AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 15, 2003.
REGISTRATION NO. 333-
POST-EFFECTIVE AMENDMENT NO. 1 TO REGISTRATION NO. 333-85564
POST-EFFECTIVE AMENDMENT NO. 1 TO REGISTRATION NO. 333-84174
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
PEABODY ENERGY CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 1222 13-4004153
(State or Other Jurisdiction (Primary Standard Industrial (I.R.S. Employer Identification
of Incorporation or Organization) Classification Code Number) Number)
701 MARKET STREET
ST. LOUIS, MISSOURI 63101-1826
(314) 342-3400
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
---------------------
JEFFERY L. KLINGER, ESQ.
PEABODY ENERGY CORPORATION
701 MARKET STREET
ST. LOUIS, MISSOURI 63101-1826
(314) 342-3400
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
---------------------
WITH COPIES TO:
RISE B. NORMAN, ESQ. THOMAS A. LITZ, ESQ.
SIMPSON THACHER & BARTLETT THOMPSON COBURN LLP
425 LEXINGTON AVENUE ONE U.S. BANK PLAZA
NEW YORK, NEW YORK 10017 ST. LOUIS, MISSOURI 63101
---------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this registration statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
------------------
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
------------------
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
---------------------
CALCULATION OF REGISTRATION FEE
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM PROPOSED MAXIMUM
AMOUNT TO BE OFFERING PRICE AGGREGATE
TITLE OF EACH CLASS OF SECURITIES TO BE REGISTERED REGISTERED PER UNIT(1) OFFERING PRICE(1)
-----------------------------------------------------------------------------------------------------------------------
Common stock, par value $0.01 per share... 9,242,277 shares $27.40 $253,238,390
-----------------------------------------------------------------------------------------------------------------------
Preferred stock purchase rights(2)... -- -- --
-----------------------------------------------------------------------------------------------------------------------
Total... 9,242,277 shares $27.40 $253,238,390
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
-------------------------------------------------- ----------------------
-------------------------------------------------- ----------------------
AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES TO BE REGISTERED REGISTRATION FEE
-------------------------------------------------- ----------------------
Common stock, par value $0.01 per share... $23,298
-------------------------------------------------------------------------------------------------
Preferred stock purchase rights(2)... --
-----------------------------------------------------------------------------------------------------------------------
Total... $23,298
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
(1) Pursuant to Rule 457(c), based on the average of the high and low price per
share of the common stock as reported on the New York Stock Exchange on
January 9, 2003, solely for purposes of calculating the registration fee.
(2) The preferred stock purchase rights initially will trade together with the
common stock. The value attributable to the preferred stock purchase rights,
if any, is reflected in the offering price of the common stock.
---------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
PURSUANT TO RULE 429 OF THE GENERAL RULES AND REGULATIONS UNDER THE
SECURITIES ACT OF 1933, THE PROSPECTUS THAT IS PART OF THIS REGISTRATION
STATEMENT IS A COMBINED PROSPECTUS THAT ALSO RELATES TO 952,000 UNSOLD SHARES OF
THE REGISTRANT'S COMMON STOCK REGISTERED UNDER REGISTRATION STATEMENT NO.
333-85564 PREVIOUSLY FILED BY THE REGISTRANT AND 1,061,384 UNSOLD SHARES OF THE
REGISTRANT'S COMMON STOCK REGISTERED UNDER REGISTRATION STATEMENT NO. 333-84174
PREVIOUSLY FILED BY THE REGISTRANT. THIS REGISTRATION STATEMENT CONSTITUTES
POST-EFFECTIVE AMENDMENT NO. 1 TO REGISTRATION STATEMENT NO. 333-85564 AND
POST-EFFECTIVE AMENDMENT NO. 1 TO REGISTRATION STATEMENT NO. 333-84174.
