exv10w1



 





EXHIBIT 10.1




AMENDMENT NO. 4 TO THE

PEABODY ENERGY CORPORATION

2004 LONG-TERM EQUITY INCENTIVE PLAN




     WHEREAS, Peabody Energy Corporation (the “Company”) adopted and maintains the Peabody Energy
Corporation 2004 Long-Term Equity Incentive Plan, as amended from time to time (the “Plan”), and
all capitalized terms used but not defined herein are defined in the Plan;



     WHEREAS, pursuant to Section 16 of the Plan, (i) the Board of Directors of the Company (the
“Board”) has the right to amend the Plan and (ii) the Administrator may amend the terms of
outstanding awards under the Plan without the Participant’s consent, so long as such amendment does
not adversely affect the Participant’s rights under the award; and



     WHEREAS, the Company spun off a portion of its business effective October 31, 2007 to Patriot
Coal Corporation (“Patriot”), resulting in the transfer of certain Company employees to employment
with Patriot and constituting a termination of employment for such employees for purposes of their
outstanding grants under the Plan;



     WHEREAS, the Board previously approved Amendment No. 3 to the Plan (the “Third Amendment”) to
allow for accelerated vesting and the deemed exercise of the Accelerated Options held by Patriot
Senior Management Employees on the Spin-Off Date;



     WHEREAS, the Board intended to pay full value for such Accelerated Options upon their exercise
by adjusting the shares of Common Stock (“Peabody Stock”) subject to such Accelerated Options to
reflect the spin-off of Patriot, as is the case for all options outstanding under the Plan
immediately after the Spin-Off Date;



     WHEREAS, the Board has determined that the Peabody Stock subject to the Accelerated Options
will not be entitled to receive the distribution of Patriot common stock on the Spin-Off Date,
because the Accelerated Options were not exercised and, thus the Peabody Stock was not owned, as of
the applicable record date preceding the Spin-Off Date,



     WHEREAS, the Board has further determined that the Third Amendment mistakenly specifies the
deemed exercise date as the Spin-Off Date, which is the day prior to the date that such Accelerated
Options could be adjusted to reflect the spin-off of Patriot, as such adjustment requires the use
of the opening sales price of Peabody Stock on the day immediately following the Spin-Off Date;



     WHEREAS, the Board desires to amend the Plan to correct this unintended result and to have the
Accelerated Options be deemed to be exercised on the day immediately following the Spin-Off Date,
and to use the opening sales price of Peabody Stock on such date in order to accurately reflect the
adjustment intended to be made to the Accelerated Options with respect to the spin-off of Patriot.



 









 





          NOW, THEREFORE, the Plan is hereby amended effective as of October 31, 2007 as follows:



     1. The second to last paragraph of Section 9 of the Plan is hereby amended in its entirety to
read as follows:




     Notwithstanding anything in the Plan or any NQSO agreement to the contrary, each
Accelerated Option (as defined below) shall vest on the Spin-Off Date and be deemed to be
exercised on the day immediately following the Spin-Off Date. The exercise price and tax
withholding with respect to such exercise shall be paid by the withholding by the
Corporation of such number of shares of Common Stock acquired by the Participant upon such
exercise of an aggregate fair market value equal to the exercise price plus the amount of
any such tax withholding. For purposes of this paragraph and notwithstanding Section 6 of
the Plan, the fair market value of a share of Common Stock shall equal the opening sales
price of one share of Common Stock as reported on the New York Stock Exchange on the day
immediately following the Spin-Off Date.



     2. In all other respects, the Plan shall remain unchanged and in full force and effect.



	 	 	 	 	 
	 	 	PEABODY ENERGY CORPORATION
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Sharon Fiehler
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Title:
	 	Executive Vice President — Human Resources and Administration
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Date:
	 	December 7, 2007
	 

	 	 	 	 





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