EXECUTION COPY

TRANSITION AGREEMENT
This TRANSITION AGREEMENT (the “Agreement”) is entered into effective April 29,
2013 by and between Peabody Energy Corporation, a Delaware corporation (the
“Company”), and Gregory H. Boyce (“Executive”).
RECITALS
Executive and the Company are parties to the 2009 Restated Employment Agreement
(the “Employment Agreement”) pursuant to which Executive currently serves as the
Company's Chairman and Chief Executive Officer. Executive and the Company desire
to provide in this Agreement the terms that will apply during the transition to
Executive's successor (or successors) as Chairman and Chief Executive of the
Company, all on the terms and subject to the conditions set forth herein.
It is therefore hereby agreed by and between the parties as follows (capitalized
terms used in this Agreement without definition to have the meanings assigned to
them in the Employment Agreement):
1.Term of Employment. The Employment Agreement provides for a term of employment
that began on December 31, 2009 and will end on December 31, 2014, subject to
earlier termination as described in Section 6 of the Employment Agreement.
Subject to the other terms and conditions of this Agreement, the Term of
Employment is hereby extended to December 31, 2015.
2.Transition of Duties, Titles and Responsibilities.
a.Transition Schedule. Executive shall continue as Chairman and Chief Executive
Officer of the Company through December 31, 2014 or such earlier date as his
successor as Chief Executive Officer is appointed (the earlier of such dates is
referred to as the “CEO Transition Date”). Upon appointment of the new Chief
Executive Officer and continuing until the earlier of the appointment of
Executive's successor as Chairman of the Board and December 31, 2015, Executive
will continue as a full-time employee of the Company in the position of
Executive Chairman. Effective upon the appointment of Executive's successor as
Chairman of the Board, Executive's service as an employee and member of the
Board will cease, and the Term of Employment will end (the date of such
appointment is referred to as the “Separation Date”). The termination of
Executive's service as a result of the appointment of his successors as Chief
Executive Officer and Chairman of the Board will be considered a termination of
Executive's employment without Cause for purposes of the Employment Agreement,
but Executive will not be considered to experience a termination of employment
as a result of the appointment of his successor as Chief Executive Officer for
so long as the Company has not terminated his service as Executive Chairman.
b.Responsibilities. As Executive Chairman, Executive shall report to the Board
and shall have the customary powers, responsibilities and authority of
executives holding the position of Executive Chairman in corporations of the
size, type and nature of the Company, as it exists from time to time, and as are
assigned by the Board. Because the Board has authority

1

--------------------------------------------------------------------------------

EXECUTION COPY

to separate the roles of Chief Executive Officer and Chairman of the Board, the
new Chief Executive Officer and new Chairman will not necessarily be the same
person.
c.Separation from Service. Executive and the Company understand and intend that
Executive will experience a “separation of service” for purposes of Section 409A
(determined using the rules of construction set forth in Section 6.2(c) of the
Employment Agreement) on the Separation Date, and not before.
3.Compensation.
a.Calendar year 2014. Executive's Base Salary for 2014 will be $1,225,660 per
annum, and his target and maximum Bonus opportunities and Long-Term Incentive
Award for calendar year 2014 shall be determined in accordance with the
Employment Agreement. For the avoidance of doubt, it is noted that if the CEO
Transition Date occurs before December 31, 2014, Executive shall continue to
receive through December 31, 2014 all of the foregoing elements of compensation
as though his employment as Chairman and Chief Executive Officer had continued
through December 31, 2014.
b.Calendar year 2015. For so much of calendar year 2015 as he shall be employed
by the Company, Executive shall be paid Base Salary at the rate of $900,000 per
annum. Executive's target Bonus opportunity for calendar year 2015 shall be 100%
of his Base Salary, and his maximum Bonus Opportunity shall be 200% of his Base
Salary. The grant date value for Executive's Long-Term Incentive Awards to be
made in 2015 shall be 300% of his Base Salary for 2015. In all other respects,
Executive's Base Salary, Bonus and Long-Term Incentive Awards for 2015 shall be
governed by the terms of Sections 3.1, 3.2 and 3.3 of the Employment Agreement,
respectively; provided, however, that except as provided Sections 4(d) and 4(e)
below, in no event will Executive's Long-Term Incentive Awards for 2015 provide
for accelerated or continued vesting in the event of Retirement or other
resignation. For the avoidance of doubt, it is noted that the Long-Term
Incentive Awards referred to in this Section 3(b) are separate and distinct from
the Special RSU Awards referred to in Section 3(d).
c.Benefits and Perquisites. During the Term of Employment, Executive shall
continue to be eligible for employee benefits and perquisites as provided in
Section 4 of the Employment Agreement. Such benefits and perquisites shall
include the continuation of Executive's existing security arrangements and the
right to travel on Company aircraft in a manner consistent with past practice;
provided, however that Executive shall not be entitled to the continuation of
security arrangements or use of Company aircraft after the Separation Date; and
provided, further, that Executive shall reimburse the Company to the extent the
“incremental cost”, as computed in accordance with Item 402(c)(2)(ix) of
Regulation S‑K promulgated by the Securities and Exchange Commission (or any
successor regulation), of Executive's non-business use of Company or chartered
aircraft during 2015 exceeds $120,000 on an annualized basis.