ACCORDINGLY, THE COMBINED PROSPECTUS RELATES TO A TOTAL OF UP TO 11,255,661
SHARES OF THE REGISTRANT'S COMMON STOCK, WHICH HAVE BEEN REGISTERED UNDER THIS
REGISTRATION STATEMENT, REGISTRATION STATEMENT NO. 333-85564 AND REGISTRATION
STATEMENT NO. 333-84174.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES, AND WE ARE NOT SOLICITING OFFERS TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED JANUARY 15, 2003
PROSPECTUS
11,255,661 Shares
[PEABODY LOGO]
PEABODY ENERGY CORPORATION
Common Stock
--------------------------------------------------------------------------------
The selling stockholders named in this prospectus may offer from time to time
all of the shares of common stock in this offering. We will not receive any of
the proceeds from the sale of the shares by the selling stockholders.
You should read this prospectus and any supplement carefully before you invest
in any of our common stock.
Our common stock is traded on the New York Stock Exchange under the symbol
"BTU." On January 13, 2003, the last reported sale price of our common stock on
the New York Stock Exchange was $28.48 per share.
INVESTING IN THE SHARES INVOLVES RISKS. "RISK FACTORS" BEGIN ON PAGE 2.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
--------------------------------------------------------------------------------
, 2003
TABLE OF CONTENTS
PAGE
----
About This Prospectus................. i
Cautionary Notice Regarding Forward-
Looking Statements.................. i
The Company........................... 1
Risk Factors.......................... 2
Use of Proceeds....................... 8
Selling Stockholders.................. 9
PAGE
----
Description of Capital Stock.......... 10
Plan of Distribution.................. 16
Validity of Our Common Stock.......... 17
Experts............................... 17
Where You Can Find Additional
Information......................... 17
ABOUT THIS PROSPECTUS
You should rely only on the information incorporated by reference or
provided in this prospectus or any supplement or term sheet. We have not
authorized anyone else to provide you with different information. We are not
making an offer of these securities in any state where the offer is not
permitted. You should not assume that the information in this prospectus or any
supplement is accurate as of any date other than the date on the front of these
documents.
CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS
Some of the information included in this prospectus or any prospectus
supplement and the documents we have incorporated by reference contain
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and are
intended to come within the safe harbor protection provided by those sections.
These statements relate to future events or our future financial performance. We
use words such as "anticipate," "believe," "expect," "may," "project," "will" or
other similar words to identify forward-looking statements.
Without limiting the foregoing, all statements relating to our future
outlook, anticipated capital expenditures, future cash flows and borrowings, and
sources of funding are forward-looking statements. These forward-looking
statements are based on numerous assumptions that we believe are reasonable, but
they are open to a wide range of uncertainties and business risks and actual
results may differ materially from those discussed in these statements.
Among the factors that could cause actual results to differ materially are:
- growth in coal and power markets;
- coal's market share of electricity generation;
- timing of reductions in customer coal inventories;
- the pace and extent of the economic recovery;
- severity of weather;
- railroad and other transportation performance and costs;
- the ability to renew sales contracts upon expiration or renegotiation;
- the ability to successfully implement operating strategies;
- the effectiveness of our cost-cutting measures;
- regulatory and court decisions;
- future legislation;
- changes in postretirement benefit and pension obligations;
- credit, market and performance risk associated with our customers;
i
- modification or termination of our long-term coal supply agreements;
- reduction of purchases by major customers;
- risks inherent to mining, including geologic conditions or unforeseen
equipment problems;
- terrorist attacks or threats affecting our or our customers' operations;
- replacement of recoverable reserves;
- implementation of new accounting standards;
- inflationary trends, interest rates and access to capital markets; and
- other factors, including those discussed in "Risk Factors."
When considering these forward-looking statements, you should keep in mind
the cautionary statements in this document or any prospectus supplement and the
documents incorporated by reference. We will not update these statements unless
the securities laws require us to do so.
ii
THE COMPANY
We are the largest private-sector coal company in the world. During the
nine months ended September 30, 2002, we sold 147.9 million tons of coal. During
this period, we sold coal to more than 280 electric generating and industrial
plants, fueling the generation of more than 9% of all electricity in the United
States and 2.5% of all electricity in the world. At September 30, 2002, we had
9.0 billion tons of proven and probable coal reserves in the U.S., approximately
double the reserves of any other U.S. coal producer.
