CASH-SETTLED PERFORMANCE UNITS AGREEMENT

THIS AGREEMENT (the “Agreement”), effective April 25, 2014 (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; and

WHEREAS, the Committee (as hereinafter defined) 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.

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” means 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” For purposes hereof, “Change of Control” shall mean:

(a)any Person (other than 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 50% or more of the combined voting power of the Company’s then-outstanding securities;

(b)during any period of twenty-four consecutive months, individuals who at the beginning of such period constitute the Board, and any new director (other than (i) a director nominated by a Person who has entered into an agreement with the Company to effect a transaction described in clause (a), (c) or (d) of this Section 1.4 or (ii) 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 of 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 in this Section 1.4, “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).

Section 1.5 -     “Committee” shall mean the Compensation Committee of the Board.

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, 2016; (ii) a Termination of Employment on account of death or Disability; or (iii) a Termination of Employment by the Company without Cause, or by the Grantee for Good Reason, in either case within the twelve (12) month period following a Change of Control. Solely for purposes of this Section 1.7, (a) the term “Change of Control” shall mean a Change of Control as defined in Section 1.4, but only to the extent the events constituting such Change of Control also constitute a “change of control event” (as defined in Treasury Regulations Section 1.409A-3(i)(5)(i)) with respect to the Company, and (b) the term “Disability” shall mean Disability as defined in Section 1.8, but only to the extent such Disability also constitutes a “disability” (as determined pursuant to Treasury Regulations Section 1.409A-3(i)(4)).

Section 1.8 -     “Disability” shall mean the Grantee’s absence from the full-time performance of the Grantee’s duties pursuant to a reasonable determination made in accordance with the Company’s disability plan that the Grantee is disabled as a result of incapacity due to physical or mental illness that lasts, or is reasonably expected to last, for at least six months.

Section 1.9 -     “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 Trade Ceasing Transaction, “FMV per Share” shall mean the per share value of equity based on amounts paid in the Trade Ceasing Transaction.

Section 1.10 -     “Good Reason” shall mean “Good Reason” as defined in the Grantee’s employment agreement with the Company.

Section 1.11 -     “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 1.12 -     “Mining Assets” shall mean the assets of the Company related to its worldwide mining operations.

Section 1.13 -     “Performance Units” shall mean the cash-settled units granted on a performance basis under this Agreement.

Section 1.14 -     “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 1.15 -     “Retirement” shall mean “Retirement” as defined in the Grantee’s employment agreement with the Company.

Section 1.16 -     “Return on Mining Assets” shall mean the average annual adjusted operating profit on the Mining Assets between the Grant Date and the Determination Date, expressed as a percentage of the Mining Assets employed (calculated as the average of the assets employed at the beginning and the end of each year (or, if earlier, the Determination Date)) by the Company. For purposes hereof, adjusted operating profit shall include actual operating profit before taxes, as wells as add-backs for (a) net selling, general and administrative expenses, and (b) operating losses (or profits) associated with the operation of the Company’s Middlemount facility.

Section 1.17 -     “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 1.18 -     “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”).

Section 1.19 -     “Trade Ceasing Transaction” means a Change of Control following which shares of Common Stock cease to be publicly traded on a securities exchange, irrespective of whether any equity of an acquiring or surviving entity is publicly traded on a securities exchange.

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 shall confer upon the Grantee any right to continue in the employ of the Company or any Subsidiary or Affiliate or interfere with or restrict in any way the rights of the Company and its Subsidiaries or Affiliates, which are hereby expressly reserved, to terminate the employment of the Grantee at any time for any reason whatsoever, with or without Cause.

Section 2.3 -     Adjustments in Performance Units. In the event of any Company stock dividend, stock split, combination or exchange of shares, recapitalization or other change in the capital structure of the Company, corporate separation or division of the Company (including, but not limited to, a split-up, spin-off, split-off or distribution to Company stockholders other than a normal cash dividend), sale by the Company of all or a substantial portion of its assets (measured on either a stand-alone or consolidated basis), reorganization, rights offering, partial or complete liquidation, or any other corporate transaction, Company share offering or other event involving the Company and having an effect similar to any of the foregoing, the Committee may make such substitution or adjustments in the characteristics or terms of the Performance Units as it may determine appropriate in its sole discretion to equitably reflect such corporate transaction, share offering or other event. Any such adjustment made by the Committee shall be final and binding upon the Grantee, the Company and all other interested persons.