2

--------------------------------------------------------------------------------

EXECUTION COPY

d.Special Equity Awards: Grant. Provided that Executive's employment continues
through the applicable grant dates described herein, Executive shall be eligible
to receive three grants of restricted stock units (“RSUs”) as follows:
i.Within 30 days after the date of this Agreement (or, if such period falls
within a “blackout period” applicable to the Company's senior executives
generally or another period of limitation to the granting of equity awards, the
earliest practicable date thereafter), Executive shall receive a grant of that
number of RSUs determined by dividing $1,000,000 by the closing price for the
Company's common stock as reported on the New York Stock Exchange on the grant
date and rounding to the nearest whole number (the “2013 RSU Award”);
ii.On each of the dates in 2014 and 2015 when the Special Committee makes
Long-Term Incentive Awards generally to the Company's senior executives,
Executive shall receive a grant of that number of RSUs determined by dividing
$1,000,000 by the closing price for the Company's common stock on the grant date
and rounding to the nearest whole number (the “2014 RSU Award” and “2015 RSU
Award”, respectively and, collectively with the 2013 RSU Award, the “Special RSU
Awards”).
The Special RSU Awards will be granted under the Company's 2011 Long-Term Equity
Incentive Plan, will vest as provided in Section 3(e) below and will be settled
as provided in Section 3(f) below. The Special RSU Awards will be governed by
separate grant agreements whose terms shall be consistent with this Agreement.
Executive's right to receive a Special RSU Award or a Substitute Cash Award (as
defined in Section 3(g) below) shall in all cases be subject to Executive's
compliance with Section 13 of the Employment Agreement through the applicable
grant date. Executive acknowledges and agrees that the Special RSU Awards will
not be considered Long-Term Incentive Awards for purposes of the Employment
Agreement or this Agreement and, as such, will not vest or continue to vest if
Executive terminates his employment for Good Reason.
e.Special RSU Awards: Vesting.
i.Subject to the other terms and conditions of this Agreement (including without
limitation Section 4(e) below): (A) the 2013 and 2014 RSU Awards will vest as to
50% of the RSUs included in each such Special RSU Award on the CEO Transition
Date and as to the remaining 50% of the RSUs included in each such Special RSU
Award on the date of the appointment of Executive's successor as Chairman of the
Board; and (B) the 2015 RSU Award will vest as to 100% of the RSUs included in
such Special RSU Award on the date of the appointment of Executive's successor
as Chairman of the Board; provided, however, that the Special RSU Awards,
whether or not vested, will be forfeited in their entirety if Executive's
employment with the Company terminates by reason of Retirement or other
resignation on or before December 31, 2014.
ii.The vesting of the Special RSU Awards shall be conditioned in each case on
Executive's continued employment with the Company through the

