S-8

As filed with the Securities and Exchange Commission on November 19, 2007

Registration No. 333-________

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-8

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

Peabody Energy Corporation

(Exact name of Registrant as specified in its charter)

Delaware	13-4004153
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

701 Market Street

St. Louis, Missouri 63101-1826

(Address of Principal Executive Offices) (Zip Code)

Peabody Energy Corporation Australian Employee Stock Purchase Plan

(Full title of the plan)

Alexander C. Schoch, Esq.

Executive Vice President and Chief Legal Officer

Peabody Energy Corporation

701 Market Street

St. Louis, Missouri 63101-1826

(Name and address of agent for service)

(314) 342-3400

(Telephone number, including area code, of agent for service)

Copy to:

R. Randall Wang, Esq.

Bryan Cave LLP

211 North Broadway, Suite 3600

St. Louis, Missouri 63102-2750

Phone: (314) 259-2000; Fax: (314) 259-2020

CALCULATION OF REGISTRATION FEE

Title of Securities To Be Registered	Amount To Be Registered	Proposed Maximum Offering Price Per Share(1)	Proposed Maximum Aggregate Offering Price(1)(2)	Amount Of Registration Fee(1)
Common Stock, $0.01 par value and Preferred Share Purchase Rights (2)	1,000,000 shares(3)	$52.635	$52,635,000	$1,615.89

(1)        Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(h) and Rule 457(c) under the Securities Act of 1933, as amended. The Proposed Maximum Offering Price Per Share and the Proposed Maximum Aggregate Offering Price are computed on the basis of the average of the high and low trading prices for the Common Stock on November 13, 2007, as reported on the New York Stock Exchange.

(2)        Each share of Common Stock issued, par value $0.01 (the “Common Stock”), also represents one Preferred Share Purchase Right. Preferred Share Purchase Rights currently cannot trade separately from the underlying Common Stock and, therefore, do not carry a separate price or necessitate an additional registration fee.

(3)        This Registration Statement also covers such additional shares as may be issued pursuant to anti-dilution provisions.

PART I

INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

The documents containing the information specified in Part I of Form S-8 will be sent or given to participants in the Peabody Energy Corporation Australian Employee Stock Purchase Plan (the “Plan”) as specified in Rule 428(b)(1) under the Securities Act of 1933, as amended. In accordance with the instructions to Part I, those documents are not filed with the Commission as part of this Registration Statement or a prospectus under Rule 424 of the Securities Act of 1933, as amended.

PART II

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3. Incorporation of Documents by Reference.

The following documents filed by Peabody Energy Corporation (the “Registrant” or “Company”) with the Securities and Exchange Commission are hereby incorporated by reference:

(i) The Registrant’s Annual Report filed on Form 10-K for the fiscal year ended December 31, 2006, as amended by the 10-K/A filed on September 10, 2007 (File No. 001-16463);

(ii) The Registrant’s Quarterly Reports filed on Form 10-Q for the quarterly periods ended March 31, 2007, June 30, 2007 and September 30, 2007 (File No. 001-16463);

(iii) The Registrant’s Current Reports on Form 8-K dated April 19, 2007 and filed on April 20, 2007; May 14, 2007 and filed on May 18, 2007; June 19, 2007 and filed on June 25, 2007; July 31, 2007 and filed on August 2, 2007; October 16, 2007 and filed on October 17, 2007 (as amended on Form 8-K/A filed on November 9, 2007); October 22, 2007 and filed on October 25, 2007; October 31, 2007 and filed on November 6, 2007 (File No. 001-16463);

(iv) The description of the Registrant’s Common Stock contained in the Registrant’s Registration Statement on Form 8-A (File No. 001-16463), filed on May 2, 2001, and any amendment or report filed for the purpose of updating such description; and

(v) The description of the Registrant’s preferred share purchase rights contained in the Registrant’s Registration Statement on Form 8-A filed under the Securities Exchange Act of 1934 (File No. 001-16463) filed with the Securities and Exchange Commission on July 24, 2002, as amended by Forms 8-A/A filed on March 29, 2005 and February 22, 2006 including any further amendment or report filed for the purpose of updating such description.

All documents subsequently filed by the Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended, prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in this Registration Statement and to be made a part hereof from the date of filing of such documents (but this shall not include any information that is merely furnished to the Securities and Exchange Commission). Any statement contained in a document

incorporated or deemed to be incorporated herein by reference shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement.

Item 4. Description of Securities.

The securities to be offered are registered under Section 12 of the Securities Exchange Act of 1934.

Item 5. Interest of Named Experts and Counsel.

Alexander C. Schoch, Esq., Executive Vice President and Chief Legal Officer of the Company, has rendered an opinion as to the legality of the Company’s common stock being registered hereby. Mr. Schoch is paid a salary and bonus by the Company, participates in certain of the Company’s employee benefit plans, owns shares of common stock and holds options to acquire shares of common stock.

Item 6. Indemnification of Directors and Officers.

Section 145 of the Delaware General Corporation Law provides that, among other things, a corporation may indemnify directors and officers, as well as other employees and agents of the corporation against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement in connection with specified actions, suits or proceedings, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation, a “derivative action”), if they acted in good faith and in a manner they 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 no reasonable cause to believe their conduct was unlawful. A similar standard is applicable in the case of derivative actions, except that indemnification only extends to expenses (including attorneys’ fees) incurred in connection with the defense or settlement of such actions, and the statute requires court approval before there can be any indemnification where the person seeking indemnification has been found liable to the corporation. The statute provides that it is not exclusive of other indemnification that may be granted by a corporation’s by-laws, disinterested director vote, stockholder vote, agreement or otherwise.

