Document:

exv10w10

 

Exhibit 10.10

MASTER EQUIPMENT SUBLEASE

     THIS MASTER EQUIPMENT SUBLEASE (this “Sublease”) is made as of                      , 2007
by and between PEC EQUIPMENT COMPANY, LLC, a Delaware limited liability company
(“Sublessor”), and [PATRIOT COAL CORPORATION], a Delaware corporation
(“Sublessee”). Sublessor and Sublessee are each sometimes referred to herein as a
“Party” and together as the “Parties”.

     WHEREAS, Sublessor has heretofore entered into, and is currently the lessee under, the
equipment leases and equipment schedules thereto identified on Exhibit A hereto (such
leases and schedules, the “Prime Leases” and “Applicable Equipment Schedules”,
respectively; with the equipment identified on the Applicable Equipment Schedules, the
“Equipment”; and with the lessors of the Equipment under the Prime Leases and Applicable
Equipment Schedules, the “Prime Lessors”);

     WHEREAS, Sublessee and Peabody Energy Corporation (“Peabody Energy”), the ultimate
parent corporation of Sublessor and Sublessee, have entered into that certain Separation Agreement,
Plan of Reorganization and Distribution dated as of                      , 2007 (the “Separation
Agreement”) pursuant to which Peabody Energy will (i) contribute, or cause its subsidiaries to
contribute, the Patriot Assets to Sublessee and (ii) distribute all of the capital stock of
Sublessee to Peabody Energy’s shareholders (such transactions collectively, the
“Reorganization”);

     WHEREAS, the Parties intend for the Equipment to be used by Sublessee following the completion
of the Reorganization in connection with Sublessee’s operation of the Patriot Business and,
therefore, wish to enter into this Sublease, whereby Sublessee will sublease the Equipment from
Sublessor; and

     WHEREAS, capitalized terms used but not defined in this Sublease will have the meanings given
to them in the Separation Agreement;

     NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and promises contained
herein and other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties agree as follows:

     1. Assignment and Novation. In order to complete the transition of the Patriot
Business from Peabody Energy to Sublessee as contemplated by the Separation Agreement, and as it is
the Parties’ intent that Sublessee succeed to and assume all obligations and rights of Sublessor
under the Prime Leases and the Applicable Equipment Schedules with respect to the Equipment,
Sublessee and Sublessor will use their commercially reasonable efforts to obtain from each Prime
Lessor a full assignment and novation of each Prime Lease and Applicable Equipment Schedule insofar
as they relate to the Equipment. To the extent the Parties are unable to obtain such assignment
and novation, and in any event from the Effective Time until the obtaining of such assignment and
novation, Sublessor hereby subleases to Sublessee, and

1

 

Sublessee hereby subleases from Sublessor, the Equipment on and subject to the terms and
conditions of this Sublease.

     2. Sublease General Provisions and Rules of Construction.

          (a) Prime Lease Terms. The text of the Prime Leases and Applicable Equipment Schedules are
hereby incorporated by reference, with the same force and effect as if such text were fully set
forth herein, subject to Section 2(b). Sublessee hereby assumes toward Sublessor all obligations
and responsibilities that Sublessor assumes toward Prime Lessor under the Prime Leases and
Applicable Equipment Schedules, and Sublessor will have the benefit of all rights and remedies
against Sublessee that each Prime Lessor has against Sublessor under the Prime Leases and
Applicable Equipment Schedules, in each case subject to Section 2(b). Whenever necessary to make
the text of any Prime Lease or Applicable Equipment Schedule applicable to this Sublease, all
references in such Prime Lease or Applicable Equipment Schedule that are intended to refer to the
lessor of the Equipment (regardless of whether or not “lessor” or any other title or identifying
term is used) will mean Sublessor, and all references in such Prime Lease and Applicable Equipment
Schedule that are intended to refer to the lessee of the Equipment (regardless of whether or not
“lessee” or any other title or identifying term is used) will mean Sublessee. Sublessor will
provide Sublessee a true, complete and correct copy of each Prime Lease and Applicable Equipment
Schedule.

          (b) Order of Precedence. Notwithstanding Section 2(a) to the contrary, the terms and
conditions of the Prime Leases and Applicable Equipment Schedules as incorporated into this
Sublease are subject to the modifications thereto set forth herein. Furthermore, in the event of a
conflict or inconsistency between the terms and conditions of this Sublease and those of any Prime
Lease or Applicable Equipment Schedule, the terms and conditions of this Sublease will control.

          (c) Relationship between Sublessee and Prime Lessors. This Sublease does not constitute an
assignment of any Prime Lease or Applicable Equipment Schedule, and there will be no privity of
contract between Sublessee and any Prime Lessor regarding this Sublease or any Prime Lease or
Applicable Equipment Schedule.

          (d) Limitation of Sublessor’s Obligations. Except as otherwise specifically provided in this
Sublease, Sublessor will have no duty to perform any obligations of any Prime Lessor under any
Prime Lease or Applicable Equipment Schedule. Any and all representations, warranties, covenants,
obligations and responsibilities of a Prime Lessor under a Prime Lease or Applicable Equipment
Schedule are to be kept, provided and performed by such Prime Lessor and are not the responsibility
or obligation of Sublessor under this Sublease. In addition, no default, failure or delay by any
Prime Lessor under a Prime Lease or Applicable Equipment Schedule will affect this Sublease or
waive or defer the performance of any of Sublessee’s obligations hereunder, except to the extent
that such default, failure or delay excuses performance by Sublessor under the relevant Prime Lease
or Applicable Equipment Schedule. Sublessor’s sole and exclusive obligation in such case will be
to use commercially reasonable efforts to assist Sublessee in the enforcement of the relevant Prime
Lease or Applicable Equipment Schedule, provided that Sublessee pays or reimburses Sublessor upon
demand for all out of pocket expenses incurred by Sublessor in providing such assistance.

2

 

          (e) Title to Equipment. Except as provided in Section 3(i), under no circumstances will
Sublessor hold or acquire title to the Equipment.

          (f) Amendments and Termination. Without first obtaining Sublessee’s prior written consent,
Sublessor will not: (i) in any way amend, modify, supplement or terminate any Prime Lease or
Applicable Equipment Schedule; or (ii) take any action that would reasonably be expected to have a
material adverse effect on Sublessee and/or Sublessee’s right to use the Equipment for its intended
purpose in accordance with the terms and conditions of this Sublease.

          (g) Notices and Information. To the extent certain provisions of a Prime Lease or Applicable
Equipment Schedule require that the Prime Lessor or Sublessor provide the other with notice within
a period of two (2) business days or less, for purposes of incorporating such requirement into this
Sublease, each party hereto will use commercially reasonable efforts to promptly relay such notice
to the other party, taking into consideration the notice requirement under such Prime Lease. In
all other situations under a Prime Lease or Applicable Equipment Schedule requiring the Prime
Lessor to provide notice or information to Sublessor within a period of time greater than two (2)
business days, for purposes of incorporating such requirement into this Sublease, such period of
time shall be extended by two (2) business days to account for the possibility that the Prime
Lessor may not provide such notice or information to Sublessor until the end of the specified
period, provided, however, that upon receipt of any notice given by the Prime Lessor, Sublessor
will use commercially reasonable efforts to promptly forward such notice to Sublessee. Likewise,
except for any provisions under a Prime Lease or Applicable Equipment Schedule requiring two (2)
business days’ or less notice, whenever a Prime Lease or Applicable Equipment Schedule requires
Sublessor to provide notice or information to the Prime Lessor within a specified period of time,
for purposes of incorporating such requirement into this Sublease, such period of time will be
shortened by two (2) business days to provide Sublessor sufficient time to provide the same notice
or information to the Prime Lessor under the Prime Lease or Applicable Equipment Schedule .

          (h) Other Equipment Subject to Prime Leases. In addition to the Equipment, Sublessor may also
lease other equipment under the Prime Leases. Such other equipment will not be subleased to
Sublessee under, and is not otherwise subject to, this Sublease.

     3. Sublease Terms and Conditions.

          (a) Effective Time and Term. This Sublease will be effective as of the Effective Time and
will continue in effect, with respect to each piece of Equipment, until the expiration or
termination of the Applicable Equipment Schedule associated with such piece of Equipment.