We own majority interests in 35 coal operations located throughout all
major U.S. coal producing regions, with 73% of our U.S. mining operation's coal
sales in the nine months ended September 30, 2002 shipped from the western
United States and the remaining 27% from the eastern United States. Most of our
production in the western United States is low sulfur coal from the Powder River
Basin. Our overall western U.S. coal production increased from 37.0 million tons
in fiscal year 1990 to 127.1 million tons in calendar year 2001, representing a
compounded annual growth rate of 12%. In the west, we own and operate mines in
Arizona, Colorado, Montana, New Mexico and Wyoming. In the east, we own and
operate mines in Illinois, Indiana, Kentucky and West Virginia. We produced 78%
of our sales volume in the nine months ended September 30, 2002 from non-union
mines.
For the nine months ended September 30, 2002, 93% of our sales were to U.S.
electricity generators, 4% were to the U.S. industrial sector and the remainder
were to customers outside the United States. Approximately 97% of our coal sales
during the nine months ended September 30, 2002 were under long-term contracts.
As of September 30, 2002, nearly one billion tons of our future coal production
were committed under long-term contracts, with remaining terms ranging from one
to 18 years and an average volume-weighted remaining term of approximately 4.5
years. As of December 31, 2002, we had nine million tons and 76 million tons of
expected production available for sale at market-based prices in calendar year
2003 and 2004, respectively. We have the ability to increase production by 15 to
20 million tons annually within three to six months by running our current
operations at their full capacity.
In addition to our mining operations, we market, broker and trade coal and
emission allowances. Our total tons traded were 55.8 million for the nine months
ended September 30, 2002. Our other related energy related businesses include
coalbed methane production, transportation-related services, third-party coal
contract restructuring and the development of coal-fueled generating plants.
Our principal executive offices are located at 701 Market Street, St.
Louis, Missouri 63101-1826, telephone (314) 342-3400.
1
RISK FACTORS
An investment in our common stock involves risks. You should consider
carefully, in addition to the other information contained in this prospectus,
the following risk factors before deciding to purchase any common stock.
RISKS RELATING TO OUR COMPANY
IF A SUBSTANTIAL PORTION OF OUR LONG-TERM COAL SUPPLY AGREEMENTS TERMINATE, OUR
REVENUES AND OPERATING PROFITS COULD SUFFER IF WE WERE UNABLE TO FIND ALTERNATE
BUYERS WILLING TO PURCHASE OUR COAL ON COMPARABLE TERMS TO THOSE IN OUR
CONTRACTS.
A substantial portion of our sales are made under coal supply agreements,
which are important to the stability and profitability of our operations. The
execution of a satisfactory coal supply agreement is frequently the basis on
which we undertake the development of coal reserves required to be supplied
under the contract. For the nine months ended September 30, 2002, 97% of our
sales volume was sold under long-term coal supply agreements. At September 30,
2002, our coal supply agreements had remaining terms ranging from one to 18
years and an average volume-weighted remaining term of approximately 4.5 years.
Many of our coal supply agreements contain provisions that permit the
parties to adjust the contract price upward or downward at specified times. We
may adjust these contract prices based on inflation and/or changes in the
factors affecting the cost of producing coal, such as taxes, fees, royalties and
changes in the laws regulating the mining, production, sale or use of coal. In a
limited number of contracts, failure of the parties to agree on a price under
those provisions may allow either party to terminate the contract. We have also
experienced a similar reduction in coal prices in new long-term coal supply
agreements replacing some of our expiring contracts. Coal supply agreements also
typically contain force majeure provisions allowing temporary suspension of
performance by us or the customer during the duration of specified events beyond
the control of the affected party. Most coal supply agreements contain
provisions requiring us to deliver coal meeting quality thresholds for certain
characteristics such as Btu, sulfur content, ash content, grindability and ash
fusion temperature. Failure to meet these specifications could result in
economic penalties, including price adjustments, the rejection of deliveries or
termination of the contracts. Moreover, some of these agreements permit the
customer to terminate the contract if transportation costs, which our customers
typically bear, increase substantially. In addition, some of these contracts
allow our customers to terminate their contracts in the event of changes in
regulations affecting our industry that increase the price of coal beyond
specified limits.
