Exhibit 10.3

 

EXHIBIT A

 

 

RESTRICTED STOCK AGREEMENT

THIS AGREEMENT, dated _______________ ___, 2007 (the “Grant Date”) is made by
and between PEABODY ENERGY CORPORATION, a Delaware corporation (the “Company”),
and the undersigned employee of the Company or a Subsidiary (as defined below)
or an Affiliate (as defined below) of the Company (“Grantee”).

WHEREAS, the Company wishes to afford the Grantee the opportunity to own shares
of its $.01 par value Common Stock (“Common Stock”);

WHEREAS, the Company wishes to carry out the Plan (as hereinafter defined), the
terms of which are hereby incorporated by reference and made a part of this
Agreement; and

WHEREAS, the Committee (as hereinafter defined) appointed to administer the Plan
has determined that it would be to the advantage and best interest of the
Company and its stockholders to give the shares of Common Stock provided for
herein to the Grantee, on a restricted basis, as an incentive for increased
efforts during his or her term of office with the Company or its Subsidiaries or
Affiliates, and has advised the Company thereof and instructed the undersigned
officers to so grant;

NOW, THEREFORE, in consideration of the mutual covenants herein contained and
other good and valuable consideration, receipt of which is hereby acknowledged,
the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

Whenever the following terms are used in this Agreement, they shall have the
meaning specified below unless the context clearly indicates to the contrary.
Capitalized terms not otherwise defined in this Agreement shall have the meaning
specified in the Plan.

Section 1.1 – “Affiliate”, as applied to any Person, shall mean any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person. For purposes of this definition, the term “control” (including,
with correlative meanings, the terms “controlling”, “controlled by” and “under
common control with”), as applied to any Person, means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of that Person, whether through the ownership of voting securities,
by contract or otherwise.

Section 1.2 – “Board of Directors” or “Board” shall mean the Board of Directors
of the Company.

Section 1.3 – “Cause” shall mean (i) any material and uncorrected breach by
Grantee of the terms of his or her employment agreement with the Company, if
any, including, but not limited to, engaging in action in violation of any
restrictive covenants therein, (ii) any willful fraud or dishonesty of Grantee
involving the property or business of the Company, (iii) a deliberate or willful
refusal or failure of Grantee to comply with any major corporate policy of the
Company

 

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which is communicated to Grantee in writing, or (iv) Grantee’s conviction of, or
plea of nolo contendere to, any felony if such conviction results in Grantee’s
imprisonment; provided that with respect to clauses (i), (ii) or (iii) above,
Grantee shall have 10 days following written notice of the conduct that is the
basis for the potential termination for Cause within which to cure such conduct
to prevent termination for Cause by the Company.

Section 1.4 – “Committee” shall mean the Compensation Committee of the Company,
duly appointed by the Board as the Administrator under Section 2 of the Plan.

Section 1.5 – “EBITDA” shall mean income from continuing operations before
deducting early debt extinguishment costs, net interest expenses, income taxes,
minority interests, asset retirement obligation expense and depreciation,
depletion and amortization.

Section 1.6 – “Good Reason” shall mean (i) a reduction by the Company in
Grantee’s Base Salary, or (ii) a material reduction in the aggregate program of
employee benefits and perquisites to which Grantee is entitled (other than a
reduction that affects all executives).

Section 1.7 – “Person” shall mean an individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated association, joint
venture, governmental authority or other entity of whatever nature.

Section 1.8 – “Plan” shall mean the Peabody Energy Corporation 2004 Long-Term
Equity Incentive Plan, as amended from time to time.

Section 1.9 – “Pronouns” The masculine pronoun shall include the feminine and
neuter, and the singular the plural, where the context so indicates.

Section 1.10 – “Retirement” shall mean normal retirement at or after age 55 with
at least ten (10) years of service with the Company.

Section 1.11 – “Subsidiary” shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations, or group of
commonly controlled corporations, other than the last corporation in the
unbroken chain then owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in such
chain.

Section 1.12 – “Termination of Employment” shall mean a termination of the
Grantee’s employment with the Company, a Subsidiary or an Affiliate (regardless
of the reason therefor).

