE>
The above table illustrates the straight life annuity amounts payable under
the Pension and Retirement Plan and pension restoration plans to CONSOL Energy
employees retiring at age 65 in 2000. Amounts shown above are subject to
deduction for Social Security payments. The current years of service credited
for retirement benefits for the named officers are as follows:
J. B. Harvey............ 13 R. J. FlorJancic........ 24
R. Zimmermann........... 1 M. F. Nemser............ 26
R. E. Smith............. 24
Employment Agreements
Employment Agreement With Mr. Harvey. J. Brett Harvey entered into an
employment agreement with CONSOL Energy Inc. and CONSOL Inc. on December 11,
1997. Under the terms of this contract, Mr. Harvey assumed his current
positions as the President and Chief Executive Officer of both companies on
January 1, 1998. The employment agreement provides for a term through December
31, 2002. The term of the agreement is to be extended for an additional year,
or through December 31, 2003, if Mr. Harvey remains employed by the Corporation
on December 31 of the year 2000. The term of the agreement can be extended for
one year in a similar manner in succeeding years e.g. if employed on December
31, 2001, the term is extended through December 31, 2004 but in no case is the
term of the employment agreement to be extended beyond December 31, 2007 unless
it is terminated earlier. Mr. Harvey's employment will terminate if:
. he becomes disabled and would be eligible to receive disability benefits
under CONSOL Inc.'s employee retirement plan,
. if either party terminates the agreement or
. for cause as determined by the Board of Directors of CONSOL Energy at any
time.
If the agreement is terminated other than by CONSOL Energy for cause or if
Mr. Harvey resigns, Mr. Harvey will receive severance payments in an amount
equal to any incentive compensation received in the preceding 12 months and his
then current base salary. These amounts would be paid to Mr. Harvey until the
end of the term of the employment agreement. In the event of termination for
cause, Mr. Harvey's compensation and benefits terminate at the end of the month
in which the notice of termination is given.
13
<PAGE>
Mr. Harvey received a yearly base salary of $414,000, increased to $455,400
effective April 1, 2000. He is entitled to participate in all incentive
compensation programs for senior management of CONSOL Inc., including short-
term and long-term incentive pay programs. He also is eligible for all employee
benefit plans and policies applicable to CONSOL Inc. employees. For employee
retirement plans purposes, Mr. Harvey will receive 11 years of additional
service credit representing his years of employment at PacifiCorp, deducting
from any such benefits amounts payable to him pursuant to any retirement or
similar plans of PacifiCorp.
Mr. Harvey's employment agreement contains certain confidentiality and non-
competition obligations. Mr. Harvey must keep CONSOL Energy's non-public
information confidential during the term of the employment agreement and for a
period of 12 months after his termination. Mr. Harvey has agreed not to compete
with the business of CONSOL Energy for so long as he receives severance
benefits under the terms of the employment agreement.
Agreement with John L. Whitmire
CONSOL Energy Inc. entered into an agreement with Mr. Whitmire on February
22, 1999 pursuant to which he was engaged as the non-executive Chairman of the
Board of both CONSOL Energy Inc. and CONSOL Inc., subject to election by each
corporation's stockholders. Under the terms of the agreement, Mr. Whitmire will
receive cash compensation of $100,000, shares of common stock having a fair
market value of $225,000 and stock options having a fair market value of
$25,000 each year. Mr. Whitmire was elected to serve as the Chairman of the
Board by the stockholders of CONSOL Energy Inc. and CONSOL Inc. on March 3,
1999.
Related Party Transactions
CONSOL Energy Inc. and Rheinbraun A.G. entered into an agreement to
investigate possible investments in which they may jointly participate. Under
this agreement, expenses are to be shared equally. For the twelve months ended
June 30, 2000, CONSOL Energy Inc. expensed $436,000 related to this agreement
and deferred $386,000 as Prepaid Expenses. To date, no investments have been
acquired pursuant to this agreement.
CONSOL Energy sells coal to Rheinbraun and its subsidiaries on a basis
reflecting the market value of the product. For the year ended June 30, 2000,
such sales amounted to $3,254,000.
Also, a subsidiary of Rheinbraun periodically provides insurance brokerage
coverage services to CONSOL Energy Inc. without fee. For the twelve months
ended June 30, 2000, CONSOL Energy Inc. has expensed $510,000 of insurance
expense and deferred $240,000 as prepaid expenses brokered through this
subsidiary of Rheinbraun A.G.
14
<PAGE>
STOCK PERFORMANCE GRAPH
The following performance graph compares the cumulative total shareholders
return on CONSOL Energy Common Stock to the cumulative total return of the New
York Stock Exchange Comp Index and the S&P 400 (Midcap) Index. The graph
assumes the value of the investment in the CONSOL Energy Common Stock and each
index was $100 at April 30, 1999 and that all dividends were reinvested through
fiscal year ended June 30, 2000.
<TABLE>
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE RETURN
AMONG CONSOL ENERGY INC, NYSE COMP. INDEX AND S&P 400 (MIDCAP) INDEX
<CAPTION>
CONSOL
Measurement period ENERGY S&P 400
(Fiscal year Covered) INC. NYSE COMP. (MIDCAP)
--------------------- -------- --------- -------
<S> <C> <C> <C>
Measurement PT -
$ $ $
FYE 4/30/99 $100 $100 $100
FYE 6/30/99 $ 75 $102.47 $105.81
FYE 6/30/2000 $104.16 $103.34 $123.75
</TABLE>
Proposal No. 2
RATIFICATION OF INDEPENDENT ACCOUNTANTS
Article III, Section 5 of the Corporation's Bylaws provides that it shall be
the duty of the Audit Committee to employ, subject to shareholder ratification
at each annual meeting, independent accountants to audit the books of account,
accounting procedures and financial statements of CONSOL Energy and its
subsidiaries for the year and to perform such other duties as prescribed from
time to time by the Audit Committee.
