Important Features of the Amended Plan

Amended Plan Summary

The following summary is of the Amended Plan (i.e., the Plan as proposed to be amended and restated in this Proposal), and this summary describes the material features of the Amended Plan and the Plan (except as otherwise stated in this Proposal where the Amended Plan differs from the current Plan).

The purposes of the Amended Plan are to promote the interests of the Corporation and our shareholders by:

The Amended Plan is administered by our Compensation Committee, including the making of awards thereunder. Awards to non-employee directors are subject to approval by our Board. The employees (including officers), directors and certain consultants of the Corporation and our affiliates are eligible to receive awards under the Amended Plan. As of March 1, 2020, approximately 460 of the Corporation’s employees (including our officers), six of our currently-serving non-employee directors, and 30 of our consultants are eligible to participate in the Amended Plan in connection with their provision of services to CNX and its affiliates.

The Amended Plan consists of the following components: stock options, stock appreciation rights, restricted stock, RSUs, performance awards (cash and equity), deferred stock units and other stock-based awards. The total number of shares of the Corporation’s common stock with respect to which awards presently may be granted under our current Plan is 48,915,944, and the Board recommends that our shareholders approve an increase to the number of shares authorized for issuance under the current Plan by 10,775,000 shares, for an aggregate of 59,690,944 shares authorized for issuance under the Amended Plan.

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Based on an analysis of leading proxy advisory firms’ policies on equity-based compensation plans and the importance of long-term incentives in supporting the key objectives of the Corporation’s equity compensation program, management recommended, and the Board approved, among other changes to the current Plan, the proposed increase of 10,775,000 shares available for issuance under the Amended Plan, which increase represented approximately 5% of our outstanding common stock as of December 31, 2019. This increase in the number of shares available for issuance under the Plan would have had a value of approximately $95,358,750 based on the closing market price per share of the Corporation’s common stock on that date ($8.85 per share).

The Board has adopted the Amended Plan, subject to shareholder approval. Absent such approval, the Amended Plan will not become effective and the current Plan will remain in force and effect. Therefore, it is not possible at present to determine the amount or form of any award that will be granted or available for grant to any person in the future.

Limitations on Awards

Subject to certain anti-dilution adjustments described below, under the Amended Plan, no participant may be granted stock options or stock appreciation rights for more than 3,465,120 shares, in the aggregate, in any one calendar year. In addition, prior to the repeal of the qualified performance-based compensation exception under Section 162(m) of the Code, in any one calendar year of the Corporation, no participant was permitted to have been granted qualified performance-based awards (as defined in the Amended Plan): (i) (payable in shares) for more than 2,310,080 shares (based on a target award level on the grant date) or (ii) (payable in cash) for more than $15,000,000 (based on a target award level on the grant date).

Notwithstanding anything in the Amended Plan to the contrary and subject to certain anti-dilution adjustments described below, no non-employee director may be granted, in any one fiscal year of the Corporation, compensation for such service having an aggregate maximum value (measured at the grant date, as applicable, and calculating the value of any awards on the grant date fair value for financial reporting purposes), of more than $900,000.

The Amended Plan provides that the aggregate number of shares available for issuance under the Amended Plan will be reduced by one share for each share issued in settlement of any award; provided, however, that (i) such aggregate number of shares will be reduced by 1.62 shares for each share issued in settlement of a “full-value award” (i.e., any award under the Amended Plan pursuant to which shares, other than stock options or stock appreciation rights, may be issued), (ii) no more than 11,550,400 shares may be issued with respect to incentive stock options, and (iii) any award (or portion thereof) settled in cash will not be counted against or have an effect upon the number of shares available for issuance under the Amended Plan.

If any shares of common stock covered by or related to an award granted under the Amended Plan are forfeited, or if such an award is settled for cash, otherwise terminates or is canceled without the delivery of shares of common stock, then the shares covered by or related to such award, or the number of shares otherwise counted against the aggregate number of shares of common stock with respect to which awards may be granted, to the extent of any such forfeiture, termination or cancellation, will again become available for issuance under the Amended Plan; provided, however, that shares (i) delivered in payment of the exercise price of an option or stock appreciation right, (ii) not issued upon the settlement of a stock-settled award, (iii) repurchased by the Corporation using proceeds from option exercises, or (iv) delivered to or withheld by the Corporation to pay withholding taxes, will not become available again for issuance under the Amended Plan. Notwithstanding the foregoing, if a participant has elected to give up the right to receive compensation in exchange for shares based on fair market value, such shares will not count against the aggregate limit under Section 3(a) of the Amended Plan.