ARTICLE II

GRANT OF RESTRICTED STOCK

Section 2.1 – Grant of Restricted Stock. For good and valuable consideration,
the Company shall grant to the Grantee the number of shares set forth on the
signature page hereof of its Common Stock (the “Restricted Stock”) upon the
terms and subject to the conditions set forth in this Agreement.

 

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Section 2.2 – Transfer Restrictions. At any time prior to vesting in accordance
with Article III, the shares of Restricted Stock or any interest therein cannot
be directly or indirectly transferred, sold, assigned, pledged, hypothecated or
otherwise disposed of. Upon vesting in accordance with Article III, the shares
of Restricted Stock shall cease to be restricted and shall become
non-forfeitable, and the Grantee shall own such shares free of all restrictions
otherwise imposed by this Agreement.

Section 2.3 – No Obligation of Employment. Nothing in this Agreement or in the
Plan shall confer upon the Grantee any right to continue in the employ of the
Company or any Subsidiary or Affiliate or interfere with or restrict in any way
the rights of the Company and its Subsidiaries or Affiliates, which are hereby
expressly reserved, to terminate the employment of the Grantee at any time for
any reason whatsoever, with or without Cause.

Section 2.4 – Adjustments in Restricted Shares. In the event that the
outstanding shares of the stock subject to this Restricted Stock grant are, from
time to time, changed into or exchanged for a different number or kind of shares
of the Company or other securities of the Company by reason of a merger,
consolidation, recapitalization event, reclassification, stock split, stock
dividend, combination of shares, or otherwise, the Committee shall make an
appropriate and equitable adjustment in the number and kind of shares that shall
constitute Restricted Stock and in any other characteristics or terms applicable
to the Restricted Stock as it may determine appropriate in its sole discretion
to equitably reflect such corporate event or transaction. Any such adjustment
made by the Committee shall be final and binding upon the Grantee, the Company
and all other interested persons.

ARTICLE III

VESTING OF RESTRICTED STOCK

Section 3.1 – Restricted Stock. Unless otherwise provided in this Agreement, the
shares of Restricted Stock shall become vested and non-forfeitable in accordance
with the following schedule, provided that the Grantee does not experience a
Termination of Employment before the designated dates:

Vesting Date

 

Percentage of Restricted
tock that May Become Vested

 

 

 

October 1, 2007

 

33.33%

 

 

 

April 1, 2008

 

33.33%

 

 

 

April 1, 2009

 

33.33%

 

Section 3.2 – Acceleration Events. Notwithstanding anything in this Article III
to the contrary, the shares of Restricted Stock shall become fully vested and
non-forfeitable upon: (i) a Change of Control; (ii) the Grantee’s death while he
or she is employed with the Company, a Subsidiary or an Affiliate; (iii) the
Grantee’s Termination of Employment due to Disability; (iv) the Grantee’s
Termination of Employment for Good Reason (as defined in the Grantee’s
employment agreement); or (v) the Grantee’s involuntary Termination of
Employment by the Company, a Subsidiary or an Affiliate for a reason other than
Cause.

 

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Section 3.3 – Effect of Termination of Employment. Unless otherwise provided in
this Article III, no share of Restricted Stock shall become vested and
non-forfeitable following Termination of Employment, and any such non-vested and
forfeitable share of Restricted Stock shall be immediately and automatically
forfeited upon Termination of Employment.

ARTICLE IV

RECEIPT OF STOCK

Section 4.1 – Conditions to Issuance of Stock Certificates. The shares of Common
Stock deliverable hereunder may be either previously authorized but unissued
shares or issued shares that have been reacquired by the Company. Such shares
shall be fully paid and nonassessable. The Company shall not be required to
issue or deliver any certificate or certificates for shares of Common Stock
granted hereunder prior to fulfillment of both of the following conditions:

(a)          The obtaining of approval or other clearance from any state or
federal governmental agency that the Committee, in its absolute discretion,
determines to be necessary or advisable; and

(b)          The lapse of such reasonable period of time following the grant as
the Committee may establish from time to time for administrative convenience.