Subject to ratification by the shareholders at the Annual Meeting, the Board
of Directors has appointed Ernst & Young LLP to serve as the independent
certified public accountants for CONSOL Energy for its 2001 fiscal year end.
Ernst & Young LLP has served as independent accountants for CONSOL Energy since
1992. It is believed that its knowledge of CONSOL Energy's business gained
through this service is most valuable. Partners and employees of the firm who
work on CONSOL Energy's account are periodically changed, thus giving CONSOL
Energy the benefit of new thinking and approaches in the audit area.
During 2000 Ernst & Young audited CONSOL Energy's annual consolidated
financial statements and those of its subsidiaries, reviewed financial
information in filings with the Securities and Exchange Commission and other
regulatory agencies, audited employee benefit plans and provided various other
services.
The affirmative vote of the majority of the votes cast by the holders of
CONSOL Energy Common Stock on this proposal shall constitute ratification of
the appointment of Ernst & Young LLP.
If the shareholders by the affirmative vote of a majority of the CONSOL
Energy Common Stock represented at the Annual Meeting do not ratify the
appointment of Ernst & Young LLP, the selection of independent certified public
accountants will be reconsidered by the Board of Directors.
15
<PAGE>
Representatives of Ernst & Young are expected to be present at the meeting
and will have an opportunity to address the meeting and respond to appropriate
questions.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE
EMPLOYMENT OF ERNST & YOUNG AS INDEPENDENT ACCOUNTANTS FOR THE FISCAL YEAR JULY
1, 2000 THROUGH JUNE 30, 2001.
SHAREHOLDER PROPOSALS
Nominations for Director
Each year the Board of Directors will submit to the shareholders at the
Annual Meeting its nominations for election of directors. In making such
recommendations, the Executive Committee will consider nominations submitted by
shareholders. Any such nominations must be made by shareholders of record and
received by the Secretary of CONSOL Energy by June 1, 2001. Nominations must be
accompanied by a statement of the nominee indicating willingness to serve if
elected and disclosing principal occupations or employments held over the past
five years.
Other Shareholder Proposals
In addition, the Bylaws require that the selection of independent
accountants by the Audit Committee of the Board of Directors be submitted for
shareholder ratification at each Annual Meeting. Other proposals may be
submitted by the Board of Directors or shareholders for inclusion in the proxy
statement for action at the Annual Meeting. Any proposal submitted by a
shareholder for inclusion in the 2001 Annual Meeting Proxy Statement must be
received by the Secretary of CONSOL Energy no later than June 1, 2001. Any such
proposal should be addressed to the Secretary, CONSOL Energy Inc., 1800
Washington Road, Pittsburgh, PA 15241.
OTHER MATTERS
The Board of Directors knows of no other proposals that may properly be
presented for consideration at the meeting but, if other matters do properly
come before the meeting, the persons named in the proxy will vote your shares
according to their best judgment.
By Order of the Board of Directors
of CONSOL Energy Inc.
D. L. Fassio
Secretary
16
<PAGE>
[X] Please mark your
vote as in this
example.
The proxies will vote the shares represented by this proxy as specified by
you, but if no specification is made, the proxies will vote the shares for the
election of directors and for approval of all proposals.
The Board of Directors Recommends a vote FOR proposals 1 and 2.
FOR WITHHELD
1. Election of [ ] [ ]
Directors.
(see reverse)
For, except vote withheld from the following nominee(s)
_________________________________________
2. Ratification of FOR AGAINST ABSTAIN
Independent Accountants. [ ] [ ] [ ]
Ernst & Young LLP
SIGNATURE(S) DATE Change of
--------------------------- ------- Address/Comments on [ ]
Reverse Side
NOTE: Please sign exactly as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian, please
give full title as such.
/\FOLD AND DETACH HERE/\
ANNUAL MEETING OF SHAREHOLDERS
OF
CONSOL ENERGY/TM/
OCTOBER 25, 2000
<PAGE>
CONSOL ENERGY INC.
Annual Meeting October 25, 2000
P PROXY SOLICITED BY THE BOARD OF DIRECTORS
R
O The undersigned hereby appoints J.B. Harvey and D.L. Fassio, and
X each of them, proxies with power of substitution to vote on behalf
Y of the undersigned all shares which the undersigned may be
entitled to vote at the Annual Meeting of Shareholders of CONSOL
Energy Inc. on October 25, 2000 and any adjournments thereof, with
all powers that the undersigned would possess if personally
present, with respect to the matters referred to on this proxy. A
majority of the proxies or substitutes present at the meeting may
exercise all power granted hereby.
Nominees for Election as Directors. COMMENTS OR CHANGE OF ADDRESS
________________________________
________________________________
J. Brett Harvey, Dr. Rolf Zimmermann, ________________________________
John L. Whitmire, Berthold Bonekamp, ________________________________
Bernd Jobst Breloer, Philip W. Baxter, (If you have written in the above
Ulrich Weber. space, please mark the corre-
sponding box on the reverse side
of this card)
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
/\DETACH PROXY CARD HERE/\