3

--------------------------------------------------------------------------------

EXECUTION COPY

applicable vesting date pursuant to the terms of this Agreement, and any RSUs
that have not vested as of the date of Executive's termination of employment
shall be forfeited without any payment therefor, and Executive shall have no
further rights or interest therein; provided, however, Executive's unvested
Special RSU Awards that are outstanding will vest immediately as of the date (A)
the Company terminates Executive's employment without Cause (including as
provided in Section 2(a) above); (B) Executive's employment terminates as a
result of death or Disability; or (C) Executive terminates employment with the
Company on December 31, 2015 (such vesting as provided in Section 4(e)(iii)).
f.Settlement of Special RSU Awards; Holding Requirement. Executive's Special RSU
Awards, to the extent vested, will be settled by delivery of the number of
shares of the Company's common stock underlying such vested awards, net of
shares withheld for taxes, on the first day of the seventh month following the
Separation Date, provided that settlement shall be made only if (and Executive
shall forfeit his entitlement to the Special RSU Awards unless) by such date
Executive has executed and delivered to the Company a general release of the
Company and its officers, employees directors and affiliates in the form
attached to this Agreement as Annex A (a “General Release”), and the General
Release has become irrevocable. Except for shares withheld for the payment of
taxes at the time that Special RSUs Awards are settled (or, if required under
applicable law, upon earlier vesting), Executive shall not sell, gift, transfer,
pledge or otherwise dispose of or encumber any shares of the Company's common
stock delivered upon settlement of any Special RSU Award before the first
anniversary of the Separation Date. The foregoing restrictions shall lapse
immediately in the event of Executive's death. In addition, if Executive
materially breaches any of the covenants set forth in Section 13 of the
Employment Agreement before the first anniversary of the Separation Date, the
Company may require Executive to return to the Company and relinquish his
interest in any or all shares delivered to Executive upon settlement of the
Special RSU Awards and to repay any cash payments made pursuant to any
Substitute Cash Awards (as defined herein).
g.Substitute Cash Awards. If, prior to any of the award dates specified in
Section 3(d) above for a Special RSU Award, (i) the Company terminates
Executive's employment without Cause, or (ii) Executive's employment terminates
as a result of death or Disability, then in either such case a Special RSU Award
shall not be made to Executive on the applicable award date or any later date
specified in Section 3(d) for a Special RSU Award, and Executive shall receive
in lieu thereof, on the applicable award date (or, if there is more than one, on
each of the applicable award dates) (but subject in all cases to the last
sentence of Section 3(f) above), a cash payment of $1,000,000 (a “Substitute
Cash Award”); provided, however, that if Executive is one of the Company's
“specified employees” for purposes of Section 409A at the time of his
termination of employment, with the result that payment of a Substitute Cash
Award may not be made on the applicable award date without causing Executive to
be subject to additional tax or interest under Section 409A, then payment will
be made instead on the first business day of the seventh month following the
Separation Date. Payment of a Substitute Cash Award shall be made only if (and
Executive shall forfeit his entitlement to the relevant Substitute RSU Award
unless) by the date specified for payment Executive has executed

