exv4w1






Exhibit 4.1




PEABODY ENERGY CORPORATION




Notice of Adjustment of Conversion Rate



February 8, 2010



Holders of 4.75% Convertible Junior Subordinated Debentures due 2066




     This Notice is provided pursuant to Section 2.18(j) of the First Supplemental Indenture dated
as of December 20, 2006 (the “Supplemental Indenture”), between Peabody Energy Corporation (the
“Company”) and U.S. Bank National Association, as Trustee, relating to the Company’s 4.75%
Convertible Junior Subordinated Debentures due 2066. Capitalized terms used herein without
definition have the meanings assigned to them in the Supplemental Indenture.




	 	1.	 	Pursuant to the Supplemental Indenture, the Conversion Rate is required to be
adjusted for distributions of cash to all or substantially all holders of Common Stock
by multiplying the Conversion Ratio in effect on the Trading Day immediately prior to
the Ex-Dividend Date for such distribution on the NYSE by a fraction, (i) the numerator
of which shall be equal to the Current Market Price per share of Common stock on such
date, less the Dividend Threshold Amount and (ii) the denominator of which shall be
equal to the Current Market Price per share of Common Stock on such date, less the
amount of the distribution per share of Common Stock. Prior to the Conversion Rate
adjustment from 17.1078 to 17.1125 effective February 8, 2009 (the “Prior Adjustment”),
all quarterly dividends paid were equal in amount to the Dividend Threshold Amount
which resulted in no adjustment to the Conversion Rate. Subsequent to the Prior
Adjustment, the Conversion Rate shall be adjusted as follows:





	 	 	 	 	 	 
	 	 	 	 	 	 
	Conversion Rate (Ex-Dividend Date 2/9/09) = 17.1125 x

	 	$27.01 - $0.056598	 	= 17.1147	 
	 	 

$27.01 - $0.060000
	 	 
	 
	 	 	 	 	 
	Conversion Rate (Ex-Dividend Date 4/28/09) = 17.1147 x

	 	$25.91 - $0.056590	 	= 17.1170	 
	 	 

$25.91 - $0.060000
	 	 
	 
	 	 	 	 	 
	Conversion Rate (Ex-Dividend Date 8/5/09) = 17.1170 x

	 	$33.86 - $0.056583	 	= 17.1187	 
	 	 

$33.86 - $0.060000
	 	 
	 
	 	 	 	 	 
	Conversion Rate (Ex-Dividend Date 11/3/09) = 17.1187 x

	 	$40.67 - $0.056577	 	= 17.1244	 
	 	 

$40.67 - $0.070000
	 	 







	 	 	 	Pursuant to Section 2.18(i) of the Supplemental Indenture, Conversion Rate adjustments
resulting in an aggregate change of less than 1% are not required to be made
immediately. The Company has carried forward the adjustments detailed above within one
year of the first such adjustment and is adjusting the Conversion Rate from 17.1125 to
17.1244.




 









 












	 	2.	 	The effective date of the adjusted Conversion Rate shall be February 8, 2010.
	 
	 	3.	 	The following table sets forth the adjusted Stock Prices and number of
Additional Shares issuable per $1,000 principal amount of Debentures in the event a
Holder elects to convert Debentures in connection with a Non-Stock Change of Control.





	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Stock Price
	Effective Date	 	$41.71	 	$47.13	 	$58.40	 	$65.98	 	$75.41	 	$84.84	 	$94.26	 	$141.39	 	$188.53	 	$235.66	 	$282.79
	December 20, 2006

	 	 	6.8496	 	 	 	5.6274	 	 	 	3.9797	 	 	 	3.2718	 	 	 	2.6516	 	 	 	2.2139	 	 	 	1.8928	 	 	 	1.0752	 	 	 	0.7323	 	 	 	0.5391	 	 	 	0.4135	 
	December 15, 2007