          (b) Rent. At least three (3) business days prior to the due date set forth in each Prime
Lease or Applicable Equipment Schedule, Sublessee will pay to Sublessor (A) all rental payments
relating to the Equipment (whether denominated “rent,” “additional rent” or otherwise) under such
Prime Lease or Applicable Equipment Schedule, and (B) all other amounts relating to the Equipment
that become due under such Prime Lease or Applicable Equipment Schedule (whether for taxes,
interest on past-due amounts, late fees or otherwise, but excluding interest, late fees and other
amounts imposed as a result of Sublessor’s breach of the Prime Lease or Applicable Equipment
Schedule that does not relate to Sublessee’s breach of this Sublease).

3

 

Once received from Sublessee, Sublessor will be responsible to pay such amounts to the Prime
Lessors.

     (c) Possession and Use of Equipment.

          (i) Sublessee will not, without Sublessor’s prior written consent or except as otherwise
permitted under Section 3(c)(ii), the relevant Prime Lease or the relevant Applicable Equipment
Schedule, part with possession or control of the Equipment or any part thereof or attempt to sell,
assign, pledge, or otherwise encumber or transfer any interest under this Sublease, any Prime Lease
or any Applicable Equipment Schedule. Sublessee will use, and will cause each Affiliate User (as
defined in Section 3(c)(ii)) to use, the Equipment in a reasonably careful and proper manner
consistent with industry practice and any applicable terms of each Prime Lease and Applicable
Equipment Schedule, in the conduct of the lawful business of Sublessee or such Affiliate User.
Notwithstanding the foregoing, Sublessee will assume all maintenance obligations set forth in each
Prime Lease and Applicable Equipment Schedule. Sublessee will comply, and will cause each
Affiliate User to comply, with all applicable laws, rules and regulations in its maintenance, use
and operation of the Equipment.

          (ii) Sublessee’s Affiliates will be entitled to use the Equipment on the following conditions:
(A) such use is not prohibited by the relevant Prime Lease or Applicable Equipment Schedule; (B)
Sublessee notifies Sublessor of such use at least five (5) business days in advance, which notice
must also provide the name of the Affiliate and the location(s) at which the Equipment will be
stored and/or used; (C) Sublessee provides such additional information as Sublessor may reasonably
request; and (D) such use must be in a manner permitted by this Sublease. Each Affiliate of
Sublessee that uses Equipment in accordance with this Section 3(c)(ii) will be referred to herein
as an “Affiliate User”. With respect to each Affiliate User, the foregoing right of use
will terminate automatically when such entity is no longer an Affiliate of Sublessee.

     (d) Inspection, Delivery and Acceptance of Equipment; Disclaimer of Warranties and Liability.
Sublessee acknowledges that (i) it has taken possession of the Equipment from Sublessor prior to
the date of this Sublease, (ii) it has inspected the Equipment prior to the date of this Sublease,
and (iii) it is satisfied with the condition of the Equipment. SUBLESSEE ACKNOWLEDGES AND AGREES
THAT THE SUBLESSOR HAS NOT MADE ANY (AND MAKES NO) REPRESENTATIONS OR WARRANTIES OF ANY NATURE
WHATSOEVER, DIRECTLY OR INDIRECTLY, EXPRESSED OR IMPLIED, AS TO THE SUITABILITY, DURABILITY,
FITNESS FOR USE, MERCHANTABILITY, CONDITION, QUALITY OR OTHERWISE OF THE EQUIPMENT. If the
Equipment does not operate as represented or warranted by the manufacturer thereof, or is
unsatisfactory for any reason, Sublessee may make any claim on account thereof against the
manufacturer but will not make any such claim against Sublessor or the Prime Lessor. Sublessor’s
sole and exclusive obligation in such case will be to use commercially reasonable efforts to assist
Sublessee in making its claim against the manufacturer, provided that Sublessee pays or reimburses
Sublessor upon demand for all out of pocket expenses incurred by Sublessor in providing such
assistance.

     EXCEPT TO THE EXTENT PROVIDED IN SECTION 7(a), SUBLESSOR WILL NOT BE LIABLE TO SUBLESSEE FOR
ANY LOSS, DAMAGE OR EXPENSE OF

4

 

ANY KIND OR NATURE RELATED TO OR CAUSED DIRECTLY OR INDIRECTLY BY ANY EQUIPMENT, THE USE OR
MAINTENANCE THEREOF, THE FAILURE OF OPERATION THEREOF, THE REPAIRS, SERVICE OR ADJUSTMENT THERETO
OR ANY DELAY OR FAILURE TO PROVIDE ANY THEREOF, ANY INTERRUPTION OF SERVICE OR LOSS OF USE OF THE
EQUIPMENT, OR ANY LOSS OF BUSINESS OR DAMAGE WHATSOEVER AND HOWSOEVER CAUSED.

     (e) Repairs. To the extent required of Sublessor under any Prime Lease or Applicable
Equipment Schedule, Sublessee, at its own cost and expense, will keep the Equipment in good repair,
condition and working order (consistent with the condition of the Equipment at the Effective Time),
reasonable wear and tear excepted, and will furnish any and all parts (replacement or otherwise),
mechanisms and devices required to keep the Equipment in such condition. If Sublessee fails to make
any repairs required in this Section 3(e) then, in addition to any other remedies available to
Sublessor hereunder (including termination of this Sublease for Sublessee’s default), Sublessor may
pay for any such repairs, in which event the amount so paid by Sublessor will be immediately
payable by the Sublessee to Sublessor as additional rent hereunder.

     (f) Loss and Damage. Sublessee hereby assumes and will bear the risk of loss, damage, theft
and destruction of the Equipment or any part thereof from and after the Effective Time (“Loss
or Damage”) from any cause whatsoever and whether or not insured against; provided that
Sublessee will not be responsible for any Loss or Damage for which Sublessor is not responsible as
lessee under any Prime Lease or Applicable Equipment Schedule. Sublessee will promptly notify
Sublessor of any Loss or Damage. In the event of Loss or Damage for which Sublessee is responsible
under this Section 3(f), Sublessee will comply with applicable requirements of the relevant Prime
Leases and Applicable Equipment Schedules.

     (g) Insurance. During the term of each Applicable Equipment Schedule, Sublessee will at all
times, and at Sublessee’s sole cost and expense, keep the Equipment thereunder insured in
accordance with the requirements of the Prime Lease and such Applicable Equipment Schedule. This
obligation applies not only to policy types and limits, but also to related requirements (if any)
with respect to the provision of certificates of insurance, waivers of subrogation, insurer
qualifications and otherwise. Furthermore, if so required by a Prime Lease or Applicable Equipment
Schedule, Sublessee will cause the relevant Prime Lessor to be named as additional insured or loss
payee on the required insurance policies. Sublessee will pay the premiums therefor and deliver
certificates of such insurance to Sublessor upon request. Sublessee will use commercially
reasonable efforts to cause each insurer to agree, by endorsement upon the policy or policies
issued by it or by independent instrument furnished to Sublessor, that it will give Sublessor
thirty (30) days written notice of the effective date of any alteration, change, cancellation or
modification of such policy, or of the failure by Sublessee to pay all required premiums when due.
In the case of Sublessee’s failure to procure and maintain such insurance, Sublessor will have the
right, but not the obligation, to obtain such insurance. The amount so paid will be immediately due
and payable by Sublessee to Sublessor as additional rent hereunder. The proceeds of such insurance,
at the option of Sublessor, will be applied (i) toward the replacement, restoration or repair of
the Equipment, or (ii) toward payment of the obligations of Sublessee hereunder.

5

 

     (h) Return of Equipment. Upon the expiration or termination of this Sublease with respect to
any piece of Equipment, Sublessee will, at its sole cost and expense, immediately surrender
possession of the Equipment to the Prime Lessor by delivering the Equipment to the Prime Lessor at
such place as is designated in the relevant Prime Lease or Applicable Equipment Schedule, or if no
such place is designated in the Prime Lease or Applicable Equipment Schedule, at the place
designated by the Prime Lessor. The Equipment so surrendered will be in the condition required by
the relevant Prime Lease and Applicable Equipment Schedule. Until the delivery of possession to
the Prime Lessor and acceptance by the Prime Lessor, Sublessee will continue to be liable for and
will pay rental at the rate being paid immediately prior to termination or expiration, and
Sublessee will in addition make all payments and keep all obligations and undertakings required of
Sublessee under any and all provisions of this Sublease as though such termination or expiration
had not occurred. Sublessee will be responsible for all costs associated with the return of the
Equipment to the Prime Lessor, as well as the cost of any repairs necessary to return the Equipment
to the Prime Lessor in the required condition, in each case in accordance with the Prime Lease and
Applicable Equipment Schedule.

