PERFORMANCE UNITS
AGREEMENT
THIS
AGREEMENT , effective January 5, 2009 (the “
Grant Date ”), is made by and between PEABODY ENERGY
CORPORATION, a Delaware corporation (the “ Company
”), and the undersigned employee of the Company or a
Subsidiary (as defined below) or an Affiliate (as defined below) of
the Company (the “ Grantee ”).
WHEREAS ,
the Company wishes to afford the Grantee the opportunity to
participate in future increases in Company value;
WHEREAS ,
the Company wishes to carry out the Plan (as hereinafter defined),
the terms of which are hereby incorporated by reference and made a
part of this Agreement; and
WHEREAS ,
the Committee (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
Performance Units provided for herein to the Grantee as an
incentive for increased efforts during his or her term of office
with the Company or its Subsidiaries or Affiliates, and has advised
the Company thereof and instructed the undersigned officer to issue
said Performance Units;
NOW,
THEREFORE , in consideration of the mutual covenants herein
contained and other good and valuable consideration, receipt of
which is hereby acknowledged, the parties hereby agree as
follows:
Whenever the
following terms are used in this Agreement, they shall have the
meanings specified below. Capitalized terms not otherwise defined
in this Agreement shall have the meanings specified in the
Plan.
Section 1.1
— “ Affiliate ” shall mean any other
Person directly or indirectly controlling, controlled by, or under
common control with the Company. For the purposes of this
definition, the term “ control ” (including,
with correlative meanings, the terms “ controlling
”, “ controlled by ” and “ under
common control with ”), as applied to any Person, means
the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of that Person,
whether through the ownership of voting securities, by contract or
otherwise.
Section 1.2
— “ Board of Directors ” or “
Board ” shall mean the Board of Directors of the
Company.
Section 1.3
— “ Cause ” shall mean “Cause”
as defined in the Grantee’s employment agreement with the
Company.
Section 1.4
— “ Change of Control ” shall mean, for
purposes of this Agreement and notwithstanding the definition set
forth in the Plan:
(a) any Person
(other than a Person holding securities representing ten percent
(10%) or more of the combined voting power of the Company’s
outstanding securities as of May 22, 2001, the Company, any
trustee or other fiduciary holding securities under an employee
benefit plan of the Company, or any corporation owned, directly or
indirectly, by the shareholders of the Company in substantially the
same proportions as their ownership of stock of the Company),
becomes the beneficial owner, directly or indirectly, of securities
of the Company representing more than fifty percent (50%) of the
combined voting power of the Company’s then-outstanding
securities (provided, however, that if any Person is considered to
own more than fifty percent (50%) of the total voting power of the
stock of the Company, the acquisition of additional stock by the
same Person is not considered to cause a change in the control of
the Company);
(b) during any
period of twelve (12) consecutive months, a majority of the
members of the Company’s Board is replaced by directors whose
appointment or election is not endorsed by a majority of the
members of the Board before the date of the appointment or
election;
(c) consummation
of any merger, consolidation, plan of arrangement, reorganization
or similar transaction or series of transactions in which the
Company is involved, other than such a transaction or series of
transactions which would result in the shareholders of the Company
immediately prior thereto continuing to own (either by remaining
outstanding or by being converted into voting securities of the
surviving entity) more than fifty percent (50%) of the combined
voting power of the securities of the Company or such surviving
entity (or the parent, if any) outstanding immediately after such
transaction(s) in substantially the same proportions as their
ownership immediately prior to such transaction(s); or
(d) the
consummation of a sale or disposition by the Company of Company
assets that have a Total Gross FMV (as defined below) equal to or
greater than eighty-five percent (85%) of the Total Gross FMV of
all of the assets of the Company immediately before such sale or
disposition (provided, however, that a transfer of assets by the
Company is not treated as a change in the ownership of such assets
if the assets are transferred to: (A) a shareholder of the
Company (immediately before the asset transfer) in exchange for or
with respect to its stock; (B) an entity of which the Company
owns, directly or indirectly, 50% or more of the total value or
voting power; (C) a Person, or more than one Person acting as
a group, that owns, directly or indirectly, fifty percent (50%) or
more of the total value or voting power of all the outstanding
stock of the Company; or (D) an entity of which a Person or
group described in clause (C) above owns, directly or
indirectly, at least fifty percent (50%) of the total value or
voting power).
As used in this
Section, the term “Person” (including a
“group”) has the meaning provided under Section 13(d)
or 14(d) of the Securities Exchange Act of 1934, as amended (or any
successor section thereto).
As used in this
Section, the term “Total Gross FMV” means the value of
the assets of the Company, or the value of the assets being
disposed of, determined by the Committee without regard to any
liabilities associated with such assets.
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Section 1.5
— “ Committee ” shall mean the
Compensation Committee of the Company, duly appointed by the Board
as the Administrator under Section 2 of the Plan.
Section 1.6
— “ Common Stock ” shall mean the common
stock of the Company, par value $0.01.
Section 1.7
— “ Determination Date ” shall mean the
earliest to occur of the following events:
(i) December 31, 2011; (ii) a Termination of
Employment on account of death or Disability; or (iii) a
Change of Control.
Section 1.8
— “ FMV per Share ” shall mean the average
of the closing prices of the shares of Common Stock for the four
(4) weeks immediately preceding the Determination Date;
notwithstanding the foregoing, in the event of a Change of Control,
“FMV per Share” shall mean the per share value of
equity based on amounts paid in the Change of Control.
Section 1.9
— “ Good Reason ” shall mean “Good
Reason” as defined in the Grantee’s employment
agreement with the Company.
Section 1.10
— “ Incentive Amount ” shall mean the
amount payable to the Grantee hereunder with respect to the
Performance Units, if any, as calculated under
Article IV.
Section 1.11
— “ Performance Units ” shall mean the
units granted on a performance basis under this Agreement. The
value of each Performance Unit shall be equal to the FMV per Share
as of the relevant Determination Date (as defined
below).
Section 1.12
— “ Person ” shall mean an individual,
partnership, corporation, business trust, joint stock company,
trust, unincorporated association, joint venture, governmental
authority or other entity of whatever nature.
Section 1.13
— “ Plan ” shall mean the Peabody Energy
Corporation 2004 Long-Term Equity Incentive Plan, as amended from
time to time.
Section 1.14
— Pronouns - The masculine pronoun shall include the
feminine and neuter, and the singular the plural, where the context
so indicates.
Section 1.15
— “ Retirement ” shall mean the
Grantee’s retirement from the Company on or after age
fifty-five (55) with at least ten (10) years of service
with the Company.
Section 1.16
— “ Subsidiary ” shall mean any
corporation in an unbroken chain of corporations beginning with the
Company, if each of the corporations, or group of commonly
controlled corporations, other than the last corporation in the
unbroken chain then owns stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock in
one of the other corporations below it in such chain.
Section 1.17
— “ Termination of Employment ” shall mean
a termination of the Grantee’s employment with the Company, a
Subsidiary or an Affiliate (regardless of the reason therefor) that
constitutes a “separation from service” as defined in
Section 409A of the Internal Revenue Code of 1986, as amended,
or applicable regulations or other guidance issued thereunder
(“Section 409A”).
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ARTICLE II
GRANT OF PERFORMANCE UNITS
Section 2.1
— Grant of Performance Units . For good and valuable
consideration, the Company hereby grants to the Grantee the number
of Performance Units set forth on the signature page hereof upon
the terms and subject to the conditions set forth in this
Agreement.
Section 2.2
— No Obligation of Employment . Nothing in this
Agreement or in the Plan shall confer upon the Grantee any right to
continue in
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