EXHIBIT 10.1
AMENDMENT AND RESTATEMENT OF THE
PEABODY HOLDING COMPANY, INC.
SUPPLEMENTAL SAVINGS AND INVESTMENT PLAN
          WHEREAS, Peabody Holding Company, Inc. (“PHCI”) previously adopted the
Peabody Holding Company, Inc. Supplemental Savings and Investment Plan (“Plan”)
for the benefit of a select group of management or highly compensated employees
of the Company and its subsidiaries or affiliates, within the meaning of the
Employee Retirement Income Security Act of 1974, as amended, whose benefits
under the Peabody Investments Corp. Employee Retirement Account and, prior to
January 1, 2006, the Lee Ranch Coal Company Retirement and Savings Plan or Black
Beauty Coal Company 401(k) Plan are limited by the provisions of
Section 401(a)(17) or 415 of the Internal Revenue Code of 1986, as amended
(“Code”); and
          WHEREAS, PHCI desires to, and hereby does, transfer its
responsibilities with respect to sponsorship and administration of the Plan to
its parent corporation, Peabody Investments Corp. (“Company”), and the Company
desires to, and hereby does, assume such responsibilities; and
          WHEREAS, the Company desires to change the name of the Plan to the
Peabody Investments Corp. Supplemental Employee Retirement Account and to amend
the Plan to reflect certain changes in operation and administration and to
comply with certain requirements under the Code; and
          WHEREAS, the Company retained the right to amend the Plan pursuant to
Section 5.1 thereof; and
          WHEREAS, the Company desires to amend and restate the Plan effective
as of January 1, 2005;
          NOW, THEREFORE, effective January 1, 2005, except as otherwise set
forth herein, the Plan is hereby amended and restated to read as follows:

 

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PEABODY INVESTMENTS CORP.
SUPPLEMENTAL EMPLOYEE RETIREMENT ACCOUNT
TABLE OF CONTENTS

              PAGE  
SECTION 1 - NAME OF PLAN
    1  
 
       
SECTION 2 - DEFINITIONS
    2  
 
       
2.1. Basic Plan
    2  
2.2. Board
    2  
2.3. Code
    2  
2.4. Committee
    2  
2.5. Company
    2  
2.6. Compensation
    2  
2.7. Controlled Group
    2  
2.8. Employee
    2  
2.9. Employer
    2  
2.10. Normal Retirement Date
    3  
2.11. Participant
    3  
2.12. Plan Administrator
    3  
2.13. Plan Year
    3  
2.14. Pro-Rated Salary
    3  
2.15. Valuation Date
    4  
2.16. Years of Service
    4  
 
       
SECTION 3 - ELIGIBILITY
    5  
 
       
3.1. Participants
    5  
3.2. Cessation Of Participation
    5  
 
       
SECTION 4 – CREDITS
    7  
 
       
4.1. Deferral Credits
    7  
4.2. Employer Matching Credits
    7  
4.3. Performance Credits
    7  
4.4. Elections
    8  
 
       
SECTION 5 - ALLOCATION
    10  
 
       
5.1. Establishment Of Accounts
    10  
5.2. Crediting Earnings Or Losses
    10  
5.3. Source of Payments
    10  
 
       
SECTION 6 - INVESTMENT OF ACCOUNTS
    11  
 
       
6.1. Investment Funds
    11  
6.2. Participant’s Selection Of Investment Fund
    11  
6.3. Transfers Between Investment Funds
    11  
6.4. Investments and Charges
    11  

 

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    PAGE  
SECTION 7 - DISTRIBUTIONS AT RETIREMENT
    12  
 
       
7.1. Normal Retirement Distributions
    12  
 
       
SECTION 8 - DISTRIBUTIONS AT TERMINATION OF EMPLOYMENT (VESTING)
    13  
 
       
8.1. Distributions Upon Termination Of Employment
    13  
8.2. Determination Of Vested Portion
    13  
8.3. Forfeitures
    14  
 
       
SECTION 9 - DISTRIBUTIONS AT DEATH
    15  
 
       
9.1. Distributions Upon Death
    15  
9.2. Designation Of Beneficiary
    15  
9.3. Beneficiary Not Designated
    15  
 
       
SECTION 10 - ADMINISTRATION
    16  
 
       
10.1. Plan Administrator
    13  
10.2. Construction
    13  
10.3. Delegation By The Plan Administrator
    13  
10.4. Records Of The Plan Administrator
    13  
10.5. Committee
    13  
10.6. Decisions ByThe Committee
    14  
10.7. Meetings Of The Committee
    14  
10.8. Expenses
    14  
 
       
SECTION 11 - CLAIM PROCEDURE
    18  
 
       
11.1. Claim.
    18  
11.2. Claim Decision
    18  
11.3. Request For Review
    18  
11.4. Review Of Decision
    19  
 
       
SECTION 12 - AMENDMENT AND TERMINATION
    21  
 
       
12.1. Amendment
    21  
12.2. Termination; Discontinuance Of Credits
    21  
 
       
SECTION 13 - MISCELLANEOUS
    22  
 
       
13.1. Participants’ Rights
    22  
13.2. Spendthrift Clause
    22  
13.3. Delegation Of Authority By Employer
    22  
13.4. Distributions To Minors
    22  
13.5. Construction Of Plan
    22  
13.6. Gender, Number And Headings
    22  
13.7. Separability Of Provisions
    23  
13.8. Service Of Process
    23  

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PEABODY INVESTMENTS CORP.
SUPPLEMENTAL EMPLOYEE RETIREMENT ACCOUNT
SECTION 1 — NAME OF PLAN
          This Plan shall be known as the “Peabody Investments Corp.
Supplemental Employee Retirement Account.”