4

--------------------------------------------------------------------------------

EXECUTION COPY

and delivered to the Company a General Release, and the General Release has
become irrevocable.
4.Termination of Employment. In addition to the amounts paid pursuant to the
surviving provisions of the Employment Agreement (see Section 6 hereof) and the
provisions of this Agreement relating to Special RSU Awards and Substitute Cash
Awards, Executive's rights upon termination of employment shall be as follows:
a.On or before December 31, 2014. If Executive's employment terminates for any
reason on or prior to December 31, 2014, Executive's rights shall be as set
forth in the Employment Agreement. (For the avoidance of doubt, it is noted that
such rights do not take account of, or apply to, the extension of the Term of
Employment to December 31, 2015.)
b.Death or Disability during Calendar Year 2015. If Executive's employment
terminates due to death or Disability at any time during calendar year 2015,
Executive's rights shall be as set forth in Section 6.4 of the Employment
Agreement. In addition, Executive's unvested Long-Term Incentive Awards that are
outstanding on the Separation Date will continue to vest in accordance with
their terms, subject to Executive's compliance with Section 13 of the Employment
Agreement, as though Executive remained employed with the Company after the
Separation Date through the vesting period applicable to such awards, and will
be exercisable and/or payable as provided in the applicable plan and/or award
agreement as though Executive remained so employed.
c.Termination for Cause or Resignation during Calendar Year 2015. If Executive's
employment with the Company is terminated as a result of Executive's Retirement
or other resignation during calendar year 2015, Executive shall be paid (i) the
Accrued Obligations as set forth in Section 6.1 of the Employment Agreement, and
(ii) if the Separation Date precedes the payment date for the Bonus earned by
Executive for 2014, the Bonus Executive earned for 2014. In addition to the
amount due pursuant to the preceding sentence, in the event of such a
termination of Executive's employment, Executive's unvested Long-Term Incentive
Awards that were granted prior to January 1, 2015, and that remain outstanding
on the Separation Date, will continue to vest in accordance with their terms,
subject to Executive's compliance with Section 13 of the Employment Agreement,
as though Executive remained employed with the Company after the Separation Date
through the vesting period applicable to such awards, and will be exercisable
and/or payable as provided in the applicable plan and/or award agreement as
though Executive remained so employed. If Executive's employment is terminated
by the Company for Cause during calendar year 2015, Executive shall be paid only
the Accrued Obligations as set forth in Section 6.1 of the Employment Agreement.
d.Termination not for Cause during Calendar Year 2015. If the Company terminates
Executive's employment without Cause (including as provided in Section 2(a)
above) during calendar year 2015, then:
i.Executive shall be entitled to be paid the Accrued Obligations;

5

--------------------------------------------------------------------------------

EXECUTION COPY

ii.If the Separation Date precedes the payment date for the Bonus earned by
Executive for 2014, the Bonus Executive earned for 2014;
iii.In addition, the Company shall pay to Executive a prorated Bonus for 2015
(the “2015 Prorated Bonus”) calculated as the Bonus, determined in accordance
with Section 3(b) above, that Executive would have received in respect of 2015
based on actual performance multiplied by a fraction, the numerator of which is
the number of business days during 2015 that Executive was employed and the
denominator of which is the total number of business days during 2015. The 2015
Prorated Bonus shall be payable when annual bonuses are paid to other senior
executives of the Company, but in no event later than March 15, 2016; and
iv.Executive's unvested Long-Term Incentive Awards that are outstanding on the
Separation Date will continue to vest in accordance with their terms, subject to
Executive's compliance with Section 13 of the Employment Agreement, as though
Executive remained employed with the Company after the Separation Date through
the vesting period applicable to such awards, and will be exercisable and/or
payable as provided in the applicable plan and/or award agreement as though
Executive remained so employed.
For the purpose of this Agreement, on or after January 1, 2015, Executive shall
be treated as if he was terminated by the Company without Cause to the extent
that: either (A) without Executive's written consent, the Company relocates
Executive's primary office so that it is no longer within 50 miles of the
Company's current offices in St. Louis, Missouri or Phoenix, Arizona; or (B) (I)
the Company fails to provide Executive with any payment or employee benefit or
perquisite (as provided in Section 3(c) above) due pursuant hereto or fails to
obtain a written assumption of its obligations under this Agreement by a
successor owner of substantially all of the Company's assets in connection with
a merger, consolidation, asset sale, liquidation, combination or other similar
transaction; (II) Executive notifies the Company of such failure in writing
within sixty (60) days of the occurrence of such failure; (III) the Company
fails to cure such failure within thirty (30) days of receipt of the written
notice described in the foregoing clause (II); and (IV) Executive terminates his
employment with the Company within fifteen (15) days of the expiration of the
cure period described in the foregoing clause (III) by delivering written notice
of such termination to the Company. To the extent Executive terminates
employment pursuant to the preceding sentence, the General Release shall not
require a release of Executive's claims for the salary or benefits that the
Company failed to provide pursuant to clause (B) of the preceding sentence, but
so long as it has become irrevocable, such General Release shall nonetheless
meet the release requirements for purposes of (1) issuing the shares that are
required to be issued to Executive pursuant to Section 3(f) hereof, and (2) if
applicable, making any Substitute Cash Award to Executive required by Section
3(g) hereof.
e.Continued Employment through December 31, 2015. In the event that Executive's
employment with the Company continues through December 31, 2015:

