exv10w16



 





Exhibit 10.16




PATRIOT COAL CORPORATION

SUPPLEMENTAL 401(k) RETIREMENT PLAN




          WHEREAS, Patriot Coal Corporation (“Company”) desires to adopt the Patriot Coal Corporation
Supplemental 401(k) Retirement Plan (“Plan”) for the benefit of a select group of management or
highly compensated employees of the Company and its subsidiaries or affiliates, within the meaning
of the Employee Retirement Income Security Act of 1974, as amended, whose benefits under the
Patriot Coal Corporation 401(k) Retirement Plan are limited by the provisions of Section 401(a)(17)
or 415 of the Internal Revenue Code of 1986, as amended (“Code”);




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





 









 








PATRIOT COAL CORPORATION

SUPPLEMENTAL 401(k) RETIREMENT PLAN




TABLE OF CONTENTS




	 	 	 	 	 
	 	 	PAGE
	SECTION 1 — NAME OF PLAN

	 	 	1	 
	 
	 	 	 	 
	SECTION 2 — DEFINITIONS

	 	 	2	 
	 
	 	 	 	 
	2.1. Basic Plan

	 	 	2	 
	2.2. Board

	 	 	2	 
	2.3. Code

	 	 	2	 
	2.4. Committee

	 	 	2	 
	2.5. Company

	 	 	2	 
	2.6. Compensation

	 	 	2	 
	2.7. Controlled Group

	 	 	2	 
	2.8. Employee

	 	 	2	 
	2.9. Employer

	 	 	2	 
	2.10. Normal Retirement Date

	 	 	3	 
	2.11. Participant

	 	 	3	 
	2.12. Plan Administrator

	 	 	3	 
	2.13. Plan Year

	 	 	3	 
	2.14. Pro-Rated Salary

	 	 	3	 
	2.15. Valuation Date

	 	 	3	 
	2.16. Years of Service

	 	 	3	 
	 
	 	 	 	 
	SECTION 3 — ELIGIBILITY

	 	 	4	 
	 
	 	 	 	 
	3.1. Prior Participants

	 	 	4	 
	3.1. New Participants

	 	 	4	 
	3.3. Cessation Of Participation

	 	 	5	 
	 
	 	 	 	 
	SECTION 4 – CREDITS

	 	 	6	 
	 
	 	 	 	 
	4.1. Deferral Credits

	 	 	6	 
	4.2. Employer Matching Credits

	 	 	6	 
	4.3. Performance Credits

	 	 	6	 
	4.4. Elections

	 	 	7	 
	 
	 	 	 	 
	SECTION 5 — ALLOCATION

	 	 	9	 
	 
	 	 	 	 
	5.1. Establishment Of Accounts

	 	 	9	 
	5.2. Crediting Earnings Or Losses

	 	 	9	 
	5.3. Source of Payments

	 	 	9	 






 









 






	 	 	 	 	 
	 	 	PAGE
	SECTION 6 — INVESTMENT OF ACCOUNTS

	 	 	10	 
	 
	 	 	 	 
	6.1. Investment Funds

	 	 	10	 
	6.2. Participant’s Selection Of Investment Fund

	 	 	10	 
	6.3. Transfers Between Investment Funds

	 	 	10	 
	6.4. Investments and Charges

	 	 	10	 
	 
	 	 	 	 
	SECTION 7 — DISTRIBUTIONS AT RETIREMENT

	 	 	11	 
	 
	 	 	 	 
	7.1. Normal Retirement Distributions

	 	 	11	 
	 
	 	 	 	 
	SECTION 8 — DISTRIBUTIONS AT TERMINATION OF EMPLOYMENT (VESTING)