The operating profits we realize from coal sold under supply agreements
depend on a variety of factors. In addition, price adjustment and other
provisions may increase our exposure to short-term coal price volatility
provided by those contracts. If a substantial portion of our coal supply
agreements were modified or terminated, we could be materially adversely
affected to the extent that we are unable to find alternate buyers for our coal
at the same level of profitability. Some of our coal supply agreements are for
prices above current market prices. Although market prices for coal increased in
most regions in 2001, market prices for coal decreased in most regions in 2002.
As a result, we cannot predict the future strength of the coal market and cannot
assure you that we will be able to replace existing long-term coal supply
agreements at the same prices or with similar profit margins when they expire.
In addition, two of our coal supply agreements are the subject of ongoing
litigation and arbitration.
THE LOSS OF, OR SIGNIFICANT REDUCTION IN, PURCHASES BY OUR LARGEST CUSTOMERS
COULD ADVERSELY AFFECT OUR REVENUES.
For the nine months ended September 30, 2002, we derived 25% of our total
coal revenues from sales to our five largest customers. At September 30, 2002,
we had 27 coal supply agreements with these customers that expire at various
times from 2003 to 2015. We are currently discussing the extension of
2
existing agreements or entering into new long-term agreements with some of these
customers, but these negotiations may not be successful and those customers may
not continue to purchase coal from us under long-term coal supply agreements. If
a number of these customers were to significantly reduce their purchases of coal
from us, or if we were unable to sell coal to them on terms as favorable to us
as the terms under our current agreements, our financial condition and results
of operations could suffer materially.
In addition, we sold 3.4 million tons of coal to the Mohave Generating
Station in the nine months ended September 30, 2002. We have a long-term coal
supply agreement with the owners of the Mohave Generating Station that expires
on December 31, 2005, but may be renewed as provided in the agreement. There is
a dispute with the Hopi Tribe regarding the use of groundwater in the
transportation of coal by pipeline to the Mohave Generating Station. Also,
Southern California Edison (the majority owner and operator of the plant) is
involved in a California Public Utility Commission proceeding related to
recovery of future capital expenditures for new pollution abatement equipment
for the station. As a result of these issues, the owners of the Mohave
Generating Station have announced that they expect to idle the plant for at
least six to 12 months beginning in 2006. We are in active discussions to
resolve the complex issues critical to the continuation of the operation of the
Mohave Generating Station and the renewal of the coal supply agreement after
December 31, 2005. There is no assurance that the issues critical to the
continued operation of the Mohave Generating Station will be resolved. The
Mohave Generating Station is the sole customer of our Black Mesa Mine, which
produces and sells 4.5 to 5 million tons of coal per year. If we are unable to
renew the coal supply agreement with the Mohave Generating Station, our
financial condition and results of operations could be adversely affected after
2005.
OUR FINANCIAL PERFORMANCE COULD BE ADVERSELY AFFECTED BY OUR SUBSTANTIAL DEBT.
Our financial performance could be affected by our substantial
indebtedness. As of September 30, 2002, we had total indebtedness of $1,047.8
million. We currently have total borrowing capacity under our and Black Beauty's
revolving credit facilities of $490.0 million. We may also incur additional
indebtedness in the future.
Our ability to pay principal and interest on our debt depends upon the
operating performance of our subsidiaries, which will be affected by, among
other things, prevailing economic conditions in the markets they serve, some of
which are beyond our control. Our business may not generate sufficient cash flow
from operations and future borrowings may not be available under our revolving
credit facilities or otherwise in an amount sufficient to enable us to service
our indebtedness or to fund our other liquidity needs.
