Document:

EX-10.10

JCM PARTNERS, LLC

a Delaware limited liability company

2006 LONG-TERM INCENTIVE UNIT AWARD PLAN

(Adopted by the Board of Managers on December 8, 2005)

(California 25102(f) and Federal Section 4(2) Plan)

1. PURPOSES OF THE PLAN. The Plan is intended to assist the Company in attracting and retaining
Employees of outstanding ability and to promote the identification of their interests with those of
the Company. Only Plan Units may be awarded under the Plan.

2. DEFINITIONS. As used herein, the following definitions shall apply:

2.1 “Administrator” means the Board or any of its Committees as shall be administering the Plan in
accordance with Section 4 hereof. Initially the Administrator shall be the Compensation Committee
of the Board. The Board may change the Administrator at any time by a resolution of the Board.

2.2 “Agreement” means a written or electronic agreement between the Company and a Recipient
evidencing the terms and conditions of an individual award of Plan Units. The Agreement is subject
to the terms and conditions of the Plan. If there is a conflict between the terms of the Plan or
the Agreement, the terms of the Plan shall control.

2.3 “Applicable Laws” means the requirements relating to the administration of unit bonus plans
under U.S. state corporate laws, U.S. federal and state securities laws, the Code, or any stock
exchange or quotation system on which the Plan Units are listed or quoted, if any.

2.4 “Board” means the Board of Managers of the Company.

2.5 “Charter Documents” means the Company’s Operating Agreement (including the Certificates of
Designations thereto), the Bylaws of the Company and the restrictions on transfer and assignment
contained therein and in the Company’s Transfer Application.

2.6 “Class 3 Units” means the Class 3 Units of the Company, the terms of which are set forth in the
Certificate of Designations of Class 3 Units.

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

2.8 “Committee” means a committee of Managers appointed by the Board in accordance with Section 4
hereof.

2.9 “Company” means JCM Partners, LLC, a Delaware limited liability company and any wholly-owned
subsidiaries of the Company.

2.10 “Disability” means total and permanent disability as defined in Section 22(e)(3) of the Code.

2.11 “Employee” means any person determined by the Committee to be a full or part-time employee of
the Company.

2.12 “Exchange Act” means the Securities Exchange Act of 1934, as amended.

2.13 “Fair Market Value” means, as of any time, the value of Class 3 Units determined in good faith
by the Administrator.

2.14 “Manager” has the meaning in the Operating Agreement.

2.15 “Member” has the meaning in the Operating Agreement.

2.16 “Officer” means a person who is an officer of the Company within the meaning of Section 16 of
the Exchange Act and the rules and regulations promulgated thereunder.

2.17 “Operating Agreement” means the Company’s Second Amended and Restated Operating Agreement,
dated as of June 21, 2005, as amended from time to time.

2.18 “Plan” means this 2006 Long-Term Incentive Unit Award Plan.

2.19 “Plan Units” means Class 3 Units awarded pursuant to the Plan.

2.20 “Recipient” means an Employee to whom Plan Units have been awarded pursuant to the Plan.

	 	 	 
	2.21

2.22

2.23

2.24

2.25

2.26

	 	“SEC” means the Securities and Exchange Commission.

“Section 16(b)” means Section 16(b) of the Exchange Act.

“Securities Act” means the Securities Act of 1933, as amended.

“Tax Liabilities” has the meaning in Section 10 below.

“Units” has the meaning in the Operating Agreement.

“U.S.” means the United States of America.

2.27 “Valuation Date” means each date on which Plan Units awarded by the Committee under the Plan
to Recipients are issued to the Recipients under the terms of the Agreements, provided the Company
notifies the Recipients pursuant to the requirements of the Financial Accounting Standards Board
No. FAS 123®, as such may be in effect from time to time. However, in the case of the initial
issuance of Plan Units, “Valuation Date” means the date of the Committee’s determination to award
Plan Units, subject to the FAS 123® notification requirements.