 

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SECTION 2 — DEFINITIONS
     2.1. Basic Plan.
          “Basic Plan” means the Peabody Investments Corp. Employee Retirement
Account and, prior to January 1, 2006, the Lee Ranch Coal Company Retirement and
Savings Plan and Black Beauty Coal Company 401(k) Plan.
     2.2. Board.
          “Board” means the board of directors of the Company or of any
successor by merger, purchase or otherwise.
     2.3. Code.
          “Code” means the Internal Revenue Code of 1986, as amended.
     2.4. Committee.
          “Committee” means the Committee appointed pursuant to Section 10.5.
     2.5. Company.
          “Company” means Peabody Investments Corp.
     2.6. Compensation.
          “Compensation” means base pay plus overtime received by an Employee
during the Plan Year for services rendered with respect to the Employer. Such
amount shall include all amounts contributed to a cafeteria plan which meets the
requirements of Section 125 of the Code. Such amount shall not include Employer
credits under this Plan or Employer contributions or benefits under any plan
qualified under Section 401 of the Code, awards under the incentive compensation
plan or any similar incentive plans, payments under any savings plan, any
special allowance for foreign service, or any payment during long-term
disability.
     2.7. Controlled Group.
          “Controlled Group” means the Company and all other entities required
to be aggregated with the Company under Sections 414(b), (c), or (m) of the Code
or regulations issued pursuant to Section 414(o) of the Code.
     2.8. Employee.
          “Employee” means any person who is classified by the Employer as an
employee.
     2.9. Employer.
          “Employer” means the Company or (i) prior to January 1, 2006, Patriot
Coal Company L.P. (including its affiliates Grand Eagle Mining, Inc. and Ohio
County Coal Company, which are hereinafter collectively referred to as “Patriot
Coal Company, L.P.”),

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Powder River Coal Company, HMC Mining, LLC, Appalachia Mine Services, LLC, Black
Stallion Coal Company, LLC, Lee Ranch Coal Company, Black Beauty Coal Company,
Twentymile Coal Company or any other member of the Controlled Group which has,
with the consent of the Board, adopted the Plan, or (ii) effective January 1,
2006, any other member of the Controlled Group which has, with the consent of
the Board, adopted the Plan, as set forth on Exhibit A, as amended from time to
time.
     2.10. Normal Retirement Date.
          “Normal Retirement Date” means the date on which a Participant
terminates his or her employment with the Employer (except by death) provided
such date is on or after (a) his attainment of age 62 or (b) such Participant’s
“Normal Retirement Date” under a plan qualified under Section 401 of the Code
maintained by the Employer which is a defined benefit plan, whichever comes
first.
     2.11. Participant.
          “Participant” means an Employee who has satisfied the eligibility
requirements of Section 3 and who has not become a former Participant under
Section 3.2.
     2.12. Plan Administrator.
          “Plan Administrator” means Peabody Investments Corp.
     2.13. Plan Year.
          “Plan Year” means the 12-month period commencing on January 1 and
ending on December 31.
     2.14. Pro-Rated Salary.
          “Pro-Rated Salary” means:
     (a) in the case of a Participant compensated on a salaried basis, such
Participant’s base salary determined as of the last day of the Employer’s fiscal
year; or
     (b) in the case of a Participant compensated on an hourly basis, the
product of such Participant’s hourly rate determined as of the last day of the
Employer’s fiscal year multiplied by 2,080;
multiplied by a fraction, the numerator of which is the number of days on which
the Participant was an Employee under the Basic Plan, as defined therein, during
such fiscal year, and the denominator of which is 365 (or, in a leap year, 366).
For purposes of this calculation only, a person shall not be considered an
“Employee” during any period during which he or she is (a) on salary continuance
for disability, (b) receiving accrued vacation or other similar amounts
following retirement under the Employer’s retirement program, (c) on a leave of
absence described in Section 13.3 of the Peabody Investments Corp Employee
Retirement Account or, on or after January 1, 2004 and prior to January 1, 2006,
in the Black Beauty Coal Company 401(k) Plan, or (d) prior to January 1, 2006,
employed by Powder River Coal Company, Lee Ranch

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Coal Company or Twentymile Coal Company or, effective January 1, 2006,
performing services in the Colorado (other than for Seneca Coal Company), New
Mexico or Wyoming region, as determined from the books and records of the
Controlled Group (other than as a person who is employed at the level of
Director or above and is eligible for a long-term incentive plan maintained by
the Company or a member of the Controlled Group).
     2.15. Valuation Date.
          “Valuation Date” means any business day the New York Stock Exchange is
open for trading.
     2.16. Years of Service.
          “Years of Service” means years of service as credited under the Basic
Plan.