     (i) Purchase Option. If a Prime Lease or Applicable Equipment Schedule gives Sublessor the
option to purchase Equipment from the Prime Lessor, then the following provisions will apply:

          (1) Sublessee will have the right to purchase such Equipment from Sublessor in accordance with
the following: (A) Sublessee must notify Sublessor in writing of its desire to purchase the
Equipment no later than two (2) business days prior to the end of the period, if any (as set forth
in the Prime Lease or Applicable Equipment Schedule), during which Sublessor must notify the Prime
Lessor of its intent to exercise such purchase option; (B) Sublessee (pursuant to authority granted
to Sublessee under Section 3(k)) will then have the right to negotiate directly with the Prime
Lessor to reach a tentative agreement on terms of purchase; (C) once terms of purchase have been
tentatively agreed upon between Sublessee and the Prime Lessor, Sublessee will then notify
Sublessor in writing of such purchase terms for Sublessor’s approval; and (D) if such purchase
terms are approved by Sublessor (which approval Sublessor will not unreasonably withhold), then (i)
Sublessor will purchase the Equipment from the Prime Lessor in accordance with such purchase terms
and (ii) Sublessor will immediately sell the Equipment to Sublessee, and Sublessee will purchase
such Equipment from Sublessor, on the same terms. Sublessee will pay, or reimburse Sublessor for,
all taxes, fees and other costs associated with Sublessor’s purchase of the Equipment from the
Prime Lessor, and Sublessee’s subsequent purchase of the same Equipment from Sublessor, pursuant to
this Section 3(i). In connection with any purchase of Equipment by Sublessee pursuant to this
Section 3(i), Sublessor will not be required to make any representations or warranties to Sublessee
concerning such Equipment other than a representation or warranty that Sublessor has not sold,
transferred or granted a security interest in the Equipment.

          (2) If Sublessee elects not to purchase Equipment, then Sublessor will have the right to
purchase such Equipment from the Prime Lessor for Sublessor’s own account, without any obligation
to resell it to Sublessee.

     (j) Audit and Inspection Rights. If a Prime Lease or Applicable Equipment Schedule gives the
Prime Lessor the right to conduct an inspection of the Equipment or an audit

6

 

or inspection of Sublessor’s facilities, processes, books, records or otherwise, for purposes
of incorporating such right into this Sublease, both Sublessor and Prime Lessor will be entitled to
enforce or exercise such audit and/or inspection rights against Sublessee.

          (k) Agency. During the term of this Sublease, Sublessee will have authority to act as agent
of Sublessor for the following purposes (and for no other purposes): (1) to exercise Sublessor’s
right to purchase Equipment pursuant to a Prime Lease or Applicable Equipment Schedule, subject to
Section 3(i); (2) to discuss with a Prime Lessor issues regarding condition or quality of
Equipment; (3) to discuss with a Prime Lessor rent or other charges imposed by such Prime Lessor
and passed-through to Sublessee under Section 3(b); (4) to discuss with a Prime Lessor any default,
failure or delay on the part of such Prime Lessor under the relevant Prime Lease (insofar as such
default, failure or delay relates to the Equipment) or Applicable Equipment Schedule; and (5) such
other purposes as Sublessor may specify from time to time in a writing signed by Sublessor.
Notwithstanding the foregoing, Sublessee will not, without first obtaining Sublessor’s written
consent: (i) bind Sublessor to any obligation, (ii) make any representations on Sublessor’s
behalf, (iii) waive, release or compromise any of Sublessor’s rights or remedies, (iv) institute an
action or other proceeding on Sublessor’s behalf or threaten to do the same; or (v) sign any
contract, letter or other document on Sublessor’s behalf.

     4. Termination of Existing Subleases. It is the intent of Sublessor and Sublessee
that all future use of the Equipment by Sublessee or its Affiliates be pursuant to either an
assignment of the relevant Prime Lease(s) (as described in Section 1) or this Sublease.
Accordingly, Sublessor and Sublessee hereby terminate each existing contract between them (other
than this Sublease) pursuant to which Sublessee has the right to use the Equipment. If Sublessor
and any other entity within the Patriot Group are currently parties to a contract pursuant to which
such entity has the right to use the Equipment, Sublessor will, and Sublessee will cause each such
Patriot Group entity to, terminate all such contracts. The contracts to be terminated pursuant to
this Section 4 may be subleases, consent to use agreements, or otherwise.

     5. Default. The occurrence of any one or more of the following will constitute an
“Event of Default” hereunder:

          (a) any breach by Sublessee of, or default by Sublessee under, any provision of this Sublease;

          (b) any breach by Sublessee of, or default by Sublessee under, any provision of any Prime
Lease or Applicable Equipment Schedule required by this Sublease to be observed or performed by
Sublessee, or an “event of default” under any Prime Lease or Applicable Equipment Schedule
resulting from Sublessee’s acts or omissions;

          (c) Sublessee (i) becomes insolvent, (ii) makes an assignment for the benefit of creditors,
(iii) admits in writing its inability to pay its debts as they become due, (iv) files an
involuntary petition in bankruptcy, (v) is adjudicated as bankrupt or as insolvent, (vi) files a
petition seeking for itself any reorganization, arrangement, readjustment or similar relief under
any present or future statute, law, or regulation or files an answer admitting the material
allegations of a petition filed against it in any such proceeding or (vii) consents to or
acquiesces

7

 

in the appointment of a trustee, receiver or liquidator of it or all or any substantial part
of its assets or properties;

          (d) within thirty (30) days after the commencement of any proceeding against Sublessee seeking
reorganization, arrangement, readjustment or similar relief under any present or future statute,
law or regulation, such proceedings will not have been dismissed; or

          (e) within thirty (30) days after the appointment without Sublessee’s consent or acquiescence
of any trustee, receiver or liquidator of it or of all or any substantial part of its assets and
properties, such appointment will not be vacated.

     6. Remedies. Upon the occurrence of any Event of Default, Sublessor may:

          (a) proceed by appropriate court action or actions or other proceedings either at law or in
equity to enforce performance by Sublessee of any and all covenants of this Sublease and to recover
damages for the breach thereof;

          (b) demand that Sublessee deliver the Equipment (or if the Event of Default relates only to a
particular piece(s) of Equipment, only such piece(s)) immediately to Sublessor at Sublessee’s
expense at such place as Sublessor may designate; or

          (c) exercise such other remedies as would be available to the Prime Lessor against Sublessor,
as lessee, under the relevant Prime Lease and Applicable Equipment Schedule (including, without
limitation, any repossession or “self-help” remedies) if the act or omission by, or event
affecting, Sublessee that gave rise to the Event of Default under this Sublease were an act or
omission by, or an event affecting, Sublessor under the Prime Lease or Applicable Equipment
Schedule. For the avoidance of doubt, it is not a condition to Sublessor’s right to exercise the
remedies described in this paragraph (c) in respect of an Event of Default by Sublessee under this
Sublease that Sublessor also be in breach of, or in default under, the Prime Lease or Applicable
Equipment Schedule.

All remedies of Sublessor hereunder are cumulative, are in addition to any other remedies provided
for by law or in equity and may, to the extent permitted by law, be exercised concurrently or
separately, and the exercise of any one remedy will not be deemed to be an election of such remedy
or to preclude the exercise of any other remedy. No failure on the part of the Sublessor to
exercise, and no delay in exercising any right or remedy, will operate as a waiver thereof or
modify the terms of this Sublease; nor will any single or partial exercise by Sublessor of any
right or remedy preclude any other or further exercise of the same or any other right or remedy.

