exv10w15



 





Exhibit 10.15




PATRIOT COAL CORPORATION

401(k) RETIREMENT PLAN




          WHEREAS, Patriot Coal Corporation (“Company”) desires to adopt the Patriot Coal Corporation
401(k) Retirement Plan (“Plan”) for the benefit of its employees;




          NOW, THEREFORE, effective November 1, 2007, the Plan is hereby adopted to read as follows:





 









 











PATRIOT COAL CORPORATION 401(k) RETIREMENT PLAN




TABLE OF CONTENTS




	 	 	 	 	 
	 	 	PAGE
	SECTION 1 - NAME OF PLAN
	 	 	1	 
	 
	 	 	 	 
	SECTION 2 - DEFINITIONS
	 	 	2	 
	 
	 	 	 	 
	2.1. Board
	 	 	2	 
	2.2. Break In Service
	 	 	2	 
	2.3. Code
	 	 	2	 
	2.4. Committee
	 	 	2	 
	2.5. Company
	 	 	2	 
	2.6. Compensation
	 	 	2	 
	2.7. Controlled Group
	 	 	2	 
	2.8. Days Of Service
	 	 	2	 
	2.9. Disability Date
	 	 	3	 
	2.10. Employee
	 	 	3	 
	2.11. Employer
	 	 	3	 
	2.12. Five Percent Owner
	 	 	3	 
	2.13. Highly Compensated Employee
	 	 	4	 
	2.14. Hours Of Employment
	 	 	4	 
	2.15. Leased Employee
	 	 	4	 
	2.16. Non-Highly Compensated Employee
	 	 	4	 
	2.17. Normal Retirement Date
	 	 	4	 
	2.18. Participant
	 	 	5	 
	2.19. Patriot Coal Corporation Stock Fund
	 	 	5	 
	2.20. Peabody Energy Stock Fund
	 	 	5	 
	2.21. Plan Administrator
	 	 	5	 
	2.22. Plan Year
	 	 	5	 
	2.23. Pro-Rated Salary
	 	 	5	 
	2.24. Qualified Plan
	 	 	6	 
	2.25. Service Period
	 	 	6	 
	2.26. Severance Date
	 	 	6	 
	2.27. Severance Period
	 	 	6	 
	2.28. Spouse
	 	 	6	 
	2.29. Trustee
	 	 	6	 
	2.30. Valuation Date
	 	 	6	 
	2.31. Years of Service
	 	 	7	 






 









 






	 	 	 	 	 
	 	 	PAGE
	SECTION 3 - ELIGIBILITY
	 	 	8	 
	 
	 	 	 	 
	3.1. Prior Participants
	 	 	8	 
	3.2. New Participants
	 	 	8	 
	3.3. Former Participants
	 	 	8	 
	3.4. Cessation Of Participation
	 	 	8	 
	 
	 	 	 	 
	SECTION 4 - CONTRIBUTIONS
	 	 	9	 
	 
	 	 	 	 
	4.1. Matched Payroll Reduction Contributions
	 	 	9	 
	4.2. Unmatched Payroll Reduction Contributions
	 	 	9	 
	4.3. Maximum Payroll Reduction Contribution
	 	 	9	 
	4.4. Employer Matching Contributions
	 	 	10	 
	4.5. Performance Contributions
	 	 	10	 
	4.6. Elections
	 	 	10	 
	4.7. Changes In And Suspension Of Payroll Reductions
	 	 	11	 
	4.8. Tax Deductions
	 	 	11	 
	4.9. Rollover Contributions And Transfers
	 	 	12	 
	 
	 	 	 	 
	SECTION 5 - LOANS AND WITHDRAWALS
	 	 	13	 
	 
	 	 	 	 
	5.1. Loans
	 	 	13	 
	5.2. Withdrawals
	 	 	13	 
	5.3. Vesting After Withdrawals
	 	 	15	 
	 
	 	 	 	 
	SECTION 6 - DISTRIBUTIONS OF EXCESS AMOUNTS
	 	 	17	 
	 
	 	 	 	 
	6.1. Distribution Of Excess Elective Deferrals
	 	 	17	 
	6.2. Limitations On Pre-Tax Contributions For Highly Compensated Employees
	 	 	17	 
	6.3. Limitations On Matching Contributions For Highly Compensated Employees
	 	 	19	 
	6.4. Definitions And Special Rules
	 	 	20	 
	 
	 	 	 	 
	SECTION 7 - ALLOCATION
	 	 	21	 
	 
	 	 	 	 
	7.1. Establishment Of Accounts
	 	 	21	 
	7.2. Allocation Of Earnings Or Losses
	 	 	21	 
	 
	 	 	 	 
	SECTION 8 - INVESTMENT OF ACCOUNTS
	 	 	22	 
	 
	 	 	 	 
	8.1. Investment Funds
	 	 	22	 
	8.2. Participant’s Selection Of Investment Fund
	 	 	22	 
	8.3. Transfers Between Investment Funds
	 	 	22	 
	8.4. Custody, Registration and Voting of Securities
	 	 	22	 
	8.5. Distributions in Kind
	 	 	22	 
	 
	 	 	 	 
	SECTION 9 - DISTRIBUTIONS AT RETIREMENT
	 	 	23	 
	 
	 	 	 	 
	9.1. Normal Retirement Distributions
	 	 	23	 
	9.2. Optional Method Of Distribution
	 	 	23	 
	9.3. Required Minimum Distributions
	 	 	23	 
	9.4. Required Beginning Date
	 	 	26	 






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	 	 	PAGE
	SECTION 10 - DISTRIBUTIONS AT DISABILITY
	 	 	27	 
	 
	 	 	 	 
	10.1. Distributions Upon Disability
	 	 	27	 
	10.2. Determination Of Disability
	 	 	28	 
	10.3. Notification Of Eligibility To Receive And Consent To Disability Benefits
	 	 	28	 
	 
	 	 	 	 
	SECTION 11 - DISTRIBUTIONS AT TERMINATION OF EMPLOYMENT (VESTING)
	 	 	29	 
	 
	 	 	 	 
	11.1. Distributions Upon Termination Of Employment
	 	 	29	 
	11.2. Determination Of Vested Portion
	 	 	30	 
	11.3. Forfeitures
	 	 	30	 
	11.4. Notification Of Eligibility To Receive And Consent To Vested Benefits
	 	 	31	 
	 
	 	 	 	 
	SECTION 12 - DISTRIBUTIONS AT DEATH
	 	 	32	 
	 
	 	 	 	 
	12.1. Distributions Upon Death
	 	 	32	 
	12.2. Distribution To Spouse
	 	 	32	 
	12.3. Designation Of Beneficiary
	 	 	32	 
	12.4. Beneficiary Not Designated
	 	 	32	 
	12.5. Spousal Consent To Designation Of Beneficiary
	 	 	32	 
	 
	 	 	 	 
	SECTION 13 - LEAVES OF ABSENCE AND TRANSFERS
	 	 	33	 
	 
	 	 	 	 
	13.1. Military Leave Of Absence
	 	 	33	 
	13.2. Maternity Or Paternity Absence
	 	 	34	 
	13.3. Other Leaves Of Absence
	 	 	35	 
	13.4. Transfers
	 	 	35	 
	 
	 	 	 	 
	SECTION 14 - TRUSTEE
	 	 	37	 
	 
	 	 	 	 
	SECTION 15 - ADMINISTRATION
	 	 	38	 
	 
	 	 	 	 
	15.1. Plan Administrator
	 	 	38	 
	15.2. Construction
	 	 	38	 
	15.3. Delegation By The Plan Administrator
	 	 	38	 
	15.4. Duties Of The Plan Administrator
	 	 	38	 
	15.5. Records Of The Plan Administrator
	 	 	38	 
	15.6. Committee
	 	 	38	 
	15.7. Decisions By The Committee
	 	 	39	 
	15.8. Meetings Of The Committee
	 	 	39	 
	15.9. Expenses
	 	 	39	 
	 
	 	 	 	 
	SECTION 16 - CLAIM PROCEDURE
	 	 	40	 
	 
	 	 	 	 
	16.1. Claim
	 	 	40	 
	16.2. Claim Decision
	 	 	40	 
	16.3. Request For Review
	 	 	40	 
	16.4. Review Of Decision
	 	 	41	 
	 
	 	 	 	 
	SECTION 17 - AMENDMENT AND TERMINATION
	 	 	43	 
	 
	 	 	 	 
	17.1. Amendment
	 	 	43	 
	17.2. Termination; Discontinuance Of Contributions
	 	 	43	 






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	 	 	PAGE
	SECTION 18 - MISCELLANEOUS
	 	 	44	 
	 
	 	 	 	 
	18.1. Participants’ Rights
	 	 	44	 
	18.2. Spendthrift Clause
	 	 	44	 
	18.3. Delegation Of Authority By Employer
	 	 	44	 
	18.4. Distributions To Minors
	 	 	44	 
	18.5. Construction Of Plan
	 	 	44	 
	18.6. Gender, Number And Headings
	 	 	45	 
	18.7. Separability Of Provisions
	 	 	45	 
	18.8. Diversion Of Assets
	 	 	45	 
	18.9. Service Of Process
	 	 	45	 
	18.10. Merger
	 	 	45	 
	18.11. Benefit Limitation
	 	 	45	 
	18.12. Commencement Of Benefits
	 	 	46	 
	18.13. Qualified Domestic Relations Order
	 	 	47	 
	18.14. Written Explanation Of Rollover Treatment
	 	 	49	 
	18.15. Leased Employees
	 	 	49	 
	18.16. Special Distribution Option
	 	 	50	 
	18.17. Waiver Of 30-Day Period
	 	 	51	 
	 
	 	 	 	 
	SECTION 19 - TOP-HEAVY DEFINITIONS
	 	 	52	 
	 
	 	 	 	 
	19.1. Accrued Benefits
	 	 	52	 
	19.2. Beneficiaries
	 	 	52	 
	19.3. Determination Date
	 	 	52	 
	19.4. Former Key Employee
	 	 	52	 
	19.5. Key Employee
	 	 	52	 
	19.6. Non-Key Employee
	 	 	53	 
	19.7. Permissive Aggregation Group
	 	 	53	 
	19.8. Required Aggregation Group
	 	 	53	 
	19.9. Top-Heavy Compensation
	 	 	53	 
	19.10. Top-Heavy Group
	 	 	53	 
	 
	 	 	 	 
	SECTION 20 - TOP-HEAVY RULES
	 	 	54	 
	 
	 	 	 	 
	20.1. Special Top-Heavy Rules
	 	 	54	 
	 
	 	 	 	 
	EXHIBIT A
	 	 	55	 






iv









 






PATRIOT COAL CORPORATION 401(k) RETIREMENT PLAN




SECTION 1 — NAME OF PLAN




          This Plan shall be known as the “Patriot Coal Corporation 401(k) Retirement Plan.” The Plan
will be considered a profit sharing plan even though contributions are not dependent on profits.




 









 








SECTION 2 — DEFINITIONS




     2.1. Board.



          “Board” means the board of directors of the Company or of any successor by merger, purchase or
otherwise.




     2.2. Break In Service.



          “Break in Service” means any twelve consecutive month Severance Period.




     2.3. Code.



          “Code” means the Internal Revenue Code of 1986, as amended.




     2.4. Committee.



          “Committee” means the Committee appointed pursuant to Section 15.6.




     2.5. Company.



          “Company” means Patriot Coal Corporation.




     2.6. Compensation.



          “Compensation” means base pay plus overtime received by an Employee during the Plan Year after
he or she becomes a Participant 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 contributions under this Plan or benefits
under any other Qualified Plan, 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.




          The Compensation of each Participant taken into account under the Plan for any Plan Year shall
not exceed $225,000 (as adjusted in accordance with Section 415(d) of the Code).




     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. For purposes of Section 18.11, in determining which entities shall be
aggregated under Section 414(b) or (c) of the Code, the modifications made by Section 415(h) of the
Code shall be applied.




     2.8. Days Of Service.



          “Days of Service” means the total number of days in a person’s Service Periods, whether or not
such periods were completed consecutively. Days of Service shall also include the number of days
in all Severance Periods, if any, in which:




2









 









     (a) The Employee severs from service by reason of quit, discharge or retirement and
immediately prior to such quit, discharge or retirement was not absent from service if the
Employee performs an Hour of Employment within twelve months of the date of such severance;
or




     (b) Notwithstanding (a) above, the Employee severs from service by reason of quit,
discharge or retirement during an absence from service of twelve months or less for any
reason other than a quit, discharge, retirement or death if the Employee performs an Hour of
Employment within twelve months of the date on which the Employee was first absent from
service.



     2.9. Disability Date.



          “Disability Date” means the date on which a Participant is determined by the Plan
Administrator to be permanently and totally disabled in accordance with Section 10.2 and has
terminated his or her employment.




     2.10. Employee.



          “Employee” means any person who is (i) classified by the Employer as an employee, (ii) is on a
U.S. dollar payroll or is a U.S. citizen, and (iii) is employed by the Employer, but excluding a
non-resident alien who receives no earned income (within the meaning of Section 911(d)(2) of the
Code) from the Employer which constitutes income from sources within the United States (within the
meaning of Section 861(a)(3) of the Code), a salaried non-exempt employee who is receiving on-site
and classroom training and assimilation training in mining practices through the Company’s Mining
Intern Program, a summer intern or a member of a collective bargaining unit for which either:





     (a) a separate retirement plan has been established pursuant to collective bargaining
negotiations, or




     (b) no separate plan has been established after collective bargaining has included
discussion of retirement benefits,


unless such collective bargaining provided for coverage under this Plan. An individual not
classified by the Employer as an employee shall not be considered an Employee regardless of whether
such individual is a common law employee or is classified as an employee for tax, employment law or
other purposes.