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SECTION 3 — ELIGIBILITY
     3.1. Participants.
          With respect to any Plan Year (hereinafter referred to in this
Section 3.1 as the “current Plan Year”):
     (a) each Employee (1) who is a member of a select group of management or
highly compensated employees of the Employer, within the meaning of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), (2) who is
eligible to participate in the Basic Plan, and (3) whose Compensation for the
Plan Year immediately preceding the current Plan Year exceeded the limit under
Section 401(a)(17) of the Code in effect for the current Plan Year (or, in the
case of a newly hired Employee who commences employment with the Employer during
the current Plan Year, whose Compensation for the current Plan Year is
anticipated to exceed such limit), shall be eligible:
     (i) to elect to defer his or her Compensation in accordance with
Section 4.1; and
     (ii) for Employer matching credits under Section 4.2 and performance
credits under Section 4.3;
     for the current Plan Year;
     (b) effective January 1, 2006, any other Employee who is eligible for an
allocation of the Performance Contribution under the Basic Plan, as defined
therein, for the current Plan Year which exceeds the limit under Section 415 of
the Code or whose Compensation for the current Plan Year exceeds the limit under
Section 401(a)(17) of the Code in effect for the current Plan Year shall be
eligible for performance credits under Section 4.3; or
     (c) any Employee (1) who is a member of a select group of management or
highly compensated employees of the Employer, within the meaning of ERISA, and
(2) whose Compensation for the current Plan Year exceeds $150,000, shall be
eligible for discretionary credits under Section 4.4; provided however, that
nothing in this Section 3.1(b) or elsewhere in the Plan shall constitute or be
construed as a guarantee that any such Employee shall have discretionary credits
credited to his or her account for any Plan Year.
     3.2. Cessation Of Participation.
          A person shall cease to be a Participant and shall become a former
Participant when he or she
     (a) has ceased to be employed by the Employer, and
     (b) has no undistributed account balances under the Plan;

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provided, however, that an Employee shall not be eligible for credits under
Section 4 for any Plan Year with respect to which the Employee does not satisfy
the applicable requirements of Section 3.1.

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SECTION 4 — CREDITS
     4.1. Deferral Credits.
          A Participant may elect to have from 2% (effective January 1, 2006,
1%) to 50% (effective January 1, 2006, 60%) of his or her Compensation deferred
and credited by the Employer to the Plan to the extent such amount exceeds the
amount of Compensation which the Participant was entitled to contribute to the
Basic Plan under the limits of Sections 401(a)(17) and 415 of the Code. Each
Participant shall elect in accordance with the rules and procedures established
by the Plan Administrator in increments of 1% the percentage of his or her
Compensation under this Section to be credited to his or her account as
described under 5.1. Any amounts described in this Section 4.1 shall be credited
to the Plan as of the date the Participants’ contributions to the Basic Plan
would be paid to the applicable trustee.
     4.2. Employer Matching Credits.
     (a) Prior to January 1, 2006, except with respect to those Participants
described in the next sentence, the Employer will credit to the Plan an amount
equal to 100% of the first 3% of his or her Compensation that a Participant
elects to have deferred and credited to the Plan under Section 4.1 plus 75% of
the next 4% of his or her Compensation that a Participant elects to have
deferred and credited to the Plan under Section 4.1. With respect to each
Participant (i) who is employed by Powder River Coal Company the Employer will
credit to the Plan an amount equal to 50% of the first 6% of his or her
Compensation that such Participant elects to have deferred and credited to the
Plan under Section 4.1, (ii) who is employed by Lee Ranch Coal Company the
Employer will credit to the Plan an amount equal to 100% of the first 4% of his
or her Compensation that such Participant elects to have deferred and credited
to the Plan under Section 4.1, or (iii) who is employed by Black Beauty Coal
Company the Employer will credit to the Plan an amount equal to 90% of the first
6% of his or her Compensation that such Participant elects to have deferred and
credited to the Plan under Section 4.1. Any amounts described in this
Section 4.2 shall be credited to the Plan as of the same date that amounts which
are matched under this Section 4.2 are credited to the Participant’s account
under Section 4.1.
     (b) Effective January 1, 2006, the Employer will credit to the Plan an
amount equal to 100% of the first 6% of his or her Compensation that the
Participant elects to have deferred and credited to the Plan under Section 4.1.
     4.3. Performance Credits.
          In addition to any amounts credited to the Plan by the Employer
pursuant to Section 4.2, the Employer will credit an additional amount if the
Employer meets or exceeds certain performance targets established by the Board
on an annual basis. If the maximum performance target established by the Board
for the Employer’s fiscal year is met or exceeded, the Employer will credit to
the Plan on behalf of each Participant described in Section 3.1(a) or (b) (other
than, prior to January 1, 2006, a Participant employed by Powder River Coal
Company, Lee Ranch Coal Company or Twentymile Coal Company) who is employed on
the last day of such fiscal year an amount equal to 4% of the Participant’s
Pro-Rated Salary to the extent such amount exceeds the amount of Pro-Rated
Salary which the Participant was entitled to