     7. Indemnification.

          (a) Subject to the last sentence of this Section 7(a), Sublessor will indemnify and hold
Sublessee and its Affiliates, successors and permitted assigns harmless from and against any and
all liabilities, losses, damages, penalties, claims, actions, suits, costs, and expenses
(including, without limitation, attorneys’ fees and expenses and court costs) of any kind and
nature whatsoever (collectively, “Claims and Losses”) which may be imposed on, incurred by
or asserted against them to the extent relating to, arising out of, or resulting from: (i)
Sublessor’s

8

 

breach of, or default under, the terms and conditions of any of the Prime Leases or Applicable
Equipment Schedules occurring prior to the Effective Time; (ii) Sublessor’s breach of, or default
under, the terms and conditions of any of the Prime Leases occurring after the Effective Time and
not involving or relating to the Equipment or an Applicable Equipment Schedule; or (iii)
Sublessor’s possession or use of the Equipment prior to the Effective Time. Notwithstanding the
foregoing, to the extent that any Claims and Losses are covered by both Sublessor’s indemnity in
this Section 7(a) and Sublessee’s indemnity in Section 7(b), they will be covered by Sublessee’s
indemnity in Section 7(b) and will be excluded from Sublessor’s indemnity in this Section 7(a).

          (b) Sublessee will indemnify and hold Sublessor and its Affiliates, successors and permitted
assigns harmless from and against any and Claims and Losses which may be imposed on, incurred by or
asserted against them to the extent relating to, arising out of, or resulting from one or more of
the following: (i) Sublessor’s breach of, or default under, the terms and conditions of any of the
Prime Leases or Applicable Equipment Schedules as a result of a breach of this Sublease by
Sublessee; (ii) Sublessee’s breach of, or default under, the terms and conditions of this Sublease
or any of the Prime Leases or Applicable Equipment Schedules (as incorporated into this Sublease)
occurring after the Effective Time; (iii) the possession or use of the Equipment before the
Effective Time by Sublessee or any entity within the Patriot Group; (iv) the possession or use of
the Equipment after the Effective Time by Sublessee or any of its Affiliates (including any entity
within the Patriot Group); (v) any loss or theft of, or damage to, the Equipment after the
Effective Time; (vi) Sublessee’s failure to maintain or repair the Equipment in accordance with
this Sublease, any Prime Lease or any Applicable Equipment Schedule; (vi) the loss or reduction of
any depreciation deductions to which any Prime Lessor is entitled in respect of any of the
Equipment, but only if and to the extent that Sublessor is liable for such loss or reduction under
a Prime Lease or Applicable Equipment Schedule; and (vii) claims by a Prime Lessor against
Sublessor that arise out of, relate to or result from Sublessee’s exercise of its agency authority
pursuant to Section 3(k), unless the act of Sublessee giving rise to the claim was approved in
writing by Sublessor.

          (c) The foregoing indemnification obligations will survive the expiration or termination, in
whole or in part, of this Sublease.

     8. General Provisions.

          (a) Entire Agreement. This Sublease contains the Parties’ entire understanding and agreement
with respect to the subject matter hereof. Any and all additional, conflicting or inconsistent
discussions, agreements, promises, representations and statements, if any, between the Parties or
their representatives that are not incorporated herein will be null and void and are merged into
this Sublease.

          (b) Modification, Amendment and Waiver. Neither this Sublease, nor any part hereof, may be
modified or amended orally, by trade usage or by course of conduct or dealing, but only by and
pursuant to an instrument in writing duly executed and delivered by the Party sought to be charged
therewith. No covenant or condition of this Sublease can be waived except by the written consent of
the Party entitled to receive the benefit of such covenant or condition.

9

 

          (c) Assignment. This Sublease and the rights and obligations of the Parties hereunder may not
be assigned or delegated (except by operation of law) and will be binding upon and will inure to
the benefit of the Parties and their successors and permitted assigns.

          (d) Construction. This Sublease will not be construed more strictly against one Party than
against another merely by virtue of the fact that this Sublease may have been physically prepared
by one of the Parties, or such Party’s counsel, it being agreed that all Parties and their
respective counsel have mutually participated in the negotiation and preparation of this Sublease.
Unless the context of this Sublease clearly requires otherwise: (i) references to the plural
include the singular and vice versa; (ii) references to any person or entity include such person’s
or entity’s successors and assigns but, if applicable, only if such successors and assigns are
permitted by this Sublease; (iii) references to one gender include all genders; (iv) “including” is
not limiting; (v) “or” has the inclusive meaning represented by the phrase “and/or”; (vi) the words
“hereof’, “herein”, “hereby”, “hereunder” and similar terms in this Sublease refer to this Sublease
as a whole and not to any particular provision of this Sublease; (vii) article, Section,
subsection, clause, exhibit and schedule references are to this Sublease unless otherwise
specified; and (viii) reference to any agreement (including this Sublease), document or instrument
means such agreement, document or instrument as amended or modified and in effect from time in
accordance with the terms thereof and, if applicable, the terms hereof.

          (e) Notices. All notices, consents, waivers and other communications under this Sublease must
be in writing and will be deemed to have been duly given when (a) delivered by hand (with written
confirmation of receipt), (b) sent by facsimile (with written confirmation of receipt), or (c) when
received by the addressee, if sent by registered U.S. mail, return receipt requested, or a
nationally recognized overnight delivery service, in each case to the appropriate addresses and
facsimile numbers set forth below (or to such other addresses and facsimile numbers as a Party may
designate by notice to the other Party(ies)):

     To Sublessor:

PEC Equipment Company, LLC

701 Market Street

St. Louis, Missouri 63101

Facsimile No.: (314) 342-7740

Attention: Walter Hawkins, Vice President and Treasurer

     To Sublessee:

[Patriot Coal Corporation]

12312 Olive Boulevard, Suite 400

St. Louis, Missouri 63141

Facsimile No.: (___)                     

Attention: General Counsel

          (f) Governing Law. This Sublease will be governed by and construed under the laws of the
State of Missouri without regard to conflicts of laws principles.

10

 

          (g) Choice of Forum and Jurisdiction; Costs. Any suit, action or proceeding against any Party
with respect to this Sublease, or any judgment entered by any court in respect thereof may be
brought in the United States District Court for the Eastern District of Missouri and the Parties
hereby submit to the exclusive jurisdiction of such court for the purpose of any such suit, action
or proceeding. Each Party hereby irrevocably waives any objection which it may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out of or relating to this
Sublease brought in such court and hereby further irrevocably waives any claim that such suit,
action or proceeding brought in any such court has been brought in an inconvenient forum. If any
legal action or other proceeding is brought for the enforcement of this Sublease, or because of an
alleged dispute, breach, default or misrepresentation in connection with any of the provisions of
this Sublease, the successful or prevailing Party will be entitled to recover reasonable attorneys’
fees and other costs incurred in that action or proceeding, in addition to any other relief to
which it or they may be entitled.

          (h) Severability. If any provision of this Sublease is found by a court of competent
jurisdiction to be contrary to, prohibited by or invalid under any applicable law, such court may
modify such provision so, as modified, such provision will be enforceable and will to the maximum
extent possible comply with the apparent intent of the parties in drafting such provision. If no
such modification is possible, such provision will be deemed omitted, without invalidating the
remaining provisions hereof. No such modification or omission of a provision will in any way affect
or impair such provision in any other jurisdiction.

          (i) Captions. The captions, headings or titles of the various Sections of this Sublease are
for convenience of reference only, and will not be deemed or construed to limit or expand the
substantive provisions of such Sections.

          (j) Counterparts; Reproductions. This Sublease may be signed in any number of counterparts,
each of which is an original for all purposes, but all of which taken together constitute one and
the same contract, notwithstanding that all Parties are not signatories to the same counterpart.
Once signed, any reproduction of this Sublease made by reliable means (e.g., photocopy, facsimile,
PDF) will be considered an original.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK – SIGNATURES ON
FOLLOWING PAGE]

11

 

     IN WITNESS WHEREOF, the parties have executed this Sublease as of the day and year first above
written.