Awards granted under the Amended Plan may provide for the payment of dividends or dividend equivalents (other than in connection with options and stock appreciation rights), payable in cash, shares, other securities or other property. Except to the extent provided in an award agreement, no award may be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by a participant, except by will or the laws of descent and distribution.

Minimum Vesting/Performance Period

Except in the case of substitute awards, awards granted under the Amended Plan to participants will either be subject to a minimum vesting or minimum performance period, in the case of performance awards, of one year. Notwithstanding the foregoing, (i) the Compensation Committee may authorize acceleration of vesting of such awards in the event of the participant’s death, disability, termination of service or the occurrence of a change in control, (ii) the Compensation Committee may grant awards without the above-described minimum requirements with respect to awards covering up to 5% of the aggregate number of shares authorized for issuance under the Amended Plan, and (iii) with respect to awards granted to non-employee directors, the vesting of such awards will be deemed to satisfy the minimum vesting

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requirement to the extent that the awards vest based on the approximate one-year period beginning on each regular annual meeting of the Corporation’s shareholders and ending on the date of the next regular annual meeting of the Corporation’s shareholders. The Amended Plan differs from the current Plan in that the minimum vesting/performance period requirement applies to all awards (subject to the exceptions described above) while the current Plan only includes minimum vesting/performance periods for restricted stock, RSUs, performance awards, options and stock appreciation rights of one or three years, as applicable, and the following exceptions for option or restricted stock and RSU awards: (i) the requirements do not apply to non-employee director awards, (ii) the requirements may not adversely affect a participant’s rights under another plan or agreement, and (iii) exception share pool amounts from the requirements, in each case, of 404,264 shares.

Stock Options

The Amended Plan permits the granting of both incentive stock options and non-qualified stock options to purchase shares of the Corporation’s common stock, provided that incentive stock options may only be granted to employees of the Corporation or a parent or subsidiary of the Corporation. The Compensation Committee establishes the exercise price at the time each option is granted. The Amended Plan provides that (i) the option exercise price for each share covered by an option may not be less than the fair market value of a share of common stock on the date the option is granted (or 110% of the fair market value in the case of an incentive stock option granted to an employee who is a 10% Shareholder (as defined in the Amended Plan)), except in the case of substitute awards granted in assumption of, or in substitution for, outstanding awards previously granted by a company acquired by the Corporation or with which the Corporation combines, and (ii) the term of the option may not exceed 10 years from the grant date (or five years in the case of an incentive stock option granted to a 10% Shareholder).

The exercise price of options granted under the Amended Plan may be paid in cash or its equivalent, by exchanging, actually or constructively, shares of the Corporation’s common stock (which are not the subject of any pledge or other security interest), by another means approved by the Compensation Committee, or by a combination of the foregoing, provided that the value of all cash and cash equivalents and the fair market value of any shares is at least equal to the option exercise price. A participant may also elect to pay all or any portion of the aggregate exercise price by having shares with a fair market value on the exercise date equal to the aggregate exercise price withheld by the Corporation or sold by a broker-dealer. The Compensation Committee may provide for the automatic exercise of an option upon such terms and conditions as established by the Compensation Committee in the award agreement at the time of grant.

Stock Appreciation Rights

Stock appreciation rights may be granted in tandem with another award, in addition to another award, or freestanding and unrelated to another award. The Amended Plan provides that stock appreciation rights will have (i) grant prices no less than the fair market value of a share of common stock on the grant date and (ii) may not be exercised more than 10 years from the grant date.

Stock appreciation rights entitle the participant to receive an amount equal to the excess of the fair market value of a share of common stock on the exercise date of the stock appreciation right over the grant price. Our Compensation Committee determines whether a stock appreciation right may be settled in cash, shares or a combination of both. The Compensation Committee will determine at or after the time of each stock appreciation right grant the methods of exercise, methods and form of settlement, and any other applicable terms and conditions. The Compensation Committee may provide for the automatic exercise of a stock appreciation right upon such terms and conditions as established by the Compensation Committee in the award agreement at the time of grant.