     2.11. Employer.



          “Employer” means the Company or 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.




     2.12. Five Percent Owner.



          “Five Percent Owner” means any person who owns (or is considered as owning within the meaning
of Section 318 of the Code) more than five percent of the outstanding stock




3









 







of
any corporation in the Controlled Group or stock possessing more than five percent of the
total combined voting power of all stock of any corporation in the Controlled Group or who owns
more than five percent of the capital or profits interest of any unincorporated entity in the
Controlled Group.




     2.13. Highly Compensated Employee.



          Highly Compensated Employee means any Participant who (i) was a Five-Percent Owner at any time
during either the determination year or the look-back year; or (ii) received compensation within
the meaning of Code Section 415(c)(3) (including the deferrals described in Code Section
415(c)(3)(D)) from the Employer in excess of $100,000 (as adjusted pursuant to Code Section 415(d))
during the look-back year.




          For purposes of Section 6, the determination year shall be the Plan Year, and the look-back
year shall be the 12 month period immediately preceding the determination year. The determination
of who is a Highly Compensated Employee, including the determination of the number and identity of
Employees in the top-paid group and the compensation that is considered, will be made in accordance
with Code Section 414(q) and the regulations thereunder.




     2.14. Hours Of Employment.



          “Hours of Employment” means an hour for which a person is directly or indirectly paid, or
entitled to payment, by the Employer for the performance of duties.




     2.15. Leased Employee.



          “Leased Employee” means any person (other than an employee of the recipient) who pursuant to
an agreement between the recipient and any other person (a “leasing organization”) has performed
services for the recipient (or for the recipient and related persons as determined in accordance
with Section 414(n)(6) of the Code) on a substantially full time basis for a period of at least one
year, if such services are performed under primary direction or control by the recipient.
Contributions or benefits provided a Leased Employee by the leasing organization which are
attributable to services performed for the recipient employer shall be treated as provided by the
recipient employer.




     2.16. Non-Highly Compensated Employee.



          Non-Highly Compensated Employee means any Employee who is not a Highly Compensated Employee
but who is eligible to participate in the Plan.




     2.17. Normal Retirement Date.



          “Normal Retirement Date” means the date on which a Participant terminates his or her
employment with the Employer (except by death or permanent and total disability as defined in
Section 10.2) provided such date is on or after his or her attainment of age 62 (or, in the case of
a Participant who was a participant in the Dodge Hill Mining Company, LLC 401(k) Plan on December
31, 2005, age 60).




4









 








     2.18. Participant.



          “Participant” means an Employee who has satisfied the eligibility requirements of Section 3
and who has not become a former Participant under Section 3.4.




     2.19. Patriot Coal Corporation Stock Fund.



          “Patriot Coal Corporation Stock Fund” means an investment fund invested and held in Patriot
Coal Corporation common stock as of November 1, 2007.




     2.20. Peabody Energy Stock Fund.



          “Peabody Energy Stock Fund” means an investment fund invested and held in Peabody Energy
Corporation common stock as of November 1, 2007.




     2.21. Plan Administrator.



          “Plan Administrator” means Patriot Coal Corporation.




     2.22. Plan Year.



          “Plan Year” means the 12-month period commencing on January 1 and ending on December 31.




     2.23. 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 during such fiscal year (including, for the fiscal year ending December 31, 2007, the
number of days on which the Participant was an Employee as defined in the Peabody Investments Corp.
Employee Retirement Account during the period from January 1, 2007 through October 31, 2007), 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, or (c) on a leave of absence
described in Section 13.3.




          The Pro-Rated Salary of each Participant taken into account under the Plan for any Plan Year,
based on the fiscal year ending in such Plan Year, shall not exceed $225,000 (as adjusted in
accordance with Section 415(d) of the Code).




5









 








     2.24. Qualified Plan.



          “Qualified Plan” means any plan qualified under Section 401 of the Code. For purposes of
Sections 19 and 20 only, the term “Qualified Plan” also means a simplified employee pension
described in Section 408(k) of the Code.




     2.25. Service Period.



          “Service Period” means the period of time commencing on the date on which a person performs an
Hour of Employment with the Employer and ending on the person’s Severance Date. If a person’s
employment with the Employer is terminated when he or she has no nonforfeitable right to a benefit
derived from Employer contributions under the Plan and the number of years of his or her Severance
Period equals or exceeds the greater of (a) 5 or (b) the number of years of his or her Service
Period prior to such termination of employment, the Service Period prior to the termination of
employment will be disregarded.




     2.26. Severance Date.



          “Severance Date” means the date on which the earliest of the following occurs:





     (a) A person employed by the Employer quits, retires, is discharged or dies or




     (b) The first anniversary of the first date of a period in which the person is not
credited with Days of Service and remains absent from service with the Employer (with or
without pay) for any reason other than quit, retirement, discharge or death.



     2.27. Severance Period.



          “Severance Period” means the period of time commencing the day after a person’s Severance Date
and ending on the day before the person performs an Hour of Employment.




     2.28. Spouse.



          “Spouse” means a person of the opposite sex of the Participant who, by reason of “marriage”
(i.e., a legal union between one man and one woman as husband and wife) is a husband or wife of the
Participant as defined under the Defense of Marriage Act of 1996.




     2.29. Trustee.



          “Trustee” means the insurer or trustee or any successor trustee appointed pursuant to Section
14 hereof.




     2.30. Valuation Date.



          “Valuation Date” means any business day the New York Stock Exchange is open for trading.




6









 








     2.31. Years of Service.



          “Years of Service” shall mean each 365 Days of Service on and after November 1, 2007;
provided, however, that for the period before November 1, 2007, each Participant will be credited
with his or her Years of Service (and any fractions thereof) under the Peabody Investments Corp.
Employee Retirement Account prior to such date as determined by the Employer’s records; provided
further, that in the case of a plan that is merged into the Plan, Years of Service for the period
prior to the date of such merger for Participants who were participants in such plan shall be
determined under the terms of the plan prior to such date as determined by the Employer’s records.




7









 








SECTION 3 — ELIGIBILITY




     3.1. Prior Participants.



          Each person who was a Participant in the Peabody Investments Corp. Employee Retirement Account
on October 31, 2007 and is an Employee on November 1, 2007 shall become a Participant on November
1, 2007.




     3.2. New Participants.



          On and after November 1, 2007, each Employee not described in Section 3.1 shall become a
Participant hereunder as of his or her date of hire. If a person is not an Employee as of his or
her date of hire, he or she shall not become a Participant until the day he or she becomes an
Employee.




          Notwithstanding any other provisions of the Plan, any individual who is providing services to
the Employer in the capacity of, or who is designated by the Employer as an independent contractor,
and who is subsequently reclassified as an Employee by court or similar action (whether
retroactively or prospectively), shall not be eligible to participate in the Plan, and shall be
treated as a member of an excluded class. No such excluded individual shall have any claim for
benefits under the Plan for any period during which he or she is excluded from participation.




     3.3. Former Participants.



          A former Participant who is reemployed by the Employer shall become a Participant on the date
he or she is reemployed as an Employee.




     3.4. 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.



8









 





SECTION 4 — CONTRIBUTIONS




     4.1. Matched Payroll Reduction Contributions.



          A Participant may elect to have up to 6% of his or her Compensation contributed by the
Employer to the Plan on a pre-tax or after-tax basis through payroll reductions. Each Participant
shall elect in accordance with such procedures and processes as determined 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 7.1. Any such election under the Peabody
Investments Corp. Employee Retirement Account by a Participant described in Section 3.1 in effect
immediately prior to November 1, 2007 (including an election of 0%) shall be deemed to have been
made, and shall be effective, under this Section 4.1.




          If a Participant fails to make an election indicating the percentage (including 0%) of his or
her Compensation to be reduced and contributed under this Section 4.1 on a pre-tax or after-tax
basis within 30 days after becoming a Participant, such Participant’s Compensation will
automatically be reduced in an amount equal to 6% of his or her Compensation and contributed to the
Plan on a pre-tax basis. Such automatic contributions shall continue until the Participant elects
a different percentage of Compensation to be contributed or the Participant affirmatively elects
not to have his or her Compensation so reduced.




     4.2. Unmatched Payroll Reduction Contributions.



          A Participant who has elected to have 6% of his or her Compensation contributed by the
Employer to the Plan under Section 4.1 may elect to have up to an additional 54% of his or her
Compensation contributed by the Employer to the Plan on a pre-tax or after-tax basis through
payroll reductions. Each Participant shall elect in accordance with such procedures and processes
as determined 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 7.1.




     4.3. Maximum Payroll Reduction Contribution.




     (a) The maximum amount which may be contributed to the Plan by a Participant on a
pre-tax basis under Sections 4.1 and 4.2 and any other Qualified Plan maintained by the
Employer in any calendar year is limited to $15,500 (or such higher amount prescribed by
applicable law). If a Participant’s pre-tax contributions reach this maximum (and, if
applicable, the amount determined under Section 4.3(b)), the Employer shall continue making
Participant contributions based upon the Participant’s election under Sections 4.1 and 4.2,
however, such Participant contributions will be treated by the Plan Administrator as
after-tax contributions for the remainder of the calendar year.




     (b) Notwithstanding subsection (a), Participants who are eligible to make elective
deferrals hereunder and who have attained or will attain age 50 before the close of the Plan
Year shall be eligible to make catch-up contributions in accordance with, and subject to the
limitations of, Section 414(v) of the Code. Such catch-up contributions shall not be taken
into account for purposes of the provisions of the Plan implementing the required
limitations of Sections 402(g) and 415 of the Code. The Plan shall not be treated as
failing to satisfy the provisions of the Plan implementing the requirements of



9









 









Section
401(k)(3), 410(b) or 416 of the Code, as applicable, by reason of the making of such
catch-up contributions.



     4.4. Employer Matching Contributions.



          The Employer will contribute to the Plan an amount equal to 100% of the amount by which each
Participant elects to have his or her Compensation reduced under Section 4.1. Any contributions
made pursuant to this Section 4.4 shall be paid to the Trustee as soon as practicable following
each pay date of the Participant.




     4.5. Performance Contributions.



          In addition to any contributions made by the Employer pursuant to Section 4.4, the Employer
will contribute an additional amount if the Employer meets 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, the Employer will contribute to the Plan on behalf of each
Participant who is employed on the last day of such fiscal year an amount equal to 4% of the
Participant’s Pro-Rated Salary. 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 contribute 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. Any contributions paid on account of the performance of the Employer pursuant to this
Section 4.5 shall be paid to the Trustee 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 contribute 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; (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 contribute 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; and (iii) in
lieu of any contribution otherwise determined under this Section 4.5, for the fiscal year ending
December 31, 2007, the Employer shall make such contribution, if any, as shall be determined by the
Board in its sole discretion, and such contribution shall be allocated among eligible Participants
who are employed on the last day of such fiscal year as a uniform percentage of each eligible
Participant’s Pro-Rated Salary.




     4.6. Elections.



          Each election by a Participant under Sections 4.1 and 4.2 shall be effective until suspended
or amended. Each election shall be effective only when made in accordance with such procedures and
processes as determined by the Plan Administrator.




10









 








     4.7. Changes In And Suspension Of Payroll Reductions.



          4.7.1. Changes In Payroll Reductions.





          Each Participant’s payroll reduction percentage under Sections 4.1 and 4.2 shall
continue in effect until the Participant shall change such percentage; provided, however,
that the Participant may elect to have his or her pre-tax payroll reduction percentage
automatically increase in increments of 1%, 2% or 3% each year on a date specified by the
Participant, up to a maximum of 60% of Compensation. A Participant may at any time in his
or her discretion change such percentage in accordance with such procedures and processes as
determined by the Plan Administrator.



          4.7.2. Suspension Of Payroll Reductions.





          A Participant may at any time suspend his or her contributions in accordance with such
procedures and processes as determined by the Plan Administrator.




	 	4.7.2.1.	 	Suspension Of Payroll Reductions During Government Or Military
Service.






          Suspension of a Participant’s contributions shall be permitted during any
period of military service, or of government service approved by the Employer,
regardless of the duration of such period.




	 	4.7.2.2.	 	Resumption Of Payroll Reductions After Suspension.






          Except as provided in Section 5.2, a Participant who has suspended his or her
contributions under Section 4.7.2 may at any time resume his or her contributions in
accordance with such procedures and processes as determined by the Plan
Administrator.



     4.8. Tax Deductions.



          All Employer contributions are made conditioned upon their deductibility for Federal income
tax purposes under Section 404 of the Code. Amounts contributed by an Employer shall be returned
to the Employer from the Plan by the Trustee under the following circumstances:





     (a) If a contribution was made by an Employer by a mistake of fact, the excess of the
amount of such contribution over the amount that would have been contributed had there been
no mistake of fact shall be returned to the Employer within one year after the payment of
the contribution; and




     (b) If an Employer makes a contribution which is not deductible under Section 404 of
the Code, such contribution (but only to the extent disallowed) shall be returned to the
Employer within one year after the disallowance of the deduction.



