[peabodylogoa03.jpg]                            
PEABODY ENERGY
Peabody Plaza
701 Market Street
St. Louis, MO 63101-1826
314.342.3400

January 27, 2015

Mr. Glenn L. Kellow
c/o Peabody Energy Corporation
701 Market Street, Suite 701
St. Louis, Missouri 63101-1826
Dear Glenn:
This letter supplements the employment agreement, entered into as of August 21,
2013, between you and Peabody Energy Corporation (the “Employment Agreement”)
and the performance-based restricted stock award agreement, effective September
16, 2013 (the “RSU Agreement”), relating to an award of restricted stock units
under the Company’s 2011 Long-Term Incentive Plan.
1.
Effective January 22, 2015, your position with Peabody Energy Corporation (the
“Company”) will be President and Chief Executive Officer-elect, with the
expectation that you will be appointed Chief Executive Officer of the Company
effective as of the date of the Company’s 2015 annual meeting of shareholders,
which is expected to be held on May 4, 2015. You acknowledge and agree that your
appointment as Chief Executive Officer is consistent with the Company’s
obligations to employ you pursuant to Section 1 of the Employment Agreement.

2.
Clause (iv) of the definition of “Good Reason” set forth in Section 6.2(d) of
the Employment Agreement is amended, effective upon your appointment as Chief
Executive Officer of the Company, to read as follows: “any material diminution
or material adverse change in Executive’s duties or responsibilities as Chief
Executive Officer.”

3.
To the extent that the RSU Agreement incorporates or otherwise refers to terms
that are defined in the Employment Agreement, or incorporates by reference other
provisions set forth in the Employment Agreement, you and we agree that solely
for purposes of the RSU Agreement such terms shall continue to have such
definitions (including, in the case of the definition of “Good Reason” set forth
in Section 6.2(d) of the Employment Agreement, as modified by the preceding
paragraph), and such provisions shall continue in effect, following the end of
your Term of Employment as defined in Section 2 of the Employment Agreement.

4.
Section 6.2(b)(i) of the Employment Agreement, relating to severance benefits,
is amended, effective as of the date of your appointment as Chief Executive
Officer of the Company, by adding immediately following clause (C) thereof the
following:

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“; provided, however, that if Executive’s termination of employment under the
circumstances provided for in this Section 6.2(b)(i) occurs within two years of
a “Change in Control” as defined in the Peabody Energy Corporation Executive
Severance Plan (the “ESP”), each reference to “two (2) times” in the foregoing
clauses (A), (B) and (C) shall instead be a reference to “two and one-half (2½)
times”.
In addition, the sentence following such clause (C) is amended, effective upon
your appointment as Chief Executive Officer, to read as follows (with the text
added hereby indicated in italics):
“The Company shall pay to Executive (x) one-quarter (¼) of such Severance
Payment (or, in the event of Executive’s termination of employment occurs within
two years of a Change in Control as defined in the ESP, one-fifth (1/5) of such
Severance Payment) in a lump sum payment on the earlier to occur of Executive's
death or the first business day immediately following the six (6) month
anniversary of Executive's Separation from Service (as defined in Section 6.2(c)
below) and (y) the remaining three quarters (¾) of the Severance Payment in
eighteen (18) substantially equal monthly payments beginning on the first day of
the month next following the initial lump sum payment (or, in the event of
Executive’s termination of employment within two years of a Change in Control as
defined in the ESP, the remaining four-fifths (4/5) of such Severance Payment in
twenty-four (24) substantially equal monthly payments beginning on the first day
of the month next following the initial lump sum payment).”
5.
Except as modified by this letter all terms of the Employment Agreement and the
RSU Agreement will continue in full force and effect.

Please indicate your agreement with the foregoing by signing this letter in the
space indicated below.
Sincerely,
PEABODY ENERGY CORPORATION
 
 
 
 
 
 
 
 
By:
   /s/ William A. Coley
 
 
 
 
William A. Coley
 
 
 
 
Compensation Committee Chair
 
 
 
 
 
 
 
 
Agreed as of this 27th day of January, 2015
 
 
 
 
 
 
 
 
   /s/ Glenn L. Kellow
 
 
 
Glenn L. Kellow
 
 
 
President and Chief Executive Officer-elect