Article Sixth of the Registrant’s third amended and restated certificate of incorporation and Article IV of the Registrant’s amended and restated by-laws requires indemnification to the fullest extent permitted by Delaware law. The Registrant has also obtained officers’ and directors’ liability insurance, which insures against liabilities that officers and directors of the Registrant, in such capacities, may incur. The Registrant’s third amended and restated certificate of incorporation requires the advancement of expenses incurred by officers or directors in relation to any action, suit or proceeding.

Section 102(b)(7) of the Delaware General Corporation Law permits a corporation to provide in its certificate of incorporation that a director of the corporation shall not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duties as a director, except for liability (i) for any transaction from which the director derives an improper personal benefit, (ii) for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law (certain illegal distributions) or (iv) for any breach of a director’s duty of loyalty to the company or its stockholders. Article Sixth of the Registrant’s third amended and restated certificate of incorporation includes such a provision.

In connection with the Registrant’s existing indemnification procedures and policies and the rights provided for by its third amended and restated certificate of incorporation and amended and restated by-laws, the Registrant has executed indemnification agreements with its directors and certain senior executive officers.

Pursuant to those agreements, to the fullest extent permitted by the laws of the State of Delaware, the Registrant has agreed to indemnify those persons against any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that the indemnified person is or was or has agreed to serve at the request of the Registrant as a director, officer, employee or agent of the Registrant, or while serving as a director or officer of the Registrant, is or was serving or has agreed to serve at the request of the Registrant as a director, officer, employee or agent (which, for purposes of the indemnification agreements, includes a trustee, partner, manager or a position of 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. The indemnification provided by these agreements is from and against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the indemnified person or on his or her behalf in connection with the action, suit or proceeding and any appeal therefrom, but shall only be provided if the indemnified person acted in good faith and in a manner the indemnified person reasonably believed to be in or not opposed to the best interests of the Registrant, and, with respect to any criminal action, suit or proceeding, had no reasonable cause to believe the indemnified person’s conduct was unlawful.

Item 7. Exemption from Registration Claimed.

Not applicable.

Item 8. Exhibits.

The Exhibits to this Registration Statement are listed in the Exhibit Index to this Registration Statement, which Index is incorporated herein by reference.

Item 9. Undertakings.

(a) The undersigned Registrant hereby undertakes:

(1)           To file during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:

(i)            To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

(ii)             To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement;

(iii)           To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

provided, however, that Paragraphs (a)(1)(i) and (a)(1)(ii) of this section do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement.

(2)           That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3)           To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4)           That, for the purpose of determining liability of the Registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: The undersigned Registrant undertakes that in a primary offering of securities of the undersigned Registrant pursuant to this Registration Statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned Registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i)             Any preliminary prospectus or prospectus of the undersigned Registrant relating to the offering required to be filed pursuant to Rule 424;

(ii)             Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned Registrant or used or referred to by the undersigned Registrant;

(iii)           The portion of any other free writing prospectus relating to the offering containing material information about the undersigned Registrant or its securities provided by or on behalf of the undersigned Registrant; and

(iv)           Any other communication that is an offer in the offering made by the undersigned Registrant to the purchaser.

(b)          The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant’s annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(c)          Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is,

therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.

SIGNATURES

The Registrant. Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of St. Louis, State of Missouri, on this 16th day of November, 2007.

PEABODY ENERGY CORPORATION
By:	/s/ Gregory H. Boyce
	Gregory H. Boyce
	Chairman, President and Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Gregory H. Boyce, Richard A. Navarre and Alexander C. Schoch, or any of them, his or her attorneys-in-fact and agents, each with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any or all amendments (including, without limitation, post-effective amendments and documents in connection therewith) to this Registration Statement with respect to the Peabody Energy Corporation Australian Employee Stock Purchase Plan, and to file the same with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto each of said attorneys-in-fact and agents full power and authority to do so and perform each and every act and thing requisite and necessary to be done in connection with this Registration Statement, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that either of said attorneys-in-fact and agents, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

/s/ Gregory H. Boyce	Chairman, President, Chief Executive	November 16, 2007
Gregory H. Boyce	Officer and Director (Principal Executive Officer)
*	Executive Vice President and Chief	November 19, 2007
Richard A. Navarre	Financial Officer (Principal Financial and Principal Accounting Officer)
*	Director	November 19, 2007
William A. Coley
*	Director	November 19, 2007
Henry Givens, Jr.