          Earnings attributable to the contribution shall not be returned to the Employer, but losses
attributable to such excess contribution shall be deducted from the amount to be returned.




11









 







In the event (a) or (b) above apply, the Employer will distribute any salary reduction amounts
returned to the Employer (less any losses) to the Employees who elected to reduce their salary by
such amounts.




     4.9. Rollover Contributions And Transfers.



          The Plan Administrator may direct the Trustee to accept from or on behalf of an Employee any
cash which would constitute an eligible rollover distribution as defined in Section 402(c)(4) of
the Code from any of the following types of plans:





     (a) a qualified plan described in Section 401(a) of the Code, excluding after-tax
contributions;




     (b) a qualified annuity plan described in Section 403(a) of the Code, excluding
after-tax contributions;




     (c) an annuity plan described in Section 403(b) of the Code, excluding after-tax
contributions; and




     (d) a plan maintained by a state or local government or instrumentality thereof as
described in Section 457(b) of the Code.



          The Plan Administrator may also direct the Trustee to accept from the trustee of another
Qualified Plan a direct transfer of cash or other assets which does not constitute an eligible
rollover contribution. Notwithstanding the preceding sentence, the Trustee may not accept the
direct transfer of any assets from any Qualified Plan which would cause the Plan to be subject to
the requirements of Section 401(a)(11) of the Code. Any contributions under this Section shall be
segregated in a separate account and shall be fully vested at all times. Such amounts shall not be
considered as a contribution by a Participant for purposes of Sections 4.1 or 18.11.




12









 










SECTION 5 — LOANS AND WITHDRAWALS




     5.1. Loans.



          Upon the application of a Participant in accordance with such procedures and processes as
determined by the Plan Administrator, the Plan Administrator, as administrator of the loan program,
in accordance with its uniform nondiscriminatory policy, shall direct the Trustee to make a loan or
loans to such Participant, provided, however, that no loan shall be made if immediately after the
loan the unpaid balance of all loans by this Plan and all other plans maintained by the Controlled
Group to the Participant would exceed the lesser of:




          (a) $50,000 or




          (b) 50% of the vested portion of the Participant’s accounts under this Plan.




          Notwithstanding the foregoing, (i) the $50,000 limitation in (a) above shall be reduced by the
highest outstanding balance for the one-year period ending on the day before a new loan is made
minus the outstanding balance of existing loans to the Participant on the date of the new loan, and
(ii) loans shall not be available from a Participant’s After-Tax Matched Account, After-Tax
Unmatched Account, Company After-Tax Matching Account, Company Pre-Tax Matching Account or
Performance Contribution Account.




     5.2. Withdrawals.



          5.2.1. Regular Withdrawals.





     A Participant in the employment of the Employer may, in accordance with such
procedures and processes as determined by the Plan Administrator, make a withdrawal
from his or her After-Tax Matched Account which has been held by the Plan for 24
months or more, his or her vested Company After-Tax Matching Account which has been
held by the Plan for 24 months or more, or his or her After-Tax Unmatched Account.
A Participant must withdraw his or her entire After-Tax Unmatched Account before
withdrawing any amounts from his or her After-Tax Matched Account or Company
After-Tax Matching Account. In the case of a Participant described in Section 3.1,
the period for which his or her After-Tax Matched Account and/or Company After-Tax
Matching Account was held by the Peabody Investments Corp. Employee Retirement
Account shall be included in determining whether such accounts have been held by the
Plan for 24 months or more.



          5.2.2. Special Withdrawals.





     A Participant in the employment of the Employer may withdraw the entire amount
in his or her After-Tax Matched Account (i.e., with no 24-month holdback) in
accordance with such procedures and processes as determined by the Plan
Administrator. In the event of a withdrawal under this Section of any amounts from
the Participant’s After-Tax Matched Account which have been held in such account for
less than 24 months, the Participant’s right to make
contributions under the Plan shall be suspended for a period of six months



13









 







following the Valuation Date following the month in which the special withdrawal is
made.



          5.2.3. Hardship Withdrawals.





     A Participant in the employment of the Employer may, in accordance with such
procedures and processes as determined by the Plan Administrator, withdraw his or
her contributions to his or her Pre-Tax Matched Account or Pre-Tax Unmatched Account
if the Participant demonstrates a substantial hardship to the Plan Administrator.
The Plan Administrator will grant a distribution on account of hardship only if the
distribution is made on account of an immediate and heavy financial need of the
Participant and is necessary to satisfy such financial need.



               5.2.3.1. Determination of Immediate and Heavy Financial Need.





          A distribution will be deemed to be made on account of an immediate and heavy
financial need of the Participant only if the distribution is on account of:




     (a) expenses for (or necessary to obtain) medical care that would be
deductible under Section 213(d) of the Code (determined without regard to
whether the expenses exceed 7.5% of adjusted gross income);




     (b) costs directly related to the purchase (excluding mortgage
payments) of a principal residence of the Participant;




     (c) the payment of tuition, related educational fees and room and board
expenses for up to the next 12 months of post-secondary education for the
Participant, the Participant’s Spouse, or the Participant’s children or
dependents (as defined in Section 152 of the Code, without regard to Section
152(b)(1), (b)(2) and (d)(1)(B) of the Code);




     (d) payments necessary to prevent the eviction of the Participant from
his or her principal residence or foreclosure on the mortgage of the
Participant’s principal residence;




     (e) payments for burial or funeral expenses for the Employee’s deceased
parent, spouse, children or dependents (as defined in Code Section 152
without regard to Code Section 152(d)(1)(B)); or




     (f) expenses for the repair of damage to the Participant’s principal
residence that would qualify for the casualty deduction under Code Section
165 (determined without regard to whether the loss exceeds 10% of adjusted
gross income).



14









 







               5.2.3.2. Amount Necessary To Satisfy Financial Need.





          A distribution will be deemed to be necessary to satisfy an immediate and heavy
financial need of a Participant if the following requirements are satisfied:




     (a) The distribution is not in excess of the amount of the immediate
and heavy financial need of the Participant (which may include any amounts
necessary to pay any federal, state or local income tax or penalties
reasonably anticipated to result from the distribution); and




     (b) The Participant has obtained all distributions, other than hardship
distributions, and all nontaxable (at the time of the loan) loans currently
available under all plans maintained by the Controlled Group.




          In addition a Participant who receives a hardship withdrawal will be unable to
make pre-tax contributions or after-tax contributions to the Plan or any other
qualified or nonqualified plan of deferred compensation maintained by the Controlled
Group, including stock option and stock purchase plans and a cash or deferred
arrangement that is part of a cafeteria plan within the meaning of Section 125 of
the Code (but not the cafeteria plan itself), for a period of six months after the
Valuation Date as of which the hardship distribution is made.



          5.2.4. Age 591/2 Withdrawals.





          A Participant in the employment of the Employer who has attained age 591/2 may, in
accordance with such procedures and processes as determined by the Plan Administrator, make
a withdrawal from his or her Pre-Tax Unmatched Account, Pre-Tax Matched Account, Performance
Contribution Account and the vested portion of his or her Company Pre-Tax Matching Account.



          5.2.5. Rollover Withdrawal.





          An Employee in the employment of the Employer may, in accordance with such procedures
and processes as determined by the Plan Administrator, make a withdrawal from his or her
Rollover Account.



     5.3. Vesting After Withdrawals.



          If a withdrawal under Section 5.2 is made by a Participant whose Company Pre-Tax Matching or
After-Tax Matching Account was not 100% vested at the time of such withdrawal, then the Employer
shall separately record the portion of his or her Company Pre-Tax Matching or After-Tax Matching
Account which was not vested at the time of the withdrawal, and the vested amount of such portion
from time to time shall equal an amount (“X”) determined by the following formula:




X =
P(AB + (R X D)) - (R X D)




15









 







For purposes of applying such formula: “P” is the vested percentage at the relevant time; “AB” is
the account balance at the relevant time; “D” is the amount previously withdrawn by the
Participant; and “R” is the ratio of the account balance at the relevant time to the account
balance after the withdrawal. If a person who has received a withdrawal hereunder is subsequently
entitled to an allocation of Employer contributions, the Employer shall separately record such
contributions and vesting with respect to such contributions shall be in accordance with Section
11.2.




16









 








SECTION 6 — DISTRIBUTIONS OF EXCESS AMOUNTS




     6.1. Distribution Of Excess Elective Deferrals.



          If a Participant’s elective deferrals for any calendar year exceed $15,500 (or such higher
amount prescribed by applicable law), then the Participant may file an election form prescribed by
the Plan Administrator with the Employer designating in writing the amount of such excess elective
deferrals to be distributed from this Plan. Any such election form must be filed with the Employer
no later than the first March 1 following the close of such calendar year in order for the Employer
to act on it. If such an election form is timely filed, the Trustee shall distribute to the
Participant the amount of such excess elective deferrals which the Participant has allocated to
this Plan (together with any income or less any loss allocable to such amount in accordance with
Section 8 for such calendar year, and for the period between the end of such calendar year and the
date of distribution, as determined on a date that is no more than seven days before the
distribution) on or before the first April 15 following the close of such calendar year. In the
case of a Highly Compensated Employee, any matching contributions which were contributed on account
of the elective deferrals being distributed will be forfeited, even if such matching contributions
are vested. For purposes of the preceding sentence, the income or loss allocable to such excess
amount will be determined under such reasonable method as the Plan Administrator shall establish,
provided the method does not discriminate in favor of Highly Compensated Employees, is used
consistently for all Participants and for all corrective distributions under the Plan for the Plan
Year, and is used by the Plan for allocating income to Participants’ accounts.




     6.2. Limitations On Pre-Tax Contributions For Highly Compensated Employees.



          The Plan Administrator is authorized to reduce to the extent necessary the maximum
contributions under Sections 4.1 and 4.2 for Highly Compensated Employees, prior to the close of
the Plan Year, if the Plan Administrator reasonably believes that such reduction is necessary to
prevent the Plan from failing both tests in Section 401(k)(3) of the Code. Such adjustments shall
be made in accordance with such procedures and processes as determined by the Plan Administrator.
The Plan Administrator may implement rules limiting contributions under Sections 4.1 and 4.2 which
may be made on behalf of some or all Highly Compensated Employees so that the limits of Section
401(k)(3) or 401(m)(2) of the Code are satisfied. If for any Plan Year the Plan satisfies neither
of the tests set forth in Code Section 401(k)(3), the Trustee shall be directed by the Plan
Administrator to return to each Highly Compensated Employee his or her portion of the excess
contributions (plus the income or less the loss allocable to such excess contributions in
accordance with Section 8 for such Plan Year, and for the period between the end of such Plan Year
and the date of such return, as determined on a date that is no more than seven days before the
return) for such Plan Year within 12 months after the last day of such Plan Year. A Highly
Compensated Employee shall forfeit any matching contributions which were contributed on account of
any portion of the excess contributions even if such matching contributions are vested. Each
Highly Compensated Employee’s portion of the excess contributions for a Plan Year shall be
determined under a two step process. First, the aggregate amount of excess contributions shall be
calculated. This shall be done by reducing the actual deferral percentages of those Highly
Compensated Employees with the highest actual deferral percentages to the extent necessary but not
below the next highest level of actual deferral percentages. This process shall be repeated, to
the extent necessary, until the actual




17









 







deferral percentage for the group of Highly
Compensated Employees satisfies one of the tests set forth in Section 401(k)(3) of the Code.
The aggregate amount of excess contributions shall be equal to the sum of all such reductions.
Second, the aggregate amount of excess contributions to be returned shall be allocated by reducing
the pre-tax contributions of those Highly Compensated Employees with the highest amount of pre-tax
contributions to the extent necessary but not below the next highest amount of pre-tax
contributions. This process shall be repeated, to the extent necessary, until all excess
contributions to be returned shall be allocated among the Highly Compensated Employees. The income
or loss allocable to a Highly Compensated Employee’s portion of the excess contribution will be
determined under such reasonable method as the Plan Administrator shall establish, provided the
method does not discriminate in favor of Highly Compensated Employees, is used consistently for all
Participants and for all corrective distributions under the Plan for the Plan Year, and is used by
the Plan for allocating income to Participants’ accounts.





     (a) Coordination With Distributions Of Elective Deferrals. If the Plan is
required to distribute both elective deferrals and excess contributions for a Plan Year, the
Plan shall:




     (1) calculate and distribute the elective deferrals before determining the
excess contributions to be distributed to Highly Compensated Employees;




     (2) calculate the actual deferral percentage including the amount of excess
elective deferrals distributed pursuant to (1) above; and




     (3) distribute excess contributions to Participants by reducing the excess
contributions distributed to a Participant by the amount of excess elective
deferrals distributed to such Participant.




     (b) Election To Make Additional Contributions. Notwithstanding the above, in
accordance with Treasury Regulation Section 1.401(k)-2(a)(6), the Company may elect, in lieu
of all or a portion of the corrective distribution described above in this Section, to make
additional qualified nonelective contributions or qualified matching contributions which are
treated as elective deferrals under the Plan and that, in combination with the elective
deferrals, satisfy the actual deferral percentage test. Any such additional qualified
nonelective contributions will be credited to a Participant’s’ Pre-Tax Matched Account and
shall be allocated to each Participant who is not a Highly Compensated Employee in an amount
as determined by the Company and will be contributed as a uniform percentage of such
Participant’s Compensation for the Plan Year. Any such additional qualified matching
contributions will be credited to a Participant’s Pre-Tax Matched Account and shall be
allocated to each Participant who is not a Highly Compensated Employee and will be
contributed as a uniform percentage of the amount contributed by such Participant under
Section 4.1.