Section 4.2 – Escrow. Upon issuance, the certificates for the shares of
Restricted Stock shall be held in escrow by the Company until, and to the
extent, the shares of Restricted Stock cease to be restricted and become
non-forfeitable and the Grantee owns such shares free of all restrictions
otherwise imposed by this Agreement. Any new, substituted or additional
securities or other property described in Section 2.4 shall immediately be
delivered to the Company to be held in such escrow. Shares of Restricted Stock,
together with any other assets or securities held in escrow hereunder, shall be
(i) surrendered to the Company for cancellation upon forfeiture, if any, of such
shares of Restricted Stock by the Grantee hereunder or (ii), subject to the
provisions of Section 5.1, released to the Grantee to the extent the shares of
Restricted Stock are no longer subject to any of the restrictions otherwise
imposed by this Agreement.

Section 4.3 – Rights as Stockholder. The Grantee shall not be, and shall not
have any of the rights or privileges of, a stockholder of the Company in respect
of any shares granted hereunder unless and until the date on which certificates
representing such shares shall have been issued by the Company to such Grantee
(the “Issuance Date”). The Grantee shall be entitled to receive any dividends
paid with respect to the shares of Restricted Stock that become payable on or
after the Issuance Date; provided, however, that no dividends shall be payable
to or for the benefit of the Grantee for shares of Restricted Stock with respect
to record dates occurring prior to the Issuance Date, or with respect to record
dates occurring on or after the date, if any, on which the Grantee has forfeited
those shares of Restricted Stock. The Grantee shall be entitled to vote the
shares of Restricted Stock on or after the Issuance Date to the same extent as
would have been applicable to the Grantee if the shares of Restricted Stock had
then become fully vested and non-forfeitable; provided, however, that the
Grantee shall not be entitled to vote the shares of Restricted Stock with
respect to record dates for such voting rights occurring prior to the Issuance
Date, or with respect to record dates occurring on or after the date, if any, on
which the Grantee has forfeited those shares of Restricted Stock.

 

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ARTICLE V

MISCELLANEOUS

Section 5.1 – Tax Consequences. The Company shall not be liable or responsible
in any way for any tax (including any withholding tax) consequences relating to
the shares of Restricted Stock, and the Grantee agrees to undertake to
determine, and be responsible for, any and all tax (including any withholding
tax) consequences to himself or herself with respect to the shares of Restricted
Stock. Notwithstanding any other provision of this Agreement, the shares of
Restricted Stock, together with any other assets or securities held in escrow
hereunder, shall not be released to the Grantee unless the Grantee has paid to
the Company, or made arrangements satisfactory to the Company regarding the
payment of, any federal, state, local or foreign taxes of any kind required by
law to be withheld with respect to the grant of the shares of Restricted Stock
or the lapse of restrictions imposed by this Agreement.

Section 5.2 – Section 83(b) Election. The Grantee understands that Section 83 of
the Code may tax as compensation income equal to the difference between the
amount paid for the shares of Restricted Stock, if any, and the fair market
value of the shares of Restricted Stock as of the date any restrictions on the
shares of Restricted Stock lapse in the absence of an election under Section
83(b) of the Code. In this context, “restriction” means the forfeitability of
the shares of Restricted Stock pursuant to the terms of this Agreement. To the
extent that the Company has registered under the Securities Exchange Act of
1934, as amended (the “Exchange Act”), the term “restriction,” with respect to
officers, directors, and 10% shareholders, may also mean the six-month period
after the acquisition of the shares of Restricted Stock during which sales of
certain securities by such officers, directors, and ten percent (10%)
shareholders would give rise to liability under Section 16(b) of the Exchange
Act.