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have the Employer contribute on his or her behalf to the Basic Plan, if any,
under the limits of Sections 401(a)(17) and 415 of the Code. If the Employer
meets the minimum performance target established by the Board for the Employer’s
fiscal year but does not meet the maximum performance target, the Employer will
credit to the Plan on behalf of each eligible Participant who is employed on the
last day of such fiscal year a percentage of such Participant’s Pro-Rated Salary
to be determined by the Board (which percentage shall be less than 4% of the
Participant’s Pro-Rated Salary) based on the Employer’s overall performance in
relation to the maximum and minimum performance target ranges to the extent such
amount exceeds the amount of Pro-Rated Salary which the Participant was entitled
to have the Employer contribute on his or her behalf to the Basic Plan, if any,
under the limits of, Sections 401(a)(17) and 415 of the Code. Any amounts
described in this Section 4.3 shall be credited to the Plan as soon as
practicable following the determination of whether the Employer has met or
exceeded the applicable performance targets. Notwithstanding the foregoing,
(i) if the Employer does not meet the minimum performance target established by
the Board for the Employer’s fiscal year, the Board may, in its sole discretion,
authorize the Employer to credit to the Plan on behalf of each eligible
Participant who is employed on the last day of such fiscal year a percentage of
such Participant’s Pro-Rated Salary determined by the Board to the extent such
amount exceeds the amount of Pro-Rated Salary which the Participant was entitled
to have the Employer contribute on his or her behalf to the Basic Plan, if any,
under the limits of Sections 401(a)(17) and 415 of the Code; and (ii) if the
Employer exceeds the maximum performance target established by the Board for the
Employer’s fiscal year, the Board may, in its sole discretion, authorize the
Employer to credit to the Plan on behalf of each eligible Participant who is
employed on the last day of such fiscal year an additional percentage of such
Participant’s Pro-Rated Salary determined by the Board to the extent such amount
exceeds the amount of Pro-Rated Salary which the Participant was entitled to
have the Employer contribute on his or her behalf to the Basic Plan, if any,
under the limits of Sections 401(a)(17) and 415 of the Code. Notwithstanding
anything herein to the contrary, effective January 1, 2006, a Participant who
performs services in the Colorado (other than for Seneca Coal Company), New
Mexico or Wyoming regions, as determined from the books and records of the
Controlled Group (other than any such Participant who is employed at the level
of Director or above and is eligible for a long-term incentive plan maintained
by the Company or a member of the Controlled Group), for all or part of any
fiscal year shall not be entitled to a Performance Credit under this Section 4.3
for the portion of such fiscal year during which such Participant performs such
services.
     4.4. Discretionary Credits.
          For any Plan Year, the Employer may credit to the Plan for one or more
Participants described in Section 3.1(c) an amount determined by the Employer in
its sole discretion for each such Participant. Nothing herein shall require the
Employer to credit (i) any such amount for any Plan Year, (ii) the same amount,
either as a dollar amount or a percentage of Compensation, for all such
Participants, or (iii) any amount for any particular Participant. The fact that
a Participant is credited with an amount under this Section 4.4 for any Plan
Year shall not entitle that Participant to be credited with any such amount for
any subsequent Plan Year.
     4.5. Elections.
          Each election by a Participant under Section 4.1 for a Plan Year must
be made prior to the beginning of the Plan Year in accordance with the rules and
procedures established

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by the Plan Administrator; provided, however, that in the case of a newly hired
Participant who commences employment with the Employer during a Plan Year, such
election may be made within 30 days after the Participant commences such
employment. Any such election shall be effective and irrevocable for such Plan
Year (or, in the case of a newly hired Participant, for the portion of the Plan
Year following such election), and shall remain in effect for subsequent Plan
Years in which the Participant continues to satisfy the requirements of
Section 3.1 unless the Participant makes a new election with respect to any such
Plan Year in accordance with this Section 4.5.

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SECTION 5 — ALLOCATION
     5.1. Establishment Of Accounts.
          The Plan Administrator shall establish and maintain for each
Participant a Pre-Tax Matched Account, a Pre-Tax Unmatched Account, a Company
Pre-Tax Matching Account, a Performance Credit Account and a SERA Discretionary
Account. All amounts by which an Employee elects to have his or her salary
deferred under Section 4.1 up to the applicable percentage of Compensation set
forth in Section 4.2 shall be credited to his or her Pre-Tax Matched Account,
all amounts by which an Employee elects to have his or her salary deferred under
Section 4.1 in excess of the applicable percentage set forth in Section 4.2
shall be credited to his or her Pre-Tax Unmatched Account, all Employer credits
under Section 4.2 shall be credited to his or her Company Pre-Tax Matching
Account, all Employer credits under Section 4.3 shall be credited to his or her
Performance Credit Account and all Employer credits under Section 4.4 shall be
credited to his or her SERA Discretionary Account.
     5.2. Crediting Earnings Or Losses.
          All earnings or losses shall be based on appreciation or depreciation
in the fair market value of the investment funds in which the Participant is
deemed to have invested his or her accounts under Section 6 and shall be
credited to accounts based on account balances on each Valuation Date.
     5.3 Source of Payments.
          Notwithstanding anything herein to the contrary, the payments to any
Participant or beneficiary under the Plan shall be made from assets which shall
continue, for all purposes, to be a part of the general, unrestricted assets of
the Employer; no person shall have any interest in any such assets by virtue of
the provisions of this Plan. The Employer’s obligation hereunder shall be an
unfunded and unsecured promise to pay money in the future. To the extent that
any person acquires a right to receive payments from the Employer under the
provisions of this Plan, such right shall be no greater than the right of any
unsecured general creditor of the Employer; no such person shall have nor
acquire any legal or equitable right, interest or claim in or to any property or
assets of the Employer.
          In the event that, in its discretion, the Employer purchases an
insurance policy or policies insuring the life of any Participant (or any other
property) to allow the Employer to recover the cost of providing benefits, in
whole or in part, hereunder, neither the Participant nor any beneficiary
hereunder shall have any rights whatsoever therein or in the proceeds therefrom.
The Employer shall be the sole owner and beneficiary of any such insurance
policy or other property and shall possess and may exercise all incidents of
ownership therein. No such policy, policies or other property shall be held in
any trust for the Participants, any beneficiary or any other person nor as
collateral security for any obligation of the Employer hereunder.