     (c) Testing Year. The actual deferral percentage of Non-Highly Compensated
Employees shall be determined as of the Plan Year preceding the Plan Year for which the Plan
must satisfy one of the tests in Code Section 401(k)(3).



18









 





     6.3. Limitations On Matching Contributions For Highly Compensated Employees.



          The Plan Administrator is authorized to reduce to the extent necessary the maximum amount of
matching contributions under Section 4.4 and after-tax contributions contributed on behalf of any
Highly Compensated Employee prior to the close of the Plan Year if the Plan Administrator
reasonably believes that such adjustment is necessary to prevent the Plan from failing Code Section
401(m)(2). Such reduction shall be made in accordance with such procedures and processes as
determined by the Plan Administrator. Notwithstanding anything herein to the contrary, the tests
in Code Section 401(m)(2) shall be treated as satisfied with respect to such matching contributions
and after-tax contributions to the Plan, or a portion of the Plan, if the Plan or such portion is a
collectively bargained plan that automatically satisfies Code Section 410(b), in accordance with
Treasury Regulation Sections 1.401(m)-1(b)(2) and 1.410(b)-2(b)(7). If for any Plan Year the Plan
fails to satisfy either of the tests set forth in Code Section 401(m)(2), the Trustee shall be
directed by the Plan Administrator to distribute to each Highly Compensated Employee his or her
vested portion (and forfeit the nonvested portion) of the excess aggregate contributions (plus the
income or less the losses allocable to such excess aggregate contributions in accordance with
Section 8 for such Plan Year, and for the period between the end of such Plan Year and the date of
such distribution or forfeiture, as determined on a date that is no more than seven days before the
distribution or forfeiture) for such Plan Year, within 12 months after the last day of such Plan
Year. Each Highly Compensated Employee’s portion of the excess aggregate contributions for a Plan
Year shall be determined under a two step process. First, the aggregate amount of excess aggregate
contributions shall be calculated. This shall be done by reducing the actual contribution
percentages of those Highly Compensated Employees with the highest actual contribution percentages
to the extent necessary but not below the next highest level of actual contribution percentages.
This process shall be repeated, to the extent necessary, until the actual contribution percentage
for the group of Highly Compensated Employees satisfies one of the tests set forth in Code Section
401(m)(2). The aggregate amount of excess aggregate contributions shall be equal to the sum of all
such reductions. Second, the aggregate amount of excess aggregate contributions to be distributed
or forfeited shall be allocated by first reducing any after-tax contributions and then any matching
contributions made by or on behalf of Highly Compensated Employees with the highest total amount of
after-tax contributions and matching contributions to the extent necessary but not below the next
highest total amount of after-tax contributions and matching contributions. This process shall be
repeated, to the extent necessary, until all excess aggregate contributions to be distributed or
forfeited shall be allocated among the Highly Compensated Employees. A Highly Compensated Employee
whose after-tax contributions are determined to be excess aggregate contributions shall forfeit any
matching contributions which were contributed on account of such after-tax contributions, even if
such matching contributions are vested. The income or loss allocable to a Highly Compensated
Employee’s portion of the excess aggregate contributions will be determined under such reasonable
method as the Plan Administrator shall establish, provided the method does not discriminate in
favor of Highly Compensated Employees, is used consistently for all Participants and for all
corrective distributions under the Plan for the Plan Year, and is used by the Plan
 for allocating
income to Participants’ accounts.





     (a) Election To Make Additional Contributions. Notwithstanding the above, in
accordance with Treasury Regulation Section 1.401(m)-2(a)(6), the Company may elect, in lieu
of all or a portion of the distribution described above, to either (i) make an
additional qualified nonelective contribution that, in combination with matching



19









 










contributions and after-tax contributions for the Plan Year, satisfies the actual
contribution percentage test or (ii) recharacterize elective contributions as matching
contributions. Any such additional qualified nonelective contributions will be credited to
a Participant’s Pre-Tax Matched Account and shall be allocated to each Participant who is
not a Highly Compensated Employee in an amount as determined by the Company and will be
contributed as a uniform percentage of such Participant’s Compensation for the Plan Year.




     (b) The actual contribution percentage of Non-Highly Compensated Employees shall be
determined as of the Plan Year preceding the Plan Year for which the Plan must satisfy one
of the tests in Code Section 401(m)(2).




6.4. Definitions And Special Rules.




     (a) All terms used in this Section 6 shall have the meaning given such terms in Code
Sections 401(k) and 401(m) and the regulations thereunder.




     (b) Plan Restructuring. The Plan may be aggregated with another plan or
disaggregated under Section 1.401(k)-1(b)(4) and Section 1.401(m)-1(b)(4) of the Treasury
Regulations for any Plan Year in order to pass the actual contribution percentage and actual
deferral percentage tests set forth in this Section.




     (c) Special Rules For Early Participation. If the Company applies Section
410(b)(4)(B) of the Code in determining whether the Plan satisfies Section 410(b) of the
Code by excluding from consideration eligible Employees who have not met minimum age and
service requirements, the Company may exclude from consideration all Non-Highly Compensated
Employees who have not met the minimum age and service requirements of Section 410(a)(1)(A)
of the Code for purposes of satisfying the tests in Sections 401(k)(3) and 401(m)(2) of the
Code.




     (d) Highly Compensated Employee In Two Or More Qualified Plans. The actual
contribution percentage and the actual deferral percentage of a Highly Compensated Employee
who is eligible to participate in two or more Qualified Plans which have (1) cash or
deferred arrangements or (2) matching contributions or after-tax contributions features
maintained by the Company or a member of the Controlled Group, shall be calculated by
treating all such cash or deferred arrangements in which the Highly Compensated Employee is
eligible to participate as one cash or deferred arrangement for purposes of calculating the
actual deferral percentage for such Highly Compensated Employee and all such features in
which the Highly Compensated Employee is eligible to participate as one feature for purposes
of calculating the actual contribution percentage for such Highly Compensated Employee with
respect to years ending within the same calendar year.



20









 





SECTION 7 — ALLOCATION




     7.1. Establishment Of Accounts.



          The Plan Administrator shall establish and maintain for each Participant a Pre-Tax Matched
Account, a Pre-Tax Unmatched Account, an After-Tax Matched Account, an After-Tax Unmatched Account,
a Company After-Tax Matching Account, a Company Pre-Tax Matching Account, a Performance
Contribution Account, and a Rollover Account. All amounts by which an Employee elects to have his
or her salary reduced under Section 4.1 on a pre-tax basis shall be credited to his or her Pre-Tax
Matched Account, all amounts by which an Employee elects to have his or her salary reduced under
Section 4.1 on an after-tax basis shall be credited to his or her After-Tax Matched Account, all
amounts by which an Employee elects to have his or her salary reduced under Section 4.2 on a
pre-tax basis shall be credited to his or her Pre-Tax Unmatched Account, all amounts by which an
Employee elects to have his or her salary reduced on an after-tax basis under Section 4.2 shall be
credited to his or her After-Tax Unmatched Account, all Employer contributions under Section 4.4
with respect to Pre-Tax Matched Contributions shall be credited to his or her Company Pre-Tax
Matching Account, all Employer contributions under Section 4.4 with respect to After-Tax Matched
Contributions shall be credited to his or her Company After-Tax Matching Account, all Employer
contributions under Section 4.5 shall be credited to his or her Performance Contribution Account,
and all direct transfer and rollover amounts received on behalf of a Participant under Section 4.9
shall be credited to his or her Rollover Account.




     7.2. Allocation Of Earnings Or Losses.



          All appreciation or depreciation in the fair market value of the investment funds shall be
allocated to accounts based on account balances on each Valuation Date.





21











 





SECTION 8 — INVESTMENT OF ACCOUNTS




     8.1. Investment Funds.



          A Participant may invest all of his or her accounts in such funds as are made available from
time to time under the Plan. No additional funds may be invested in the Patriot Coal Corporation
Stock Fund or the Peabody Energy Stock Fund after November 1, 2007.




     8.2. Participant’s Selection Of Investment Fund.



          Each Participant shall designate in 1% increments the percentages of contributions under
Section 4.1 and 4.2 for such Plan Year allocable to his or her accounts which are to be invested
among the applicable investment funds (other than Patriot Coal Corporation Stock Fund or the
Peabody Energy Stock Fund). Such a designation shall be made in accordance with such procedures
and processes as determined by the Plan Administrator. Any such designation shall continue in
effect for successive Plan Years unless changed in the same manner by the Participant.
Notwithstanding the foregoing, the following amounts will be invested in the investment fund
designated by the Committee unless the Participant designates a different investment fund in
accordance with this Section 8.2 or transfers such portion of his or her accounts to a different
investment fund in accordance with Section 8.3:





     (a) all contributions under Sections 4.1, 4.4 and 4.5 of the Plan in the case of a
Participant who has not made an election under Section 4.1 and 4.2 but for whom Compensation
is automatically being reduced and contributed to the Plan under Section 4.1 or Employer
contributions under Section 4.5 are being credited to his or her Performance Contribution
Account; and




     (b) all direct transfer and rollover amounts received on behalf of a Participant under
Section 4.9 of the Plan.



     8.3. Transfers Between Investment Funds.



          A Participant may elect in accordance with such procedures and processes as determined by the
Plan Administrator to transfer all or any portion of his or her accounts in an investment fund to
any other investment fund (other than the Patriot Coal Corporation Stock Fund or the Peabody Energy
Stock Fund). Such transfers shall be subject to such reasonable requirements as may be established
by the Trustee.




     8.4. Custody, Registration and Voting of Securities.



          All securities acquired by the Trustee shall be held in the possession of the Trustee until
disposed of pursuant to the provisions of the Plan. Any shares of stock may be registered in the
name of the Trustee or its nominee. The Trustee shall have all voting rights with respect to such
shares and may, in its discretion, vote such shares itself or by such proxy as it may select.




     8.5. Distributions in Kind.



          In accordance with such procedures and processes as determined by the Plan Administrator, any
portion of a Participant’s accounts distributed pursuant to Sections 9, 10, 11
or 12 herein which
are invested in the Patriot Coal Corporation Stock Fund or the Peabody Energy Stock Fund may, at
the Participant’s election, be distributed in whole shares of Patriot Coal Corporation common stock
or Peabody Energy Corporation common stock, respectively. Fractional shares of such stock shall be
distributed in cash.



22









 








SECTION 9 — DISTRIBUTIONS AT RETIREMENT




     9.1. 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, unless
the Participant elects an optional form of benefit in accordance with Section 9.2; provided,
however, that if a Participant’s account balances exceed $5,000 (excluding rollover contributions
and earnings thereon), he or she may defer distribution to any date not later than, and shall be
required to make an election in accordance with such procedures and processes as determined by the
Plan Administrator to have his or her accounts distributed prior to, his or her Required Beginning
Date.




     9.2. Optional Method Of Distribution.



          In lieu of distribution of his or her accounts in a lump sum, a Participant may elect in
accordance with such procedures and processes as determined by the Plan Administrator to have his
or her accounts distributed in substantially equal payments over a period of time not less than 2
years and not more than 10 years. In the event that a Participant who elects this optional form of
benefit dies before the entire amount in his or her accounts has been distributed, distribution
will continue to be made to such Participant’s surviving Spouse, if any, or designated beneficiary,
unless such Participant’s surviving Spouse or beneficiary elects to receive such remaining amounts
in a lump sum.




     9.3. Required Minimum Distributions.



          Notwithstanding anything to the contrary contained in the Plan, the entire interest of a
Participant will be distributed in accordance with Section 401(a)(9) of the Code and the
regulations thereunder beginning no later than the Participant’s Required Beginning Date. The
provisions of this Section will apply for purposes of determining required minimum distributions
for calendar years beginning with the 2003 calendar year. Notwithstanding the other provisions of
this Section, distributions may be made under a designation made before January 1, 1984, in
accordance with section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act (TEFRA) and the
provisions of the Plan that relate to section 242(b)(2) of TEFRA.





     (a) If the Participant dies before distributions begin, the Participant’s entire
interest will be distributed, or begin to be distributed, no later than as follows:




     (1) If the Participant’s surviving Spouse is the Participant’s sole designated
beneficiary, then distributions to the surviving Spouse will begin by December 31 of
the calendar year immediately following the calendar year in which the Participant
died, or by December 31 of the calendar year in which the Participant would have
attained age 70-1/2, if later.




     (2) If the Participant’s surviving Spouse is not the Participant’s sole
designated beneficiary, then distributions to the designated beneficiary will begin
by December 31 of the calendar year immediately following the calendar year in which
the Participant died.



23









 






     (3) If there is no designated beneficiary as of September 30 of the year
following the year of the Participant’s death, the Participant’s entire interest
will be distributed by December 31 of the calendar year containing the fifth
anniversary of the Participant’s death.




     (4) If the Participant’s surviving Spouse is the Participant’s sole designated
beneficiary and the surviving Spouse dies after the Participant but before
distributions to the surviving Spouse begin, this subsection, other than subsection
(a)(1), will apply as if the surviving Spouse were the Participant.