3. TREATMENT OF UNITS SUBJECT TO THE PLAN.

3.1 Type of Units. Only Class 3 Units may be awarded under the Plan.

3.2 Maximum Number of Units under the Plan. Subject to the provisions of Section 8 of the Plan,
the maximum aggregate number of Units which may be awarded under the Plan is 901,521 minus any
Units awarded pursuant to Section 2.1.3.2 of the Company’s Operating Agreement outside the Plan.
No Member approval of the Plan was required, since Section 2.1.3.2 of the Company’s Operating
Agreement provided authority for the Plan and the number of Units covered by the Plan.

3.3 Treatment of Non-Issued Plan Units and Repurchased Plan Units. If Plan Units are not issued
under the terms of the Agreements, the non-issued Units shall become available for future awards
under the Plan (unless the Plan has terminated). However, Plan Units that have been issued under
the terms of the Agreements shall not be returned to the Plan and shall not become available for
future distribution under the Plan, even if such Plan Units are repurchased by the Company.

4. ADMINISTRATION OF THE PLAN.

4.1 Administrator. The Plan shall be administered by the Board or a Committee appointed by the
Board, which Committee shall be constituted to comply with Applicable Laws, including, but not
limited to Rule 16b-3 of the Securities Act (at such time as the Company is subject to the Exchange
Act).

4.2 Powers of the Administrator. Subject to the provisions of the Plan and, in the case of a
Committee, the specific duties delegated by the Board to such Committee, and subject to the
approval of any relevant authorities, the Administrator shall have the authority in its discretion:

4.2.1 to determine the Fair Market Value;

4.2.2 to select the Employees to whom Plan Units may from time to time be awarded hereunder;
provided however, that any award shall be in compliance with the Plan, the Charter Documents and
Applicable Laws, including but not limited to federal and state securities laws;

4.2.3 to determine the time or times at which awards of Plan Units may be made;

4.2.4 to determine the number of Plan Units to be awarded hereunder to any Employee;

4.2.5 to approve forms of agreement for use under the Plan;

4.2.6 to determine the terms and conditions of any Plan Units awarded hereunder (which terms
need not be identical). Such terms and conditions shall include, but are not limited to, issuance
provisions, any acceleration of issuance provisions, the right of the Company to repurchase Plan
Units that have been issued to Recipients and the responsibility for payment of Tax Liabilities,
based in each case on such factors as the Administrator, in its sole discretion, shall determine;
and

4.2.7 to construe and interpret the terms of the Plan and Plan Units awarded pursuant to the
Plan.

4.3 Effect of Administrator’s Decision. All decisions, determinations and interpretations of the
Administrator shall be final and binding on all Recipients.

5. ELIGIBILITY; OTHER PROVISIONS.

5.1 Employees Only. Plan Units may be awarded only to Employees.

5.2 Determination of Fair Market Value. The Fair Market Value shall be determined as of the time
each Plan Unit is issued to a Recipient.

5.3 No Employment Rights. Neither the Plan nor any Agreement shall confer upon any Recipient any
right with respect to continuing the Recipient’s relationship as an Employee with the Company, nor
shall they interfere in any way with Recipient’s right or the Company’s right to terminate such
relationship at any time, with or without cause.

6. TERM OF PLAN. The Plan shall become effective upon its adoption by the Board. The Plan shall
remain in effect until terminated pursuant to Article 9 hereof. The termination of the Plan shall
not affect the validity of any Plan Units outstanding on the date of termination.

7. RIGHTS AS A MEMBER.

7.1 Recipient shall become a Member. The issuance of Plan Units under the Plan shall be
conditioned upon the Recipient being or becoming a Member in accordance with the terms of the
Operating Agreement as of the date of the first issuance of Plan Units to the Recipient.

7.2 Subject to Charter Documents. Therefore, in addition to the terms and restrictions contained
in the Plan and any Agreement thereunder, each Recipient and each Plan Unit issued pursuant to the
Plan is subject at all times to the terms of the Charter Documents, including but not limited to
the restrictions on transfer and assignment contained therein.

7.3 Membership Rights with Respect to Issued Plan Units. Subject to the Company’s right to
repurchase issued Plan Units set forth in any Agreement, once Plan Units have been issued to a
Recipient, the Recipient shall have all of the rights of a Member with respect to the issued Plan
Units, including the right to vote and to receive distributions.