6

--------------------------------------------------------------------------------

EXECUTION COPY

i.Executive shall be entitled to a full year bonus for 2015, determined in
accordance with Section 3(b) above;
ii.upon Executive's termination of employment unvested Long-Term Incentive
Awards that are outstanding on his Separation Date will continue to vest in
accordance with their terms, subject to Executive's compliance with Section 13
of the Employment Agreement, as though Executive remained employed with the
Company after the Separation Date through the vesting period applicable to such
awards, and will be exercisable and/or payable as provided in the applicable
plan and/or award agreement as though Executive remained so employed; and
iii.the Special RSU awards will be vested in full as of December 31, 2015 and
will be paid as provided in Section 3(f) above.
Except as set forth in this Agreement, Executive shall have no other rights to
severance, compensation or benefits following his Separation from Service during
calendar year 2015, and in particular Executive and the Company acknowledge and
agree that Sections 6.2 and 6.5 of the Employment Agreement shall not apply if
Executive's employment terminates on or after January 1, 2015.
5.Resignation from the Board. Upon Executive's termination of employment as
Executive Chairman for any reason, whether at the end of the Term of Employment
or otherwise, Executive shall be deemed to have resigned from the Board and to
have resigned from the board of directors or similar governing body, and as an
officer or employee, of any of the Company's subsidiaries and affiliates where
Executive held such positions, and to have executed any documents necessary to
effect such resignation.
6.Employment Agreement. This Agreement amends the Employment Agreement, but
except as modified hereby, the Employment Agreement will remain in full force
and effect. In particular, Executive acknowledges and agrees that the covenants
set forth in Section 13 of the Employment will continue in effect for the
periods specified therein, it being understood and agreed that the Term of
Employment referred to in such Section 13 shall be the Term of Employment as
modified by Section 1 of this Agreement (that is, December 31, 2015 unless
terminated earlier). Without limiting the generality of the preceding sentence,
nothing in this Agreement is intended, or will be construed, to impair
Executive's rights under Sections 3.4 and 3.5 of the Employment Agreement.
Executive further acknowledges and agrees that neither the entering into of this
Agreement nor the taking of any action or consummation of any transaction
contemplated by this Agreement (including without limitation Executive's ceasing
to hold the position of Chief Executive Officer of the Company or the reduction
in Executive's current Base Salary and Bonus opportunity provided for in Section
3(b) of this Agreement) shall constitute Good Reason for purposes of the
Employment Agreement. All references to a successor's appointment to a position
or office shall be deemed to refer to and include the successor's assumption of
such position or office. In the event of any conflict between the Employment
Agreement and this Agreement, this Agreement will control.
7.Counterparts. This Agreement may be executed in two or more counterparts, each
of which shall be considered an original.

7

--------------------------------------------------------------------------------

EXECUTION COPY

[SIGNATURE PAGE FOLLOWS]

8

--------------------------------------------------------------------------------

EXECUTION COPY

 
PEABODY ENERGY CORPORATION
 
 
 
By: /s/ William A. Coley
 
William A. Coley
Compensation Committee Chair
 
 
 
EXECUTIVE
 
 
 
/s/ Gregory H. Boyce
 
Gregory H. Boyce

9

--------------------------------------------------------------------------------

EXECUTION COPY

ANNEX A
Form of General Release

This Agreement (“Release”) is entered into in connection with your
termination/resignation from Peabody Energy Corporation(the “Company”) on [DATE
OF TERMINATION] (“Termination Date”).
For the consideration set forth in the Transition Agreement between you and the
Company dated as of April      , 2013 (your “Transition Agreement”), which
constitute monies and benefits to which you are not already entitled, you agree
as follows:
1.
You agree that, upon the request of the Company, you will cooperate in any
pending or future litigation or governmental inquiry which involves any
interests of the Company, its parent companies and their subsidiaries or
affiliates (collectively the “Companies”), to which you are not a party adverse
to the Companies and in relation to which you have knowledge or information.
Upon the request of and at the expense of the Companies, and upon reasonable
notice, you will testify truthfully in such proceedings, in any jurisdiction,
whether or not such testimony can otherwise be compelled. The Companies will
attempt to schedule such testimony in a manner that does not interfere with your
professional and/or personal obligations, but cannot guarantee such scheduling.

