Exhibit 10.3
Summary of the Award Levels and Performance Goals
for the Named Executive Officers
of Arch Coal, Inc.

                              Incentive Award as a Percentage of Base Salary (1)
(2) Name and Title of Executive Officer   Minimum   Target   Maximum
Steven F. Leer
    18.75 %     75.00 %     150.00 %
President and Chief Executive Officer
                       
John W. Eaves
    15.00 %     60.00 %     120.00 %
Executive Vice President and Chief Operating Officer
                       
Robert J. Messey
    12.50 %     50.00 %     100.00 %
Senior Vice President and Chief Financial Officer
                       
Robert G. Jones
    12.50 %     50.00 %     100.00 %
Vice President — Law, General Counsel and Secretary
                       
C. Henry Besten
Senior Vice President — Strategic Development
    12.50 %     50.00 %     100.00 %

 

(1)   For 2006, upon the recommendation of the Personnel and Compensation
Committee, Board of Directors approved certain performance objectives for the
executive officers based on adjusted earnings before interest, taxes,
depreciation, and amortization (adjusted EBITDA), earnings per share (EPS),
safety, and environmental compliance.