7.4 No Membership Rights for Plan Units not Issued to a Recipient. A Recipient shall not have any
membership rights with respect to the non-issued Plan Units until they have been issued to the
Recipient in accordance with the terms of an Agreement.

8. CAPITAL ADJUSTMENTS. The number of Units subject to each outstanding Plan Unit award shall be
subject to such adjustment or substitution, if any, as the Committee in its sole discretion deems
appropriate to reflect such events as distributions, Unit or other security splits,
recapitalizations, reclassifications, mergers, consolidations, liquidations, reorganizations,
conversions or other similar events of or by the Company.

9. AMENDMENT AND TERMINATION OF THE PLAN.

9.1 Amendment and Termination. The Board may at any time amend, alter, suspend or terminate the
Plan.

9.2 Member Approval. The Board shall obtain Member approval of any Plan amendment to the extent
necessary and desirable to comply with Applicable Laws or the Company’s Charter Documents.

9.3 Effect of Amendment or Termination. No amendment, alteration, suspension or termination of the
Plan shall adversely affect the rights of any Recipient, unless mutually agreed otherwise between
the Recipient and the Administrator, which agreement must be in writing and signed by the Recipient
and the Company. Termination of the Plan shall not affect the Administrator’s ability to exercise
the powers granted to it hereunder with respect to the Plan Units awarded under the Plan prior to
the date of such termination.

10. WITHHOLDING.

10.1 General. The Company’s obligations under this Plan and any Agreement thereunder shall be
subject to the satisfaction by the Recipient of applicable federal, state and local tax withholding
requirements (“Tax Liabilities”) prior to the issuance of Plan Units to a Recipient. A Recipient
shall satisfy any Tax Liabilities by delivering, in accordance with the applicable Agreement, a
cash payment to the Company. If the Recipient fails to satisfy any Tax Liabilities, the Company
may satisfy such Tax Liabilities by deducting an amount equal to such Tax Liabilities from any
other amount then or thereafter payable to a Recipient or his or her beneficiary or legal
representative. At the time of any issuance of Plan Units hereunder, the Company shall provide
each Recipient with a notice specifying the amount and timing of the Recipient’s Tax Liability for
such issuance.

10.2 Forfeiture of Plan Units intended to be issued to a Recipient for Failure to Satisfy Tax
Liabilities. If a Recipient fails to satisfy the Tax Liabilities with respect to a specific
issuance of Plan Units by the time the Company is legally obligated to have withheld sufficient
funds to satisfy such Tax Liabilities, the Recipient shall forever forfeit the intended issuance of
Plan Units pro rata to the extent the Recipient has not satisfied the Tax Liabilities. Any
forfeiture shall relate solely to the proposed issuance of Plan Units for which the Tax Liabilities
have not been satisfied and shall have no effect on any issuance or proposed issuance of Plan Units
for which a Recipient has timely satisfied the Tax Liabilities. The Company shall provide a
written notice to a Recipient regarding any such forfeiture.

11. INDEMNIFICATION OF ADMINISTRATOR. In addition to such other rights of indemnification as they
may have as Managers, the members of the Administrator shall be indemnified by the Company, to the
fullest extent permitted by applicable law in effect on the date on which the Plan is made
effective and to such greater extent as applicable law may thereafter from time to time permit,
against the reasonable expenses, including attorneys’ fees, actually and reasonably incurred in
connection with the defense of any action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason of any action taken or failure to
act under or in connection with the Plan or any Plan Units awarded hereunder, and against all
amounts reasonably paid by them in settlement thereof or paid by them in satisfaction of a judgment
in any such action, suit or proceeding, if such members acted in good faith and in a manner which
they believed to be in, and not opposed to, the best interests of the Company.

12. GENERAL PROVISIONS.

12.1 No Other Rights. The establishment of the Plan shall not confer upon any Employee any legal
or equitable right against the Company or the Administrator, except as expressly provided in the
Plan.