	 	 	12	 
	 
	 	 	 	 
	8.1. Distributions Upon Termination Of Employment

	 	 	12	 
	8.2. Determination Of Vested Portion

	 	 	12	 
	8.3. Forfeitures

	 	 	12	 
	 
	 	 	 	 
	SECTION 9 — DISTRIBUTIONS AT DEATH

	 	 	14	 
	 
	 	 	 	 
	9.1. Distributions Upon Death

	 	 	14	 
	9.2. Designation Of Beneficiary

	 	 	14	 
	9.3. Beneficiary Not Designated

	 	 	14	 
	 
	 	 	 	 
	SECTION 10 — ADMINISTRATION

	 	 	15	 
	 
	 	 	 	 
	10.1. Plan Administrator

	 	 	13	 
	10.2. Construction

	 	 	13	 
	10.3. Delegation By The Plan Administrator

	 	 	13	 
	10.4. Records Of The Plan Administrator

	 	 	13	 
	10.5. Committee

	 	 	13	 
	10.6. Decisions ByThe Committee

	 	 	14	 
	10.7. Meetings Of The Committee

	 	 	14	 
	10.8. Expenses

	 	 	14	 
	 
	 	 	 	 
	SECTION 11 — CLAIM PROCEDURE

	 	 	17	 
	 
	 	 	 	 
	11.1. Claim

	 	 	17	 
	11.2. Claim Decision

	 	 	17	 
	11.3. Request For Review

	 	 	17	 
	11.4. Review Of Decision

	 	 	18	 
	 
	 	 	 	 
	SECTION 12 — AMENDMENT AND TERMINATION

	 	 	20	 
	 
	 	 	 	 
	12.1. Amendment

	 	 	20	 
	12.2. Termination; Discontinuance Of Credits

	 	 	20	 
	 
	 	 	 	 
	SECTION 13 — MISCELLANEOUS

	 	 	21	 
	 
	 	 	 	 
	13.1. Participants’ Rights

	 	 	21	 
	13.2. Spendthrift Clause

	 	 	21	 
	13.3. Delegation Of Authority By Employer

	 	 	21	 
	13.4. Distributions To Minors

	 	 	21	 
	13.5. Construction Of Plan

	 	 	21	 
	13.6. Gender, Number And Headings

	 	 	21	 
	13.7. Separability Of Provisions

	 	 	22	 
	13.8. Service Of Process

	 	 	22	 







ii









 








PATRIOT COAL CORPORATION

SUPPLEMENTAL 401(k) RETIREMENT PLAN




SECTION 1 — NAME OF PLAN




          This Plan shall be known as the “Patriot Coal Corporation Supplemental 401(k) Retirement
Plan.”




 









 








SECTION 2 — DEFINITIONS




     2.1. Basic Plan.



      
    “Basic Plan” means the Patriot Coal Corporation 401(k) Retirement Plan.




     2.2. Board.



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



     2.3. Code.



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




     2.4. Committee.



          “Committee” means the Committee appointed pursuant to Section 10.5.




     2.5. Company.



          “Company” means Patriot Coal Corporation.




     2.6. Compensation.



          “Compensation” means base pay plus overtime received on or after November 1, 2007 by an
Employee during the Plan Year for services rendered with respect to the Employer. Such amount
shall include all amounts contributed to a cafeteria plan which meets the requirements of Section
125 of the Code. Such amount shall not include Employer credits under this Plan or Employer
contributions or benefits under any plan qualified under Section 401 of the Code, awards under the
incentive compensation plan or any similar incentive plans, payments under any savings plan, any
special allowance for foreign service, or any payment during long-term disability.




     2.7. Controlled Group.



          “Controlled Group” means the Company and all other entities required to be aggregated with the
Company under Sections 414(b), (c), or (m) of the Code or regulations issued pursuant to Section
414(o) of the Code.




     2.8. Employee.



          “Employee” means any person who is classified by the Employer as an employee.




     2.9. Employer.



          “Employer” means the Company or 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









 








     2.10. Normal Retirement Date.



          “Normal Retirement Date” means the date on which a Participant terminates his or her
employment with the Employer (except by death) provided such date is on or after (a) his attainment
of age 62.




     2.11. Participant.



          “Participant” means an Employee who has satisfied the eligibility requirements of Section 3
and who has not become a former Participant under Section 3.3.




     2.12. Plan Administrator.



          “Plan Administrator” means Patriot Coal Corporation.