Restricted Stock and Restricted Stock Units

Restricted stock and RSUs may also be granted under our Amended Plan. Subject to the terms of the Amended Plan, the Compensation Committee determines the number of shares of restricted stock and/or the number of RSUs to be granted to each participant, as well as the duration of such awards, the conditions under which the restricted stock and RSUs may be forfeited and other terms and conditions. Shares of restricted stock and RSUs may not be sold, assigned, transferred, pledged or otherwise encumbered, except, in the case of restricted stock, as provided in the Amended Plan or the applicable award agreements. Each RSU has a value equal to the fair market value of a share on the settlement or payment date of such award. RSUs may be paid in cash, shares, other securities, or other property, as determined in the sole discretion of the Compensation Committee, upon the lapse of restrictions applicable to the award or pursuant

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to the terms of the applicable award agreement. Dividends and other distributions paid on or in respect of any shares of restricted stock or RSUs may be paid directly to the participant, or may be reinvested in additional shares of restricted stock or RSUs, as determined by the Compensation Committee in its sole discretion, but in all cases remain subject to the same restrictions on vesting, payment or otherwise as the underlying award.

Performance Awards

Performance awards may be granted under the Amended Plan. A “performance award” consists of a right that is:

Performance awards may be paid in a lump sum or in installments following the close of the performance period, or on a deferred basis. For awards intended to be performance-based compensation, performance goals, the achievement of which may be necessary to receive the underlying performance award, will be pre-established by the Compensation Committee and may relate to one or more of the following performance measures (subject to such modifications as specified by our Compensation Committee) including, without limitation: cash flow; cash flow from operations; earnings (including earnings before interest, taxes, depreciation, and amortization or some variation thereof); earnings per share, diluted or basic; earnings per share from continuing operations; internal rate of return; net asset turnover; inventory turnover; capital expenditures; debt; debt reduction; working capital; return on investment; return on sales; net or gross sales; market share; share price; equity ratios; economic value added; cost of capital; assets or change in assets; expenses; expense reduction levels; productivity; delivery performance; safety record and/or performance; environmental record and/or performance; mine closures; stock price; interest-sensitivity gap levels; return on equity or capital employed; total or relative increases to shareholder return; return on capital; return on assets or net assets; revenue; income or net income; operating income or net operating income; operating profit or net operating profit; gross margin, operating margin or profit margin; amount of oil and gas reserves; oil and gas reserve additions; oil and gas reserve replacement ratios and similar measures; finding and development costs (including costs of finding oil and gas reserves); daily natural gas and/or oil production; volume metrics (including volumes sold, volumes produced, volumes transported and similar measures); drilling and well metrics (including number of gross or net wells drilled, number of horizontal wells drilled, cost per well and similar measures); operating efficiency metrics; charge-offs; non-performing assets; asset sale targets; asset quality levels; asset write-downs; value of assets; employee retention/attrition rates; talent management; diversity; investments; regulatory compliance; satisfactory internal or external audits; improvement of financial ratings; value creation; achievement of balance sheet or income statement objectives; and completion of acquisitions, business expansion, major project or organizational initiatives, product diversification and other non-financial operating and management performance objectives.

Our Compensation Committee may determine that adjustments will apply, in whole or in part, in such manner as determined by the Compensation Committee, to include or exclude the effect of any of the following events that occur during a performance period including the following: the impairment of tangible or intangible assets; asset write-downs; litigation or claim judgments or settlements; acquisitions or divestitures; gains/losses on the sale of assets; foreign exchange gains and/or losses; expenses related to stock offerings and stock repurchases, the effect of changes in tax law, accounting principles or other such laws or provisions affecting reported results; business combinations, reorganization and/or restructuring programs, including, but not limited to, reductions in force and early retirement incentives; currency fluctuations; and any unusual, infrequent or non-recurring items, including, but not limited to, such items described in management’s discussion and analysis of financial condition and results of operations or the financial statements and notes thereto appearing in the Corporation’s annual report to shareholders for the applicable year. Performance measures may be determined either individually, alternatively or in any combination, applied to either the Corporation as a whole or to a business unit or subsidiary entity thereof, either individually, alternatively or in any combination, and measured over a period of time including any portion of a year, annually or cumulatively over a period of years, on an absolute basis or relative to a pre-established target, to previous years’ results or to a designated comparison group, in each case as specified by our Compensation Committee.