*	Director	November 19, 2007
William E. James
*	Director	November 19, 2007
Robert B. Karn III
*	Director	November 19, 2007
Henry E. Lentz
*	Director	November 19, 2007
William C. Rusnack
*	Director	November 19, 2007
James R. Schlesinger
*	Director	November 19, 2007
Blanche M. Touhill
*	Director	November 19, 2007
John F. Turner
*	Director	November 19, 2007
Sandra A. Van Trease
*	Director	November 19, 2007
Alan H. Washkowitz

*By:	/s/ Alexander C. Schoch
	Alexander C. Schoch
	Attorney-in-fact

INDEX TO EXHIBITS

Exhibit Number	Exhibit
4.1	Third Amended and Restated Certificate of Incorporation of Peabody Energy Corporation, as amended (Incorporated by reference to Exhibit 3.1 of the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2006, filed on August 7, 2006).
4.2	Amended and Restated By-Laws of Peabody Energy Corporation (Incorporated by reference to Exhibit 3.2 of the Registrant’s Current Report on Form 8-K dated July 31, 2007, filed on August 2, 2007).
4.3	Rights Agreement, dated as of July 24, 2002, between the Company and EquiServe Trust Company, N.A., as Rights Agent (which includes the form of Certificate of Designations of Series A Junior Preferred Stock of the Company as Exhibit A, the form of Right Certificate as Exhibit B and the Summary of Rights to Purchase Preferred Shares as Exhibit C) (Incorporated herein by reference to Exhibit 4.1 to the Company’s Registration Statement on Form 8-A, Commission File No. 001-16463, filed on July 24, 2002).
4.4	Certificate of Designations of Series A Junior Participating Preferred Stock of the Company, filed with the Secretary of State of the State of Delaware on July 24, 2002 (Incorporated herein by reference to Exhibit 3.1 to the Company’s Registration Statement on Form 8-A, Commission File No. 001-16463, filed on July 24, 2002).
4.5	Certificate of Adjustment delivered by the Registrant to Equiserve Trust Company, N.A., as Rights Agent, on March 29, 2005 (Incorporated by reference to Exhibit 4.2 to Amendment No. 1 to the Registrant’s Registration Statement on Form 8-A filed on March 29, 2005).
4.6	Certificate of Adjustment delivered by the Registrant to American Stock Transfer & Trust Company, as Rights Agent, on February 22, 2006 (Incorporated by reference to Exhibit 4.2 to Amendment No. 1 to the Registrant’s Registration Statement on Form 8-A filed on February 22, 2006).
4.7	Specimen of stock certificate representing the Registrant’s common stock, $0.01 par value (Incorporated by reference to Exhibit 4.13 of the Registrant’s Form S-1 Registration Statement No. 333-55412).
5.1	Opinion of Alexander C. Schoch.
23.1	Consent of Ernst & Young LLP.
24.1	Power of Attorney (included on signature page).
99.1	Peabody Energy Corporation Australian Employee Stock Purchase Plan.

EX-5.1

Exhibit 5.1

[LETTERHEAD OF PEABODY ENERGY CORPORATION]

November 19, 2007

Peabody Energy Corporation

701 Market Street

St. Louis, Missouri 63101

Re: Peabody Energy Corporation Registration Statement on Form S-8

Ladies and Gentlemen:

I am Executive Vice President and Chief Legal Officer of Peabody Energy Corporation, a Delaware corporation (the “Company”), and am giving this opinion in connection with the preparation of a registration statement on Form S-8 (the “Registration Statement”) under the Securities Act of 1933, as amended (the “Act”), to be filed with the Securities and Exchange Commission (the “Commission”) in connection with the registration under the Act of an aggregate of one million (1,000,000) shares of Common Stock, par value $0.01 per share, of the Company (collectively, the “Shares”) and the same number of associated preferred share purchase rights issuable from time to time pursuant to the Peabody Energy Corporation Australian Employee Stock Purchase Plan (the “Plan”).

In connection herewith I have examined the Registration Statement, originals or copies, certified or otherwise identified to my satisfaction, of the Third Amended and Restated Certificate of Incorporation, as amended, and the Amended and Restated By-laws of the Company and such other corporate records, agreements and instruments of the Company, certificates of public officials and officers of the Company, and such other documents, records and instruments, and I have made certain legal and factual inquiries, as I deemed necessary or appropriate to render the opinions hereinafter expressed. In my examination of the foregoing, I assumed the genuineness of all signatures, the legal competence and capacity of natural persons, the authenticity of documents submitted to me as originals and the conformity with authentic original documents of all documents submitted to me as copies. When relevant facts were not independently established, I relied without independent investigation as to matters of fact upon statements and certificates of appropriate officers and representatives of the Company.

Based on the foregoing and in reliance thereon, and subject to the assumptions, comments, qualifications, limitations and exceptions set forth herein, and upon my review of applicable statutes and case law, I am of the opinion that the Shares, after the Registration Statement becomes effective and after any post-effective amendment required by law is duly completed, filed and becomes effective, and when the applicable provisions of “Blue Sky” and other state or foreign securities laws shall have been complied with, and when the Shares are issued and sold in accordance with the Plan and the Form S 8 prospectus to be delivered to the participants in the Plan, will be validly issued, fully paid and non-assessable.

The opinions expressed herein are rendered solely for your benefit in accordance with the subject transaction and are not to be otherwise used, circulated, quoted or referred to without my prior written consent. The opinions reflect only the application of the Federal laws of the United States

and, to the extent required by the foregoing opinions, the General Corporation Law of the State of Delaware. The opinions set forth herein are made as of the date hereof and are subject to, and may be limited by, future changes in the factual matters set forth herein, and I undertake no duty to advise you of the same. The opinions are based upon the law in effect (and published or otherwise generally available) on the date hereof, and I assume no obligation to revise or supplement these opinions should such law be changed by legislative action, judicial decision or otherwise. In rendering my opinions, I have not considered, and hereby disclaim any opinion as to, the application or impact of any laws, cases, decisions, rules or regulations of any other jurisdiction, court or administrative agency.