     2.13. Plan Year.



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



     2.14. Pro-Rated Salary.




     “Pro-Rated Salary” means:




     (a) in the case of a Participant compensated on a salaried basis, such Participant’s
base salary determined as of the last day of the Employer’s fiscal year; or




     (b) in the case of a Participant compensated on an hourly basis, the product of such
Participant’s hourly rate determined as of the last day of the Employer’s fiscal year
multiplied by 2,080;


multiplied by a fraction, the numerator of which is the number of days on which the Participant was
an Employee under the Basic Plan, as defined therein, during such fiscal year (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, (c) on a leave of absence described in Section 13.3 of the Basic Plan.




     2.15. Valuation Date.



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




     2.16. Years of Service.



          “Years of Service” means years of service as credited under the Basic Plan.




3









 








SECTION 3 — ELIGIBILITY




     3.1. Prior Participants.



          For the Plan Year ending December 31, 2007, each person who was a Participant in the Peabody
Investments Corp. Supplemental 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.



          With respect to any Plan Year beginning after December 31, 2007 (hereinafter referred to in
this Section 3.2 as the “current Plan Year”):





     (a) each Employee (1) who is a member of a select group of management or highly
compensated employees of the Employer, within the meaning of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”), (2) who is eligible to participate in the Basic
Plan, and (3) whose Compensation for the Plan Year immediately preceding the current Plan
Year (including, for purposes of determining eligibility for the Plan Year beginning January
1, 2008, Compensation as determined under the Peabody Investments Corp. Supplemental
Employee Retirement Account during the period from January 1, 2007 through October 31, 2007)
exceeded the limit under Section 401(a)(17) of the Code in effect for the current Plan Year
(or, in the case of a newly hired Employee who commences employment with the Employer during
the current Plan Year, whose Compensation for the current Plan Year is anticipated to exceed
such limit), shall be eligible:




     (i) to elect to defer his or her Compensation in accordance with Section 4.1;
and




     (ii) for Employer matching credits under Section 4.2 and performance credits
under Section 4.3;



     for the current Plan Year;




     (b) any other Employee who is eligible for an allocation of the Performance
Contribution under the Basic Plan, as defined therein, for the current Plan Year which
exceeds the limit under Section 415 of the Code or whose Compensation for the current Plan
Year exceeds the limit under Section 401(a)(17) of the Code in effect for the current Plan
Year shall be eligible for performance credits under Section 4.3; or




     (c) any Employee (1) who is a member of a select group of management or highly
compensated employees of the Employer, within the meaning of ERISA, and (2) who is employed
at the level of Director or above and is eligible for a long-term incentive plan maintained
by the Company or a member of the Controlled Group, shall be eligible for discretionary
credits under Section 4.4; provided however, that nothing in this Section 3.2(c) or
elsewhere in the Plan shall constitute or be construed as a guarantee that any such Employee
shall have discretionary credits credited to his or her account for any Plan Year.



4









 





     3.3. 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;



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




5









 








SECTION 4 — CREDITS




     4.1. Deferral Credits.



          A Participant may elect to have from 1% to 60% of his or her Compensation deferred and
credited by the Employer to the Plan to the extent such amount (1) exceeds the amount of
Compensation which the Participant was entitled to contribute to the Basic Plan under the limits of
Sections 401(a)(17) of the Code, or (2) would exceed the amount of Compensation which the
Participant would be entitled to contribute to the Basic Plan under the limits of Section 415 of
the Code, determined on the basis of the Participant’s elections in effect under the Basic Plan on
the first day of the Plan Year and without regard to any changes in such elections on or after the
first day of such Plan Year (or, in the case of a newly hired Participant who commences employment
with the Employer during a Plan Year, the day such Participant makes his or her election with
respect to such Plan Year). Each Participant shall elect in accordance with the rules and
procedures established by the Plan Administrator in increments of 1% the percentage of his or her
Compensation under this Section to be credited to his or her account as described under 5.1. Any
such election under the Peabody Investments Corp. Supplemental 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.
Any amounts described in this Section 4.1 shall be credited to the Plan as of the date the
Participants’ contributions to the Basic Plan would be paid to the trustee.




     4.2. Employer Matching Credits.



          The Employer will credit to the Plan an amount equal to 100% of the first 6% of his or her
Compensation that the Participant elects to have deferred and credited to the Plan under Section
4.1.