Our Compensation Committee may, in its sole discretion, also establish such additional restrictions or conditions that must be satisfied as conditions precedent to the payment of all or a portion of any performance award. Our Compensation Committee may also increase or reduce the amount of any performance award if it concludes that such increase or reduction is necessary or appropriate based on: (i) an evaluation of such participant’s performance; (ii) comparisons with compensation received by other similarly situated individuals working within our industry or peer group; (iii) our financial results and conditions; or (iv) such other factors or conditions that our Compensation Committee deems relevant.

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Other Stock-Based Awards

Other stock-based awards may also be granted under the Amended Plan, which consist of any right that is not an award described above and is an award of shares or an award denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, shares (including, without limitation, securities convertible into shares), as deemed by the Compensation Committee to be consistent with the purposes of the Amended Plan. The Compensation Committee will determine the terms and conditions of any such other stock-based awards, subject to the terms of the Amended Plan and any applicable award agreement.

Eligible Directors

Under the Amended Plan, our Compensation Committee provides recommendations to our Board regarding the Board’s approval of the grant and types of equity awards to be granted to our non-employee directors. Except as otherwise determined by the Board in its sole discretion, non-employee directors will receive awards in accordance with the terms of the Amended Plan. Additionally, our Amended Plan permits the Board to grant deferred stock units to non-employee directors in lieu of all or any portion of the annual retainer or meeting fees otherwise payable to such directors and any other types of awards described in the Amended Plan. More information regarding the terms of deferred stock units is set forth in ” Understanding Our Director Compensation Table.”

Change in Control

In the event that the Corporation engages in a transaction constituting a Change in Control (as defined in the Amended Plan), our Compensation Committee will have complete authority and discretion, but not the obligation, to accelerate the vesting of outstanding awards and the termination of restrictions on shares. In addition, the Compensation Committee may, if deemed appropriate, in its discretion and in connection with a Change in Control: (i) provide for an equivalent award or substitute award in respect of securities of the surviving entity of such transaction; (ii) upon advance notice to the affected participants, cancel any outstanding options or stock appreciation rights and pay to the holders thereof, in cash, stock or other property (including the property, if any, payable in such a transaction) (or any combination thereof), an amount equal to the excess of the fair market value of the shares covered by the award, based on the price per share received or to be received by other shareholders of the Corporation in such a transaction or such other value as determined by the Compensation Committee (the “Transaction Fair Market Value”), over the exercise price of the award, or (iii) make provision for a cash payment or payment of other property (including the property, if any, payable in such transaction) to the holder of any other outstanding award in settlement of such award; provided that, in the case of an option or stock appreciation right with an exercise price that equals or exceeds the Transaction Fair Market Value, the Compensation Committee may cancel such options or stock appreciation right without payment or consideration therefor. Any such action taken shall be performed in accordance with the applicable provisions of the Code and treasury regulations issued thereunder so as not to affect the status of any award intended to qualify as an incentive stock option under Section 422 of the Code, unless the Compensation Committee determines otherwise, or any award intended to comply with, or qualify for an exception to, Section 409A of the Code. Any such action taken by the Compensation Committee will be final, conclusive and binding for all purposes of the Amended Plan.

Amendment and Termination

Except to the extent prohibited by applicable law and unless otherwise expressly provided in an award agreement or in the Amended Plan, our Compensation Committee may amend, alter, suspend, discontinue, cancel or terminate the Amended Plan or any award agreement or any portion thereof at any time; provided that no such amendment, alteration, suspension, discontinuation, cancellation or termination will:

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Notwithstanding the foregoing or any provision of the Amended Plan or an award agreement to the contrary, the Compensation Committee, may at any time (without the consent of participants, and with the approval of the Board), modify, amend, or terminate any or all of the provisions of the Amended Plan or an award agreement to the extent necessary to conform the provisions of the Amended Plan and/or the award agreement with Section 409A or any other provision of the federal income tax laws, regardless of whether such modification, amendment or termination of the Amended Plan and/or award agreement shall adversely affect the rights of a participant, and to enable the Amended Plan to achieve its stated purposes in any jurisdiction outside the United States in a tax-efficient manner and in compliance with local rules and regulations. Notwithstanding the foregoing, our Compensation Committee may not amend Section 10 (Eligible Directors) of the Amended Plan without the consent of the Board or Section 2(c) of the Amended Plan, which provides that the Board must approve awards made to its non-employee directors.