I do not give any opinions except as set forth above. I hereby consent to the inclusion of my opinion as Exhibit 5.1 to the Registration Statement. I also consent to your filing copies of this opinion letter as an exhibit to the Registration Statement with agencies of such states as you deem necessary in the course of complying with the laws of such states regarding the offering and sale of the Shares. In giving this consent, I do not hereby admit that I am in the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission thereunder.

Very truly yours,

/s/ Alexander C. Schoch

Alexander C. Schoch

Executive Vice President and

Chief Legal Officer

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 333-00000) pertaining to the Peabody Energy Corporation Australian Employee Stock Purchase Plan for the registration of 1,000,000 shares of Peabody Energy Corporation common stock of our reports dated February 20, 2007, with respect to the consolidated financial statements and schedule of Peabody Energy Corporation included in its Annual Report (Form 10-K/A) for the year ended December 31, 2006, Peabody Energy Corporation management's assessment of the effectiveness of internal control over financial reporting, and the effectiveness of internal control over financial reporting of Peabody Energy Corporation, filed with the Securities and Exchange Commission.

/s/ Ernst & Young LLP

St. Louis, Missouri

November 14, 2007

EX-99.1

Exhibit 99.1

PEABODY ENERGY CORPORATION

Australian Employee Stock Purchase Plan

SECTION 1 – INTRODUCTION

1.1Purpose. The purpose of the Peabody Energy Corporation Australian Employee Stock Purchase Plan is to provide eligible employees of Participating Subsidiaries, as defined herein, of Peabody Energy Corporation (the “Company”) the opportunity to acquire a proprietary interest in the Company and thereby provide employees with an additional incentive to contribute to the long-term profitability and success of the Company and its Subsidiaries. The Plan is for the exclusive benefit of eligible employees of Participating Subsidiaries.

1.2       Stock Purchase Plan. The Plan is a stock purchase plan that is intended to mirror the provisions of the Company’s U.S. employee stock purchase plan, except that stockholder approval is not required for adoption of this Plan, in accordance with guidance from the New York Stock Exchange, and except as otherwise expressly provided herein. The Plan is not intended to qualify under Section 423 of the Code.

1.3       Effective Date and Term. The Plan will be effective on January 1, 2008 or such later date as may be selected by the Committee (the “Effective Date”). The Plan shall continue in effect until the earlier of the date the Company terminates the Plan or the date all of the shares of Stock subject to the Plan, as amended from time to time, are purchased.

1.4       Participating Subsidiaries. The Plan will be deemed to have been adopted by (i) Peabody Pacific Pty Limited and its Subsidiaries listed on Exhibit A for eligible Employees as of the Effective Date and (ii) any other Subsidiary designated by the Committee after the Effective Date for its eligible Employees as of the date of designation.

1.5       Stock Subject to Plan.

(a)       The Stock subject to purchase under the Plan will be shares of the Company’s authorized but unissued shares, or previously issued shares of Stock reacquired and held by the Company, or shares acquired in the market. The aggregate number of shares of Stock that may be purchased under the Plan shall not exceed one million (1,000,000) shares. All shares of Stock purchased under the Plan will count against this limitation.

(b)       In case of a reorganization, recapitalization, stock split, reverse stock split, stock dividend, combination of shares, merger, consolidation, offering of rights or other change in the capital structure of the Company, the Committee may make such adjustment as it deems appropriate in the number, kind and purchase price of shares of Stock available for purchase under the Plan, subject to Section 7.1.

SECTION 2 – DEFINITIONS

For purposes of this Plan, the following words and phrases, whether or not capitalized, have the meanings specified below, unless the context plainly requires a different meaning:

2.1       “Beneficiary” means a person to whom all or a portion of the cash amounts due to the Employee under this Plan will be paid if the Employee dies before receiving such cash amounts.

2.2       “Board” means the Board of Directors of the Company.

2.3       “Change in Control” means any one of the following:

(a)       any Person (other than a Person holding securities representing 10% or more of the combined voting power of the Company’s outstanding securities as of the Effective Date, the Company, any trustee or other fiduciary holding securities under an employee benefit plan of the Company, or any company 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 50% or more of the combined voting power of the Company’s then- outstanding securities;

(b)       during any period of twenty-four consecutive months (not including any period prior to the Effective Date), individuals who at the beginning of such period constitute the Board, and any new director (other than (A) a director nominated by a Person who has entered into an agreement with the Company to effect a transaction described in clause 2.3(a), (c) or (d) or (B) a director nominated by any Person (including the Company) who publicly announces an intention to take or to consider taking actions (including, but not limited to, an actual or threatened proxy contest) which if consummated would constitute a Change in Control) whose election by the Board or nomination for election by the Company’s shareholders was approved by a vote of at least three-fourths (3/4) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority thereof;

(c)       the 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 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 shareholders of the Company approve a plan of complete liquidation of the Company or the sale or disposition by the Company of all or substantially all of the Company’s assets, other than a liquidation of the Company into a wholly owned subsidiary.

As used herein, “Person” (including a “group”), has the meaning as such term is used for purposes of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (or any successor section thereto).

2.4       “Code” means the U.S. Internal Revenue Code of 1986, as amended, and any successor thereto.

2.5       “Committee” means the individuals appointed by the Board to administer the Plan.

2.6       “Company” means Peabody Energy Corporation, and any successor.