12.2 Non-Permitted Transfers Void. Any Transfer or attempted Transfer of Plan Units, or any rights
pertaining thereto, in violation of this Plan or any Agreement thereunder shall be null and void.

12.3 Plan Not an Employment Contract. The Plan does not constitute inducement or consideration for
the employment of any Employee, nor is it a contract between the Company and any Employee.
Participation in the Plan shall not give an Employee any right to be retained in the service of the
Company.

12.4 No Limit on Ability to Issue other Interests Outside the Plan. The adoption of the Plan shall
not be taken to impose any limitations on the powers of the Company to issue interests otherwise
than under the Plan, or to adopt other plans providing for the issuance of other interests.

12.5 Free From Creditor Claims. The interests of any Employee under the Plan are not subject to
the claims of creditors and may not, in any way, be assigned, alienated or encumbered.

12.6 Governing Law. The Plan shall be governed, construed and administered in accordance with the
laws of the State of Delaware, without giving effect to the principles of conflicts of law thereof.

12.7 Securities Laws Restrictions. The Administrator may require each person acquiring Plan Units
pursuant to awards hereunder to represent to and agree with the Company in writing that such person
is acquiring the Plan Units without a view to distribution thereof. The Agreements for such Plan
Units may include any legend which the Administrator deems appropriate to reflect any restrictions
on transfer, since the Company’s Units are uncertificated. Plan Units issued pursuant to the Plan
shall be subject to such transfer orders and other restrictions as the Administrator may deem
advisable under the rules, regulations and other requirements of the SEC, and any applicable
federal or state securities laws.

12.8 Uncertificated Units; Compliance with Applicable Laws. Notwithstanding any other provision of
the Plan or any provision of any Agreement thereunder, the Company shall not be required to issue
any certificate or certificates for Plan Units. In addition, notwithstanding any other provision
of the Plan or any provision of any Agreement thereunder, the Administrator shall not be required
to record any person as a holder of record of such Plan Units, without obtaining, to the complete
satisfaction of the Administrator, the approval of all regulatory bodies deemed necessary by the
Administrator, and without complying, to the Administrator’s complete satisfaction, with all rules
and regulations, under federal, state or local law deemed applicable by the Administrator.

JCM PARTNERS, LLC

a Delaware limited liability company

By:

Gayle M. Ing, Chief Executive Officer

Dated: December 13, 2005EX-10.1

Exhibit 10.1

PEABODY ENERGY CORPORATION

LONG-TERM EQUITY INCENTIVE PLAN

NONQUALIFIED STOCK OPTION AGREEMENT

THIS AGREEMENT (the “Agreement”), dated as of      , 20     is made between PEABODY
ENERGY CORPORATION, a Delaware corporation (the “Company”) and the undersigned director of the
Company (the “Participant”).

WHEREAS, the Company wishes to afford the Participant the opportunity to purchase shares of
its $.01 par value common stock (“Stock”);

WHEREAS, the Company wishes to carry out the Peabody Energy Corporation Long-Term Equity
Incentive Plan (the “Plan”), the terms of which are hereby incorporated by reference and made a
part of this Agreement; and

WHEREAS, the Board (as hereinafter defined), appointed to administer the Plan, has determined
that it would be to the advantage and best interest of the Company and its stockholders to grant
the nonqualified stock option (the “Option”) provided herein to the Participant as an incentive for
increased efforts during the Participant’s term as a director of the Company, and has advised the
Company thereof and instructed its officers to issue the said Option.

NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and
valuable consideration, receipt of which is hereby acknowledged, the parties do hereby agree as
follows:

1. Terms of Award. The following words and phrases used in the Agreement shall have
the meanings set forth in this paragraph 1:

	 	(a)	 	The “Participant” is      .

	 	(b)	 	The “Grant Date” is      .

	 	(c)	 	The number of “Covered Shares” is      shares of Stock.

	 	(d)	 	The “Exercise Price” is $    per share.

Other words and phrases used in the Agreement are defined in the Plan or elsewhere in the
Agreement. Except where the context clearly implies or indicates the contrary, a word, term or
phrase used in the Plan is similarly used in the Agreement.