The Grantee understands that he or she may elect to be taxed at the time he or
she receives the shares of Restricted Stock and while the shares of Restricted
Stock are subjected to restrictions rather than waiting to be taxed on the
shares of Restricted Stock when and as the restrictions lapse. The Grantee
realizes that he or she may choose this tax treatment by filing an election
under Section 83(b) of the Code with the Internal Revenue Service within thirty
(30) days after the Grant Date and by filing a copy of such election with his or
her tax return for the tax year in which the Restricted Shares were subjected to
the restrictions. THE GRANTEE UNDERSTANDS THAT FAILURE TO MAKE THIS FILING IN A
TIMELY MANNER MAY RESULT IN THE RECOGNITION OF COMPENSATION INCOME BY THE
GRANTEE, AS THE RESTRICTIONS LAPSE, ON ANY DIFFERENCE BETWEEN THE PURCHASE
PRICE, IF ANY, AND THE FAIR MARKET VALUE OF THE SHARES OF RESTRICTED STOCK AT
THE TIME SUCH RESTRICTIONS LAPSE. THE GRANTEE ACKNOWLEDGES THAT IT IS THE
GRANTEE’S SOLE RESPONSIBILITY AND NOT THE COMPANY’S TO TIMELY FILE THE ELECTION
UNDER SECTION 83(b) OF THE CODE. THE GRANTEE ACKNOWLEDGES THAT HE OR SHE SHALL
CONSULT HIS OWN TAX ADVISERS REGARDING THE ADVISABILITY OR NON-ADVISABILITY OF
MAKING THE ELECTION UNDER SECTION 83(b) OF THE CODE AND ACKNOWLEDGES THAT HE OR
SHE SHALL NOT RELY ON THE COMPANY OR ITS ADVISERS FOR SUCH ADVICE.

 

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Section 5.3 – Administration. The Committee has the power to interpret the Plan
and this Agreement and to adopt such rules for the administration,
interpretation and application of the Plan as are consistent therewith and to
interpret or revoke any such rules. All actions taken and all interpretations
and determinations made by the Committee shall be final and binding upon the
Grantee, the Company and all other interested persons. No member of the
Committee shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or the shares of
Restricted Stock. In its absolute discretion, the Board of Directors may at any
time and from time to time exercise any and all rights and duties of the
Committee under the Plan and this Agreement.

Section 5.4 – Notices. Any notice to be given under the terms of this Agreement
to the Company shall be addressed to the Company in care of its Secretary, and
any notice to be given to the Grantee shall be addressed to him or her at the
address given beneath his or her signature hereto. By a notice given pursuant to
this Section 5.4, either party may hereafter designate a different address for
notices to be given to him, her or it. Any notice that is required to be given
to the Grantee shall, if the Grantee is then deceased, be given to the Grantee’s
personal representative if such representative has previously informed the
Company of his, her or its status and address by written notice under this
Section 5.4. Any notice shall be deemed duly given when enclosed in a properly
sealed envelope or wrapper addressed as aforesaid, deposited (with postage
prepaid) in a post office or branch post office regularly maintained by the
United States Postal Service.

Section 5.5 – Titles. Titles are provided herein for convenience only and are
not to serve as a basis for interpretation or construction of this Agreement.

Section 5.6 – Applicability of Plan. The shares of Common Stock issued to the
Grantee hereunder shall be subject to all of the terms and provisions of the
Plan, to the extent applicable to such shares. In the event of any conflict
between this Agreement and the Plan, the terms of the Plan shall control.

Section 5.7 – Amendment. This Agreement may be amended only by a writing
executed by the parties hereto that specifically states that it is amending this
Agreement.

Section 5.8 – Dispute Resolution. Any dispute or controversy arising under or in
connection with this Agreement shall be resolved by arbitration. Arbitrators
shall be selected, and arbitration shall be conducted, in accordance with the
rules of the American Arbitration Association. The Company shall pay any legal
fees in connection with such arbitration in the event that the Grantee prevails
on a material element of his claim or defense.

Section 5.9 – Governing Law. The laws of the State of Delaware shall govern the
interpretation, validity and performance of the terms of this Agreement
regardless of the law that might be applied under principles of conflicts of
laws.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto.

GRANTEE

 

PEABODY ENERGY CORPORATION

 

 

 

 

 

 

 

 

 

 

By

 

Eric Ford

 

 

Gregory H. Boyce
President and Chief Executive Officer

77 Moons Lane
Brookfield
Brisbane
Queensland 4069
AUSTRALIA

 

 

 

 

 

 

 

 

 

 

 

Grantee’s Taxpayer Identification Number:

________-______-__________

 

Aggregate number of shares of Common Stock granted hereunder: 45,198

 

 

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