     4.3. Performance Credits.



          In addition to any amounts credited to the Plan by the Employer pursuant to Section 4.2, the
Employer will credit an additional amount if the Employer meets or exceeds certain performance
targets established by the Board on an annual basis. If the maximum performance target established
by the Board for the Employer’s fiscal year is met or exceeded, the Employer will credit to the
Plan on behalf of each Participant described in Section 3.2(a) or (b) (or, for the Plan Year ending
December 31, 2007, Participants described in Section 3.1 who were described in Section 3.1(a) or
(b) of the Peabody Investments Corp. Supplemental Employee Retirement Account immediately prior to
November 1, 2007) who is employed on the last day of such fiscal year an amount equal to 4% of the
Participant’s Pro-Rated Salary to the extent such amount exceeds the amount of Pro-Rated Salary
which the Participant was entitled to have the Employer contribute on his or her behalf to the
Basic Plan, if any, under the limits of Sections 401(a)(17) and 415 of the Code. If the Employer
meets the minimum performance target established by the Board for the Employer’s fiscal year but
does not meet the maximum performance target, the Employer will credit to the Plan on behalf of
each eligible Participant who is employed on the last day of such fiscal year a percentage of such
Participant’s Pro-Rated Salary to be determined by the Board (which percentage shall be less than
4% of the Participant’s Pro-Rated Salary) based on the Employer’s overall performance in relation
to the maximum and
minimum performance target ranges to the extent such amount exceeds the




6









 







amount of Pro-Rated
Salary which the Participant was entitled to have the Employer contribute on his or her behalf to
the Basic Plan, if any, under the limits of, Sections 401(a)(17) and 415 of the Code. Any amounts
described in this Section 4.3 shall be credited to the Plan as soon as practicable following the
determination of whether the Employer has met or exceeded the applicable performance targets.
Notwithstanding the foregoing, (i) if the Employer does not meet the minimum performance target
established by the Board for the Employer’s fiscal year, the Board may, in its sole discretion,
authorize the Employer to credit to the Plan on behalf of each eligible Participant who is employed
on the last day of such fiscal year a percentage of such Participant’s Pro-Rated Salary determined
by the Board to the extent such amount exceeds the amount of Pro-Rated Salary which the Participant
was entitled to have the Employer contribute on his or her behalf to the Basic Plan, if any, under
the limits of Sections 401(a)(17) and 415 of the Code; (ii) if the Employer exceeds the maximum
performance target established by the Board for the Employer’s fiscal year, the Board may, in its
sole discretion, authorize the Employer to credit to the Plan on behalf of each eligible
Participant who is employed on the last day of such fiscal year an additional percentage of such
Participant’s Pro-Rated Salary determined by the Board to the extent such amount exceeds the amount
of Pro-Rated Salary which the Participant was entitled to have the Employer contribute on his or
her behalf to the Basic Plan, if any, under the limits of Sections 401(a)(17) and 415 of the Code;
and (iii) in lieu of any credit otherwise determined under this Section 4.3, for the fiscal year
ending December 31, 2007, the Employer shall credit to the Plan on behalf of each eligible
Participant who is employed on the last day of such fiscal year such amount, if any, that is equal
to that uniform percentage of such eligible Participant’s Pro-Rated Salary as was determined under
Section 4.5(iii) of the Basic Plan for such fiscal year to the extent such eligible Participant’s
Pro-Rated Salary exceeded the limit of Section 401(a)(17) of the Code or would have caused the
contribution allocated to such eligible Participant under Section 4.5(iii) of the Basic Plan for
such fiscal year to exceed the limits of Section 415 of the Code.




     4.4. Discretionary Credits.



          For any Plan Year, the Employer may credit to the Plan for one or more Participants described
in Section 3.2(c) an amount determined by the Employer in its sole discretion for each such
Participant. Nothing herein shall require the Employer to credit (i) any such amount for any Plan
Year, (ii) the same amount, either as a dollar amount or a percentage of Compensation, for all such
Participants, or (iii) any amount for any particular Participant. The fact that a Participant is
credited with an amount under this Section 4.4 for any Plan Year shall not entitle that Participant
to be credited with any such amount for any subsequent Plan Year.