	 	 	 	 	 	 	 	 	 	 	 
	SUBLESSOR:	 	 	 	SUBLESSEE:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	PEC EQUIPMENT COMPANY, LLC	 	 	 	[PATRIOT COAL CORPORATION]	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Name:

	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Title:

	 	 	 	 	 	Title:exv10w15

 

Exhibit 10.15

FORM OF

EMPLOYMENT AGREEMENT

     This AGREEMENT is entered into as of the date set forth on the signature page hereof, by and
between Patriot Coal Corporation, a Delaware corporation (the “Company”), and Richard M. Whiting (the
“Executive”).

RECITALS

     To induce Executive to serve as the Company’s President and Chief Executive Officer, the
Company desires to provide Executive with compensation and other benefits on the terms and subject
to the conditions set forth in this Agreement.

     Executive is willing to accept such employment and perform services for the Company, on the
terms and subject to the conditions hereinafter set forth.

     It is therefore hereby agreed by and between the parties as follows:

     1. Employment.

     1.1 Subject to the terms and conditions of this Agreement, the Company agrees to employ
Executive during the term hereof as the Company’s President and Chief Executive Officer. In
such capacity, Executive shall report to the Board of Directors of the Company (the “Board”)
and shall have the customary powers, responsibilities and authorities of executives holding
such positions in publicly held corporations of the size, type and nature of the Company, as
it exists from time to time.

     1.2 Subject to the terms and conditions of this Agreement, Executive hereby accepts
employment as the Company’s President and Chief Executive Officer commencing as of the date
hereof (the “Commencement Date”) and agrees, subject to any period of vacation or sick
leave, to devote his full business time and efforts to the performance of services, duties
and responsibilities in connection therewith.

     1.3 Nothing in this Agreement shall preclude Executive from engaging in trade
association activities, charitable work and community affairs, from delivering lectures,
fulfilling speaking engagements or teaching at educational institutions, from managing any
investment made by him or his immediate family with respect to which Executive or such
family member is not substantially involved with the management or operation of the entity
in which Executive has invested (provided that no such investment in publicly traded equity
securities or other property may exceed 5% of the equity of any entity, without the prior
approval of the Board) or from serving, subject to the prior approval of the Board, as a
member of the board of directors or as a trustee of any other corporation, association or
entity, to the extent that any of the above activities do not materially interfere with the
performance of his duties hereunder. For the avoidance of
doubt, Executive shall be permitted to continue to serve as a member or director in any

1

 

organization of which he was a member or director as of the date hereof (including, without
limitation, as director of the Society of Mining Engineers Foundation) without obtaining
Board approval. For purposes of this Section 1.3, any approval by the Board required herein
shall not be unreasonably withheld.

     2. Term of Employment. Executive’s term of employment under this Agreement (the “Term
of Employment”) shall commence on the Commencement Date and shall continue until terminated as
provided in this Agreement.

     3. Compensation.

     3.1 Salary. During the Term of Employment, the Company shall pay Executive a
base salary (“Base Salary”), which shall be payable in accordance with the ordinary payroll
practices of the Company. Executive’s initial Base Salary shall be $700,000 per annum.
During the Term of Employment, the Board shall review in good faith, at least annually,
Executive’s Base Salary in accordance with the Company’s customary procedures and practices
regarding the salaries of senior executives and may, if determined by the Board to be
appropriate, increase Executive’s Base Salary following such review. “Base Salary” for all
purposes herein shall be deemed to be a reference to any such increased amount.

     3.2 Annual Bonus. In addition to his Base Salary, Executive shall, commencing
with the 2007 calendar year and continuing each calendar year thereafter during the Term of
Employment, be eligible to receive an annual cash bonus (the “Bonus”) in accordance with a
program to be developed by the Board, based on achievement of performance targets
established by the Board as soon as practicable at or after the beginning of the calendar
year to which the performance targets relate. For each calendar year, Executive’s target
Bonus shall be at least 100% of Base Salary, and his maximum bonus shall be at least 175% of
Base Salary, as in effect at the end of such calendar year. The Bonus shall be payable to
Executive at the time bonuses are paid to executive officers in accordance with the
Company’s policies and practices as set by the Board, but in no event later than March 15 of
the calendar year following the calendar year in which the Bonus is earned and vested.

     4. Employee Benefits.

     4.1 Equity and Stock Options.

     (a) Executive shall receive an extended long-term incentive award (the
“Extended Long Term Incentive Award”) with a value that is at least equal to 850% of
Executive’s initial Base Salary as set forth in Section 3.1. Such award shall
consist of stock options and restricted stock units, which will be granted on or
about         , 2007. The stock options will be granted with an exercise price per
share equal to the closing market price of a share of Company common stock on the
grant date. The restricted stock units will be granted with a value per unit equal
to the closing market price of a share of Company common stock on the grant date.

2

 

     (b) With respect to each calendar year commencing with the 2008 calendar year,
Executive shall receive equity-based compensation awards under the Company’s equity
incentive plans (the “Annual Long Term Incentive Awards” and, together with the
Extended Long Term
Incentive Award, the “Long Term Incentive Awards”) with a value at least equal
to 250% of Executive’s Base Salary as in effect on the date of such award. The
Annual Long Term Incentive Award with respect to the 2008 calendar year shall be
made in the form of restricted stock on or about
        , 2007, with a value per share
that equals the closing market price of a share of Company common stock on the grant
date. The Annual Long Term Incentive Award with respect to each calendar year after
2008 shall be made effective on the first business day of such calendar year.

     (c) As of the date of termination of Executive’s employment due to Executive’s
Disability (as hereinafter defined) or death, or upon the occurrence of a change in
control (as defined in the applicable equity-based plan or award) all outstanding
Long Term Incentive Awards and any other equity-based awards granted to the
Executive by the Company shall become immediately and fully vested; provided,
however, that any performance units granted to Executive shall not become fully
vested upon a change in control unless otherwise provided in the applicable plan or
award agreement. In the case of termination of Executive’s employment due to
Executive’s Disability (as hereinafter defined) or death, any options held by
Executive as of such date shall remain exercisable until at least the earlier of (i)
the date that is one (1) year after the date of termination of Executive’s
employment or (ii) the date on which the option would have expired solely by reason
of the passage of time if Executive’s employment had not been terminated, provided
that no option shall remain outstanding longer than the maximum time permitted by
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).

     (d) The Long Term Incentive Awards shall be governed by separate grant
agreements (together with any other agreement approved by the Board and designated
by the Board as an “Ancillary Document” for purposes of this Agreement, the
“Ancillary Documents”). In the event of any conflict between an Ancillary Document
and the terms of this Agreement, the terms of this Agreement shall govern.

     (e) All Long Term Incentive Awards and any other equity-based awards granted to
the Executive by the Company shall be approved by a committee of the Board comprised
of individuals who are both disinterested directors (within the meaning of Section
16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) and
independent directors (within the meaning of applicable stock exchange rules) and
shall be exempt from Section 16(b) of the Exchange Act by reason of Rule 16b-3 under
the Exchange Act.

     4.2 Employee Benefit Programs, Plans and Practices; Perquisites. During
the Term of Employment, the Company shall provide Executive with employee benefits and
perquisites at a level (a) commensurate with his position in the Company and (b) at least

3

 

as favorable to the Executive as the Company provides to its other senior executives, including
retirement benefits, health and welfare benefits (both active and retiree), the Continuation
Benefits (as defined herein), and other employee benefits and perquisites which the Company
may make available to its senior executives from time to time. Executive’s service with
Peabody Energy Corporation and its affiliates shall be taken into account for purposes of
determining eligibility, vesting, level of benefits and benefit accruals under the Company’s
benefit plans (except to the extent that such service credit would result in a duplication
of benefits).

     4.3 Vacation. Executive shall be entitled to the number of business days paid
vacation in each calendar year, as determined in accordance with the Company’s applicable
vacation policies, but in no event less than twenty (20) business days, which shall be taken
at such times as are reasonably consistent with Executive’s responsibilities hereunder.

     5. Expenses. Subject to prevailing Company policy or such guidelines as may be
established by the Board, the Company will reimburse Executive for all reasonable expenses incurred
by Executive in carrying out his duties on behalf of the Company.

