INDEMNIFICATION
AGREEMENT
This
Indemnification Agreement, dated as of June 19, 2008, is made
by and between PEABODY ENERGY CORPORATION, a Delaware corporation
(the “Corporation”) and MICHAEL C. CREWS (the
“Indemnitee”).
A.
The Corporation recognizes that competent and experienced persons
are increasingly reluctant to serve or to continue to serve as
directors or officers of corporations unless they are protected by
comprehensive liability insurance or indemnification, or both, due
to increased exposure to litigation costs and risks resulting from
their service to such corporations, and due to the fact that the
exposure frequently bears no reasonable relationship to the
compensation of such directors and officers;
B.
The statutes and judicial decisions regarding the duties of
directors and officers are often difficult to apply, ambiguous, or
conflicting, and therefore fail to provide such directors and
officers with adequate, reliable knowledge of legal risks to which
they are exposed or information regarding the proper course of
action to take;
C.
The Corporation and Indemnitee recognize that plaintiffs often seek
damages in such large amounts and the costs of litigation may be so
enormous (whether or not the case is meritorious), that the defense
and/or settlement of such litigation is often beyond the personal
resources of directors and officers;
D.
The Corporation believes that it is unfair for its directors and
officers to assume the risk of huge judgments and other expenses
which may occur in cases in which the director or officer received
no personal profit and in cases where the director or officer was
not culpable;
E.
The Corporation, after reasonable investigation, has determined
that the liability insurance coverage presently available to the
Corporation may be inadequate in certain circumstances to cover all
possible exposure for which Indemnitee should be protected. The
Corporation believes that the interests of the Corporation and its
stockholders would best be served by a combination of such
insurance and the indemnification by the Corporation of the
directors and officers of the Corporation;
F.
The Corporation’s Amended and Restated Certificate of
Incorporation (the “Certificate of Incorporation”) and
Amended and Restated By-Laws require the Corporation to indemnify
its directors and officers to the fullest extent permitted by the
Delaware General Corporation Law (the “DGCL”). The
Certificate of Incorporation expressly provides that the
indemnification provisions set forth therein are not exclusive, and
contemplates that contracts may be entered into between the
Corporation and its directors and officers with respect to
indemnification;
G.
Section 145 of the DGCL (“Section 145”),
under which the Corporation is organized, empowers the Corporation
to indemnify its officers, directors, employees and agents by
agreement and to indemnify persons who serve, at the request of the
Corporation, as the directors, officers, employees or agents of
other corporations or enterprises, and expressly provides that the
indemnification provided by Section 145 is not
exclusive;
H.
The Board of Directors has determined that contractual
indemnification as set forth herein is not only reasonable and
prudent but also promotes the best interests of the Corporation and
its stockholders;
I.
The Corporation desires and has requested Indemnitee to serve or
continue to serve as a director or officer of the Corporation free
from undue concern for unwarranted claims for damages arising out
of or related to such services to the Corporation; and
J.
Indemnitee is willing to serve, continue to serve or to provide
additional service for or on behalf of the Corporation on the
condition that he is furnished the indemnity provided for
herein.
NOW,
THEREFORE, in consideration of the mutual covenants and agreements
set forth below, and other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties
hereto, intending to be legally bound, hereby agree as
follows:
To the fullest
extent permitted by the laws of the State of Delaware:
(a) The
Corporation shall indemnify Indemnitee if Indemnitee was or is a
party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact
that Indemnitee is or was or has agreed to serve at the request of
the Corporation as a director, officer, employee or agent of the
Corporation, or while serving as a director or officer of the
Corporation, is or was serving or has agreed to serve at the
request of the Corporation as a director, officer, employee or
agent (which, for purposes hereof, shall include a trustee, partner
or manager or similar capacity) of another corporation,
partnership, joint venture, trust, employee benefit plan or other
enterprise, or by reason of any action alleged to have been taken
or omitted in such capacity.
(b) The
indemnification provided by this Section 1 shall be from and
against expenses (including attorneys’ fees), judgments,
fines and amounts paid in settlement actually and reasonably
incurred by Indemnitee or on Indemnitee’s behalf in
connection with such action, suit or proceeding and any appeal
therefrom, but shall only be provided if Indemnitee acted in good
faith and in a manner Indemnitee reasonably believed to be in or
not opposed to the best interests of the Corporation, and, with
respect to any criminal action, suit or proceeding, had no
reasonable cause to believe Indemnitee’s conduct was
unlawful.
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(c) Notwithstanding
the foregoing provisions of this Section 1, in the case of any
threatened, pending or completed action or suit by or in the right
of the Corporation to procure a judgment in its favor by reason of
the fact that Indemnitee is or was a director, officer, employee or
agent of the Corporation, or while serving as a director or officer
of the Corporation, is or was serving or has agreed to serve at the
request of the Corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise, no indemnification shall
be made in respect of any claim, issue or matter as to which
Indemnitee shall have been adjudged to be liable to the Corporation
unless, and only to the extent that, the Delaware Court of Chancery
or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case,
Indemnitee is fairly and reasonably entitled to indemnity for such
expenses which the Delaware Court of Chancery or such other court
shall deem proper.
(d) The
termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that
Indemnitee did not act in good faith and in a manner which
Indemnitee reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal
action or proceeding, had reasonable cause to believe that
Indemnitee’s conduct was unlawful.
Section 2.