2.
Subject to the provisions of paragraph 7, you hereby irrevocably and
unconditionally waive, on behalf of yourself and each of your heirs, executors,
administrators, representatives, agents, insurers, successors and assigns
(collectively, the “Releasors”) any and all claims, demands, causes of action,
costs and expenses for damages (whether known or unknown) which you had, now
have or may have against the Companies on any grounds whatsoever, whether known
or not at the time of execution of this Agreement, including without limitation
any claims arising out of your employment with, or other service as an officer
or director of, any of the Companies or in connection with the termination of
such employment or other service, and, on behalf of yourself and the other
Releasors, hereby release and discharge forever the Companies and all of their
predecessors, successors, assigns and their respective current and former
employees, officers, directors, shareholders, insurers, agents and counsel
(hereinafter, with the Companies, collectively referred to as the “Releasees”)
from any such claims or demands. This Release includes, but is not limited to,
the following: (i) any claim under any contract, tort, or any other local,
state, or federal statutory or common law, including, but not limited to, any
claim that the Releasees, jointly or severally, breached any contract or
promise, express or implied, or any term or condition of your employment, and
any claim for promissory estoppel or wrongful discharge arising out of your
employment with the Companies or any of the Releasees and/or the termination of
such employment; (ii) any claim of unjust, wrongful, or tortious discharge
(including any claim of fraud, negligence, retaliation for whistle blowing, or
intentional infliction of emotional distress); (iii) any claim of defamation or
other common-law action; (iv) any claims of discrimination on any basis,
including, without limitation, age, appearance, color, disability, gender
identification, marital status, military status, national origin, political
affiliation, race, religion, sex, sexual orientation, veteran status, or any
other characteristic (including, but not limited to, status as a
“whistleblower”), under any federal, state, or local statute, ordinance, order,
or law, including, but not limited to, the Civil Rights Act of 1964, 42 U.S.C. §
2000e et seq., the Civil Rights Act of 1866, 42 U.S.C. § 1981, the Age
Discrimination in Employment Act, 29 U.S.C. § 621 et seq., (including but not
limited to the Older Worker's Benefit Protection Act), the Americans with
Disabilities Act of 1990, 42 U.S.C. § 12101 et seq., the Fair Labor Standards
Act of 1938, 29 U.S.C. § 201 et seq., the Rehabilitation Act of 1973, 29 U.S.C.
§ 701 et seq., the Family and Medical Leave Act, 29 U.S.C. § 2601, the Employee
Retirement Income Security Act, 29 U.S.C. § 1001, et seq., the Lilly Ledbetter
Fair Pay Act of 2009, the Pregnancy Discrimination Act of 1978, or the Worker
Adjustment and Retraining Notification Act, 29 U.S.C. 210l, et seq., all as
amended; (v) any claim under any Missouri employment law; and/or (vi) any other
claim relating to your employment or other service as an officer or director,
the termination of your employment or such other service or the Releasees'
failure to reemploy you under any federal, state or local statute, ordinance,
order or law. Except as provided in paragraph 7 below, this Release is intended
to cover all possible legal and/or equitable relief, including, but not limited
to, reinstatement, wages, back pay, front pay, benefits, perquisites,
compensatory damages, punitive damages, liquidated damages, damages for pain or
suffering, damages for emotional distress, damages for loss of consortium, and
attorneys' fees. You further agree not to file any claim, complaint, or cause of
action or lawsuit against the Releasees that you have released in this Release.
You understand and acknowledge that, except as provided in paragraph 7 and for
claims arising after the date hereof, the provisions

10

--------------------------------------------------------------------------------

EXECUTION COPY

of this Paragraph mean that neither you nor any of the Releasors can bring a
lawsuit against the Releasees for any reason.
3.
You acknowledge that, as of the date you sign this Release: (a) you have
properly disclosed to the Companies any work-related injury(s); (b) you have
been paid in full all wages due and owing to you for any and all work performed
for the Companies; and (c) you have properly disclosed to the Companies all
facts or circumstances of which you are aware that may constitute a violation by
the Companies of the Fair Labor Standards Act or a state law equivalent.