     6. Termination of Employment.

     6.1 Termination of Employment for Any Reason. In the event of a termination of
the Executive’s employment for any reason, the Company shall pay to the Executive (a) within
five (5) business days following the date of termination of the Executive’s employment, a
lump sum equal to (i) Executive’s Base Salary earned on or prior to the date of such
termination, (ii) any business expenses incurred by Executive and not yet reimbursed by the
Company as of the date of such termination, (iii) any vacation time accrued but unused on or
prior to the date of such termination and (iv) any Bonus earned but not yet paid for any
calendar year prior to the date of such termination, and (b) any benefits accrued and vested
under any of the Company’s employee benefit programs, plans and practices on or prior to the
date of termination of Executive’s employment (the “Accrued Obligations”) in accordance with
the terms of such programs, plans and practices.

     6.2 Termination Not for Cause or for Good Reason. (a) The Company or
Executive may terminate Executive’s Term of Employment at any time for any reason by
providing written notice to the other party at least thirty (30) days (or such other number
of days specified in this Agreement) in advance of the date of termination of Executive’s
employment. If Executive terminates his employment for Good Reason, such notice shall
describe the conduct Executive believes to constitute Good Reason and the Company shall have
the opportunity to cure the Good Reason within 30 days of receiving such notice. If the
Company cures the conduct that is the basis for the potential termination for Good Reason
within such 30-day period, Executive’s notice of termination shall be deemed withdrawn.

If Executive’s employment is terminated (i) by the Company other than for Cause (as
defined in Section 6.3(b) hereof), Disability (as defined in Section 6.4 hereof) or death or
(ii) by Executive for Good Reason (as defined in Section 6.2(b) hereof), the Company, as

4

 

severance, shall pay to Executive an amount (the “Severance Payment”) equal to the total of:

     (A) three (3) times Executive’s Base Salary, plus

     (B) an additional amount equal three (3) times the greater of (x) Executive’s
target Bonus for the calendar year of termination of Executive’s employment or (y)
the annual average of the actual Bonus awards paid to Executive by the Company
during the three calendar years preceding the date of termination of Executive’s
employment (or, if Executive has not yet been employed by the Company pursuant to
this Agreement for three full calendar years as of the date his employment is
terminated, during the two-year or one-year period, as applicable, for which he has
been so employed and received a Bonus).

The amounts described in (A) and (B) above are collectively referred to herein as the
“Severance Payment.” The Company shall pay to the Executive (I) one-third (1/3) of such
amount in twelve (12) equal monthly installments commencing on the date of termination of
Executive’s employment and (II) the
remainder of such amount in a lump sum on the first anniversary of the date of such
termination of employment.

In addition, the Company shall pay to Executive a prorated bonus (the “Prorated Bonus”)
for the calendar year of termination of Executive’s employment, calculated as the Bonus
Executive would have received in such year based on actual performance multiplied by a
fraction, the numerator of which is the number of business days during the calendar year of
termination that Executive was employed and the denominator of which is the total number of
business days during the calendar year of termination. The Prorated Bonus shall be payable
when annual bonuses are paid to other senior executives of the Company, but in no event
later than March 15 of the calendar year following the calendar year in which the Prorated
Bonus was earned and vested.

The Company shall also continue to provide Executive as though he remained actively
employed, for a period of three (3) years following the date of termination of Executive’s
employment (the “Benefit Continuation Period”), life insurance, health coverage, retirement
and other benefits identified on the signature page hereof (collectively, the “Continuation
Benefits”), provided, however, that the Company shall not be obligated to
provide any benefits under any tax-qualified plan that is not permitted by the terms of such
plan or by applicable law or that could jeopardize the plan’s tax status; provided,
further, that any such coverage shall terminate to the extent that Executive is
offered or obtains comparable benefits from any other employer during the Benefit
Continuation Period. Notwithstanding the foregoing, if Executive breaches any provision of
Section 13 hereof, the remaining balances of the Severance Payment, the Prorated Bonus and
any Continuation Benefits shall be forfeited.

     (b) For purposes of this Agreement, the term “Good Reason” means: (i) a reduction by the
Company in Executive’s Base Salary (in which event the Severance Payment shall be calculated based
on Executive’s Base Salary in effect prior to any such reduction); (ii) a material reduction in the
aggregate program of employee benefits and perquisites to which Executive is entitled (other than a
reduction that generally affects all executives); (iii) a material

5

 

decline in Executive’s Bonus or
Long Term Incentive Award opportunities; (iv) relocation of Executive’s primary office by more than
50 miles from the location of Executive’s primary office in Saint Louis, Missouri; or (v) any
material diminution or material adverse change in Executive’s title, duties, responsibilities or
reporting relationships. Any amounts due to the Executive in connection with a termination of
employment shall be computed without giving effect to any changes that give rise to Good Reason.
If Executive does not give notice to the Company as described in Section 6.2(a) hereof within
ninety (90) days after an event giving rise to Good Reason, the Executive’s right to claim Good
Reason termination on the basis of such event shall be deemed waived.

     6.3 Voluntary Termination by Executive; Discharge for Cause. (a) In the event
that Executive’s employment is terminated (i) by the Company for Cause, as hereinafter
defined, or (ii) by Executive other than for Good Reason, Disability or death, the Company
shall pay to Executive the Accrued Obligations.

     (b) As used herein, the term “Cause” shall be limited to (i) any material and
uncorrected breach by Executive of the terms of this Agreement, including, but not
limited to, a violation of Section 13 hereof, (ii) any willful fraud or dishonesty of
Executive involving the property or business of the Company, (iii) a deliberate or willful
refusal or failure of Executive to comply with any major corporate policy of the Company
which is communicated to Executive in writing, or (iv) Executive’s conviction of, or plea of
nolo contendere to, any felony if such conviction or plea results in his
imprisonment; provided that, with respect to clauses (i), (ii) and (iii)
above, Executive shall have thirty (30) days following his receipt of written notice of the
conduct that is the basis for the potential termination for Cause within which to cure such
conduct to prevent termination for Cause by the Company. If the Executive cures the conduct
that is the basis for the potential termination for Cause within such 30-day period, the
Company’s notice of termination shall be deemed withdrawn. In the event that Executive is
terminated for failure to meet performance goals, as determined by the Board, such
termination shall be considered a termination for Cause for all purposes relating to his
equity-based compensation awards, but it shall be considered a termination without Cause for
purposes of his right to receive the Severance Payment, the Prorated Bonus and the
Continuation Benefits.

     6.4 Disability. In the event of the Disability (as defined below) of Executive
during the Term of Employment, the Company may terminate Executive’s Term of Employment upon
written notice to Executive (or Executive’s personal representative, if applicable)
effective upon the date of receipt thereof (the “Disability Commencement Date”). The
Company shall pay to the Executive the Accrued Obligations as provided in Section 6.1, and
the Prorated Bonus when such bonuses are paid to other senior executives of the Company, but
in no event later than March 15 of the calendar year following the calendar year in which
the Executive’s employment was terminated. The term “Disability,” for purposes of this
Agreement, shall mean Executive’s absence from the full-time performance of Executive’s
duties pursuant to a reasonable determination made in accordance with the Company’s
disability plan that Executive is disabled as a result of incapacity due to physical or
mental illness that lasts, or is reasonably expected to last, for at least six months.

6

 

     6.5 Death. In the event of Executive’s death during his Term of Employment or
at any time thereafter while payments are still owing to Executive under the terms of this
Agreement, the Company shall pay to the Executive’s beneficiary(ies) (to the extent so
designated by the Executive) or his estate (to the extent that no such beneficiary has been
designated) the Accrued Obligations as provided in Section 6.1, the Prorated Bonus when such
bonuses are paid to other senior executives of the Company, but in no event later than March
15 of the calendar year following the calendar year in which Executive’s employment was
terminated, and any remaining payments that were payable to Executive by reason of his
termination of employment under Section 6.2 to which Executive was entitled at the time of
his death in accordance with the terms of Section 6.2.

     6.6 No Further Notice or Compensation or Damages. Executive understands and
agrees that he shall not be entitled to any further notice, compensation or damages upon a
termination of his employment under this Agreement, other than amounts specified in Sections
4 and 6 hereof, the Ancillary Documents, and any plan, program or arrangement of the
Company.