2.7       “Compensation” means wages or base salary (inclusively) paid for services rendered by an Employee to the Company or any Participating Subsidiary during the applicable period specified in the Plan, including any such amounts contributed by the Employee to any plan or plans established by the Company or Participating Subsidiary in accordance with sections 125 or 401(k) of the Code. Bonuses, incentive compensation, overtime, commissions and shift premiums paid to an Employee shall not be included in Compensation.

2.8       “Custodian” means the custodian for the Plan, which shall be located in Australia if and to the extent so required by law, appointed by the Company.

2.9       “Effective Date” shall have the meaning set forth in Section 1.3.

2.10     “Employee” means any employee (as defined for purposes of Section 423 of the Code) of a Participating Subsidiary, but does not include any employee of the Company

2.11     “Fair Market Value” means the fair market value of one share of Stock as of a particular day, which shall be the closing price per share of Stock on the New York Stock Exchange on that day, or, if such day is not a trading day, the last preceding trading day.

2.12       “Offering Date” means the first day of the Offering Period.

2.13     “Offering Period” means any of the following time periods: the Effective Date through June 30, 2008; and each consecutive six-month period thereafter; or such other period designated by the Committee in its sole discretion.

2.14     “Option” means an option to purchase shares of Stock under the Plan, based on the contributions credited to each Employee’s Option Account.

2.15     “Option Account” means the account solely maintained and held on trustin an Australian authorized deposit-taking institution designated by the Committee on behalf of the Employee under Section 3.4 to which contributions to the Plan are credited and from which amounts are withdrawn to exercise options on a Termination Date, provided, that such amounts shall be converted to U.S. dollars utilizing the $A/$US exchange rate published by the Reserve Bank of Australia on that date.

2.16     “Participating Subsidiary” means a Subsidiary which is participating in the Plan in accordance with Section 1.4.

2.17     “Plan” means this Peabody Energy Corporation Australian Employee Stock Purchase Plan, as described in this document and as amended from time to time.

2.18       “Stock” means the common stock, $0.01 par value, of the Company.

2.19     “Subsidiary” means any corporation (other than the Company) 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 owns 50% or more of the total combined voting power of all classes of stock in one of the other corporations in the chain.

2.20     “Termination Date” means the last day of an Offering Period, or if earlier, the date of a Change in Control that occurs during such Offering Period.

SECTION 3 – ENROLLMENT AND CONTRIBUTIONS

3.1       Eligibility for Enrollment.

(a)       An Employee may enroll in the Plan for an Offering Period unless one of the following applies:

(i)        The customary employment of the Employee on the Offering Date is twenty (20) hours or less per week; or

(ii)       The customary employment of the Employee on the Offering Date is for not more than five months in any calendar year; or

(iii)      The Employee is not employed by a Participating Subsidiary on the Offering Date; or

(iv)      The Employee would, immediately upon enrollment, own directly or indirectly, or hold options or rights to acquire, an aggregate of five percent (5%) or more of the total combined voting power or value of all outstanding shares of all classes of the Company or any Subsidiary, with ownership determined in accordance with the rules of Section 424(d) of the Code and treating stock which the Employee may purchase under outstanding options as owned by the Employee; or

(v)       The Employee is eligible to participate in an employee stock purchase plan of the Company other than the Plan; or

(vi)      The primary place where the Employee provides services is notin Australia, unless otherwise determined by the Committee, which may be on a case-by-case or general basis or otherwise, in the Committee’s discretion.

(b)       The Committee or its designee will notify an Employee that the Employee is first eligible to enroll in the Plan and make available to each eligible Employee the necessary enrollment forms before the Offering Date.

3.2       Enrollment Procedure.

(a)       To enroll in the Plan for an Offering Period, an Employee must file an enrollment form with the Company and elect to make contributions under the Plan in accordance with Section 3.3. The enrollment form must be received by the Company at least fifteen (15) calendar days prior to the Offering Date and must state the contribution rate elected by the Employee for the Offering Period. An Employee who does not enroll in the Plan for an Offering Period will receive no shares of Stock under the Plan for such Offering Period.

(b)       An Employee whose enrollment in, and contributions under, the Plan continue throughout an Offering Period will automatically be enrolled in the Plan for the next Offering Period unless (i) the Employee files a written notice of discontinuance of contributions with the Company before the Offering Date for the next Offering Period in accordance with Section 5.1(a)(i), or (ii) on the Offering Date for such Offering Period the Employee is described in Section 3.1(a). The contribution rate for an Employee who is automatically enrolled for an Offering Period pursuant to this Section will be the contribution rate in effect for the immediately preceding Offering Period, unless the Employee files an amended enrollment form with the Company at least fifteen (15) calendar days prior to the next subsequent Offering Period designating a different contribution rate.

3.3       Contributions.

(a)       To enroll for the first time in the Plan for an Offering Period, an Employee must elect to make a contribution under the Plan, subject to the terms and conditions prescribed below, by means of payroll deduction for each payroll period within the Offering Period.

(b)       An Employee may elect to make payroll deduction contributions on a pre-tax or post-tax basis in amounts not less than one percent (1%) of Compensation per payroll period and not more than the lesser of (i) fifteen percent (15%) of Compensation per Offering Period (or such other amount as the Committee may establish from time to time and communicate to Employees before the Offering Date) or (ii) a percentage of Compensation for each payroll period that ensures that the limit on the purchase of shares of Stock specified in Section 4.1 is not exceeded for the Offering Period.