     For purposes of this subsection, unless subsection (a)(4) applies, distributions are
considered to begin on the Participant’s Required Beginning Date. If subsection (a)(4)
applies, distributions are considered to begin on the date distributions are required to
begin to the surviving Spouse under subsection (a)(1). To the extent the Plan provides for
distributions in the form of annuities, if distributions under an annuity purchased from an
insurance company irrevocably commence to the Participant before the Participant’s Required
Beginning Date (or to the Participant’s surviving Spouse before the date distributions are
required to begin to the surviving Spouse under subsection (a)(1)), the date distributions
are considered to begin is the date distributions actually commence.




     (b) Unless the Participant’s interest is distributed in the form of an annuity
purchased from an insurance company or in a single sum on or before the Required Beginning
Date, as of the first distribution calendar year distributions will be made in accordance
with subsections (c) and (d). To the extent the Plan provides for distributions in the form
of annuities, if the Participant’s interest is distributed in the form of an annuity
purchased from an insurance company, distributions thereunder will be made in accordance
with the requirements of Code Section 401(a)(9) and the Treasury regulations.




     (c) During the Participant’s lifetime, the minimum amount that will be distributed for
each distribution calendar year is the lesser of:




     (1) the quotient obtained by dividing the Participant’s account balance by the
distribution period in the Uniform Lifetime Table set forth in section 1.401(a)(9)-9
of the Treasury regulations, using the Participant’s age as of the Participant’s
birthday in the distribution calendar year; or




     (2) if the Participant’s sole designated beneficiary for the distribution
calendar year is the Participant’s Spouse, the quotient obtained by dividing the
Participant’s account balance by the number in the Joint and Last Survivor Table set
forth in section 1.401(a)(9)-9 of the Treasury regulations, using the Participant’s
and Spouse’s attained ages as of the Participant’s and Spouse’s birthdays in the
distribution calendar year.




     Required minimum distributions will be determined beginning with the first distribution
calendar year and up to and including the distribution calendar year that includes the
Participant’s date of death.



24









 






     (d) If the Participant dies on or after the date distributions begin and there is a
designated beneficiary, the minimum amount that will be distributed for each distribution
calendar year after the year of the Participant’s death is the quotient obtained by dividing
the Participant’s account balance by the longer of the remaining life expectancy of the
Participant or the remaining life expectancy of the Participant’s designated Beneficiary,
determined as follows:




     (1) The Participant’s remaining life expectancy is calculated using the age of
the Participant in the year of death, reduced by one for each subsequent year.




     (2) If the Participant’s surviving Spouse is the Participant’s sole designated
beneficiary, the remaining life expectancy of the surviving Spouse is calculated for
each distribution calendar year after the year of the Participant’s death using the
surviving Spouse’s age as of the Spouse’s birthday in that year. For distribution
calendar years after the year of the surviving Spouse’s death, the remaining life
expectancy of the surviving Spouse is calculated using the age of the surviving
Spouse as of the Spouse’s birthday in the calendar year of the Spouse’s death,
reduced by one for each subsequent calendar year.




     (3) If the Participant’s surviving Spouse is not the Participant’s sole
designated beneficiary, the designated beneficiary’s remaining life expectancy is
calculated using the age of the beneficiary in the year following the year of the
Participant’s death, reduced by one for each subsequent year.




     If the Participant dies on or after the date distributions begin and there is no
designated beneficiary as of September 30 of the year after the year of the Participant’s
death, the minimum amount that will be distributed for each distribution calendar year after
the year of the Participant’s death is the quotient obtained by dividing the Participant’s
account balance by the Participant’s remaining life expectancy calculated using the age of
the Participant in the year of death, reduced by one for each subsequent year.




     (e) If the Participant dies before the date distributions begin and there is a
designated beneficiary, the minimum amount that will be distributed for each distribution
calendar year after the year of the Participant’s death is the quotient obtained by dividing
the Participant’s account balance by the remaining life expectancy of the Participant’s
designated beneficiary, determined as provided in subsection (d). If the Participant dies
before the date distributions begin and there is no designated beneficiary as of
September 30 of the year following the year of the Participant’s death, distribution of the
Participant’s entire interest will be completed by December 31 of the calendar year
containing the fifth anniversary of the Participant’s death. If the Participant dies before
the date distributions begin, the Participant’s surviving Spouse is the Participant’s sole
designated beneficiary, and the surviving Spouse dies before distributions are required to
begin to the surviving Spouse under subsection (a)(1), this Section will apply as if
the surviving Spouse were the Participant.



25









 






     (f) The following definitions shall apply for purposes of this Section:




     (1) Designated beneficiary shall mean the individual who is designated as the
beneficiary under the terms of the Plan and is the designated beneficiary under Code
Section 401(a)(9) and section 1.401(a)(9)-1, Q&A-4 of the Treasury regulations.




     (2) A distribution calendar year is a calendar year for which a minimum
distribution is required. For distributions beginning before the Participant’s
death, the first distribution calendar year is the calendar year immediately
preceding the calendar year which contains the Participant’s Required Beginning
Date. For distributions beginning after the Participant’s death, the first
distribution calendar year is the calendar year in which distributions are required
to begin under subsection (a). The required minimum distribution for the
Participant’s first distribution calendar year will be made on or before the
Participant’s Required Beginning Date. The required minimum distribution for other
distribution calendar years, including the required minimum distribution for the
distribution calendar year in which the Participant’s Required Beginning Date
occurs, will be made on or before December 31 of that distribution calendar year.




     (3) Life expectancy means an individual’s life expectancy as computed by use of
the Single Life Table in section 1.401(a)(9)-9 of the Treasury regulations.




     (4) The Participant’s account balance is the account balance as of the last
valuation date in the calendar year immediately preceding the distribution calendar
year (valuation calendar year) increased by the amount of any contributions made and
allocated or forfeitures allocated to the account balance as of dates in the
valuation calendar year after the valuation date and decreased by distributions made
in the valuation calendar year after the valuation date. The account balance for
the valuation calendar year includes any amounts rolled over or transferred to the
Plan either in the valuation calendar year or in the distribution calendar year if
distributed or transferred in the valuation calendar year.



     9.4. Required Beginning Date.



          The Required Beginning Date of a Participant shall be:





     (a) in the case of a Participant who is not a Five Percent Owner with respect to the
Plan Year ending in the calendar year in which the Participant attains age 70-1/2, the April
1 following the calendar year in which occurs the later of the date the Participant attains
age 70-1/2 and the date on which the Participant terminates employment; or




     (b) in the case of a Participant who is a Five Percent Owner with respect to the Plan
Year ending in the calendar year in which the Participant attains age 70-1/2, the April 1
following the calendar year in which the Participant attains age
70-1/2.







          
Each Participant shall have the right to withdraw all or any portion of his or her accounts
beginning on the April 1 following the calendar year in which the Participant reaches age 70-1/2.
 

26









 








SECTION 10 — DISTRIBUTIONS AT DISABILITY




     10.1. Distributions Upon Disability.



          If a Participant becomes permanently and totally disabled while in the employment of the
Employer, his or her accounts shall become fully vested (if not already fully vested), and shall be
distributed to him or her in a lump sum, unless the Participant elects an optional form of benefit
described in Section 9.2, in accordance with Sections 10.1.1, 10.1.2, 10.1.3, and 10.1.4 below.




          10.1.1. Distributions Of $5,000 Or Less.





          Distribution to a Participant who has terminated employment at his or her Disability
Date and whose vested account balances are less than or equal to $5,000 (excluding rollover
contributions and earnings thereon) shall be made in a lump sum within 60 days after the
Valuation Date coinciding with or next following his or her Disability Date.




          In the event of a mandatory distribution greater than $1,000 (including rollover
contributions and earnings thereon) pursuant to this Section 10.1.1, if the Participant does
not elect to have such distribution paid directly to an Eligible Retirement Plan (as defined
in Section 18.16(b) of the Plan) specified by the Participant in a Direct Rollover (as
defined in Section 18.16(d) of the Plan) or to receive the distribution directly, then such
distribution will be paid in a Direct Rollover to an individual retirement account
established on behalf of such Participant by the Plan Administrator.



          10.1.2. Distributions In Excess Of $5,000.





          In the event that the vested account balances of a Participant who has terminated
employment at his or her Disability Date exceed $5,000 (excluding rollover contributions and
earnings thereon), such Participant shall receive the notice described in Section 10.3.1.
If the Participant consents to the distribution of his or her accounts in the manner
required under Section 10.3.2 within 180 days after receiving the notice, distribution of
his or her accounts will be made in accordance with his or her election.



          10.1.3. Failure To Consent To Distribution.





          In the event that a Participant whose vested account balances exceed $5,000 (excluding
rollover contributions and earnings thereon) does not consent to the distribution of his or
her accounts in accordance with subsection 10.1.2 above when first eligible to do so, his or
her accounts shall be distributed to him or her on his or her Required Beginning Date as
determined under Section 9.4. Notwithstanding the preceding, such Participant may notify
the Employer at any time following his or her Disability Date that he or she wants to
receive the notice described in Section 10.3.1. If such Participant consents to the
distribution of his or her accounts in the manner required
under Section 10.3.2 within 180 days after receiving the notice, distribution of his or
her accounts will be made in accordance with his or her election.



27









 





          10.1.4. Valuation.





          A distribution under Sections 10.1.1, 10.1.2, or 10.1.3 shall be based on the value of
the Participant’s accounts as of the date such distribution is being made.



          10.1.5. Deemed Termination.





          A Participant who is permanently and totally disabled as described in Section 10.2
while in the employment of the Employer shall be deemed to have terminated such employment
on the date the Plan Administrator determines that he or she is permanently and totally
disabled.




     10.2. Determination Of Disability.





          A Participant shall be considered permanently and totally disabled only if he or she is
disabled by reason of a disability for which he or she becomes eligible for benefits under the
Employer’s long term disability plan or disability benefits under the Social Security Act.



     10.3. Notification Of Eligibility To Receive And Consent To Disability Benefits.



          10.3.1. Notice.





          In the event that the vested account balances of a Participant to be distributed
pursuant to Section 10.1 exceed $5,000 (excluding rollover contributions and earnings
thereon), such Participant shall receive notification of:




     (a) the material features and the relative values of his or her benefits under
the optional forms of benefit available under the Plan; and




     (b) his right to defer receipt of disability benefits, including the
consequences of failing to defer such receipt.



          10.3.2. Consent.




     The Participant’s consent to the distribution of disability benefits must be:





     (a) made after the Participant receives the notice described in the preceding
sentence; and




     (b) made within 180 days after he or she receives the notice (or a summary of
such notice).



28









 





SECTION 11 — DISTRIBUTIONS AT TERMINATION OF EMPLOYMENT (VESTING)




     11.1. Distributions Upon Termination Of Employment.



          A Participant whose employment with the Employer is terminated prior to the earliest of his or
her death, Disability Date or Normal Retirement Date shall receive the vested portion of his or her
accounts in a lump sum, unless the Participant elects an optional form of benefit described in
Section 9.2, in accordance with Sections 11.1.1, 11.1.2, 11.1.3, and 11.1.4 below.




          11.1.1. Distributions Of $5,000 Or Less.





          Distribution to a Participant who has terminated employment prior to his or her death,
Disability Date or Normal Retirement Date and whose vested account balances are less than or
equal to $5,000 (excluding rollover contributions and earnings thereon) shall be made in a
lump sum within 60 days after the Valuation Date coinciding with or next following the date
he or she terminates employment, provided he or she is not an Employee on such date.




          In the event of a mandatory distribution greater than $1,000 (including rollover
contributions and earnings thereon) pursuant to this Section 11.1.1, if the Participant does
not elect to have such distribution paid directly to an Eligible Retirement Plan (as defined
in Section 18.16(b) of the Plan) specified by the Participant in a Direct Rollover (as
defined in Section 18.16(d) of the Plan) or to receive the distribution directly, then such
distribution will be paid in a Direct Rollover to an individual retirement account
established on behalf of such Participant by the Plan Administrator.



          11.1.2. Distributions In Excess Of $5,000.





          In the event that the vested account balances of a Participant who has terminated
employment prior to his or her death, Disability Date or Normal Retirement Date exceed
$5,000 (excluding rollover contributions and earnings thereon), such Participant shall
receive the notice described in Section 11.4.1. If the Participant consents to the
distribution of his or her accounts in the manner required under Section 11.4.2 within 180
days after receiving the notice, distribution of his or her accounts will be made in
accordance with his or her election.



          11.1.3. Failure To Consent To Distribution.





          In the event that a Participant whose vested account balances exceed $5,000 (excluding
rollover contributions and earnings thereon) does not consent to the distribution of his or
her accounts in accordance with subsection 11.1.2 above when first eligible to do so, his or
her accounts shall be distributed to him or her on his or her Required Beginning Date as
determined under Section 9.4. Notwithstanding the
preceding, such Participant may notify the Employer at any time after his or her
termination that he or she wants to receive the notice described in Section 11.4.1. If such
Participant consents to the distribution of his or her accounts in the manner required under
Section 11.4.2 within 180 days after receiving the notice, distribution of his or her
accounts will be made in accordance with his or her election.



29









 





          11.1.4. Valuation.





          A distribution under Sections 11.1.1, 11.1.2 or 11.1.3 shall be based on the value of
the Participant’s accounts as of the Valuation Date as of which such distribution is being
made.



     11.2. Determination Of Vested Portion.




     (a) A Participant’s Pre-Tax Matched Account, Pre-Tax Unmatched Account, After-Tax
Matched Account, After-Tax Unmatched Account, Performance Contribution Account, and Rollover
Account shall be 100% vested and nonforfeitable at all times.