     4.5. Elections.



          Each election by a Participant under Section 4.1 for a Plan Year must be made prior to the
beginning of the Plan Year in accordance with the rules and procedures established by the Plan
Administrator; provided, however, that in the case of a newly hired Participant who commences
employment with the Employer during a Plan Year, such election may be made within 30 days after the
Participant commences such employment. Any such election shall be effective and irrevocable for
such Plan Year (or, in the case of a newly hired Participant, for the portion of the Plan Year
following such election), and shall remain in effect for subsequent Plan
Years in which the Participant continues to satisfy the requirements of Section 3.2 unless the
Participant makes a new election with respect to any such Plan Year in accordance with this Section
4.5.




7









 








SECTION 5 — ALLOCATION




     5.1. Establishment Of Accounts.



          The Plan Administrator shall establish and maintain for each Participant a Pre-Tax Matched
Account, a Pre-Tax Unmatched Account, a Company Pre-Tax Matching Account, a Performance Credit
Account and a Discretionary Account. All amounts by which an Employee elects to have his or her
salary deferred under Section 4.1 up to the applicable percentage of Compensation set forth in
Section 4.2 shall be credited to his or her Pre-Tax Matched Account, all amounts by which an
Employee elects to have his or her salary deferred under Section 4.1 in excess of the applicable
percentage set forth in Section 4.2 shall be credited to his or her Pre-Tax Unmatched Account, all
Employer credits under Section 4.2 shall be credited to his or her Company Pre-Tax Matching
Account, all Employer credits under Section 4.3 shall be credited to his or her Performance Credit
Account and all Employer credits under Section 4.4 shall be credited to his or her Discretionary
Account.




     5.2. Crediting Earnings Or Losses.



          All earnings or losses shall be based on appreciation or depreciation in the fair market value
of the investment funds in which the Participant is deemed to have invested his or her accounts
under Section 6 and shall be credited to accounts based on account balances on each Valuation Date.




     5.3 Source of Payments.



          Notwithstanding anything herein to the contrary, the payments to any Participant or
beneficiary under the Plan shall be made from assets which shall continue, for all purposes, to be
a part of the general, unrestricted assets of the Employer; no person shall have any interest in
any such assets by virtue of the provisions of this Plan. The Employer’s obligation hereunder
shall be an unfunded and unsecured promise to pay money in the future. To the extent that any
person acquires a right to receive payments from the Employer under the provisions of this Plan,
such right shall be no greater than the right of any unsecured general creditor of the Employer; no
such person shall have nor acquire any legal or equitable right, interest or claim in or to any
property or assets of the Employer.




          In the event that, in its discretion, the Employer purchases an insurance policy or policies
insuring the life of any Participant (or any other property) to allow the Employer to recover the
cost of providing benefits, in whole or in part, hereunder, neither the Participant nor any
beneficiary hereunder shall have any rights whatsoever therein or in the proceeds therefrom. The
Employer shall be the sole owner and beneficiary of any such insurance policy or other property and
shall possess and may exercise all incidents of ownership therein. No such policy, policies or
other property shall be held in any trust for the Participants, any beneficiary or any other person
nor as collateral security for any obligation of the Employer hereunder.




8









 








SECTION 6 — EARNINGS ON ACCOUNTS




     6.1. Investment Funds.



          A Participant may elect to have earnings or losses credited on all of his or her accounts as
if such accounts had been invested in such funds as are made available from time to time under the
Basic Plan, excluding the Patriot Coal Corporation Stock Fund and the Peabody Energy Stock Fund.




     6.2. Participant’s Selection Of Investment Fund.



          Each Participant shall designate in 1% increments the percentages of amounts credited to his
or her accounts under Section 4 for such Plan Year which are to be treated as if invested among the
applicable investment funds. Such a designation shall be made in accordance with the rules and
procedures established by the Plan Administrator. Any such designation shall continue in effect
for successive Plan Years unless changed in the same manner by the Participant. If any Participant
fails to designate investment funds under this Section 6.2, amounts credited to his or her accounts
under this Plan shall be treated as if invested in the applicable investment funds designated by
the Participant for his or her contributions to the Basic Plan; provided, however, that in the case
of a Participant who has not made an election to contribute to the Basic Plan, but for whom
Employer credits under Section 4.3 or 4.4 have been credited to the Participant’s Performance
Credit Account or Discretionary Account, or for whom any amount would be treated as if invested in
the Patriot Coal Corporation Stock Fund, such credits or amount will be treated as if invested in
the investment fund designated by the Committee under Section 8.2 of the Basic Plan unless the
Participant designates a different investment fund in accordance with this Section 6.2 or makes a
deemed transfer of such portion of his or her accounts to a different investment fund in accordance
with Section 6.3.