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SECTION 6 — EARNINGS ON ACCOUNTS
     6.1. Investment Funds.
          A Participant may elect to have earnings or losses credited on all of
his or her accounts as if such accounts had been invested in such funds as are
made available from time to time under the Basic Plan, excluding the Peabody
Energy Stock Fund.
     6.2. Participant’s Selection Of Investment Fund.
          Each Participant shall designate in 1% increments the percentages of
amounts credited to his or her accounts under Section 4 for such Plan Year which
are to be treated as if invested among the applicable investment funds. Such a
designation shall be made in accordance with the rules and procedures
established by Plan Administrator. Any such designation shall continue in effect
for successive Plan Years unless changed in the same manner by the Participant.
If any Participant fails to designate investment funds under this Section 6.2,
amounts credited to his or her accounts under this Plan shall be treated as if
invested in the applicable investment funds designated by the Participant for
his or her contributions to the Basic Plan; provided, however, that in the case
of a Participant who has not made an election to contribute to the Basic Plan,
but for whom Employer credits under Section 4.3 or 4.4 have been credited to the
Participant’s Performance Credit Account or SERA Discretionary Account, or for
whom any amount would be treated as if invested in the Peabody Energy Stock
Fund, such credits or amount will be treated as if invested in the investment
fund designated by the Committee under Section 8.2 of the Basic Plan unless the
Participant designates a different investment fund in accordance with this
Section 6.2 or makes a deemed transfer of such portion of his or her accounts to
a different investment fund in accordance with Section 6.3.
     6.3. Deemed Transfers Between Investment Funds.
          A Participant may elect in accordance with the rules and procedures
established by the Plan Administrator to make a deemed transfer of all or any
portion of his or her accounts that is treated as if invested in an investment
fund by designating that such amount be treated as if subsequently invested in
any other investment fund.
     6.4 Investments and Charges.
          Nothing in this Section 6 shall require the Employer to actually
invest any amount credited to a Participant’s accounts in accordance with the
Participant’s election; provided, however, that if the Employer in its sole
discretion does make any such investment in order to assist it in the meeting of
its liabilities under the Plan, the Participant’s accounts shall be reduced for
any charges imposed by the applicable investment fund.

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SECTION 7 — DISTRIBUTIONS AT RETIREMENT
     7.1. Normal Retirement Distributions.
          Upon a Participant’s Normal Retirement Date, the Participant’s
accounts shall become fully vested (if not already fully vested) and shall be
distributed to him or her in a lump sum. Such distribution shall be made on the
later of:
     (a) the date which is six months after the Participant’s Normal Retirement
Date; and
     (b) January 31 of the calendar year immediately following the calendar year
in which the Participant’s Normal Retirement Date occurs;
or as soon as administratively feasible thereafter, but in no event later than
the last day of the calendar year in which the date on which such distribution
would be made in accordance with the foregoing occurs. A distribution hereunder
shall be based on the value of the Participant’s accounts as of the Valuation
Date as of which such distribution is being made.

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SECTION 8 — DISTRIBUTIONS AT TERMINATION OF EMPLOYMENT (VESTING)
     8.1. Distributions Upon Termination Of Employment.
          A Participant whose employment with the Employer is terminated prior
to the earlier of his or her death or Normal Retirement Date shall receive the
vested portion of his or her accounts in a lump sum. Such distribution shall be
made on the later of:
     (a) the date which is six months after the date of the Participant’s
termination of employment; and
     (b) January 31 of the calendar year immediately following the calendar year
in which the Participant’s termination of employment occurs;
or as soon as administratively feasible thereafter, but in no event later than
the last day of the calendar year in which the date on which such distribution
would be made in accordance with the foregoing occurs. A distribution hereunder
shall be based on the value of the Participant’s accounts as of the Valuation
Date as of which such distribution is being made.
     8.2. Determination Of Vested Portion.
     (a) A Participant’s Pre-Tax Matched Account. Pre-Tax Unmatched Account and
Performance Credit Account shall be 100% vested and nonforfeitable at all times.
     (b) The portion of a Participant’s Company Pre-Tax Matching Account which
shall be vested and nonforfeitable shall be determined in accordance with the
following schedule:
     (i) prior to January 1, 2006:

      Years of Service   Percentage of Account Vested
Less than 2
    0%
2
  25%
3
  50%
4
  75%
5 or more
  100%  

     (ii) effective January 1, 2006:

      Years of Service   Percentage of Account Vested
Less than 1
    0%
1
  20%
2
  40%
3
  60%
4
  80%
5 or more
  100%  

13

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     (c) The portion of a Participant’s SERA Discretionary Account which shall
be vested and nonforfeitable shall be determined in accordance with a separate
agreement entered into with the Participant.
     (d) Notwithstanding any provision herein to the contrary, a Participant’s
accounts shall be 100% vested and nonforfeitable upon such Participant’s death
or Normal Retirement Date.
     8.3. Forfeitures.
          The nonvested portion of the Company Pre-Tax Matching Account and SERA
Discretionary Account of a Participant whose employment with the Employer is
terminated prior to the earlier of his or her death or Normal Retirement Date
shall be forfeited immediately when such Participant has terminated employment.