     (b) The portion of a Participant’s Company After-Tax Matching Account and Company
Pre-Tax Matching Account which shall be vested and nonforfeitable shall be determined in
accordance with the following schedule:



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







     (c) Notwithstanding paragraph (b) above, the Company After-Tax Matching Account and
Company Pre-Tax Matching Account of Participants who were employed by Patriot Coal Company
L.P. on December 1, 1995, shall be 100% vested and nonforfeitable at all times.




     (d) Notwithstanding any provision herein to the contrary, a Participant’s accounts
shall be 100% vested and nonforfeitable upon such Participant’s death, Normal Retirement
Date or Disability Date.



     11.3. Forfeitures.



          The nonvested portion of the Company After-Tax Matching and Pre-Tax Matching Accounts of a
Participant whose employment with the Employer is terminated prior to the earliest of his or her
death, Disability Date, or Normal Retirement Date shall be forfeited immediately when such
Participant has both terminated employment and received a distribution of his or her entire vested
account balances derived from Employer contributions under the Plan or when such Participant incurs
five consecutive one-year Breaks in Service, whichever first occurs.
The nonvested amounts shall be placed in a separate account until forfeited and shall be
credited with an allocation of earnings and losses pursuant to Section 7.2. If the Participant is
not employed again by the Employer on the date a forfeiture occurs under this Section, any
forfeited amounts plus earnings and losses thereon shall be used to reduce future Employer
contributions. Following such forfeiture, the Participant shall be 100% vested in the balance, if
any, of his or her accounts. If a Participant terminates employment with no vested interest in his
or her account balances derived from Employer contributions under the Plan, such Participant





30









 







shall
be treated as receiving a distribution of the vested portion of such account balances on the last
day of the Plan Year in which his or her termination occurs, provided he or she is not employed by
the Employer on such date. For purposes of determining whether a Participant has a vested interest
in his or her account balances derived from Employer contributions under the Plan, the Participant
shall be deemed to have such a vested interest if pre-tax contributions have been made under
Section 4.1 or 4.2 by the Employer for the Participant.




          If a person who has incurred a forfeiture hereunder is reemployed by the Employer during a
Plan Year before he or she has incurred five consecutive Breaks in Service, the amount in his or
her account balance which was forfeited shall be restored without adjustment for any subsequent
gains or losses. Restoration will first be made out of any unallocated forfeitures and, if such
forfeitures are insufficient to restore such person’s account balance, restoration shall be made
through an Employer contribution. If such a restoration is made, the restored amount shall be
maintained as a separate account, and the vested portion of such account from time to time shall
equal an amount (“X”) determined by the following formula:




X = P
(AB + (R x D)) - (R x D)



For purposes of applying such formula: “P” is the vested percentage at the relevant time; “AB” is
the account balance at the relevant time; “D” is the amount previously distributed to the
Participant upon his or her termination of employment; and “R” is the ratio of the account balance
at the relevant time to the amount of the account balance which was restored. If an amount is
restored to a person under this Section, separate Company After-Tax Matching and Pre-Tax Matching
Accounts shall be maintained for allocations made after his or her reemployment and vesting with
respect to such accounts shall be in accordance with Section 11.2.




     11.4. Notification Of Eligibility To Receive And Consent To Vested Benefits.



          11.4.1. Notice.





          In the event that the vested account balances of a Participant to be distributed
pursuant to Section 11.1 exceed $5,000 (excluding rollover contributions and earnings
thereon), such Participant shall receive notification of:




     (a) the material features and the relative values of his or her benefits under
the optional forms of benefit available under the Plan; and




     (b) his right to defer receipt of vested benefits, including the consequences
of failing to defer such receipt.



          11.4.2. Consent.





          The Participant’s consent to the distribution of the vested portion of his or her
accounts must be:




     (a) made after the Participant receives the notice described in the preceding
sentence; and




     (b) made within 180 days before the Valuation Date as of which distribution to
the Participant is to be made.




31









 





SECTION 12 — DISTRIBUTIONS AT DEATH




     12.1. 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 Spouse or beneficiaries in accordance with Sections 12.2, 12.3 and 12.4 . Upon
the death of a Participant after termination of his or her employment with the Employer, the vested
portion of the Participant’s remaining account balances shall be distributed in a lump sum to his
or her Spouse or beneficiaries in accordance with Sections 12.2, 12.3 and 12.4 . Any distribution
hereunder shall be based on the value of the Participant’s accounts as of the date such
distribution is made.




     12.2. Distribution To Spouse.



          Upon the death of a Participant, the entire balance of his or her accounts shall be
distributed to his or her surviving Spouse, if any, unless the surviving Spouse has consented in
the manner required under Section 12.5 to a designated beneficiary and one or more designated
beneficiaries survives the Participant.




     12.3. Designation Of Beneficiary.



          Each Participant shall have the right to name and change primary and contingent beneficiaries
under the Plan in accordance with such procedures and processes as determined by the Plan
Administrator. If upon the death of the Participant, the Participant has no surviving Spouse or
the Participant’s surviving Spouse has consented to the designation of a beneficiary in the manner
required under Section 12.5, 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.




     12.4. Beneficiary Not Designated.



          In the event the Participant has no surviving Spouse and 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 executor or
administrator.




     12.5. Spousal Consent To Designation Of Beneficiary.



          The Spouse of a Participant may consent in writing to the designation of a beneficiary other
than the Spouse or to a change in the designation of a beneficiary other than the Spouse. The
Spouse’s consent must acknowledge the effect of such designation of an alternate beneficiary (or
change in the alternate beneficiary) and must be witnessed by a notary public or Plan
representative. Any such consent must be filed with the Plan Administrator in order to be
effective.




          No consent need be obtained in the event the Participant has no Spouse or the Participant’s
Spouse cannot be located. In this event, the Participant must certify in accordance with such
procedures and processes as determined by the Plan Administrator that he or she has no Spouse or
that his or her Spouse cannot be located in order for his or her beneficiary designation to be
effective.


32









 








SECTION 13 — LEAVES OF ABSENCE AND TRANSFERS




     13.1. Military Leave Of Absence.



          So long as The Uniformed Services Employment and Reemployment Rights Act of 1994 (“USERRA”) or
any similar law shall remain in force, providing for reemployment rights for all persons in
military service, as therein defined, an Employee who leaves the employment of the Employer for
military service in the Armed Forces of the United States, as defined in such Act from time to time
in force, shall, for all purposes of this Plan, be considered as having been in the employment of
the Employer, with the time of his or her service in the military credited to his or her Service;
provided that upon such Employee being discharged from the military service of the United States he
or she applies for re-employment with the Employer and takes all other necessary action to be
entitled to, and to be otherwise eligible for, reemployment rights, as provided by USERRA, or any
similar law from time to time in force.




          13.1.1. Rights With Respect To Payroll Reduction Contributions.





          Any Employee who is reemployed while entitled to veterans’ reemployment rights under
USERRA and who has either (i) suspended his or her contributions during military service, or
(ii) made less than the maximum amount of contributions permitted by this Section during his
or her period of military service, shall be permitted to make the contributions described in
Sections 4.1 and 4.2 to the Plan with respect to the period of his or her military service
during the period which begins on the Employee’s date of reemployment with the Employer and
ends upon the earlier of:




     (a) the period equal to three times the Employee’s period of military service;
and




     (b) five years.




          The maximum amount of contributions which the Employee can make during this period
shall be the maximum amount of contributions that he or she would have been permitted to
make to the Plan during the period of military service if the individual had continued to be
employed by the Employer during such period and received Compensation during such period
equal to the Compensation the Employee would have received during the period of military
service had the Employee worked for the Employer during such period. If the Compensation
the Employee would have received during the period was not reasonably certain, the
Employee’s average Compensation from the Employer during the 12 month period immediately
preceding the period of military service shall be deemed to be such Compensation.




          If the Employer makes a contribution under Section 4.4 during a period when an Employee
was on military leave of absence and if the Employee later returns to employment and makes
the contributions described in Sections 4.1 and 4.2 for this period, the Employer shall make
such matching contributions on behalf of the Employee as would
have been made had the Employee’s contributions actually been made during the period of
his or her military service.



33









 





          13.1.2. Performance Contributions.





          An Employee who is on a leave of absence on account of military service described in
this Section which commenced during the Plan Year, but before the last day of the Employer’s
fiscal year ending in such Plan Year, will share in the allocation of Performance
Contributions under Section 4.5 for such Plan Year, but will not share in such allocations
for any subsequent Plan Year ending before the Employee’s return from such military leave.
If the Employee is reemployed while entitled to veterans’ reemployment rights under USERRA,
the Employer shall make Performance Contributions under Section 4.5 on behalf of the
Employee for each partial and full Plan Year in the Employee’s period of military service
for which the Employee did not receive a contribution. Such contributions shall be equal to
the amount of contributions which would have been made had the Employee continued to be
employed by the Employer during such military service and shall be determined as though the
Employee received Compensation equal to the amount the Employee would have received if he or
she were not in military service. If the Compensation the Employee would have received but
for such military service is not reasonably certain, the Employee’s average Compensation
from the Employer during the 12 month period immediately preceding the period of military
service shall be deemed to be such Compensation.



          13.1.3. Treatment Of Contributions.





          Contributions under this Section will be taken into account for purposes of the
limitations of Sections 402(g) or 415 in the year to which the contributions relate, not the
year in which the contributions are made. In addition, such contributions will not cause
the Plan to be treated as failing to meet the requirements of Code Sections 401(a)(4),
401(a)(26), 401(k)(3), 401(m), 410(b) or 416.




          Notwithstanding any provision of this Plan to the contrary, contributions, benefits and
service credit with respect to qualified military service will be provided in accordance
with Code Section 414(u). Loan repayments will be suspended under this Plan during a period
of qualified military service as permitted under Code Section 414(u)(4).



     13.2. Maternity Or Paternity Absence.



          In the case of any Employee who is absent from work





     (a) by reason of the pregnancy of the individual,




     (b) by reason of the birth of a child of the individual,




     (c) by reason of the placement of a child with the individual in connection with the
adoption of such child by such individual, or




     (d) for purposes of caring for such child for a period beginning immediately following
such birth or placement,



34









 




the Employee shall be credited with Days of Service following the date such absence begins until
the first anniversary of such date solely for purposes of determining whether a Break in Service
has occurred. In order to receive credit under this Section, an Employee must furnish to the
Employer information establishing (i) that the absence from work is for one of the reasons
described in this Section and (ii) the number of days for which the Employee was absent.




     13.3. Other Leaves Of Absence.



          An Employee on an Employer-approved leave of absence not described in Section 13.1 above shall
for all purposes of this Plan be considered as having continued in the employment of the Employer
for the period of such leave, provided that the Employee returns to the active employment of the
Employer before or at the expiration of such leave. Such approved leaves of absence shall be given
on a uniform, non-discriminatory basis in similar fact situations.




          Notwithstanding any other provision of the Plan, a Participant who is on an Employer-approved
leave of absence will share in the allocations of Employer contributions under Section 4.5 for the
Plan Year in which such leave of absence begins but will not share in such allocations for any
subsequent Plan Year ending before the Participant’s return from such leave of absence.




     13.4. Transfers.



          In the event that:





     (a) a Participant is transferred to employment with a member of the Controlled Group in
a status as a non-Employee; or




     (b) a person is transferred from employment with a member of the Controlled Group in a
status as a non-Employee to employment with the Employer under circumstances making such
person an Employee; or




     (c) a person was employed by a member of the Controlled Group in a status as a
non-Employee, terminated his or her employment and was subsequently employed by the Employer
as an Employee; or




     (d) a Participant was employed by the Employer as an Employee, terminated his or her
employment and was subsequently employed by a member of the Controlled Group in a status as
a non-Employee;



then the following provisions of this Subsection shall apply:





     (a) transfer to employment with a member of the Controlled Group as a non-Employee
shall not be considered termination of employment with the Employer, and such transferred
person shall continue to be entitled to the benefits provided in the Plan, as modified by
this Section;




     (b) employment with a member of the Controlled Group by a non-Employee will be deemed
to be employment by the Employer, but only with respect to employment



35









 







during any period that
such member of the Controlled Group is required to be aggregated with the Company pursuant
to Code Sections 414(b), (c) or (m);




     (c) amounts earned from a member of the Controlled Group by a non-Employee shall not
constitute Compensation hereunder;




     (d) termination of employment with a member of the Controlled Group which has not
adopted the Plan by a person entitled to benefits under this Plan (other than to transfer to
employment with another member of the Controlled Group) shall be considered as termination
of employment with the Employer;




     (e) all other terms and provisions of this Plan shall fully apply to such person and to
any benefits to which he or she may be entitled hereunder.



          Notwithstanding anything in this Plan to the contrary, a Participant who is no longer employed
by a member of the Controlled Group which includes the Company as a member shall be considered a
terminated Employee.




          Notwithstanding anything to the contrary in the Plan, a transfer from the status of an
employee of the Employer to that of a leased employee (as defined in Section 414(n) of the Code,
without regard to Section 414(n)(2)(B)) shall not be considered a termination of employment under
the Plan. An individual who has such a transfer shall not have a termination of employment until
he or she ceases to be an employee of the Employer and all members of the Controlled Group and is
no longer a leased employee.