Successful Defense; Partial Indemnification . To the extent
that Indemnitee has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in
Section 1 hereof or in defense of any claim, issue or matter
therein, Indemnitee shall be indemnified against expenses
(including attorneys’ fees) actually and reasonably incurred
in connection therewith. For purposes of this Agreement and without
limiting the foregoing, if any action, suit or proceeding is
disposed of, on the merits or otherwise (including a disposition
without prejudice), without (i) the disposition being adverse
to Indemnitee, (ii) an adjudication that Indemnitee was liable
to the Corporation, (iii) a plea of guilty or nolo contendere
by Indemnitee, (iv) an adjudication that Indemnitee did not
act in good faith and in a manner Indemnitee reasonably believed to
be in or not opposed to the best interests of the Corporation, and
(v) with respect to any criminal proceeding, an adjudication
that Indemnitee had reasonable cause to believe Indemnitee’s
conduct was unlawful, Indemnitee shall be considered for the
purposes hereof to have been wholly successful with respect
thereto.
If
Indemnitee is entitled under any provision of this Agreement to
indemnification by the Corporation for some or a portion of the
expenses (including attorneys’ fees), judgments, fines or
amounts paid in settlement actually and reasonably incurred by
Indemnitee or on Indemnitee’s behalf in connection with any
action, suit, proceeding or investigation, or in defense of any
claim, issue or matter therein, and any appeal therefrom but not,
however, for the total amount thereof, the Corporation shall
nevertheless indemnify Indemnitee for the portion of such expenses
(including attorneys’ fees), judgments, fines or amounts paid
in settlement to which Indemnitee is entitled.
Section 3.
Determination That Indemnification Is Proper . Any
indemnification hereunder shall (unless otherwise ordered by a
court) be made by the Corporation unless a determination is made
that indemnification of such person is not proper in the
circumstances because he or she has not met the applicable standard
of conduct set forth in Section 1(b) hereof. Any such determination
shall be made (i) by a majority vote of the directors who are
not parties to the
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action, suit or
proceeding in question (“disinterested directors”),
even if less than a quorum, (ii) by a majority vote of a
committee of disinterested directors designated by majority vote of
disinterested directors, even if less than a quorum, (iii) by
a majority vote of a quorum of the outstanding shares of stock of
all classes entitled to vote on the matter, voting as a single
class, which quorum shall consist of stockholders who are not at
that time parties to the action, suit or proceeding in question,
(iv) by independent legal counsel, or (v) by a court of
competent jurisdiction.
Section 4.
Advance Payment of Expenses; Notification and Defense of
Claim .
(a) Expenses
(including attorneys’ fees) incurred by Indemnitee in
defending a threatened or pending civil, criminal, administrative
or investigative action, suit or proceeding shall be paid by the
Corporation in advance of the final disposition of such action,
suit or proceeding within twenty (20) days after receipt by
the Corporation of (i) a statement or statements from
Indemnitee requesting such advance or advances from time to time,
and (ii) an undertaking by or on behalf of Indemnitee to repay
such amount or amounts, only if, and to the extent that, it shall
ultimately be determined that Indemnitee is not entitled to be
indemnified by the Corporation as authorized by this Agreement or
otherwise. Such undertaking shall be accepted without reference to
the financial ability of Indemnitee to make such repayment.
Advances shall be unsecured and interest-free.
(b) Promptly
after receipt by Indemnitee of notice of the commencement of any
action, suit or proceeding, Indemnitee shall, if a claim thereof is
to be made against the Corporation hereunder, notify the
Corporation of the commencement thereof. The failure to promptly
notify the Corporation of the commencement of the action, suit or
proceeding, or Indemnitee’s request for indemnification, will
not relieve the Corporation from any liability that it may have to
Indemnitee hereunder, except to the extent the Corporation is
prejudiced in its defense of such action, suit or proceeding as a
result of such failure.
(c) In
the event the Corporation shall be obligated to pay the expenses of
Indemnitee with respect to an action, suit or proceeding, as
provided in this Agreement, the Corporation, if appropriate, shall
be entitled to assume the defense of such action, suit or
proceeding, with counsel reasonably acceptable to Indemnitee, upon
the delivery to Indemnitee of written notice of its election to do
so. After delivery of such notice, approval of such counsel by
Indemnitee and the retention of such counsel by the Corporation,
the Corporation will not be liable to Indemnitee under this
Agreement for any fees of counsel subsequently incurred by
Indemnitee with respect to the same action, suit or proceeding,
provided that (1) Indemnitee shall have the right to employ
Indemnitee’s own counsel in such action, suit or proceeding
at Indemnitee’s expense and (2) if (i) the employment of
counsel by Indemnitee has been previously authorized in writing by
the Corporation, (ii) counsel to the Corporation or Indemnitee
shall have reasonably concluded that there may be a conflict of
interest or position, or reasonably believes that a conflict is
likely to arise, on any significant issue between the Corporation
and Indemnitee in the conduct of any such defense or (iii) the
Corporation shall not, in fact, have employed counsel to assume the
defense of such action, suit or proceeding, then the fees and
expenses of Indemnitee’s counsel shall be at the expense of
the Corporation, except as otherwise expressly provided by this
Agreement. The Corporation shall not be entitled, without the
consent of Indemnitee, to assume the defense of any claim brought
by or in the right of the Corporation or
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as to which
counsel for the Corporation shall have reasonably made the
conclusion provided for in clause (ii) above.
(d) Notwithstanding
any other provision of this Agreement to the contrary, to the
extent that Indemnitee is, by reason of Indemnitee’s
corporate status with respect to the Corporation or any
corporation, partnership, joint venture, trust, employee
benefit
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