     6.7 Executive’s Duty to Deliver Materials. Upon the termination of Executive’s
employment for any reason, Executive or his estate shall surrender to the Company all
correspondence, letters, files, contracts, mailing lists, customer lists, advertising
materials, ledgers, supplies, equipment, checks, and all other materials and records of any
kind that are the property of the Company or any of its subsidiaries or affiliates, that may
be in Executive’s possession or under his control, including all copies of any of the
foregoing.

7. Tax Gross-Up Payments.

     (a) If Executive becomes entitled to any payment, benefit or distribution (or
combination thereof) by the Company, any affiliated company, or one or more trusts
established by the Company for the benefit of its employees, whether paid or payable
pursuant to Section 6.2 of this Agreement or any other plan, arrangement, or agreement with
the Company or any affiliated company (the “Payments”), which are or become subject to the
excise tax imposed by Code Section 4999, or any interest or penalties are incurred by
Executive with respect to such excise tax (such excise tax, together with any such interest
and penalties, hereinafter collectively referred to as the “Excise Tax”), the Company shall
pay to Executive an additional payment (the “Gross-Up Payment”) in an amount such that after
payment by Executive of all taxes (including any interest or penalties imposed with respect
to such taxes), including, without limitation, any income taxes (and any interest and
penalties imposed with respect thereto) and the Excise Tax imposed upon the Gross-Up
Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.

     (b) All determinations required to be made under this Section 7, including whether and
when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the
assumptions to be utilized in arriving at such determination, shall be made by a nationally
recognized certified public accounting firm as may be mutually agreed by the Company and the
Executive (the “Accounting Firm”), which shall provide detailed supporting calculations to
both the Company and Executive within ten business

7

 

days after the receipt of notice from
Executive that Payments were made, or such earlier time as is required by the Company;
provided that, for purposes of determining the amount of any Gross-Up Payment,
Executive shall be deemed to pay federal income tax at the highest marginal rates applicable
to individuals in the calendar year in which any such Gross-Up Payment is to be made and
deemed to pay state and local income taxes at the highest effective rates applicable to
individuals in the state or locality of Executive’s residence or place of employment in the
calendar year in which any such Gross-Up Payment is to be made, net of the maximum reduction
in federal income taxes that can be obtained from deduction of such state and local taxes,
taking into account limitations applicable to individuals subject to federal income tax at
the highest marginal rates. All fees and expenses of the Accounting Firm shall be borne
solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 7,
shall be paid by the Company to Executive (or to the appropriate taxing authority on
Executive’s behalf) no later than March 15 of the calendar year following the calendar year
in which the Accounting Firm determines that Executive is entitled to a Gross-Up Payment.
If the Accounting Firm determines that no Excise Tax is payable by Executive, it shall so
indicate to the Company and Executive in writing. Any determination by the Accounting Firm
shall be binding upon the Company and Executive. As a result of the uncertainty in the
application of Code Section 4999, it is possible that the amount of the Gross-Up Payment
determined by the Accounting Firm to be due to (or on behalf of) Executive may be lower than
the amount actually due (“Underpayment”). In the event that the Company exhausts its
remedies hereunder and Executive thereafter is required to make a payment of any Excise Tax,
the Accounting Firm shall determine the amount of the Underpayment that has occurred and any
such Underpayment shall be promptly paid by the Company to or for the benefit of Executive;
provided, however, that such Underpayment shall be paid to Executive no
later than March 15 of the calendar year following the calendar year in which it is
determined that the Executive is entitled to an Underpayment.

     (c) Executive shall notify the Company in writing of any claim by the Internal Revenue
Service that, if successful, would require the payment by the Company of any Gross-Up
Payment. Such notification shall be given as soon as practicable, but no later than fifteen
business days after Executive is informed in writing of such claim and shall apprise the
Company of the nature of such claim and the date on which such claim is requested to be
paid. Executive shall not pay such claim prior to the expiration of the thirty-day period
following the date on which he gives such notice to the Company (or such shorter period
ending on the date that any payment of taxes with respect to such claim is due). If the
Company notifies Executive in writing prior to the expiration of such period that it desires
to contest such claim, Executive shall (i) give the Company any information reasonably
requested by the Company relating to such claim, (ii) take such action in connection with
contesting such claim as the Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with respect to such claim by
an attorney reasonably selected by the Company, (iii) cooperate with the Company in good
faith in order to effectively contest such claim and (iv) permit the Company to participate
in any proceedings relating to such claim; provided, however, that the
Company shall bear and pay directly all costs and expenses (including additional interest
and penalties) incurred in connection with such contest and

8

 

shall indemnify and hold
Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including
interest and penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions of this
Section 7, the Company shall control all proceedings taken in connection with such contest
and, at its sole option, may pursue or forego any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in respect of such claim and
may, at its sole option, either direct Executive to pay the tax claimed and sue for a refund
or contest the claim in any permissible manner, and Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall determine;
provided, further, that if the Company directs Executive to pay such claim
and sue for a refund, the Company shall advance the amount of such payment to Executive, on
an interest-free basis, and shall indemnify and hold Executive harmless, on an after-tax
basis, from any Excise Tax or income tax (including interest or penalties with respect
thereto) imposed with respect to such advance or with respect to any imputed income with
respect to such advance; provided, further, that if Executive is
required to extend the statute of limitations to enable the Company to contest such claim,
Executive may limit this extension solely to such contested amount. The Company’s control
of the contest shall be limited to issues with respect to which a Gross-Up Payment would be
payable hereunder and Executive shall be entitled to settle or contest, as the case may be,
any other issue raised by the Internal Revenue Service or any other taxing authority.

     (d) If, after the receipt by Executive of an amount paid or advanced by the
Company pursuant to this Section 7, Executive becomes entitled to receive any refund with
respect to a Gross-Up Payment, Executive shall (subject to the Company’s compliance with the
requirements of Section 7(c)) promptly pay to the Company the amount of such refund received
(together with any interest paid or credited thereon after taxes applicable thereto). If,
after the receipt by Executive of an amount advanced by the Company pursuant to this Section
7, a determination is made that Executive shall not be entitled to any refund with respect
to such claim and the Company does not notify Executive in writing of its intent to contest
such denial of refund prior to the expiration of thirty days after such determination, then
such advance shall be forgiven and shall not be required to be repaid and the amount of such
advance shall offset, to the extent thereof, the amount of the Gross-Up Payment required to
be paid.

     8. Notices. All notices or communications hereunder shall be in writing,
addressed as follows:

     To the Company:

Patriot
Coal Corporation

attn: Board of Directors

     with a copy to:

9

 

     To Executive at the address set forth on the signature page hereof.

Any such notice or communication shall be delivered by hand or by courier or sent certified or
registered mail, return receipt requested, postage prepaid, addressed as above (or to such other
address as such party may designate in a notice duly delivered as described above), and the third
business day after the actual date of sending shall constitute the time at which notice was given.

     9. Severability. If any provision of this Agreement shall be declared to be
invalid or unenforceable, in whole or in part, such invalidity or unenforceability shall not affect
the remaining provisions hereof which shall remain in full force and effect.

     10. Assignment. This Agreement shall be binding upon, inure to the benefit of and be
enforceable by the heirs and representatives of Executive and the assigns and successors of the
Company, but neither this Agreement nor any rights or obligations hereunder shall be assignable or
otherwise subject to hypothecation by Executive (except by will or by operation of the laws of
intestate succession) or by the Company, except that the Company may assign this Agreement to any
successor (whether by merger, purchase or otherwise) to all or substantially all of the stock,
assets or businesses of the Company.

     11. Amendment. This Agreement may be amended only by written agreement of the parties
hereto.

     12. Amendment to Comply with Code Section 409A. If either party to this Agreement
reasonably determines that any amount payable pursuant to this Agreement would result in adverse
tax consequences under Code Section 409A (including, but not limited to, the additional tax
described in Code Section 409A(a)(1)(B)), then such party shall deliver written notice of such
determination to the other party, and the parties hereby agree to work in good faith to amend this
Agreement so it is exempt from, or compliant with, the requirements of Code Section 409A and
preserves as nearly as possible the original intentions of the affected provisions. If any payment
due to the Executive is required to be delayed by reason of Code Section 409A, such payment shall
be paid in one lump-sum payment as soon as administratively feasible on or after the date such
payment is permitted to be made under Code Section 409A, subject to standard payroll deductions and
withholdings.