Section 2.4 -     Special Treatment In the Event of a Change of Control. In addition to any adjustment that may be made pursuant to Section 2.3 hereof, in order to maintain the Grantee’s rights upon a Change of Control with respect to the Performance Units, the Committee, as constituted before such event, may, in its sole discretion, in connection with a Change of Control, take any one of the following actions: (i) make any adjustment to the Performance Units as the Committee deems appropriate to reflect such Change of Control, (ii) cause the Performance Units to be assumed, or have new rights substituted therefore, by the acquiring or surviving entity after such Change of Control, or (iii) subject to the requirements of Section 409A, accelerate the vesting of the Performance Units and/or payment of the Incentive Amount so that the Performance Units become fully vested and non-forfeitable and the Incentive Amount is paid in connection with such Change of Control, but only if such Change of Control is also a “change of control event” (as defined in Treasury Regulations Section 1.409A-3(i)(5)(i)) with respect to the Company.

Section 3.1 -     Performance Units. Unless the Grantee incurs a Termination of Employment with the Company for Cause or due to his Retirement without the Grantee giving six (6) months written notice, then regardless of whether the Grantee remains employed, the Performance Units shall vest on the fifteenth (15^th) day of each calendar month, in equal monthly increments, during the period beginning on January 2, 2014 and ending on December 31, 2016 (the “Performance Cycle”), such that 11.1111% of the Performance Units are vested as of the Grant Date. For the avoidance of doubt, (a) if the Grantee incurs a Termination of Employment with the Company for Cause then all Performance Units (whether or not they are vested) shall terminate and the Grantee shall not become entitled to the Incentive Amount hereunder, and (b) if the Grantee incurs a Termination of Employment with the Company due to his Retirement without the Grantee giving six (6) months written notice, no further Performance Units shall become vested following such Termination of Employment and the Grantee shall become entitled to the Incentive Amount calculated and payable pursuant to Article IV hereof with respect to the Performance Units that are vested as of the date of his Termination of Employment.

Section 3.2 -     Effect of Certain Events. Notwithstanding the foregoing Section 3.1, during the Performance Cycle, upon the Grantee’s Termination of Employment either (a) within twelve months following a Change of Control, provided such Termination of Employment is by the Company without Cause or by the Grantee for Good Reason; or (b) on account of the Grantee’s death or Disability, all of the Performance Units shall become immediately vested and the Grantee shall become entitled to the Incentive Amount calculated and payable pursuant to Article IV hereof with respect to the Performance Units that are or become vested as of the date of his Termination of Employment.

Section 4.1 -     Calculation of Incentive Amount. Calculation of Incentive Amount. The Incentive Amount, if any, payable to the Grantee hereunder shall be calculated as of the Determination Date in accordance with this Section 4.1.

(a)Pre-Change of Control. The Incentive Amount shall equal the result of the following formula:

(0.5 x A x B x C) + (0.5 x A x B x D);

where

“A” = the number of Performance Units that are vested as of the Determination Date pursuant to Article III hereof;

“B” = the FMV per Share as of the Determination Date;

“C” = the applicable composite total shareholder return payout percentage determined under Section 4.2 below (the “Composite TSR Percentage”) as of the Determination Date; and

“D” = the applicable ROMA payout percentage determined under Section 4.3 below (the “ROMA Percentage”) as of the Determination Date.

(b)Post-Change of Control that is not a Trade Ceasing Transaction. Notwithstanding Section 4.1(a) hereof, if a Change of Control that is NOT a Trade Ceasing Transaction occurs, then on the Determination Date, the Incentive Amount shall be equal to the sum of the amounts determined pursuant to clauses (i) and (ii) immediately below:

(i)Pre-Transaction Amount. The pre-transaction amount shall equal the result of the following formula:

(0.5 x A x B x C) + (0.5 x A x B x D)

Where:

“A” = the number of Performance Units that are vested as of the date of the Change of Control;

“B” = the FMV per Share as of the date of the Change of Control;

“C” = the Composite TSR Percentage as of the date of the Change of Control; and

“D” = the ROMA percentage as of the date of the Change of Control.

(ii)Post-Transaction Amount. The post-transaction amount shall equal the result of the following formula:

(0.5 x E x F x G) + (0.5 x E x F x H)

Where:

“E” = the number of Performance Units that became vested after the date of the Change of Control through the Determination Date;

“F” = the FMV per Share as of the date of the Determination Date;

“G” = the Composite TSR Percentage as of the Determination Date; and

“H” = 100%.

An example of how the Incentive Amount is intended to be determined if the Determination Date is after a Change of Control that is not a Trade Ceasing Transaction is attached as Exhibit A.

(c)Post-Trade Ceasing Transaction. Notwithstanding Section 4.1(a) hereof, if a Change of Control that is ALSO a Trade Ceasing Transaction occurs, then on the Determination Date, the Incentive Amount shall be equal to the sum of the amounts determined pursuant to clauses (i) and (ii) immediately below:

(i)Pre-Transaction Amount. The pre-transaction amount shall equal the result of the following formula:

(0.5 x A x B x C) + (0.5 x A x B x D)

Where:

“A” = the number of Performance Units that are vested as of the date of the Trade Ceasing Transaction;

“B” = the FMV per Share as of the date of the Trade Ceasing Transaction;

“C” = the Composite TSR Percentage as of the date of the Trade Ceasing Transaction; and

“D” = the ROMA percentage as of the date of the Trade Ceasing Transaction.