2. Nonqualified Stock Option. The Option is a nonqualified stock option and is not
intended to constitute an “incentive stock option” as that term is used in Section 422 of the
Internal Revenue Code of 1986, as amended.

3. Date of Exercise.

	 	(a)	 	Subject to the terms of paragraph 3(b) and the limitations of this Agreement,
the Option shall become exercisable in three annual installments, commencing on the
first anniversary of the Grant Date, as follows:

	 	(i)	 	The Option shall become exercisable with respect to one-third
(1/3) of the Covered Shares (rounded down to the nearest whole share) on the
first anniversary of the Grant Date.

	 	(ii)	 	The Option shall become exercisable with respect to an
additional one-third (1/3) of the Covered Shares (rounded down to the nearest
whole share) on the second anniversary of the Grant Date.

	 	(iii)	 	The Option shall become exercisable with respect to the
balance of the Covered Shares on the third anniversary of the Grant Date.

	 	(b)	 	Notwithstanding the terms of paragraph 3(a) but otherwise subject to the
limitations of this Agreement, the Option shall become fully exercisable upon a (i)
termination by the Company without Cause, (ii) termination by the Participant for any
reason or (iii) a Change of Control (as defined in the Plan).

4. Expiration. The Option shall not be exercisable after the Company’s close of
business on the last business day that occurs prior to the Expiration Date. The “Expiration Date”
shall be the earliest to occur of:

	 	(a)	 	the ten (10) year anniversary of the Grant Date;

	 	(b)	 	the ninety (90) day anniversary of such Date of Termination if the Date of
Termination occurs by reason of termination by the Company with Cause; or

	 	(c)	 	the five (5) year anniversary of such Date of Termination if the Date of
Termination occurs by reason of (i) termination by the Company without Cause, (ii)
termination by the Participant for any reason or, (iii) Disability, or (iv) death.

If the Date of Termination occurs due to any reason described in paragraph 4(b) above, the
portion of the Option that is not exercisable shall be immediately forfeited. If the Date of
Termination occurs due to any reason described in paragraph 4(c) above, the Option shall continue
to become exercisable in accordance with paragraph 3 above. Notwithstanding the foregoing, if the
Participant dies within five (5) years following the Date of Termination and the Option has not
already expired, the Option shall be exercisable for two (2) years after the Participant’s death or
until the five (5) year anniversary of the Date of Termination, if longer, but in no event shall
the Option be exercisable following the ten (10) year anniversary of the Grant Date.

5. Method of Option Exercise. Subject to the terms of this Agreement and the Plan,
the Option may be exercised in whole or in part by filing a written notice with the Secretary of
the Company at its corporate headquarters prior to the Company’s close of business on the last
business day that occurs prior to the Expiration Date. Such notice shall specify the number of
shares of Stock which the Participant elects to purchase, and shall be accompanied by payment of
the Exercise Price for such shares of Stock indicated by the Participant’s election. Payment shall
be by (a) cash, (b) check payable to the Company, (c) by delivery of shares of Stock that have been
beneficially owned by the Participant for at least six (6) months before the date of exercise
(“Mature Stock”) or (d) any combination of the foregoing. The Option shall not be exercisable if
and to the extent the Company determines that such exercise would violate applicable state or
Federal securities laws or the rules and regulations of the New York Stock Exchange. If the
Company makes such a determination, it shall use all reasonable efforts to obtain compliance with
such laws, rules and regulations by making any determination hereunder, the Company may rely on the
opinion of counsel for the Company.

6. Withholding. All deliveries and distributions under this Agreement are subject to
withholding of all applicable taxes, if any. At the election of the Participant, and subject to
such rules and limitations as may be established by the Board from time to time, such withholding
obligations, if any, may be satisfied through the surrender of Mature Stock.