The Compensation Committee is authorized to make adjustments in the terms and conditions of, and the criteria included in, awards in recognition of unusual or nonrecurring events (including, without limitation, the events described in Section 3(c) of the Amended Plan) affecting the Corporation, any affiliate, or the financial statements of the Corporation or any affiliate, or of changes in applicable laws, regulations, or accounting principles, whenever the Compensation Committee determines that such adjustments are appropriate in order to prevent dilution, reduction or enlargement of the benefits or potential benefits made or intended to be made available under the Amended Plan; provided that no such adjustment will be authorized to the extent that such authority would be inconsistent with the Amended Plan’s meeting the requirements of Section 409A.

Anti-Dilution Adjustments

In the event a dividend or other distribution (whether in the form of cash, shares, other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of shares or other securities of the Corporation, issuance of warrants or other rights to purchase shares or other securities of the Corporation, or other similar corporate transaction or event affects the shares such that an adjustment is determined by the Compensation Committee to be necessary in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Amended Plan, then the Compensation Committee will, in an equitable manner, adjust any or all of (i) the number of shares or other securities of the Corporation (or number and kind of other securities or property) with respect to which awards may be granted, (ii) the maximum number of shares subject to an award granted to a participant pursuant to Section 3(b) of the Amended Plan, (iii) the number of shares or other securities of the Corporation (or number and kind of other securities or property) subject to outstanding awards, (iv) the grant or exercise price with respect to any award, and (v) any applicable performance goals with respect to awards; provided, in each case, that (A) with respect to awards of incentive stock options no such adjustment shall be authorized to the extent that such authority would cause the Amended Plan to violate Section 422(b)(1) of the Code, as from time to time amended, unless the Compensation Committee determines otherwise, (B) with respect to any award subject to Section 409A, no such adjustment will be authorized to the extent that such authority would cause the Amended Plan to fail to comply with, or qualify for, an exception to Section 409A, and (C) any fractional shares resulting from such adjustment will be eliminated.

Notwithstanding the foregoing, in the event of a transaction in which the Corporation is not the surviving entity, or any other transaction in which the shareholders of the Corporation exchange their shares in the Corporation for stock or equity securities of another company, or in the event of complete liquidation or dissolution of the Corporation, or in the case of a tender offer accepted by the Board, all outstanding awards will thereupon terminate, provided that the Compensation Committee may, prior to the effective date of any such transaction, either (i) make all outstanding awards immediately exercisable or vested or (ii) arrange to have the surviving entity grant to the participants replacement awards (including cash) on terms which the Compensation Committee will determine to be fair and reasonable. The Compensation Committee, in its sole discretion and to the extent not inconsistent with Section 14(r) of the Amended Plan, may determine that, in the event of a transaction in which the Corporation is not the surviving entity, each outstanding award will terminate within a specified number of days after notice to the participant, and such participant will receive, with respect to each such award, cash or other property, including securities of any entity acquiring the Corporation, in an amount equal to the fair market value of such award (if any) as determined by the Compensation Committee in its sole discretion. In addition, for each option or stock appreciation right with an exercise price or base price, as the case may be, greater than the consideration offered in connection with any such transaction or event or Change in Control, the Compensation Committee may, in its sole discretion, elect to cancel such option or stock appreciation right without any payment to the person holding such option or stock appreciation right.

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Cancellation of Awards and Termination of Employment/Service

The Compensation Committee may cause any award granted under the Amended Plan to be canceled in consideration of a cash payment or alternative award made to the holder of such canceled award equal in value to the fair market value of such canceled award, except to the extent that such payment would violate the requirements of Section 409A of the Code. Notwithstanding the foregoing or any other provision of the Amended Plan, except for adjustments pursuant to Section 3(c) of the Amended Plan or in connection with a corporate transaction involving the Corporation (including, without limitation, any stock dividend, distribution (whether in the form of cash, other Corporation securities, or other property), stock split, extraordinary cash dividend, recapitalization, Change in Control, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of shares or other Corporation securities, or similar transaction(s)), the terms of outstanding options or SARs may not be amended to reduce the exercise price of such outstanding options or stock appreciation rights or canceled in exchange for cash, other awards or options or stock appreciation rights with an exercise price that is less than the exercise price of the original options or stock appreciation rights without obtaining shareholder approval.