     6.3. Deemed Transfers Between Investment Funds.



          A Participant may elect in accordance with the rules and procedures established by the Plan
Administrator to make a deemed transfer of all or any portion of his or her accounts that is
treated as if invested in an investment fund by designating that such amount be treated as if
subsequently invested in any other investment fund.




     6.4 Investments and Charges.



          Nothing in this Section 6 shall require the Employer to actually invest any amount credited to
a Participant’s accounts in accordance with the Participant’s election; provided, however, that if
the Employer in its sole discretion does make any such investment in order to assist it in the
meeting of its liabilities under the Plan, the Participant’s accounts shall be reduced for any
charges imposed by the applicable investment fund.




9









 








SECTION 7 — DISTRIBUTIONS AT RETIREMENT




     7.1. Normal Retirement Distributions.



          Upon a Participant’s Normal Retirement Date, the Participant’s accounts shall become fully
vested (if not already fully vested) and shall be distributed to him or her in a lump sum. Such
distribution shall be made on the later of:





     (a) the date which is six months after the Participant’s Normal Retirement Date; and




     (b) January 31 of the calendar year immediately following the calendar year in which
the Participant’s Normal Retirement Date occurs;


or as soon as administratively feasible thereafter, but in no event later than the last day of the
calendar year in which the date on which such distribution would be made in accordance with the
foregoing occurs. A distribution hereunder shall be based on the value of the Participant’s
accounts as of the Valuation Date as of which such distribution is being made.




10









 








SECTION 8 — DISTRIBUTIONS AT TERMINATION OF EMPLOYMENT (VESTING)




     8.1. Distributions Upon Termination Of Employment.



          A Participant whose employment with the Employer is terminated prior to the earlier of his or
her death or Normal Retirement Date shall receive the vested portion of his or her accounts in a
lump sum. Such distribution shall be made on the later of:





     (a) the date which is six months after the date of the Participant’s termination of
employment; and




     (b) January 31 of the calendar year immediately following the calendar year in which
the Participant’s termination of employment occurs;


or as soon as administratively feasible thereafter, but in no event later than the last day of the
calendar year in which the date on which such distribution would be made in accordance with the
foregoing occurs. A distribution hereunder shall be based on the value of the Participant’s
accounts as of the Valuation Date as of which such distribution is being made.




     8.2. Determination Of Vested Portion.




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




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



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







     (c) The portion of a Participant’s Discretionary Account which shall be vested and
nonforfeitable shall be determined in accordance with a separate agreement entered into with
the Participant.




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



     8.3. Forfeitures.



          The nonvested portion of the Company Pre-Tax Matching Account and Discretionary Account of a
Participant whose employment with the Employer is terminated prior
to the earlier of his or her death or Normal Retirement Date shall be forfeited immediately
when such Participant has terminated employment.




11









 








SECTION 9 — DISTRIBUTIONS AT DEATH




     9.1. Distributions Upon Death.



          Upon the death of a Participant while in the employment of the Employer, the Participant’s
accounts shall become fully vested (if not already fully vested) and shall be distributed in a lump
sum to his or her beneficiaries in accordance with Sections 9.2 and 9.3. Upon the death of a
Participant after termination of his or her employment with the Employer but prior to distribution
under Section 7 or 8 being made, the vested portion of the Participant’s account balances shall be
distributed in a lump sum to his or her beneficiaries in accordance with Sections 9.2 and 9.3.
Such distribution shall be made 15 days following the date of the Participant’s death or as soon as
administratively feasible thereafter, but in no event later than the last day of the calendar year
in which the date on which such distribution would be made in accordance with the foregoing occurs
or, if later the 15th day of the third calendar month following such date. A distribution
hereunder shall be based on the value of the Participant’s accounts as of the Valuation Date as of
which such distribution is being made.