7. Transferability. Except as otherwise provided in this paragraph 7, the Option is
not transferable other than as designated by the Participant by will or by the laws of descent and
distribution and during the Participant’s life may only be exercised by the Participant. However,
the Participant may transfer the Option to (a) one or more of the Participant’s Family Members; (b)
one or more trusts for the benefit of the Participant and/or one or more Family Members; or (c) one
or more partnerships (general or limited), corporations, limited liability companies or other
entities in which the aggregate interests of the Participant and Family Members exceed eighty
percent (80%) of all interests (each a “Permitted Transferee”). In the event of the death of the
Participant, the Option may be exercised only by the Permitted Transferee, the executor or
administrator of the Participant’s estate or the person or persons to whom the Participant’s rights
passed by will or the laws of descent and distribution and only to the extent that the Participant
or the Permitted Transferee was entitled to exercise the Option at the date of the Participant’s
death.

8. Definitions.

	 	(a)	 	Board. The term “Board” shall mean the Board of Directors of Peabody
Energy Corporation.

	 	(b)	 	Cause. The term “Cause” shall mean (i) the willful and
continued failure by the Participant to substantially perform the duties as required of
a director of the Company, (ii) any willful fraud or dishonesty of the Participant
involving the property or business of the Company, or (iii) the Participant’s
conviction of, or plea of nolo contendere to, any felony; provided that
with respect to clauses (i) or (ii) above, the Participant shall have 10 days following
written notice of the conduct which is the basis for the potential termination for
Cause within which to cure such conduct in order to prevent termination for Cause by
the Company.

	 	(c)	 	Date of Termination. The “Date of Termination” shall be the first day
occurring on or after the Grant Date on which the Participant ceases to be a director
of the Company, regardless of the reason for such cessation.

	 	(d)	 	Disability. The term “Disability” shall mean a medically determinable
physical or mental impairment that causes the Participant to be unable to engage in any
substantial gainful activity, which condition, in the opinion of a physician selected
by the Board, is expected to have a duration of not less than 120 days.

	 	(e)	 	Family Member. The term “Family Member” shall mean any one of the
Participant’s spouse, children or grandchildren.

9. Successors and Assigns. This Agreement shall be binding upon, and inure to the
benefit of, the Company and its successors and assigns, and upon any person acquiring, whether by
merger, consolidation, purchase of assets or otherwise, all or substantially all of the Company’s
assets and business.

10. Administration. The authority to manage and control the operation and
administration of this Agreement shall be vested in the Board, and the Board shall have all powers
with respect to this Agreement as it has with respect to the Plan. Any interpretation of the
Agreement by the Board and any decision made by it with respect to the Agreement is final and
binding on all persons.

11. Plan Governs. Notwithstanding anything in this Agreement to the contrary, the
terms of this Agreement shall be subject to the terms of the Plan, a copy of which may be obtained
by the Participant from the office of the Secretary of the Company; and this Agreement is subject
to all interpretations, amendments, rules and regulations promulgated by the Board from time to
time pursuant to the Plan.

12. No Right to Continue as a Director. Neither the Plan nor this Agreement shall
constitute or be evidence of any agreement, express or implied, that the Participant has a right to
continue as a director of the Company for any period of time, or at any particular compensation.

13. Notice. Any written notice to the Company required by any of the provisions of
this Plan shall be addressed to the Secretary of the Company and shall become effective when it is
received.

14. No Rights as a Stockholder. The Participant shall not have any rights of a
stockholder with respect to the shares subject to the Option, until a stock certificate has been
duly issued following exercise of the Option as provided herein.

15. Amendment. This Agreement may be amended by written agreement of the Participant
and the Company, without the consent of any other person.

16. Dispute Resolution. Any dispute or controversy arising under or in connection
with this Agreement shall be resolved by arbitration. Arbitrators shall be selected, and
arbitration shall be conducted, in accordance with the rules of the American Arbitration
Association.

17. Governing Law. The laws of the State of Delaware shall govern the interpretation,
validity and performance of the terms of this Agreement regardless of the law that might be applied
under principles of conflicts of laws.

IN WITNESS WHEREOF, the Participant has executed this Agreement, and the Company has caused
these presents to be executed in its name and on its behalf, all as of the Grant Date.

PARTICIPANT

PEABODY ENERGY CORPORATION

By:

Its:

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