36









 








SECTION 14 — TRUSTEE




          The Company shall select a Trustee to hold and administer the assets of the Plan and shall
enter into a trust agreement with such Trustee. The Company may change the Trustee from time to
time subject to the terms of the trust agreement.





37











 





SECTION 15 — ADMINISTRATION




     15.1. Plan Administrator.



          The Company shall be the Plan Administrator of the Plan within the meaning of 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.



     15.2. 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.



     15.3. 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.



     15.4. Duties Of The Plan Administrator.



          The Plan Administrator shall, as part of its general duty to supervise and administer the
Plan, direct the Trustee specifically in writing in regard to:




     (a) distribution payments, including the names of the payees, the amounts to be paid
and the time or times when payments shall be made;




     (b) any other payments which the Trustee is not authorized to make without direction in
writing by the Plan Administrator; and




     (c) preparation of an annual report for the Company, as of the end of each Plan Year,
in such form as the Company may require.



     15.5. 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.



     15.6. 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 select and monitor such funds as are made available
from time to time under the Plan in accordance with Section 8.1, to review claims



38









 







determinations in
accordance with Sections 16.3 and 16.4 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 15.8 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.



     15.7. 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.



     15.8. 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.



     15.9. Expenses.



          Any expense incurred by the Plan Administrator, the Committee or the Trustee with respect to
employment of agents, attorneys or other persons, including expenses incurred in maintaining the
qualified status of the Plan and the exempt status of the related trust shall be paid from the
assets of such trust unless paid by the Employer without reimbursement from the Plan.



39









 





SECTION 16 — CLAIM PROCEDURE




     16.1. 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 Director of
Benefits setting forth his or her claim. The request must be addressed to:



Director of Benefits

Patriot Coal Corporation 401(k) Retirement Plan

12312 Olive Boulevard

St. Louis, Missouri 63141




     16.2. Claim Decision.



          Upon receipt of a claim, the Director of Benefits shall advise the Claimant that a reply will
be forthcoming within a reasonable period of time, but ordinarily not later than ninety days, and
shall, in fact, deliver such reply within such period. However, the Director of Benefits may
extend the reply period for an additional ninety days for reasonable cause. If the reply period
will be extended, the Director of Benefits shall advise the Claimant in writing during the initial
ninety-day period indicating the special circumstances requiring an extension and the date by which
the Director of Benefits expects to render the benefit determination. If the claim is denied in
whole or in part, the Director of Benefits 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 as to 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 Subsection 16.3 hereof
and for the actual review of the denial under Subsection 16.4 hereof.



     16.3. Request For Review.



          Within sixty 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 of Benefits’ prior
determination. Such request must be addressed to:



40









 





Committee

Patriot Coal Corporation 401(k) Retirement Plan

12312 Olive Boulevard

St. Louis, Missouri 63141




          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 of Benefits in making its initial claims decision, (ii) was submitted, considered or
generated in the course of the Director of Benefits making its initial claims decision, without
regard to whether such instrument was actually relied upon by the Director of Benefits in making
its decision or (iii) demonstrates compliance by the Director of Benefits 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 of Benefits’ determination within such sixty-day period, he or
she shall be barred and estopped from challenging such determination.



     16.4. Review Of Decision.



          Within a reasonable period of time, ordinarily not later than sixty days, after the
Committee’s receipt of a request for review, it will review the Director of Benefits’ prior
determination. If special circumstances require that the sixty-day time period be extended, the
Committee will so notify the Claimant within the initial sixty-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 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;




     (b) the specific references to pertinent Plan provisions on which the denial is based;



41









 






     (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.



42









 





SECTION 17 — AMENDMENT AND TERMINATION




     17.1. 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 authorize or permit any part of the assets of the Plan (other than such
part as is required to pay taxes and administration expenses of the Plan) to be used for or
diverted to purposes other than for the exclusive benefit of the Participants or their
beneficiaries; no such amendment shall cause any reduction in the amount credited to any
Participant’s account or cause or permit any portion of the assets of the Plan to revert to or
become the property of the Employer; provided, however, that if a favorable determination letter
shall not be received upon the initial submission to the Internal Revenue Service that the Plan as
herein set forth or as amended meets the requirements of Sections 401(a), 401(k) and 501(a) of the
Code, the Company may, at its option, amend the Plan in any manner which will result in a favorable
determination letter being issued by the Internal Revenue Service or the Company may withdraw all
contributions made by it and the Plan shall then terminate with the same effect as if it had never
been adopted.



     17.2. Termination; Discontinuance Of Contributions.



          The Company shall have the right at any time to terminate this Plan. Upon termination,
partial termination, or complete discontinuance of contributions, 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.



43









 





SECTION 18 — MISCELLANEOUS




     18.1. 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, the Trustee 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.



     18.2. Spendthrift Clause.



          Except as provided in Section 5.1, 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 above, a Participant’s benefit will be offset against any amount he or she
is ordered or required to pay to the Plan pursuant to an order or requirement which arises under a
judgment of conviction for a crime involving the Plan, under a civil judgment entered by a court in
an action involving a fiduciary breach, or pursuant to a settlement agreement between the
Participant and the Department of Labor or the Pension Benefit Guaranty Corporation. Any such
offset shall be made pursuant to Section 206(d) of ERISA.



     18.3. 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 Committee or officer duly authorized by the board of
directors of the Employer. If no such Committee or officer has been so authorized, such act shall
be done and performed by resolution of the Board of Directors of the Company.



     18.4. 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.



     18.5. Construction Of Plan.



          Except as provided in ERISA, this Plan shall be construed according to the laws of the State
of Delaware, and all provisions of the Plan shall be administered according to the laws of such
state.



44









 





     18.6. 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 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.



     18.7. 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.



     18.8. Diversion Of Assets.



          No part of the assets of the Plan shall be used for, or diverted to, purposes other than the
exclusive benefit of Participants or their beneficiaries. Except as provided in Section 4.8, the
Employer shall have no beneficial interest in the assets of the Plan and no part of the assets of
the Plan shall revert or be repaid to the Employer, directly or indirectly.



     18.9. Service Of Process.



          The Plan Administrator shall constitute the Plan’s agent for service of process.



     18.10. Merger.



          In the event of any merger or consolidation with, or transfer of assets or liabilities to, any
other plan, each Participant shall (as if the Plan had then terminated) receive a benefit
immediately after the merger, consolidation or transfer which is equal to or greater than the
benefit he or she would have been entitled to receive immediately before the merger, consolidation
or transfer (if the Plan had then terminated).



     18.11. Benefit Limitation.




     (a) Notwithstanding any other provision hereof, and except as provided in Section 13.1,
the amounts allocated to a Participant during the Limitation Year under the Plan and
allocated to the Participant under any other defined contribution plan to which the Company
or any other member of the Controlled Group has contributed shall be proportionately
reduced, to the extent necessary, so that the Annual Addition does not exceed the lesser of:




     (1) $45,000, as adjusted for increases in the cost-of-living under Section
415(d) of the Code; or




     (2) 100% of the Participant’s compensation within the meaning of Section
415(c)(3) of the Code and Treasury Regulations Section 1.415-2(d)(11)(i), including
the deferrals described in Code Section 415(c)(3)(D), for the Limitation Year;
provided that such compensation limit shall not include any



45









 







contribution for medical
benefits after separation from service (within the meaning of Section 401(k) or
419A(f)(2) of the Code) which is otherwise treated as an Annual Addition.




     (b) For purposes of this Section, Limitation Year means the 12 month period commencing
on January 1 and ending on December 31.




     (c) If as a result of the allocation of forfeitures, a reasonable error in estimating a
Participant’s remuneration, a reasonable error in determining the amount of elective
deferrals (within the meaning of Section 402(g)(3) of the Code) that may be made with
respect to a Participant under the limits of Section 415 of the Code or other limited facts
and circumstances, the Annual Additions under the Plan for a particular Participant exceed
the limitations in this Section, the excess amounts will not be deemed Annual Additions for
the Limitation Year and will be treated as follows:




     (1) First, the portion of the excess attributable to amounts by which a
Participant elected to have his or her salary reduced under Sections 4.1 and 4.2
(together with any income or less any loss allocable to such amounts) shall be
returned to such Participant to the extent that the return would reduce the excess
amount in the Participant’s accounts, such amount to be returned on or before the
April 15 following the close of such Limitation Year.




     (2) Second, any Employer matching contributions which are attributable to the
contributions returned in (1) above shall be held in a suspense account and used to
reduce Employer contributions otherwise due under Section 4.




     (3) Third, to the extent required to reduce the excess amount, other Employer
contributions under Section 4 shall be held in a suspense account and used to reduce
Employer contributions otherwise due under Section 4.




     (d) For purposes of this Section, Annual Additions means the sum for the Limitation
Year of Employer contributions, Employee contributions (determined without regard to any
rollover contributions as defined in Sections 402(c), 403(a)(4), 403(b)(8), 408(d)(3) and
457(e)(16) of the Code and without regard to Employee contributions to a simplified employee
pension plan which are excludable from gross income under Section 408(k)(6) of the Code) and
forfeitures.



     18.12. Commencement Of Benefits.




     (a) Except as otherwise provided in Section 9.1, 10.1.3 or 11.1.3, the payment of
benefits under the Plan to the Participant will begin not later than the 60th day after the
close of the Plan Year in which the last of the following occurs:




     (1) the date on which the Participant attains age 62 (or, in the case of a
Participant who was a participant in the Dodge Hill Mining Company, LLC 401(k) Plan
on December 31, 2005, age 60); or



46









 






     (2) the 10th anniversary of the date on which the Participant commenced
participation in the Plan; or




     (3) the Participant’s termination of employment with the Employer.




          Notwithstanding the foregoing, if a Participant’s aggregate account balance exceeds
$5,000 (excluding rollover contributions and earnings thereon), in no case shall
distribution commence until the later of the date on which the Participant attains age 62 or
his or her Normal Retirement Age unless the Participant elects an earlier distribution in
the manner provided in Section 10.3 or 11.4.




     (b) Notwithstanding Subsection (a) or any other provision of the Plan, if the amount of
payment cannot be ascertained, or if it is not possible to make payment because the Plan
Administrator cannot locate the Participant after making reasonable efforts to do so, a
retroactive payment may be made no later than 60 days after the earliest date on which the
amount of such payment can be ascertained or the date on which the Participant is located,
whichever is applicable.




     (c) If the Plan Administrator is unable to locate any person entitled to receive
distribution from an account hereunder, such account shall be forfeited and used to reduce
Employer contributions on the date two years after:




     (1) the date the Plan Administrator sends by certified mail a notice concerning
the benefits to such person at his or her last known address, or




     (2) the Plan Administrator determines that there is no last known address.




          If an account is forfeited under this Section and a person otherwise entitled to the
account subsequently files a claim with the Plan Administrator during any Plan Year, before
any allocations for such Plan Year are made the account will be restored to the amount which
was forfeited without regard to any earnings or losses that would have been allocated. Such
restoration shall first be taken out of forfeitures which have not been allocated and if
such forfeitures are insufficient to restore such person’s account balance, restoration
shall be made by an Employer contribution to the Plan.



     18.13. Qualified Domestic Relations Order.




     Notwithstanding anything in the Plan to the contrary, benefits may be distributed in
accordance with the terms of a Qualified Domestic Relations Order (“QDRO”). For this purpose a
QDRO is any Domestic Relations Order determined by the Employer to be a Qualified Domestic
Relations Order within the meaning of Section 414(p) of the Code pursuant to this Section.




     (a) A Domestic Relations Order means a judgment, decree, or order (including the
approval of a property settlement agreement) which



47









 






     (1) relates to the provision of child support, alimony payments, or marital
property rights to a Spouse, former Spouse, child or other dependent of a
Participant,




     (2) is made pursuant to a state domestic relations law, and




     (3) creates or recognizes the existence of an Alternate Payee’s right, or
assigns to the Alternate Payee the right, to receive all or a portion of the
benefits of the Participant under the Plan.




          An “Alternate Payee” includes any Spouse, former Spouse, child, or other dependent of a
Participant who is designated by the Domestic Relations Order as having a right to receive
all or a portion of the benefits payable under the Plan with respect to the concerned
Participant.




     (b) To be a QDRO, the Domestic Relations Order must meet the specifications set forth
in Section 414(p) of the Code and must clearly specify the following:




     (1) Name and last known mailing address of the Participant.




     (2) Name and last known mailing address of each Alternate Payee covered by the
Domestic Relations Order.




     (3) The amount or the percentage of the Participant’s benefit to be paid to
each Alternate Payee, or the manner in which such amount or percentage is to be
determined.




     (4) The number of payments or period to which the Domestic Relations Order
applies.




     (5) Each plan to which the Domestic Relations Order applies.




     (c) The status of any Domestic Relations Order as a QDRO shall be determined under the
following procedures:




     (1) Upon receiving notice that a potential Alternate Payee intends to obtain a
QDRO with respect to a Participant’s benefits under the Plan (such as
notice that the potential Alternate Payee is currently seeking a Domestic
Relations Order), the Employer may, in its discretion, delay any payments of such
Participant’s benefits for a reasonable period of time.




     (2) Promptly upon receiving a Domestic Relations Order, the Employer will
notify the affected Participant and any Alternate Payee of the receipt by the Plan
of the Domestic Relations Order and of the Plan’s procedures for determining its
qualified status.