	 	 	6.8496	 	 	 	5.3222	 	 	 	3.6489	 	 	 	2.9435	 	 	 	2.3385	 	 	 	1.9224	 	 	 	1.6247	 	 	 	0.9043	 	 	 	0.6167	 	 	 	0.4560	 	 	 	0.3512	 
	December 15, 2008

	 	 	6.8496	 	 	 	4.9654	 	 	 	3.2523	 	 	 	2.5464	 	 	 	1.9584	 	 	 	1.5692	 	 	 	1.3019	 	 	 	0.7043	 	 	 	0.4821	 	 	 	0.3582	 	 	 	0.2772	 
	December 15, 2009

	 	 	6.8496	 	 	 	4.6181	 	 	 	2.8208	 	 	 	2.0974	 	 	 	1.5195	 	 	 	1.1604	 	 	 	0.9304	 	 	 	0.4843	 	 	 	0.3346	 	 	 	0.2501	 	 	 	0.1943	 
	December 15, 2010

	 	 	6.8496	 	 	 	4.3534	 	 	 	2.3778	 	 	 	1.5868	 	 	 	0.9938	 	 	 	0.6699	 	 	 	0.4951	 	 	 	0.2487	 	 	 	0.1749	 	 	 	0.1314	 	 	 	0.1025	 
	December 15, 2011

	 	 	6.8496	 	 	 	4.2795	 	 	 	2.0987	 	 	 	1.0532	 	 	 	0.0470	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 
	December 15, 2012

	 	 	6.8496	 	 	 	4.2641	 	 	 	2.0899	 	 	 	1.0484	 	 	 	0.0468	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 
	December 15, 2013

	 	 	6.8496	 	 	 	4.2513	 	 	 	2.0821	 	 	 	1.0442	 	 	 	0.0466	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 
	December 15, 2014

	 	 	6.8496	 	 	 	4.2399	 	 	 	2.0747	 	 	 	1.0400	 	 	 	0.0464	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 
	December 15, 2015

	 	 	6.8496	 	 	 	4.2324	 	 	 	2.0691	 	 	 	1.0367	 	 	 	0.0463	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 
	December 15, 2016

	 	 	6.8496	 	 	 	4.2278	 	 	 	2.0631	 	 	 	1.0322	 	 	 	0.0459	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 
	December 15, 2021

	 	 	6.8496	 	 	 	4.2985	 	 	 	2.0926	 	 	 	1.0459	 	 	 	0.0466	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 
	December 15, 2026

	 	 	6.8496	 	 	 	4.4453	 	 	 	2.1573	 	 	 	1.0764	 	 	 	0.0478	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 
	December 15, 2031

	 	 	6.8496	 	 	 	4.5851	 	 	 	2.2099	 	 	 	1.0990	 	 	 	0.0487	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 
	December 20, 2036

	 	 	6.8496	 	 	 	4.7443	 	 	 	2.2528	 	 	 	1.1147	 	 	 	0.0492	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 







	 	 	 	The adjusted Stock Prices equal the prices per share applicable immediately
prior to such adjustment, multiplied by a fraction, (i) the numerator of which is
the Conversion Rate immediately prior to the adjustment giving rise to the Stock
Price adjustment and (ii) the denominator of which is the Conversion Rate as so
adjusted.
	 
	 	 	 	If the Stock Price is more than $282.79, subject to adjustment, the number of
Additional Shares will be zero.
	 
	 	 	 	If the Stock Price is less than $41.71, subject to adjustment, the number of
Additional Shares will be zero.
	 
	 	 	 	In no event will the total number of shares of Common Stock issuable upon conversion
of a Debenture (after giving effect to any Additional Shares issuable pursuant to
Section 2.24 of the Supplemental Indenture) exceed 23.9741 per $1,000 principal
amount of Debentures, subject to adjustment in the same manner and for the same
events as the Conversion Rate may be adjusted pursuant to Section 2.18 of the
Supplemental Indenture.