     9.2. Designation Of Beneficiary.



          Each Participant shall have the right to name and change primary and contingent beneficiaries
under the Plan in accordance with the rules and procedures established by the Plan Administrator.
Upon the death of the Participant, the vested balance of his or her accounts shall be divided among
the primary or contingent beneficiaries designated by such Participant who survive the Participant.




     9.3. Beneficiary Not Designated.



          In the event the Participant has either failed to designate a beneficiary or no designated
beneficiary survives him or her, the amounts otherwise payable to a beneficiary under the
provisions of this Section shall be paid to the Participant’s surviving spouse or, if the
Participant is not survived by his or her spouse, to the Participant’s executor or administrator.




12









 








SECTION 10 — ADMINISTRATION




     10.1 Plan Administrator.



          The Company shall be the Plan Administrator of the Plan within the meaning of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), and, except as otherwise specifically
set forth herein, shall be solely responsible for and have sole control of the operation and
administration of the Plan and the establishment of such procedures and processes as may be
necessary for the efficient operation and administration of the Plan.




     10.2 Construction.



          The Plan Administrator shall have the discretionary authority to construe, interpret and
administer all provisions of the Plan and to determine a Participant’s eligibility for benefits on
a uniform, non-discriminatory basis in similar fact situations.




     10.3 Delegation By The Plan Administrator.



          The Plan Administrator may appoint such agents as it may deem necessary for the effective
exercise of its duties, and may, to the extent not inconsistent herewith, delegate to such agents
any powers and duties, both ministerial and discretionary, as the Plan Administrator may deem
expedient or appropriate.




     10.4 Records Of The Plan Administrator.



          All acts and determinations of the Plan Administrator shall be duly recorded, and all such
records, together with such other documents as may be necessary for the proper administration of
the Plan, shall be preserved in the custody of the Plan Administrator. Such records and documents
shall at all times be open for inspection and copying by any person designated by the Board.




     10.5 Committee.



          The Board shall appoint a Committee of one (1) or more persons who shall serve without
remuneration at the pleasure of the Board to review claims determinations in accordance with
Sections 11.3 and 11.4 and to perform such other duties as may be delegated to it by the Plan
Administrator. Upon death, resignation, removal or inability of a member of the Committee to
continue, the Board shall appoint a successor. The Committee shall appoint its own Chairman from
among the regular members of the Committee and shall also appoint a Secretary who may be, but need
not be, a member of the Committee. The Chief Executive Officer of the Company may appoint persons
as alternate members for designated regular members of the Committee for the sole and limited
purpose of acting in place of such regular member at a Committee meeting called under Section 10.7
which such regular member is unable to attend. Alternate members shall serve without remuneration
at the pleasure of the Chief Executive Officer. If, at any time, the Board has not appointed a
Committee, or there is no Committee, then the Plan Administrator shall exercise all of the duties,
responsibilities, powers and authorities given to the Committee.




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     10.6 Decisions By The Committee.



          A decision of the Committee may be made by a written document signed by a majority of the
members of the Committee or by majority vote at a meeting of the Committee. The Secretary of the
Committee shall keep all records of meetings and of any action by the Committee and any and all
other records desired by the Committee. No member of the Committee shall make any decision or take
any action covering exclusively his or her own benefits under the Plan. All such matters shall be
decided by a majority of the remaining members of the Committee or, in the event of inability to
obtain a majority, by the Board.




     10.7 Meetings Of The Committee.



          The Committee shall hold meetings upon such notice, at such place or places and at such times
as the Committee may determine. Meetings may be called by the Chairman or any member of the
Committee. A majority of the Committee shall constitute a quorum for the transaction of business.




     10.8 Expenses.



          Any expense incurred by the Plan Administrator or the Committee with respect to employment of
agents, attorneys or other persons shall be paid by the Employer.