4.
You understand that you are not waiving any rights or claims that may arise
after this document has been signed by you. In exchange for signing this
document, you will be given the rights and benefits provided herein and in your
Transition Agreement, which constitute monies and benefits to which you are not
already entitled. You further represent and agree that, except as enumerated in
your Transition Agreement, as well as any surviving obligations in your
Employment Agreement, you are not entitled to any other payment or remuneration
of any kind.

5.
You hereby acknowledge that you have been advised to consult with an attorney
before you sign this document and that, for a period of seven (7) days after the
date on which you execute this Release, you may revoke this Release, but such
revocation would only apply to claims arising under the Age Discrimination in
Employment Act, 29 U.S.C. § 621 et seq., (including but not limited to the Older
Worker's Benefit Protection Act); that this Release is not effective or
enforceable with respect to the Age Discrimination in Employment Act, 29 U.S.C.
§ 621 et seq., (including but not limited to the Older Worker's Benefit
Protection Act) until such seven (7) day period has expired; that, if you
exercise your right to revoke this Release within seven (7) days after signing
this Release, all provisions contained in this Release relating to the Age
Discrimination in Employment Act, 29 U.S.C. § 621 et seq., (including but not
limited to the Older Worker's Benefit Protection Act) shall be null and void and
the contents of this Release may not be used by either party for any such
purpose, but that it shall remain fully in effect and enforceable for all other
purposes; that, should you decide to revoke this Release for the purposes set
forth in this paragraph 5, such revocation must be in writing and delivered to
Vice President of Corporate and International Human Resources, Peabody Energy,
701 Market Street, St. Louis, MO 63101, by personal delivery or by first class
mail, postage prepaid, or certified mail within the same seven (7) day period
(if mailed, the date of the postmark or certification will be used to determine
the date of revocation); and that should any such revocation occur, you will
forfeit your right to receive any and all benefits (including severance
payments) that are to be paid or provided pursuant to your Transition Agreement
to the extent such benefits are contingent upon execution and non-revocation of
a release of claims against some or all of the Releasees.

6.
You acknowledge that you have been informed that you have up to twenty-one (21)
days within which to consider this Release prior to your execution of it.

7.
It is specifically understood and agreed that this Release has no effect on your
rights: (a) with regard to claims that cannot be waived by law; however, you
acknowledge and agree that you waive any right to monetary recovery should any
federal, state, or local administrative agency or commission pursue any claims
on your behalf arising out of or related to your employment with and/or
separation from the Company; (b) to receive retirement benefits from the
Company's retirement plans accrued and vested on or prior to the Termination
Date; (c) to continue participation in any Company health insurance plan
pursuant to the provisions of COBRA following the Termination Date; (d) to
continue participation in all other applicable Company benefit plans until the
Termination Date, subject to the terms of such plans as they may exist from time
to time; and (e) with regard to a workers' compensation claim, if applicable.
You further acknowledge and agree that your participation in any of the
Company's disability, life insurance, accidental death and dismemberment, and/or
other related plans shall cease in accordance with the terms of the respective
plan, and that you have been informed that the Company's Long Term Disability
plan requires as a condition of participation that the employee be “actively at
work” and that you will not, therefore, be eligible to continue to participate
in such plan after the Termination Date, except as a result of your exercising
any conversion rights as contained in the plan. Furthermore, nothing in this
Release modifies or affects any rights that you have (i) to be indemnified and
held harmless for your acts and omissions to act as an employee of the Company
under any insurance policy procured and maintained by the Company, any
Indemnification Agreement with or indemnification policy of the Company or of
any other party, as in effect at any time and from time to time (including, but
not limited to, the Company's Amended and Restated By-Laws, Article IV,
Indemnification), or under applicable law, (ii) to be paid amounts due pursuant
to, and to be provided benefits required to be provided by your Transition
Agreement and your Employment Agreement, incorporated herein by reference.

11

--------------------------------------------------------------------------------

EXECUTION COPY

8.
You expressly represent that you have relied on no representations or statements
other than those, which appear in your Transition Agreement. There shall be no
modifications or amendments to your Transition Agreement unless they are in
writing and signed by all of the parties.