Withholding

A participant may be required to pay to the Corporation or an affiliate and the Corporation or an affiliate may withhold from any award, from any payment due or transfer made under any award, or under the Amended Plan, or from any compensation or other amount owing to a participant, an amount (in cash, shares, other securities, other awards or other property) sufficient to cover any federal, state, local or foreign income taxes or such other applicable taxes required by law in respect of an award, its exercise, or any payment or transfer under an award or under the Amended Plan and to take such other action as may be necessary in the opinion of the Corporation to satisfy all obligations for the payment of such taxes.

Clawback

Notwithstanding any other provisions in the Amended Plan, any award that is subject to recovery under any law, government regulation, stock exchange listing requirement or Corporation policy shall be subject to such deductions, recoupment and clawback as may be required to be made pursuant to such law, government regulation, stock exchange listing requirement or Corporation policy, as may be in effect from time to time, and which may operate to create additional rights for the Corporation with respect to awards and recovery of amounts relating thereto. By accepting awards under the Amended Plan, participants agree and acknowledge that they are obligated to cooperate with, and provide any and all assistance necessary to, the Corporation to recover or recoup any award or amounts paid under the Amended Plan subject to clawback pursuant to such law, government regulation, stock exchange listing requirement, or Corporation policy. Such cooperation and assistance will include, but is not limited to, executing, completing and submitting any documentation necessary to recover or recoup any award or amounts paid under the Amended Plan from a participant’s accounts, or pending or future compensation or awards.

Sub-Plans

The Compensation Committee may from time to time establish sub-plans under the Amended Plan, including for purposes of satisfying securities, tax or other laws of various jurisdictions in which the Corporation intends to grant awards. Any sub-plans will contain such limitations and other terms and conditions as the Compensation Committee determines are necessary or desirable. All sub-plans will be deemed a part of the Amended Plan, but, if applicable, each sub-plan will apply only to the participants in the jurisdiction for which the sub-plan was designed.

U.S. Federal Income Tax Consequences

The following is a brief summary of certain of the United States federal income tax consequences applicable to our Amended Plan participants and the Corporation and is based upon an interpretation of present federal tax laws and regulations and may be inapplicable if such laws and regulations are changed. This summary, which is presented for the information of shareholders concerning how to vote on this proposal and not for Amended Plan participants, is not intended to be complete and does not describe federal taxes other than income taxes (such as Medicare and Social Security taxes), or state, local or foreign tax consequences.

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Incentive Stock Options

Options issued under our Amended Plan and designated as incentive stock options are intended to qualify under Section 422 of the Code. Under the provisions of Section 422 and the related regulations, an optionee who has been granted an incentive stock option will not recognize income and the Corporation will not be entitled to a deduction at the time of the grant or exercise of the option; provided, however, that the difference between the value of the common stock received on the exercise date and the exercise price paid is an item of tax preference for purposes of determining the optionee’s alternative minimum tax. The taxation of gain or loss upon the sale of the common stock acquired upon exercise of an incentive stock option depends, in part, on whether the holding period of the common stock is at least (i) two years from the date the option was granted and (ii) one year from the date the common stock was transferred to the optionee. If this holding period is satisfied, any gain or loss recognized on a subsequent disposition of the common stock will be treated as a long-term capital gain or loss. If this holding period is not met, then, upon such “disqualifying disposition” of the common stock, the optionee will recognize compensation, taxable as ordinary income, in an amount equal to the excess of the fair market value of the common stock at the time of exercise over the option price limited, however, to the gain on sale. Any further gain (or loss) recognized by the optionee generally will be taxed as short-term or long-term capital gain (or loss) depending on the holding period. If the optionee recognizes ordinary income upon a disqualifying disposition, the Corporation generally will be entitled to a tax deduction in the same amount. If, however, the optionee meets the applicable holding period, the Corporation will generally not be entitled to a tax deduction with respect to capital gains recognized by the optionee. If an incentive stock option is exercised at a time when it no longer qualifies as an incentive stock option, the option will be treated as a nonqualified stock option.