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SECTION 9 — DISTRIBUTIONS AT DEATH
     9.1. Distributions Upon Death.
          Upon the death of a Participant while in the employment of the
Employer, the Participant’s accounts shall become fully vested (if not already
fully vested) and shall be distributed in a lump sum to his or her beneficiaries
in accordance with Sections 9.2 and 9.3. Upon the death of a Participant after
termination of his or her employment with the Employer but prior to distribution
under Section 7 or 8 being made, the vested portion of the Participant’s account
balances shall be distributed in a lump sum to his or her beneficiaries in
accordance with Sections 9.2 and 9.3. Such distribution shall be made 15 days
following the date of the Participant’s death or as soon as administratively
feasible thereafter, but in no event later than the last day of the calendar
year in which the date on which such distribution would be made in accordance
with the foregoing occurs or, if later the 15th day of the third calendar month
following such date. A distribution hereunder shall be based on the value of the
Participant’s accounts as of the Valuation Date as of which such distribution is
being made.
     9.2. Designation Of Beneficiary.
          Each Participant shall have the right to name and change primary and
contingent beneficiaries under the Plan in accordance with the rules and
procedures established by the Plan Administrator. Upon the death of the
Participant, the vested balance of his or her accounts shall be divided among
the primary or contingent beneficiaries designated by such Participant who
survive the Participant.
     9.3. Beneficiary Not Designated.
          In the event the Participant has either failed to designate a
beneficiary or no designated beneficiary survives him or her, the amounts
otherwise payable to a beneficiary under the provisions of this Section shall be
paid to the Participant’s surviving spouse or, if the Participant is not
survived by his or her spouse, to the Participant’s executor or administrator.

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SECTION 10 — ADMINISTRATION
     10.1 Plan Administrator.
          The Company shall be the Plan Administrator of the Plan within the
meaning of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), and, except as otherwise specifically set forth herein, shall be
solely responsible for and have sole control of the operation and administration
of the Plan and the establishment of such procedures and processes as may be
necessary for the efficient operation and administration of the Plan.
     10.2 Construction.
          The Plan Administrator shall have the discretionary authority to
construe, interpret and administer all provisions of the Plan and to determine a
Participant’s eligibility for benefits on a uniform, non-discriminatory basis in
similar fact situations.
     10.3 Delegation By The Plan Administrator.
          The Plan Administrator may appoint such agents as it may deem
necessary for the effective exercise of its duties, and may, to the extent not
inconsistent herewith, delegate to such agents any powers and duties, both
ministerial and discretionary, as the Plan Administrator may deem expedient or
appropriate.
     10.4 Records Of The Plan Administrator.
          All acts and determinations of the Plan Administrator shall be duly
recorded, and all such records, together with such other documents as may be
necessary for the proper administration of the Plan, shall be preserved in the
custody of the Plan Administrator. Such records and documents shall at all times
be open for inspection and copying by any person designated by the Board.
     10.5 Committee.
          The Board shall appoint a Committee of one (1) or more persons who
shall serve without remuneration at the pleasure of the Board to review claims
determinations in accordance with Sections 11.3 and 11.4 and to perform such
other duties as may be delegated to it by the Plan Administrator. Upon death,
resignation, removal or inability of a member of the Committee to continue, the
Board shall appoint a successor. The Committee shall appoint its own Chairman
from among the regular members of the Committee and shall also appoint a
Secretary who may be, but need not be, a member of the Committee. The Chief
Executive Officer of the Company may appoint persons as alternate members for
designated regular members of the Committee for the sole and limited purpose of
acting in place of such regular member at a Committee meeting called under
Section 10.7 which such regular member is unable to attend. Alternate members
shall serve without remuneration at the pleasure of the Chief Executive Officer.
If, at any time, the Board has not appointed a Committee, or there is no
Committee, then the Plan Administrator shall exercise all of the duties,
responsibilities, powers and authorities given to the Committee.

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     10.6 Decisions By The Committee.
          A decision of the Committee may be made by a written document signed
by a majority of the members of the Committee or by majority vote at a meeting
of the Committee. The Secretary of the Committee shall keep all records of
meetings and of any action by the Committee and any and all other records
desired by the Committee. No member of the Committee shall make any decision or
take any action covering exclusively his or her own benefits under the Plan. All
such matters shall be decided by a majority of the remaining members of the
Committee or, in the event of inability to obtain a majority, by the Board.
     10.7 Meetings Of The Committee.
          The Committee shall hold meetings upon such notice, at such place or
places and at such times as the Committee may determine. Meetings may be called
by the Chairman or any member of the Committee. A majority of the Committee
shall constitute a quorum for the transaction of business.
     10.8 Expenses.
          Any expense incurred by the Plan Administrator or the Committee with
respect to employment of agents, attorneys or other persons shall be paid by the
Employer.