(c)       Payroll deductions will commence with the first payroll period that begins during the Offering Period and will be made in conformity with the Company’s payroll deduction schedule and practices.

(d)       Except as provided in Section 5.1, an Employee may elect to increase, decrease or discontinue contributions once each Offering Period as of the first day of the first payroll period beginning in the Offering Period by giving written notice to the Committee at least fifteen (15) calendar days before such date.

3.4       Option Accounts. All contributions made by an Employee under the Plan will be credited to an Option Account maintained by the Company or the Custodian and held on truston behalf of the Employee. The Company will make the credit as soon as practicable after the contributions are withheld from the Employee’s Compensation.

3.5       Withdrawal of Contributions. An Employee may elect to withdraw contributions made during an Offering Period by giving written notice to the Committee at least fifteen (15) calendar days before the end of such Offering Period, in which case the cash credited to the Employee’s Option Account will be refunded to the Employee without interest as soon as administratively feasible after the Committee receives such notice, and the Employee may not re-enroll in the Plan until the next Offering Period.

3.6       No Funding of Accounts. No cash shall be set aside with respect to an Option Account until it is credited thereto.

SECTION 4 – GRANT AND EXERCISE OF OPTION

4.1       Grant of Options; Terms. Enrollment in the Plan with respect to any Offering Period will constitute the grant by the Company of an Option to purchase shares of Stock under the Plan during such Offering Period. All Employees granted Options shall have the same rights and privileges as required by section 423(b)(5) of the Code. Each Option will be subject to the following terms:

(a)       The exercise price will be as specified in Section 4.2.

(b)       Except as limited in (e) below, the number of shares of Stock subject to the option will equal the number of shares of Stock that can be purchased at the exercise price specified in Section 4.2 with the aggregate amount credited to the Employee’s Option Account as of the Termination Date.

(c)       The Option with respect to an Offering Period will be exercised on the Termination Date of such Offering Period.

(d)       The payment by an Employee for the shares of Stock purchased upon exercise of an option will be made only through payroll deduction, all in accordance with Section 3.3.

(e)       No Employee shall be granted an option to the extent the number of shares of Stock that may be purchased for such Employee (when taken together with all other options exercisable by such Employee under any other stock purchase plan of the Company or a Subsidiary that is qualified under Section 423 of the Code) in the aggregate during a calendar year exceeds the lesser of (i) twenty-five thousand U.S. dollars (U.S. $25,000) in Fair Market Value of such shares of Stock determined on the Offering Date for the Offering Period with respect to which the purchase is made or (ii) twenty-five thousand Australian dollars (A $25,000) in Fair Market Value of such shares of Stock determined on the Offering Date for the Offering Period with respect to which the purchase is made.

4.2       Exercise of Option; Exercise Price.

(a)       As soon as practicable after the Termination Date of each Offering Period, the Company or Custodian will apply to the purchase of the number of shares of Stock the exercise price of which is covered by the amounts credited to each Employee’s Option Account as of such Termination Date. In the event the aggregate amount credited to the Employees’ Option Accounts as of such Termination Date exceeds the exercise price of the shares available for purchase as of such date under this Plan, the Company or Custodian shall purchase for each Employee his or her proportional share of the shares available for purchase, based on the percentage that the cash allocated to his or her Option Account represents of the total cash allocated to the Option Accounts of all Employees for the Offering Period ending on such date, and the excess of the amount so credited shall be rolled over to the next Offering Period (except insofar as such excess, together with amounts otherwise contributed by an Employee for such Offering Period, shall exceed the amount specified in Section 4.1(e)(i) above, in which case such excess shall be returned to the Employee without interest). The Stock so purchased shall be allocated to the Option Account for the Employee. The Stock shall be held by the Custodian on behalf of the Employee and registered in the name of a nominee.

(b)       The exercise price of each share of Stock purchased with respect to any Offering Period shall be the lower of:

(i)        Eighty five percent (85%) of the Fair Market Value of the Stock on the Offering Date for such Offering Period, or

(ii)       Eighty five percent (85%) of the Fair Market Value of the Stock on the Termination Date for such Offering Period.

4.3       Option Accounts.

(a)       All shares of Stock purchased on behalf of an Employee as of a Termination Date shall be credited to such Employee’s Option Account as of such date. Dividends payable with respect to shares of Stock credited to the Employee’s Option Account will be credited to the Employee’s Option Account and used by the Custodian to purchase additional shares of Stock on the open market as soon as administratively feasible following receipt of the dividend payment by the Custodian.

(b)       The Committee may determine whether cash in an amount representing the price of a fractional share shall be carried over to the next Offering Period, or applied to the purchase of a fractional share at the end of an Offering Period; provided that such determination shall apply uniformly to all Employees for each Offering Period.

4.4       No Interest on Account Balances. No interest or other earnings will be credited to any Option Account with respect to (a) amounts credited thereto during an Offering Period or (b) amounts to be returned to the Employee. Neither the Committee nor the Company shall have any obligation to invest or otherwise manage amounts credited to an Option Account, other than to apply such amounts to the purchase of Stock in accordance with the terms of this Plan.