     (3) Within a reasonable period after receipt of a Domestic Relations Order, the
Employer will review the Domestic Relations Order to determine



48









 







whether the order is
a QDRO. After determining whether a Domestic Relations Order is a QDRO, the
affected Participant and each Alternate Payee (or any representative designated by
an Alternate Payee by written notice to the Employer) shall be furnished a copy of
such determination. The notice shall state:




     (A) whether the Domestic Relations Order has been determined to be a
QDRO; and




     (B) if the Domestic Relations Order is determined to be a QDRO, that
the Employer will commence any payments currently due under the Plan or the
QDRO to the person or persons entitled thereto after the expiration of a
period of 60 days commencing on the date of the mailing of the notice unless
prior thereto the Employer receives notice of legal proceedings disputing
the determination. The Employer shall, as soon as practical after such 60
day period, ascertain the dollar amount currently payable to each payee
pursuant to the Plan and the QDRO, and any such amounts shall be disbursed
by the Plan.




     (4) If there is a dispute on the status of a Domestic Relations Order as a
QDRO, there shall be a delay in making payments. The Employer shall direct that the
amounts otherwise payable be separately accounted for within the Plan. If within 18
months after the date the first payment would be required to be made under the
Domestic Relations Order, the Domestic Relations Order is determined not to be a
valid QDRO, or the status of the Domestic Relations Order has not been finally
determined, such amounts (including interest thereon) shall be paid to the person or
persons who would have been entitled to such amounts if there had been no Domestic
Relations Order. Any determination thereafter that the Domestic Relations Order is
a QDRO shall be applied prospectively only.




     (d) If a Domestic Relations Order requires payment to an Alternate Payee in an
immediate lump sum, the order shall not lose its status as a Qualified Domestic Relations
Order merely because of the immediate lump sum provision.



     18.14. Written Explanation Of Rollover Treatment.



          The Employer shall, when making an eligible rollover distribution, provide an explanation (or
summary thereof) to the recipient of such distribution of his or her right to roll
over such distribution to an eligible retirement plan and, if applicable, his or her right to
the special five or ten-year averaging and capital gains tax treatment in the Code. Such
explanation (or summary) will be provided to the recipient in accordance with rules prescribed by
the Internal Revenue Service.



     18.15. Leased Employees.



          Any person who is a leased employee of any member of the Controlled Group shall be treated for
all purposes of the Plan as if he or she were employed by a member of the Controlled Group which
has not adopted the Plan. In the case of a Leased Employee or an Employee, Years of Service shall
be determined by taking into account any period for which the



49









 






individual would have been a Leased
Employee but for the fact that he or she had not performed services for a member of the Controlled
Group on a substantially full-time basis for a period of at least one year. A transfer from the
status of an employee of the Employer to that of a Leased Employee shall not be considered a
termination of employment under the Plan. An individual who has such a transfer shall not have a
termination of employment until he or she ceases to be an employee of the Employer and all members
of its Controlled Group and is no longer a Leased Employee.



     18.16. Special Distribution Option.



          Notwithstanding any provision of the Plan to the contrary that would otherwise limit a
Distributee’s (as hereinafter defined) election under this Section, a Distributee may elect, at the
time and in the manner prescribed by the Plan Administrator, to have any portion of an Eligible
Rollover Distribution (as hereinafter defined) paid directly to an Eligible Retirement Plan (as
hereinafter defined) specified by the Distributee in a Direct Rollover.




     (a) An Eligible Rollover Distribution is any distribution of all or any portion of the
balance to the credit of the Distributee, except that an Eligible Rollover Distribution does
not include:




     (1) any distribution that is one of a series of substantially equal periodic
payments (not less frequently than annually) made for the life (or life expectancy)
of the Distributee or the joint lives (or joint life expectancies) of the
Distributee and the Distributee’s designated beneficiary, or for a specified period
of ten years or more;




     (2) any distribution to the extent such distribution is required under Section
401(a)(9) of the Code; and




     (3) any hardship distribution.




     (b) An Eligible Retirement Plan is




     (1) an individual retirement account described in Section 408(a) of the Code,




     (2) an individual retirement annuity described in Section 408(b) of the Code,




     (3) an annuity plan described in Section 403(a) of the Code, or




     (4) a qualified trust described in Section 401(a) of the Code,




     (5) an eligible deferred compensation plan described in Section 457(b) of the
Code which is maintained by an eligible employer described in Section 457(e)(1)(A)
of the Code, or




     (6) an annuity contract described in Section 403(b) of the Code,



50









 






that accepts the Distributee’s Eligible Rollover Distribution. However, in the case
of an Eligible Rollover Distribution to a Distributee who is a nonspouse
beneficiary, an Eligible Retirement Plan is only an individual retirement account or
individual retirement annuity.




     (c) A Distributee includes an Employee or former Employee. In addition, the Employee’s
or former Employee’s surviving Spouse, the Employee’s or former Employee’s Spouse or former
Spouse who is the Alternate Payee under a Qualified Domestic Relations Order, as defined in
Section 414(p) of the Code, and the Employee’s or former Employee’s nonspouse beneficiary
who is an individual (or, to the extent permitted in regulations issued under Section
402(c)(11)(B) of the Code, a trust) designated in accordance with Section 12.3 are
Distributees with regard to the interest of the surviving Spouse, Spouse, former Spouse or
nonspouse beneficiary.




     (d) A Direct Rollover payment is a payment by the Plan to the Eligible Retirement Plan
specified by the Distributee.




     (e) The Employer shall provide notice of the special distribution option described in
the preceding Section to the Participant in accordance with rules prescribed by the Internal
Revenue Service.



     18.17. Waiver Of 30-Day Period.



          A Participant who receives the notice (or summary) described in Section 10.3.1 or 11.4.1 will
simultaneously receive the notice (or summary) described in Section 18.14 and will be given the
opportunity to consider for at least 30 days after such notices (or summaries) are provided the
decision of whether or not to elect a Direct Rollover (as described in Section 18.16) and whether
or not to elect to defer receipt of his or her vested benefit. A Participant may waive such
opportunity to consider such elections for at least 30 days by making an election before the 30 day
time period has elapsed. Notwithstanding any provision herein to the contrary, the Employer may
distribute a Participant’s vested benefit pursuant to his or her distribution election forms at any
time following such Participant’s waiver of the opportunity to consider such elections for at least
30 days.



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SECTION 19 — TOP-HEAVY DEFINITIONS




     19.1. Accrued Benefits.



          “Accrued Benefits” means “the present value of accrued benefits” as that phrase is defined
under regulations issued under Section 416 of the Code. For purposes of Sections 19 and 20 hereof,
the Accrued Benefits of any Participant (other than a Key Employee) shall be determined under the
single accrual rate used by all Qualified Plans of the Employer which are defined benefit plans, or
if there is no single accrual rate, Accrued Benefits shall be determined as accruing no more
rapidly than the slowest rate permitted under Section 411(b)(1)(C) of the Code. The present values
of Accrued Benefits and the amounts in accounts of an employee as of the Determination Date shall
be increased by the distributions made with respect to the employee under the Plan and any plan
aggregated with the Plan under Section 416(g)(2) of the Code during the one year period ending on
the Determination Date. The preceding sentence shall also apply to distributions under a
terminated plan which, had it not been terminated, would have been aggregated with the Plan under
Section 416(g)(2)(A)(i) of the Code. In the case of a distribution made for a reason other than
separation from service, death or disability, this provision shall be applied by substituting “five
year period” for “one year period.”



     19.2. Beneficiaries.



          “Beneficiaries” means the person or persons to whom the share of a deceased Participant’s
accounts are payable.



     19.3. Determination Date.



          “Determination Date” means for a Plan Year the last day of the preceding Plan Year.



     19.4. Former Key Employee.



          “Former Key Employee” means any person presently or formerly employed by the Controlled Group
(and the Beneficiaries of such person) who during the Plan Year is not classified as a Key Employee
but who was classified as a Key Employee in a previous Plan Year; provided, however, that a person
who has not performed any services for the Controlled Group at any time during the one year period
ending on the Determination Date (and the Beneficiaries of any such person) shall not be considered
a Former Key Employee.



     19.5. Key Employee.



          “Key Employee” means any person presently or formerly employed by the Controlled Group (and
the Beneficiaries of such person) who is a “key employee” as that term is defined in Section 416(i)
of the Code and the regulations thereunder; provided, however, that a person who has not performed
any services for the Controlled Group at any time during the one year period ending on the
Determination Date (and the Beneficiaries of any such person) shall
not be considered a Key Employee. For purposes of determining whether a person is a Key
Employee, the definition of Top Heavy Compensation shall be applied.



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     19.6. Non-Key Employee.



          “Non-Key Employee” means any person presently or formerly employed by the Controlled Group
(and the Beneficiaries of such person) who is not a Key Employee or a Former Key Employee;
provided, however, that a person who has not performed any services for the Controlled Group at any
time during the one year period ending on the Determination Date (and the Beneficiaries of any such
person) shall not be considered a Non-Key Employee.



     19.7. Permissive Aggregation Group.



          “Permissive Aggregation Group” means each Qualified Plan of the Controlled Group in the
Required Aggregation Group plus each other Qualified Plan which is not part of the Required
Aggregation Group but which satisfies the requirements of Sections 401(a)(4) and 410 of the Code
when considered together with the Required Aggregation Group.



     19.8. Required Aggregation Group.



          “Required Aggregation Group” means each Qualified Plan (including any terminated Qualified
Plan) of the Controlled Group in which a Key Employee participates during the Plan Year containing
the Determination Date or any of the four preceding Plan Years and each other Qualified Plan
(including any terminated Qualified Plan) of the Controlled Group which during this period enables
any Qualified Plan (including any terminated Qualified Plan) in which a Key Employee participates
to meet the requirements of Section 401(a)(4) or 410 of the Code.



     19.9. Top-Heavy Compensation.



          “Top-Heavy Compensation” means compensation within the meaning of Section 415(c)(3) of the
Code.



     19.10. Top-Heavy Group.



          “Top-Heavy Group” means, for a Plan Year, the Required Aggregation Group if, and only if, the
sum of the Accrued Benefits (valued as of the Determination Date for such Plan Year) under all
Qualified Plans (including any terminated Qualified Plans) in the Required Aggregation Group for
Key Employees exceeds 60% of the sum of the Accrued Benefits (valued as of such Determination Date)
under all Qualified Plans (including any terminated Qualified Plans) in the Required Aggregation
Group for all Key Employees and Non-Key Employees; provided, however, that the Required Aggregation
Group will not be a Top-Heavy Group for a Plan Year if the sum of the Accrued Benefits (valued as
of the Determination Date for such Plan Year) under all Qualified Plans (including any terminated
Qualified Plans) in the Required Aggregation Group for Key Employees does not exceed 60% of the sum
of the Accrued Benefits (valued as of such Determination Date) under all Qualified Plans in the
Permissive Aggregation Group for all Key Employees and Non-Key Employees. If the Qualified Plans
in the Required or Permissive Aggregation Group have different Determination Dates, the Accrued
Benefits under
each such Plan shall be calculated separately, and the Accrued Benefits as of Determination
Dates for such Plans that fall within the same calendar year shall be aggregated.



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SECTION 20 — TOP-HEAVY RULES




     20.1. Special Top-Heavy Rules.



          If for any Plan Year the Plan is part of a Top-Heavy Group, then, effective as of the first
day of such Plan Year the following new Section 7.3 is added to apply to Participants who accrue an
Hour of Employment on or after the first day of such Plan Year:



          7.3 Minimum Allocation if Plan is part of Top-Heavy Group.




          Notwithstanding the foregoing, for each Plan Year in which the Plan is part of a
Top-Heavy Group, the sum of the Employer contributions and forfeitures allocated under the
Plan to the account of each Non-Key Employee who is both a Participant and Employee on the
last day of such Plan Year shall be at least equal to the lesser of three percent of such
Non-Key Employee’s Top-Heavy Compensation for such Plan Year or the largest percentage of
Top-Heavy Compensation allocated to the account of any Key Employee; provided, however, that
if for any Plan Year a Non-Key Employee is a Participant in both this Plan and one or more
defined contribution plans, the Employer need not provide the minimum allocation described
in the preceding sentence for such Non-Key Employee if the Employer satisfies the minimum
allocation requirement of Section 416(c)(2)(B) of the Code for the Non-Key Employee in such
other defined contribution plans. Amounts which a Non-Key Employee or Key Employee elects
to contribute on a pre-tax basis to a Qualified Plan which meets the requirements of Section
401(k) of the Code shall be considered an Employer contribution for purposes of Section
19.10; provided, however, that such pre-tax contributions made by Non-Key Employees may not
be taken into account in determining the minimum allocation provided under this Section. In
addition, matching contributions made on behalf of Non-Key Employees may be taken into
account in determining the minimum allocation provided under this Section.



          IN WITNESS WHEREOF, the Company has caused this Plan to be executed by one of its duly
authorized officers this 1st day of November, 2007.



	 	 	 	 	 
	 	PATRIOT COAL CORPORATION

 	 
	 	By:  	/s/ Sara E. Wade
 	 
	 	 	Senior Vice President – Human Resources 	 
	 	 	 	 



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EXHIBIT A




Appalachia Mine Services, LLC

Dodge Hill Mining Company, LLC

Eastern Associated Coal Corp.

Grand Eagle Mining, Inc.

Highland Mining Company

Ohio County Coal Company

Peabody Coal Company

Pine Ridge Coal Company

Rivers Edge Mining, Inc.





55