     13. Nondisclosure of Confidential Information; Non-Competition; Non-Solicitation.

     (a) Executive, both during the term hereof and thereafter, will not, directly or
indirectly, use for himself or use for, or disclose to, any party other than the Company, or
any subsidiary of the Company (other than in the ordinary course of Executive’s duties for
the benefit of the Company or any subsidiary of the Company or to the extent required by
applicable law), any secret or confidential information that is not publicly available
regarding the business or property of the Company or its subsidiaries or regarding any
secret or confidential apparatus, process, system, or other method at any time used,
developed, acquired, discovered or investigated by or for the Company or its subsidiaries,
whether or not developed, acquired, discovered or investigated by Executive. At the
termination of Executive’s employment or at any other time the Company or any of its
subsidiaries may request, Executive shall promptly deliver to the

10

 

Company all memoranda,
notes, records, plats, sketches, plans or other documents made by, compiled by, delivered
to, or otherwise acquired by Executive concerning the business or properties of the Company
or its subsidiaries or any secret or confidential product, apparatus or process used
developed, acquired or investigated by the Company or its subsidiaries.

     (b) In consideration of the Company’s obligations under this Agreement, Executive
agrees that: (i) during the period of his employment hereunder and for a period of one year
thereafter, without the prior written consent of the Board, he will not, directly or
indirectly, as principal, manager, agent, consultant, officer, stockholder, partner,
investor, lender or employee or in any other capacity, carry on, be engaged in or have any
financial interest in, any activities which are in competition with the business of the
Company or its subsidiaries; (ii) during the period of his employment hereunder and for a
period of one year thereafter, without the prior written consent of the Board, he shall not,
on his own behalf or on behalf of any person, firm or company, directly or indirectly
solicit or offer employment to any person who is or has been employed by the Company or its
subsidiaries at any time during the twelve (12) months immediately preceding such
solicitation; and (iii) during the first year that this Agreement is in effect, he shall
not, on his own behalf or on behalf of any person, firm or company, directly or indirectly
solicit, offer employment to or hire any person who is employed by Peabody Energy
Corporation or its subsidiaries, except to the extent agreed upon in writing by Peabody
Energy Corporation.

     (c) For purposes of this Section 13, an entity shall be deemed to be in competition
with the Company if it is principally involved in the purchase, sale or other dealing in any
property or the rendering of any service purchased, sold, dealt in or rendered by the
Company as a part of the business of the Company within the same geographic area in which
the Company effects such sales or dealings or renders such services. Notwithstanding this
subsection 13(c) or subsection 13(b), nothing herein shall be construed so as to preclude
Executive from investing in any publicly or privately held company, provided Executive’s
beneficial ownership of any class of such company’s securities does not exceed 5% of the
outstanding securities of such class.

     (d) Executive agrees that this covenant not to compete is reasonable under the
circumstances and will not interfere with his ability to earn a living or to otherwise meet
his financial obligations. Executive and the Company agree that if in the opinion of any
court of competent jurisdiction such restraint is not reasonable in any respect, such court
shall have the right, power and authority to excise or modify such provision or provisions
of this covenant as to the court shall appear not reasonable and to enforce the remainder of
the covenant as so amended. Executive agrees that any breach of the covenants contained in
this Section 13 would irreparably injure the Company. Accordingly, Executive agrees that,
in the event of such a breach of this Section 13 by the Executive, the Company may, in
addition to pursuing any other remedies it may have in law or in equity, cease making any
payments otherwise required by this Agreement and seek to obtain an injunction against
Executive from any court having jurisdiction over the matter to restrain any further
violation of this Section 13 by Executive.

11

 

     14. Beneficiaries; References. Executive shall be entitled to select (and change, to
the extent permitted under any applicable law) a beneficiary or beneficiaries to receive any
compensation or benefit payable hereunder following Executive’s death, and may change such
election, in either case by giving the Company written notice thereof. In the event of Executive’s
death or a judicial determination of his incompetence, reference in this Agreement to Executive
shall be deemed, where appropriate, to refer to his beneficiary, estate or other legal
representative. Any reference to the masculine gender in this Agreement shall include, where
appropriate, the feminine.

     15. Dispute Resolution. Any dispute or controversy arising under or in connection
with this Agreement (other than an action to enforce the covenants in Section 13 hereof) or the
Ancillary Documents shall be resolved by arbitration. Arbitrators shall be selected, and
arbitration shall be conducted, in accordance with the rules of the American Arbitration
Association. The Company shall pay any legal fees in connection with such arbitration in the event
that Executive prevails on a material element of his claim or defense.

     16. Legal Fees; Indemnification; Directors’ & Officers’ Liability Insurance.

     (a) The Company shall reimburse Executive for reasonable legal fees and expenses
incurred by Executive in connection with negotiating and preparing this Agreement.

     (b) The Company shall indemnify the Executive during and after the Term of Employment
to the maximum extent permitted by applicable law for any liability
incurred by the Executive by reason of his service as an officer or director of the
Company or any of its subsidiaries or affiliates or by reason of his service as a fiduciary
of any employee benefit plan of the Company or any of its subsidiaries or affiliates.

     (c) During the Term of Employment and for so long as Executive may have any liability
by reason of serving as an officer or director of the Company or any of its subsidiaries or
affiliates, the Executive shall be entitled to the same directors’ and officers’ liability
insurance coverage that the Company provides generally to its other directors and officers,
as may be amended from time to time for such directors and officers. During the Term of
Employment and for so long as Executive may have any liability by reason of serving as a
fiduciary of any employee benefit plan of the Company or any of its subsidiaries or
affiliates, the Executive shall be entitled to the same fiduciary liability insurance
coverage that the Company provides generally to its other directors and officers, as may be
amended from time to time for such directors and officers.

     17. Governing Law. This Agreement shall be construed, interpreted and governed in
accordance with the laws of the State of New York, without reference to rules relating to conflicts
of law.

     18. Effect on Prior Agreements. This Agreement, the transition letter agreement
entered into by Peabody Energy Corporation and Executive in connection with Executive’s transfer to
the Company, and the Ancillary Documents contain the entire understanding between the parties
hereto and supersede in all respects any prior or other agreement or understanding,

12

 

both written
and oral, between the Company, any affiliate of the Company or any predecessor of the Company or
affiliate of the Company and Executive.

     19. Withholding. The Company shall be entitled to withhold from payments to Executive
any amount of withholding required by law.

     20. Survival. Notwithstanding the expiration of the term of this Agreement, the
provisions of Sections 4, 13 and 16 hereunder shall remain in effect as long as is reasonably
necessary to give effect thereto in accordance with the terms hereof.

     21. Counterparts. This Agreement may be executed in two or more counterparts, each of
which will be deemed an original.

[SIGNATURE PAGE FOLLOWS]

13

 

PATRIOT
COAL CORPORATION

	 	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	EXECUTIVE	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Richard M. Whiting	 	 

	 	 	 	 	 
	Agreement Commencement Date:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	Name of Executive:

	 	Richard M. Whiting	 	 
	 
	 	 	 	 
	

	Address of Executive:

	 		 	 
	 

	 		 	 
	 

	 		 	 
	 
	 	 	 	 
	

	Executive Team Position:

	 	President and Chief Executive Officer	 	 
	 
	 	 	 	 
	Base Salary:

	 	$700,000 per annum	 	 
	 
	 	 	 	 
	Annual Bonus Target:

	 	100% of Base Salary (with maximum no less than 175% of Base
Salary)	 	 
	 
	 	 	 	 
	Long-Term Incentive Award:

	 	250% of Base Salary	 	 
	 
	 	 	 	 
	Extended Long-Term Incentive Award:

	 	850% of Base Salary	 	 
	 
	 	 	 	 
	Continuation Benefits:

	 	1. Medical, dental and vision benefits	 	 
	 

	 	2. Life insurance	 	 
	 

	 	3. AD&D	 	 
	 

	 	4.
Health care flexible spending account (to extent
required to comply with COBRA continuation
coverage requirements)
	 	 
	 

	 	5.
Qualified and non-qualified defined contribution
plan benefits	 	 
	 

	 	6.
Qualified and non-qualified defined benefit plan
benefits	 	 

14

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00128-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00128-of-00352.parquet"}]]