9.
You agree to relinquish any and all rights to reemployment or reinstatement as
an employee with the Companies and you agree not to apply or otherwise seek
employment or reemployment with the Companies in any capacity. The Companies
shall have the right to reject without cause any application for future
employment made by you.

10.
You hereby reaffirm your obligations pursuant to Section 13 of your Employment
Agreement. In addition, you hereby reaffirm all other post-employment
obligations you have pursuant to your Transition Agreement.

11.
You expressly represent that you have not assigned any claim being released
under this Release.

12.
You expressly represent that you have not filed, and you agree not to initiate
or cause to be initiated on your behalf, any complaint, charge, claim or
proceeding against the Releasees before any local, state or federal agency,
court or other body relating to your employment or other service as an officer
or director of the Companies or the termination of your employment or such other
service, other than with respect to claims which by virtue of paragraph 7 are
not released (each, individually, a “Proceeding”), and you agree not to
participate voluntarily in any Proceeding. You hereby waive any right you may
have to benefit in any manner from any relief (whether monetary or otherwise)
arising out of any Proceeding. The preceding two sentences, however, shall not
preclude you from filing a charge with or participating in any administrative
investigation or proceeding by the Equal Employment Opportunity Commission or
another Fair Employment Practices agency, but you are waiving your right to
recover money in connection with any such charge or investigation.

13.
You acknowledge that this Release provided hereunder does not constitute and
should not be construed as an admission of liability or wrongdoing by the
Releasees with respect to any claim asserted by you or by any other employee.
You also understand that, by signing this Release, you are giving up any rights
to receive any remedial and/or monetary relief (for example, reinstatement, back
pay, front pay, emotional distress damages and punitive damages) as a
consequence of any charge or complaint filed with the EEOC or any other human
rights commission.

14.
You represent and warrant that, unless otherwise agreed between you and the
Company and except for any materials that you have the right to retain under
applicable law, you have made reasonable efforts to return all Company property
in your possession, including without limitation all Company files, access keys
and codes, desk keys, ID badges, computers, records, manuals, electronic
devices, computer programs, papers, electronically stored information or
documents, telephones and credit cards, and that you have not knowingly retained
copies of any Company property, either electronically or in print.

12

--------------------------------------------------------------------------------

EXECUTION COPY

15.
You and the Companies agree that this Release shall be construed under the laws
of the state of Missouri, except as otherwise preempted by the Employee
Retirement Income Security Act of 1974.

16.
You understand that, if any of the provisions of this Release are declared
invalid, void or unenforceable, in whole or in part, all other provisions of
this Release shall remain in full force and effect.

17.
You understand that other than your Transition Agreement, your Employment
Agreement and your Indemnification Agreement, this Release supersedes and
replaces any other agreement, whether written or oral, and represents the entire
agreement between the parties in respect of the subject matter hereof, and that
other than your Transition Agreement, your Employment Agreement and your
Indemnification Agreement, there are no other understandings or agreements
between the parties regarding your employment, your benefits or termination from
the Company. You further acknowledge: that you have read this Release; that you
have been given an opportunity to review this Release with legal counsel of your
own choosing, at your own expense; that you have apprised yourself of sufficient
relevant information, through sources of your own selection, in order that you
might intelligently exercise your own judgment in deciding whether to execute
this Release; that you have freely executed this Release on the basis of your
own judgment, belief, and knowledge, and not on the basis of any representation
by the Companies, their attorneys, or anyone acting on their behalf; and that
you are not relying on any promise or representation whatsoever not contained
herein or in the Transition Agreement or your Employment Agreement as an
inducement to execute this Release.

13

--------------------------------------------------------------------------------

EXECUTION COPY

By signing this agreement, you agree and recognize that, subject to the limited
revocation provisions of paragraph 5 hereof, this Release is final and binding.

PEABODY ENERGY CORPORATION:

By:    _________________________________
Name:    _________________________________
Title:    _________________________________    
Date:    _________________________________

EXECUTIVE:
By:
_________________________________

Gregory Boyce
Date:    _________________________________

14