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SECTION 11 — CLAIM PROCEDURES
     11.1 Claim.
          A Participant, beneficiary or other person who believes that he or she
is being denied a benefit to which he or she is entitled (hereinafter referred
to as “Claimant”), or his or her duly authorized representative, may file a
written request for such benefit with the Plan Administrator, setting forth his
or her claim. The request must be addressed to:
Director, Benefits Administration
Peabody Investments Corp. Supplemental Employee Retirement Account
701 Market Street
St. Louis, Missouri 63101-1826
     11.2 Claim Decision.
          Upon receipt of a claim, the Director, Benefits Administration shall
advise the Claimant that a reply will be forthcoming within a reasonable period
of time, but ordinarily not later than 90 days, and shall, in fact, deliver such
reply in writing within such period. However, the Director, Benefits
Administration may extend the reply period for an additional 90 days for
reasonable cause. If the reply period will be extended, the Director, Benefits
Administration shall advise the Claimant in writing during the initial 90-day
period indicating the special circumstances requiring an extension and the date
by which the Director, Benefits Administration expects to render the benefit
determination. If the claim is denied in whole or in part, the Director,
Benefits Administration will render a written opinion, using language calculated
to be understood by the Claimant, setting forth:
     (a) the specific reason or reasons for the denial;
     (b) the specific references to pertinent Plan provisions on which the
denial is based;
     (c) a description of any additional material or information necessary for
the Claimant to perfect the claim and an explanation why such material or such
information is necessary;
     (d) appropriate information as to the steps to be taken if the Claimant
wishes to submit the claim for review, including a statement of the Claimant’s
right to bring a civil action under Section 502(a) of ERISA following an adverse
benefit determination on review; and
     (e) the time limits for requesting a review of the denial under
Section 11.3 hereof and for the actual review of the denial under Section 11.4
hereof.
     11.3 Request For Review.
          Within 60 days after the receipt by the Claimant of the written
opinion described above, the Claimant may request in writing that the Committee
review the Director, Benefits Administration’s prior determination. Such request
must be addressed to:

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Committee
Peabody Investments Corp. Supplemental Employee Retirement Account
701 Market Street
St. Louis, Missouri 63101-1826
          The Claimant or his or her duly authorized representative may submit
written comments, documents, records or other information relating to the denied
claim, which such information shall be considered in the review under this
subsection without regard to whether such information was submitted or
considered in the initial benefit determination. The Claimant or his or her duly
authorized representative shall be provided, upon request and free of charge,
reasonable access to, and copies of, all documents, records and other
information which (i) was relied upon by the Director, Benefits Administration
in making its initial claims decision, (ii) was submitted, considered or
generated in the course of the Director, Benefits Administration making its
initial claims decision, without regard to whether such instrument was actually
relied upon by the Director, Benefits Administration in making its decision or
(iii) demonstrates compliance by the Director, Benefits Administration with its
administrative processes and safeguards designed to ensure and to verify that
benefit claims determinations are made in accordance with governing Plan
documents and that, where appropriate, the Plan provisions have been applied
consistently with respect to similarly situated claimants. If the Claimant does
not request a review of the Director, Benefits Administration’s determination by
the Committee within such 60-day period, he or she shall be barred and estopped
from challenging such determination.

  11.4   Review Of Decision.

          Within a reasonable period of time, ordinarily not later than 60 days,
after the Committee’s receipt of a request for review, it will review the
Director, Benefits Administration’s determination. If special circumstances
require that the 60-day time period be extended, the Committee will so notify
the Claimant within the initial 60-day period indicating the special
circumstances requiring an extension and the date by which the Committee expects
to render its decision on review, which shall be as soon as possible but not
later than 120 days after receipt of the request for review. In the event that
the Committee extends the determination period on review due to a Claimant’s
failure to submit information necessary to decide a claim, the period for making
the benefit determination on review shall not take into account the period
beginning on the date on which notification of extension is sent to the Claimant
and ending on the date on which notification of extension is sent to the
Claimant and ending on the date on which the Claimant responds to the request
for additional information. The Committee has discretionary authority to
determine a Claimant’s eligibility for benefits and to interpret the terms of
the Plan. Benefits under the Plan will be paid only if the Committee decides in
its discretion that the Claimant is entitled to such benefits. The decision of
the Committee shall be final and non-reviewable, unless found to be arbitrary
and capricious by a court of competent review. Such decision will be binding
upon the Employer and the Claimant.
          If the Committee makes an adverse benefit determination on review, the
Committee will render a written opinion, using language calculated to be
understood by the Claimant, setting forth:
     (a) the specific reason or reasons for the denial;

19

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     (b) the specific references to pertinent Plan provisions on which the
denial is based;
     (c) a statement that the Claimant is entitled to receive, upon request and
free of charge, reasonable access to, and copies of, all documents, records and
other information which (i) was relied upon by the Committee in making its
decision, (ii) was submitted, considered or generated in the course of the
Committee making its decision, without regard to whether such instrument was
actually relied upon by the Committee in making its decision or
(iii) demonstrates compliance by the Committee with its administrative processes
and safeguards designed to ensure and to verify that benefit claims
determinations are made in accordance with governing Plan documents, and that,
where appropriate, the Plan provisions have been applied consistently with
respect to similarly situated claimants; and
     (d) a statement of the Claimant’s right to bring a civil action under
Section 502(a) of ERISA following the adverse benefit determination on such
review.