(ii)Post-Transaction Amount. The post-transaction amount shall equal the result of the following formula:

(0.5 x E x F x G) + (0.5 x E x F x H)

Where:

“E” = the number of Performance Units that became vested after the date of the Trade Ceasing Transaction through the Determination Date;

“F” = the FMV per Share as of the date of the date of the Trade Ceasing Transaction;

“G” = 100%; and

“H” = 100%.

An example of how the Incentive Amount is intended to be determined if the Determination Date is after a Trade Ceasing Transaction is attached as Exhibit B.

(d)Multiple Transactions. In the event that multiple Change of Control transactions occur, the Committee shall equitably determine how the Incentive Amount shall be calculated based on the principles set forth in Sections 4.1(b) and 4.1(c) hereof.

Section 4.2 -     Composite TSR Percentage. The Composite TSR Percentage equals the sum of the weighted payout percentages derived under paragraphs (a) and (b) below as of the Determination Date.

(a)Cumulative TSR - Peer Group Weighted Payout Percentage. The Cumulative TSR - Peer Group measure represents the Company’s average total shareholder return (based on the average of the closing prices of the shares of Common Stock for the four (4) weeks immediately preceding the Determination Date compared to the average of the closing prices of the shares of Common Stock for the four (4) weeks immediately following the Grant Date), expressed as a percentile ranking in an industry peer group (which peer group shall include Alpha Natural Resources, Inc.; Arch Coal Inc.; Cloud Peak Energy, Inc.; Consol Energy, Inc.; Market Vectors Coal ETF (KOL); and Walter Energy) that corresponds with a specified payout percentage.

The table below is used to determine the applicable payout percentage, which is then multiplied by 50% to determine the Cumulative TSR - Peer Group weighted payout percentage for purposes of the Composite TSR Percentage.

Notwithstanding the foregoing, if the Company’s average total shareholder return as of the Determination Date (based on the average of the closing prices of the shares of Common Stock for the four (4) weeks immediately preceding the Determination Date compared to the average of the closing prices of the shares of Common Stock for the four (4) weeks immediately following the Grant Date) is negative, the following shall apply:

(i)If the Company’s total shareholder return percentile ranking is at or above the 50th percentile of the peer group, then the applicable payout percentage used to determine the Cumulative TSR - Peer Group weighted payout percentage for purposes of the Composite TSR Percentage shall be 100%.

(ii)If the Company’s total shareholder return percentile ranking is below the 50th percentile of the peer group, then the Cumulative TSR - Peer Group weighted payout percentage shall be 0%.

(b)Cumulative TSR - S&P 500 Index Weighted Payout Percentage. The Cumulative TSR - S&P 500 Index measure represents the Company’s average total shareholder return (based on the average of the closing prices of the shares of Common Stock for the four (4) weeks immediately preceding the Determination Date compared to the average of the closing prices of the shares of Common Stock for the four (4) weeks

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immediately following the Grant Date), expressed as a percentile ranking in the Standard & Poor’s 500 Index that corresponds with a specified payout percentage.

The table below is used to determine the applicable payout percentage, which is then multiplied by 50% to determine the Cumulative TSR - S&P 500 Index weighted payout percentage for purposes of the Composite TSR Percentage.

Notwithstanding the foregoing, if the Company’s average total shareholder return as of the Determination Date (based on the average of the closing prices of the shares of Common Stock for the four (4) weeks immediately preceding the Determination Date compared to the average of the closing prices of the shares of Common Stock for the four (4) weeks immediately following the Grant Date) is negative, the following shall apply:

(i)If the Company’s total shareholder return percentile ranking is at or above the 50th percentile of the Standard & Poor’s 500 Index, then the applicable payout percentage used to determine the Cumulative TSR - S&P 500 Index weighted payout percentage for purposes of the Composite TSR Percentage shall be 100%.

(ii)If the Company’s total shareholder return percentile ranking is below the 50th percentile of the Standard & Poor’s 500 Index, then the Cumulative TSR - S&P 500 Index weighted payout percentage shall be 0%.

(c)For purposes of this Section 4.2, references to the S&P 500 Index shall be deemed to be references to such index, but in all cases excluding the financial services companies that would otherwise be included in such index.

Section 4.3 -     ROMA Percentage. The ROMA Percentage equals the payout percentage derived pursuant to this Section 4.3 as of the Determination Date. The ROMA Percentage measure represents the Company’s aggregate Return on Mining Assets, expressed as a percentage that corresponds with a specified payout percentage. The table below is used to determine the applicable payout percentage.