SECTION 5 – TERMINATION OF ENROLLMENT

5.1       Termination of Enrollment.

(a)       An Employee’s enrollment in the Plan will terminate under the following circumstances:

(i)        as of the beginning of the Offering Period that is at least fifteen (15) calendar days after the Employee files with the Company a written notice of discontinuance of contributions;

(ii)       following the termination of employment with the Company and all Participating Subsidiaries;

(iii)      as of the date on which the Employee would own directly or indirectly, or hold options or rights to acquire, an aggregate of five percent (5%) or more of the total combined voting power or value of all outstanding shares of all classes of the Company or any Subsidiary, determined in accordance with Section 424(d) of the Code;

(iv)      upon termination of the Plan or as of the date the relevant Participating Subsidiary ceases to be a Subsidiary; and

(v)       immediately upon the circumstances described in Section 3.1(a)(v) or (vi).

(b)       An Employee whose enrollment in the Plan terminates under this Section, other than by reason of termination of the Plan, may again enroll in the Plan as of any subsequent Offering Date if the Employee satisfies the eligibility conditions of Section 3.1 as of such date.

5.2       Distributions to Employee.

(a)       Subject to the three year holding period prescribed in subsection 5.2(c), as soon as administratively feasible after an Employee’s enrollment in the Plan terminates under Section 5.1:

(i)        The Company will pay to the Employee all cash credited to the Employee’s Option Account as of the date of termination without interest; and

(ii)       The Committee will direct the Custodian to distribute to the Employee shares of Stock then credited to the Employee’s Option Account that have been credited to the Employee’s Option Account for at least three years in the form of certificates representing whole shares of Stock (and cash equal to the Fair Market Value of any fractional share), or a nominee account, as requested by the Employee or former Employee.

(b)       If an Employee’s enrollment terminates as a result of death, or if the Employee’s death occurs before the Employee receives a distribution under this Section, all cash amounts payable under this Section to the Employee will be paid to the Employee’s Beneficiary; and shares of Stock credited to the Option Account of a deceased Employee may be distributed

to the personal representative of the deceased employee without regard to the three year holding period prescribed in subsection 5.2(c).

(c)       An Employee or former Employee may, from time to time, request distribution of shares of Stock then credited to the Employee’s Option Account that have been credited to the Employee’s Option Account for at least three years. Notwithstanding the above, in the event of a Change in Control an Employee or former Employee may request distribution of shares of Stock then credited to the Employee’s Option Account. Distribution may be made as soon as administratively practicable in the form of a stock certificates representing whole shares of Stock (and cash equal to the Fair Market Value of any fractional share), or a nominee account, as requested by the Employee or former Employee.

5.3       Beneficiaries.

(a)       An Employee may designate a Beneficiary. Any such designation must be made on a form provided by the Company for this purpose, will be effective on the date received by the Company and may be revoked by the Employee at any time.

(b)       If the Employee fails to designate a Beneficiary or if no designated beneficiary survives the Employee, then any cash amounts shall be made to the Employee’s estate.

SECTION 6 – PLAN ADMINISTRATION

6.1       Committee. The Plan will be administered by the Committee.

6.2       Committee Powers.

(a)       The Committee will have all powers appropriate to administer the Plan including, but not limited to, the following:

(i)        To determine all questions that may arise under the Plan, including the power to determine the rights or eligibility of Employees or their Beneficiaries;

(ii)       To construe the terms of the Plan and to remedy ambiguities, inconsistencies or omissions;

(iii)      To adopt such rules of procedure and prescribe such forms as it considers appropriate for the proper administration of the Plan and are consistent with the Plan;

(iv)      To enforce the Plan provisions and the rules of procedure which it adopts;

(v)       To employ agents, attorneys, accountants, actuaries or other persons, and to allocate or delegate to them such powers, rights and duties as it considers appropriate for the proper administration of the Plan.

(b)       The Committee will have such further powers and duties as may be elsewhere specified in the Plan.

6.3       Committee Actions. The actions of the Committee may be taken at a meeting by a majority of its members, in writing without a meeting if a majority of its members sign such writing or by the use of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other and participation in such a meeting in this manner shall constitute attendance and presence in person at the meeting of the person or persons so participating for all purposes. In taking action:

(a)       The Committee may allocate authority to a specific member(s) of the Committee to carry out such duties as the Committee may assign;

(b)       A member of the Committee may by writing delegate any or all of such member’s rights, powers, duties and discretions to any other member of the Committee, with the consent of the latter;

(c)       The Committee may delegate to any agents such duties and powers as it deems appropriate, by an instrument in writing which specifies which duties are so delegated and to whom each such duty is so delegated; and

(d)       When there is an even division of opinion among the members of the Committee as to a matter, the Board of Directors of the Company will decide the matter, provided, however, that no member of the Board of Directors may vote on such a matter if it concerns such member’s individual rights, privileges or obligations under the Plan.

6.4       Member Who is Participant. If a member of the Committee is an Employee, such member may not decide any matter relating to the member’s participation or Option Account or how the Option Account is to be paid to the member that the member would not have the right to decide in the absence of membership on the Committee, and no Employee will receive any compensation for services as a member of the Committee.

6.5       Information Required from Company. The Company will furnish the Committee with such data and information as the Committee deems appropriate to administer the Plan. The records of the Company as to an Employee’s Compensation will be conclusive on all persons unless determined by the Committee to be clearly incorrect.

6.6       Information Required from Employees. Each person entitled to benefits under the Plan must furnish the Company from time to time in writing such person’s mailing address, each change of mailing address and such other data and information as the Committee deems appropriate to administer the Plan. Any communication, statement or notice mailed with postage prepaid to any person at the last mailing address filed with the Company will be binding upon such person for all purposes of the Plan.