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SECTION 11 — CLAIM PROCEDURES




     11.1 Claim.



          A Participant, beneficiary or other person who believes that he or she is being denied a
benefit to which he or she is entitled (hereinafter referred to as “Claimant”), or his or her duly
authorized representative, may file a written request for such benefit with the Plan Administrator,
setting forth his or her claim. The request must be addressed to:




Director of Benefits Administration

Patriot Coal Corporation Supplemental 401(k) Retirement Plan

12312 Olive Boulevard

St. Louis, Missouri 63141




     11.2 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 90 days, and
shall, in fact, deliver such reply in writing within such period. However, the Director of
Benefits may extend the reply period for an additional 90 days for reasonable cause. If the reply
period will be extended, the Director of Benefits shall advise the Claimant in writing during the
initial 90-day period indicating the special circumstances requiring an extension and the date by
which the Director 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 why such material or such information is necessary;




     (d) appropriate information as to the steps to be taken if the Claimant wishes to
submit the claim for review, including a statement of the Claimant’s right to bring a civil
action under Section 502(a) of ERISA following an adverse benefit determination on review;
and




     (e) the time limits for requesting a review of the denial under Section 11.3 hereof and
for the actual review of the denial under Section 11.4 hereof.



     11.3 Request For Review.



          Within 60 days after the receipt by the Claimant of the written opinion described above, the
Claimant may request in writing that the Committee review the Director of Benefits’ prior
determination. Such request must be addressed to:




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Committee

Patriot Coal Corporation Supplemental 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 by the Committee within such 60-day
period, he or she shall be barred and estopped from challenging such determination.




     11.4 Review Of Decision.



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




          If the Committee makes an adverse benefit determination on review, the Committee will
render a written opinion, using language calculated to be understood by the Claimant,
setting forth:





     (a) the specific reason or reasons for the denial;



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




     (c) a statement that the Claimant is entitled to receive, upon request and free
of charge, reasonable access to, and copies of, all documents, records and other
information which (i) was relied upon by the Committee in making its decision, (ii)
was submitted, considered or generated in the course of the Committee making its
decision, without regard to whether such instrument was actually relied upon by the
Committee in making its decision or (iii) demonstrates compliance by the Committee
with its administrative processes and safeguards designed to ensure and to verify
that benefit claims determinations are made in accordance with governing Plan
documents, and that, where appropriate, the Plan provisions have been applied
consistently with respect to similarly situated claimants; and




     (d) a statement of the Claimant’s right to bring a civil action under Section
502(a) of ERISA following the adverse benefit determination on such review.



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SECTION 12 — AMENDMENT AND TERMINATION




     12.1 Amendment.



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




     12.2 Termination; Discontinuance Of Credits.



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




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SECTION 13 — MISCELLANEOUS




     13.1 Participants’ Rights.



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




     13.2 Spendthrift Clause.



          No benefit or beneficial interest provided under the Plan shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge, either
voluntary or involuntary, and any attempt to so alienate, anticipate, sell, transfer, assign,
pledge, encumber or charge the same shall be null and void. No such benefit or beneficial interest
shall be liable for or subject to the debts, contracts, liabilities, engagements, or torts of any
person to whom such benefits or funds are or may be payable.




          Notwithstanding the foregoing, if, at such time as the Participant or his or her beneficiary
becomes entitled to benefit payments hereunder, the Participant has any debt, obligation or other
liability representing an amount owing to the Company or any other Employer, and if such debt,
obligation or other liability is due and owing at the time benefit payments are payable hereunder,
the Company may offset the amount owed it or the other Employer against the amount of benefits
otherwise payable hereunder.




     13.3 Delegation Of Authority By Employer.



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




     13.4 Distributions To Minors.



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




     13.5 Construction Of Plan.



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




     13.6 Gender, Number And Headings.



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



19









 






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




     13.7 Separability Of Provisions.



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




     13.8 Service Of Process.



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




     13.9. Qualified Domestic Relations Order.



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




     13.10 No Trust.



          Nothing contained in this Plan, and no action taken pursuant to its provisions, shall create,
or be construed to create, a trust of any kind, or a fiduciary relationship between the Company or
the Employer and the Participants, their beneficiaries hereunder or any other person.




          IN WITNESS WHEREOF, the Company has caused this Amendment to be executed by one of its duly
authorized officers this 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.





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