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Section 4.4 -     Form and Time of Payment.

(a)General. Subject to Section 4.4(b) hereof, the Incentive Amount shall be paid to the Grantee in cash as soon as administratively feasible, but not later than the ninetieth (90th) day following, the Determination Date.

(b)Specified Employee. If the Determination Date is triggered by a Termination of Employment other than due to death and at the time of such Termination of Employment the Grantee is a “specified employee” (as such term is defined in Section 409A, but generally meaning one of the Company’s key employees within the meaning of Code Section 416(i)), the Incentive Amount shall be paid to the Grantee on the first day of the seventh month after the Determination Date.

Section 5.1 -     Administration. The Committee has the power to interpret this Agreement and to adopt such rules for the administration, interpretation and application of this Agreement as are consistent herewith and to interpret or revoke any such rules. All actions taken and all interpretations and determinations made by the Committee shall be final and binding upon the Grantee, the Company and all other interested persons. No member of the Committee shall be personally liable for any action, determination or interpretation made in good faith with respect to the Performance Units or this Agreement. In its absolute discretion, the Board may at any time and from time to time exercise any and all rights and duties of the Committee under this Agreement.

Section 5.2 -     Performance Units Not Transferable. Neither the Performance Units nor any interest or right therein or part thereof shall be liable for the debts, contracts or engagements of the Grantee or his or her successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition is voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect; provided, however, that this Section 5.2 shall not prevent transfers by will or by the applicable laws of descent and distribution.

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Section 5.3 -     Withholding. In connection with the payment of the Incentive Amount, unless the Grantee makes alternative arrangements satisfactory to the Company to personally remit required withholding amounts, then as of the date that all or a portion of the Incentive Amount is paid, the Company will withhold a portion of such Incentive Amount equal to the aggregate amount required by law to be withheld by the Company in connection with such payment for applicable federal, state, local and foreign taxes of any kind.

Section 5.4 -     Notices. Any notice to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of its Secretary, and any notice to be given to the Grantee shall be addressed to him at the address set forth in the records of the Company. By a notice given pursuant to this Section 5.4, either party may hereafter designate a different address for notices to be given to him or it. Any notice which is required to be given to the Grantee shall, if the Grantee is then deceased, be given to the Grantee’s personal representative if such representative has previously informed the Company of his, her or its status and address by written notice under this Section 5.4. Any notice shall be deemed duly given when enclosed in a properly sealed envelope or wrapper addressed as aforesaid, deposited (with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service. Notwithstanding the foregoing, any notice required or permitted hereunder from the Company to the Grantee may be made by electronic means, including by electronic mail to the Company-maintained electronic mailbox of the Grantee, and the Grantee hereby consents to receive such notice by electronic delivery. To the extent permitted in an electronically delivered notice described in the previous sentence, the Grantee shall be permitted to respond to such notice or communication by way of a responsive electronic communication, including by electronic mail.

Section 5.5 -     Titles. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

Section 5.6 -     Pronouns ‑ The masculine pronoun shall include the feminine and neuter, and the singular the plural, where the context so indicates.

Section 5.7 -     Amendment.

(a)This Agreement may be amended only by a writing executed by the parties hereto that specifically states that it is amending this Agreement.

(b)This Agreement is intended to comply with Section 409A and shall, to the extent practicable, be construed in accordance therewith. If either party to this Agreement reasonably determines that any amount payable pursuant to this Agreement would result in adverse tax consequences under Section 409A, then such party shall deliver written notice of such determination to the other party, and the parties hereby agree to work in good faith to amend this Agreement so it complies with the requirements of Section 409A and preserves as nearly as possible the original intent and economic effect of the affected provisions.

Section 5.8 -     Dispute Resolution. Any dispute or controversy arising under or in connection with this Agreement shall be resolved by arbitration in St. Louis, Missouri. Arbitrators shall be selected, and arbitration shall be conducted, in accordance with the rules of the American Arbitration Association. The Company shall pay or reimburse any legal fees in connection with such arbitration in the event that the Grantee prevails on a material element of his claim or defense.

Payments or reimbursements of legal fees made under this Section 5.8 that are provided during one calendar year shall not affect the amount of such payments or reimbursements provided during a subsequent calendar year, payments or reimbursements under this Section 5.8 may not be exchanged or substituted for another form of compensation to the Grantee, and any such reimbursement or payment will be paid within sixty (60) days after the Grantee prevails, but in no event later than the last day of the Grantee’s taxable year following the taxable year in which he incurred the expense giving rise to such reimbursement or payment. This Section 5.8 shall remain in effect throughout the Grantee’s employment with the Company and for a period of five (5) years following the Grantee’s Termination of Employment.

Section 5.9 -     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, this Agreement has been executed and delivered by the parties hereto.