20

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SECTION 12 — AMENDMENT AND TERMINATION

  12.1   Amendment.

          The Company shall have the right, by a resolution adopted by action of
the Board or anyone to whom corporate authority to amend the Plan has been
delegated by the Board, at any time and from time to time to amend, in whole or
in part, any or all of the provisions of the Plan. No such amendment, however,
shall cause any reduction in the amount credited to any Participant’s account.

  12.2   Termination; Discontinuance Of Credits.

          The Company shall have the right at any time to terminate this Plan.
Upon termination, partial termination, or complete discontinuance of credits,
all Participants’ accounts (or, in the case of a partial termination, the
accounts of all affected Participants) shall become fully vested, and shall not
thereafter be subject to forfeiture.

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SECTION 13 — MISCELLANEOUS

  13.1   Participants’ Rights.

          Neither the establishment of the Plan hereby created, nor any
modification thereof, nor the creation of any fund or account, nor the payment
of any benefits, shall be construed as giving to any Participant or other person
any legal or equitable right against the Employer, any officer or Employee
thereof or the Board except as herein provided. Under no circumstances shall the
terms of employment of any Participant be modified or in any way affected
hereby.

  13.2   Spendthrift Clause.

          No benefit or beneficial interest provided under the Plan shall be
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance or charge, either voluntary or involuntary, and any attempt
to so alienate, anticipate, sell, transfer, assign, pledge, encumber or charge
the same shall be null and void. No such benefit or beneficial interest shall be
liable for or subject to the debts, contracts, liabilities, engagements, or
torts of any person to whom such benefits or funds are or may be payable.
          Notwithstanding the foregoing, if, at such time as the Participant or
his or her beneficiary becomes entitled to benefit payments hereunder, the
Participant has any debt, obligation or other liability representing an amount
owing to the Company or any other Employer, and if such debt, obligation or
other liability is due and owing at the time benefit payments are payable
hereunder, the Company may offset the amount owed it or the other Employer
against the amount of benefits otherwise payable hereunder.

  13.3   Delegation Of Authority By Employer.

          Whenever the Employer, under the terms of this Plan, is permitted or
required to do or perform any act, it shall be done and performed by any officer
duly authorized by the board of directors of the Employer.

  13.4   Distributions To Minors.

          In the event that any portion of the Plan becomes distributable to a
minor or other person under legal disability (as determined by the laws of the
jurisdiction in which he or she then resides), the Plan Administrator shall
direct that such distribution be made to the legal representative of such minor
or other person.

  13.5   Construction Of Plan.

          This Plan shall be construed according to the laws of the State of
Missouri, and all provisions of the Plan shall be administered according to the
laws of such state.

  13.6   Gender, Number And Headings.

          Whenever any words are used herein in the masculine gender, they shall
be construed as though they were also used in the feminine gender in all cases
where they would so apply, and wherever any words are used herein in the
singular form, they shall be construed as

22

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though they were also used in the plural form in all cases where they would so
apply. Headings of Sections and Subsections are inserted for convenience of
reference, constitute no part of the Plan and are not to be considered in the
construction of the Plan.

  13.7   Separability Of Provisions.

          If any provision of this Plan shall be for any reason invalid or
unenforceable, the remaining provisions shall nevertheless be carried into
effect.

  13.8   Service Of Process.

          The General Counsel of the Company shall constitute the Plan’s agent
for service of process.

  13.9.   Qualified Domestic Relations Order.

          Notwithstanding anything in the Plan to the contrary, benefits may be
distributed in accordance with the terms of an order that would constitute a
qualified domestic relations order, within the meaning of Section 414(p) of the
Code, with respect to the Basic Plan, as determined thereunder.

  13.10   No Trust.

          Nothing contained in this Plan, and no action taken pursuant to its
provisions, shall create, or be construed to create, a trust of any kind, or a
fiduciary relationship between the Company or the Employer and the Participants,
their beneficiaries hereunder or any other person.
          IN WITNESS WHEREOF, the Company has caused this Amendment to be
executed by one of its duly authorized officers this 6 day of April, 2007.

             
 
  PEABODY INVESTMENTS CORP.    
 
           
 
  By   /s/ Sharon Fiehler    
 
           

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EXHIBIT A
Appalachia Mine Services, LLC
Arclar Company, LLC (effective January 31, 2006)
Big Ridge, Inc. (effective January 31, 2006)
Big Sky Coal Company
Black Beauty Coal Company
Black Stallion Coal Company, LLC
Bluegrass Coal Company
COALSALES, LLC
COALSALES II, LLC
COALTRADE, LLC
Colony Bay Coal Company
Dodge Hill Mining Company, LLC
Eastern Associated Coal Corp.
Grand Eagle Mining, Inc.
Highland Mining Company
Highwall Mining Services Company
HMC Mining, LLC
Lee Ranch Coal Company
Martinka Coal Company
Ohio County Coal Company
Patriot Coal Company, L.P.
Peabody Coal Company
Peabody Western Coal Company
Powder River Coal Company
Pine Ridge Coal Company
Rivers Edge Mining, Inc.
Seneca Coal Company
Twentymile Coal Company

24