6.7       Uniform Rules and Administration. Except as provided in Section 3.1(a)(vi), the Committee will administer the Plan on a nondiscriminatory basis and will apply uniform rules to all persons similarly situated.

SECTION 7 – AMENDMENT AND TERMINATION

7.1       Amendment.

(a)       The Company reserves the right to amend the Plan from time to time subject to the following limitations:

(i)        To the extent necessary to comply with or get an exemption from any provision of the Code, including regulations thereunder, or of the Securities Exchange Act of 1934, as amended, no amendment will be made without the prior approval of the stockholders of the Company if the amendment will (1) increase the number of shares of Stock reserved for purchase under the Plan, or (2) materially reduce the eligibility conditions or materially increase the benefits available under the Plan.

(ii)       No amendment will make any change in a previously granted and outstanding Option that adversely affects the rights of an Employee with respect to such option.

(iii)      No amendment will reduce the amount of an Employee’s Option Account balance.

(b)       The Company may delegate to the Committee or its officers the power to amend the Plan as the Company deems appropriate, subject to the limitations of this Section.

7.2       Termination. The Plan is entirely voluntary on the part of the Company and the continuance of the Plan should not be construed as a contractual obligation of the Company. Accordingly, the Company reserves the right to terminate the Plan at any time. Unless sooner terminated by the Company, the Plan shall terminate on the date all of the shares of Stock specified in Section 1.5(a) are purchased unless additional shares of Stock are authorized for the Plan by the stockholders of the Company. No Option may be granted under the Plan after the Plan is terminated.

7.3       Rights Upon Termination.

(a)       If the Plan terminates, the Committee may elect to terminate all outstanding Options either immediately or upon completion of the purchase of shares of Stock on the next following Termination Date.

(b)       If the Committee terminates an Option prior to the expiration of the Option, all amounts contributed to the Plan which remain in an Employee’s Option Account will be returned to the Employee as soon as reasonably practicable.

SECTION 8 – GENERAL PROVISIONS

8.1       No Transfer or Assignment. The rights of an Employee under the Plan may not be sold, pledged, assigned or transferred, voluntarily or involuntarily, in any manner other than by will or the laws of descent and distribution. Any such attempted sale, pledge, assignment or

transfer shall be without effect. An Employee’s rights and all Options granted under the Plan shall only be exercisable during his or her lifetime by such Employee.

Furthermore, except as provided in Section 5.2(b), shares purchased for an Employee as of a Termination Date may not be sold, exchanged, assigned, transferred, pledged, or otherwise disposed of in any way by the Employee, other than by will or the laws of descent and distribution, until after three years after such Termination Date. The Company may place controls on the Account of the participant to which such shares are credited as necessary or appropriate to enforce such restrictions. Any such attempted assignment, transfer, pledge or other disposition shall be without effect.

8.2       Rights as Stockholder. The grant of an Option to purchase shares of Stock under the Plan will not confer upon an Employee any rights as a stockholder of the Company with respect to shares of Stock subject to the Option. An Employee will become a stockholder with respect to shares of Stock subject to an Option under the Plan only when the purchase of such shares of Stock is completed as of a Termination Date.

8.3       Rights as Employee. The Plan is not a contract of employment, and the grant of an option to purchase shares of Stock under the Plan will not confer upon any Employee the right to be retained in the employ of the Company or any Subsidiary.

8.4       Costs. All costs and expenses incurred in the administration of the Plan will be paid by the Company and its Subsidiaries. Any brokerage fees for the sale of shares of Stock by an Employee will be borne by the Employee.

8.5       Application of Funds. All proceeds received by the Company from the sale of Stock under the Plan will be used for general corporate purposes.

8.6       Reports. The Company will provide or cause to be provided to each Employee an annual report of the Employee’s contributions under the Plan for each Plan Year and the shares of Stock purchased with such contributions.

8.7       Actions by Company. Any action taken by the Company with respect to the Plan will be by resolution of its Board of Directors or by a person or persons authorized by resolution of its Board of Directors.

8.8       Governmental Approval. The Plan and any offering or sale made to Employees under the Plan is subject to any governmental approvals or consents that are or may become applicable in connection herewith.

8.9       Applicable Law. The Plan will be governed by the laws of the State of Delaware, without regard to the law of conflicts of such state, to the extent that federal law does not preempt such laws.

8.10     Gender and Number. When the context permits, words in the Plan used in the masculine gender include the feminine gender, words in the singular include the plural and words in the plural include the singular.

8.11     Headings. All headings in the Plan are included solely for ease of reference and do not bear on the interpretation of the text.

The undersigned hereby certifies that this Plan was duly adopted by the Board on October 18, 2007.

/s/ Sharon D. Fiehler

Sharon D. Fiehler, Executive Vice President –

Human Resources and Administration

Exhibit A

List of Additional Participating Subsidiaries¹

Peabody Energy Australia Coal Pty Ltd (100%)

Peabody (Wilkie Creek) Pty Ltd (100%)

North Goonyella Mine Management Pty Ltd (100%)

North Goonyella Coal Mines Pty Ltd (100%)

Millennium Coal Pty Ltd (84.62%)

Wambo Coal Pty Ltd (75%)

North Wambo Pty Ltd (75%)

Helensburgh Coal Pty Ltd (100%)

Lakecoal Pty Ltd (100%)

_________________________

¹ In addition to Peabody Pacific Pty Limited.