PERSONAL AND CONFIDENTIALTransition Agreement • May 18th, 2007 • Peabody Energy Corp • Bituminous coal & lignite surface mining • New York
This letter agreement (the “Letter Agreement”) summarizes the basic terms of your anticipated transition from employment with Peabody Energy Corporation (“Peabody”) to employment with a new entity that Peabody has proposed to establish and spin off. As you know, Peabody is contemplating the creation of a separate publicly owned corporation (referred to in this Letter Agreement as “Gemini”) through a spin-off of certain of Peabody’s operations, and Peabody would like you to serve as the President and Chief Executive Officer of Gemini. The spin-off is expected to be effective during the second half of 2007, and the spin-off effective date also will be the effective date of your employment with Gemini (the “Effective Date”). Prior to the Effective Date, you will continue to be employed by Peabody subject to the terms and conditions of your current employment agreement (the “Existing Employment Agreement”).
ContractCeo Employment Agreement • May 18th, 2007 • Peabody Energy Corp • Bituminous coal & lignite surface mining
The Chief Executive Officer’s employment agreement will extend from day-to-day so that there is at all times remaining a term of three years. Following a termination without cause or resignation for good reason, the Chief Executive Officer would be entitled to a payment equal to three years’ base salary and three times the higher of (1) the target annual bonus for the year of termination or (2) the average of the actual annual bonuses we paid in respect of the three prior years. One-third of this severance payment would be payable in twelve equal monthly installments commencing on the date of termination, with the remainder payable in a lump sum on the first anniversary of termination. Upon termination, the CEO would also be entitled to a one-time prorated bonus for the year of termination (based on our actual performance for that year multiplied by a fraction, the numerator of which is the number of calendar days he was employed during the year of termination, and the denominator of w