Nonqualified Stock Options and Stock Appreciation Rights

An optionee will generally not recognize income at the time a nonqualified stock option is granted. Rather, the optionee recognizes compensation, taxable as income, only when the nonqualified stock option is exercised. The amount of income recognized is equal to the excess of the fair market value of the common stock received over the exercise price. The Corporation is generally entitled to a tax deduction in an amount equal to the ordinary income recognized by the optionee. Upon a subsequent disposition of the common stock acquired under a nonqualified stock option, the optionee will recognize short-term or long-term capital gain (or loss) depending on the holding period.

Stock appreciation rights are treated very similar to nonqualified stock options for tax purposes. A participant receiving a stock appreciation right will not normally recognize any taxable income upon the grant of the stock appreciation right. Upon the exercise of the stock appreciation right, the participant will recognize compensation taxable as ordinary income equal to either: (i) the cash received upon the exercise or (ii) if common stock is received, upon the exercise of the stock appreciation right, the fair market value of the common stock received. The Corporation will generally be entitled to a tax deduction in an amount equal to the ordinary income recognized by the participant.

Unrestricted Stock and Other Stock-Based Awards

The tax consequences of receiving common stock pursuant to a stock award under our Amended Plan are similar to receiving cash compensation from the Corporation, unless the common stock awarded is restricted stock (i.e., subject to a substantial risk of forfeiture). If the shares of common stock are unrestricted (i.e., not subject to a substantial risk of forfeiture), the participant must recognize compensation, taxable as ordinary income equal to the fair market value of the common stock received less any amount paid for common stock. The federal income tax consequences of other stock-based incentive awards will depend on how the awards are structured. Generally, the Corporation will be entitled to a deduction with respect to other incentive awards only to the extent that the recipient recognizes ordinary income in connection with such awards.

Restricted Stock

A participant that receives a restricted stock award under our Amended Plan will normally not be required to recognize income for federal income tax purposes at the time of grant, nor is the Corporation entitled to any deduction, to the extent that the common stock awarded has not vested (i.e., no longer subject to a substantial risk of forfeiture). When any part of a restricted stock award vests, the participant will recognize compensation taxable as ordinary income in an amount equal to the fair market value of the vested common stock on the vesting date. The participant may, however, make an election, referred to as a Section 83(b) election, within thirty days following the grant of the restricted stock award, to be taxed at the time of the grant of the award based on the fair market value of the common stock on the grant date (determined without regard to the restrictions). If a Section 83(b) election has not been made, any dividends received with respect to the restricted stock award prior to the lapse of the restrictions will be treated as additional compensation that is taxable as ordinary income to the participant. The Corporation will be entitled to a deduction in the same amount and at the same time that the participant recognizes ordinary income. Upon the sale of the vested common stock, the participant will recognize short-term or long-term capital gain or loss depending on the holding period.

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Restricted Stock Units

A participant who receives restricted stock units will not recognize taxable income for federal income tax purposes, and the Corporation is not entitled to a deduction, at the time of grant. Rather, upon the settlement of units, the recipient of such units generally will be subject to tax at ordinary income rates on the fair market value of any common stock issued or cash paid in settlement of the award of such units, and the Corporation generally will be entitled to a deduction equal to the amount of the ordinary income recognized by the recipient. If the recipient receives shares of common stock upon settlement then, upon disposition of such shares, appreciation or depreciation after the settlement date is treated as either short-term or long-term capital gain or loss, depending on how long the shares have been held.

Performance Awards

A participant generally will not recognize income upon the grant of a performance award. Upon payment of the performance award, the participant will recognize compensation, taxable as ordinary income, in an amount equal to the cash received or, if the performance award is payable in common stock, the fair market value of the common stock received. When the participant recognizes ordinary income upon payment of a performance award, the Corporation will generally be entitled to a tax deduction in the same amount.

The Board of Directors Unanimously Recommends that You Vote “FOR” Approval of the CNX Resources Corporation Amended and Restated Equity and Incentive Compensation Plan.

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ADDITIONAL MATTERS