The degree to which we are leveraged could have important consequences,
including, but not limited to: (1) making it more difficult for us to pay
dividends and satisfy our debt obligations; (2) increasing our vulnerability to
general adverse economic and industry conditions; (3) requiring the dedication
of a substantial portion of our cash flow from operations to the payment of
principal of, and interest on, our indebtedness, thereby reducing the
availability of the cash flow to fund working capital, capital expenditures,
research and development or other general corporate uses; (4) limiting our
ability to obtain additional financing to fund future working capital, capital
expenditures, research and development or other general corporate requirements;
(5) limiting our flexibility in planning for, or reacting to, changes in our
business; and (6) placing us at a competitive disadvantage compared to less
leveraged competitors. In addition, our indebtedness subjects us to financial
and other restrictive covenants. Failure by us to comply with these covenants
could result in an event of default which, if not cured or waived, could have a
material adverse effect on us. Furthermore, substantially all of our assets,
except for the assets of Black Beauty Coal Company and its affiliates, secure
our indebtedness under our senior credit facility.
IF TRANSPORTATION FOR OUR COAL BECOMES UNAVAILABLE OR UNECONOMIC FOR OUR
CUSTOMERS, OUR ABILITY TO SELL COAL COULD SUFFER.
Transportation costs represent a significant portion of the total cost of
coal, and as a result, the cost of transportation is a critical factor in a
customer's purchasing decision. Increases in transportation costs could make
coal a less competitive source of energy or could make some of our operations
less competitive
3
than other sources of coal. Certain coal supply agreements permit the customer
to terminate the contract if the cost of transportation increases by an amount
ranging from 10% to 20% in any given 12-month period.
Coal producers depend upon rail, barge, trucking, overland conveyor and
other systems to deliver coal to markets. While U.S. coal customers typically
arrange and pay for transportation of coal from the mine to the point of use,
disruption of these transportation services because of weather-related problems,
strikes, lock-outs or other events could temporarily impair our ability to
supply coal to our customers and thus could adversely affect our results of
operations. For example, the high volume of coal shipped from all Southern
Powder River Basin mines could create temporary congestion on the rail systems
servicing that region.
RISKS INHERENT TO MINING COULD INCREASE THE COST OF OPERATING OUR BUSINESS.
Our mining operations are subject to conditions beyond our control that can
delay coal deliveries or increase the cost of mining at particular mines for
varying lengths of time. These conditions include weather and natural disasters,
unexpected maintenance problems, key equipment failures, variations in coal seam
thickness, variations in the amount of rock and soil overlying the coal deposit,
variations in rock and other natural materials and variations in geologic
conditions.
THE GOVERNMENT EXTENSIVELY REGULATES OUR MINING OPERATIONS, WHICH IMPOSES
SIGNIFICANT COSTS ON US, AND FUTURE REGULATIONS COULD INCREASE THOSE COSTS OR
LIMIT OUR ABILITY TO PRODUCE COAL.
Federal, state and local authorities regulate the coal mining industry with
respect to matters such as employee health and safety, permitting and licensing
requirements, air quality standards, water pollution, plant and wildlife
protection, reclamation and restoration of mining properties after mining is
completed, the discharge of materials into the environment, surface subsidence
from underground mining and the effects that mining has on groundwater quality
and availability. In addition, significant legislation mandating specified
benefits for retired coal miners affects our industry. Numerous governmental
permits and approvals are required for mining operations. We are required to
prepare and present to federal, state or local authorities data pertaining to
the effect or impact that any proposed exploration for or production of coal may
have upon the environment. The costs, liabilities and requirements associated
with these regulations may be costly and time-consuming and may delay
commencement or continuation of exploration or production operations. The
possibility exists that new legislation and/or regulations and orders may be
adopted that may materially adversely affect our mining operations, our cost
structure and/or our customers' ability to use coal. New legislation or
administrative regulations (or judicial interpretations of existing laws and
regulations), including proposals related to the protection of the environment
that would further regulate and tax the coal industry, may also require us or
our customers to change operations significantly or incur increased costs. The
majority of our coal supply agreements contain provisions that allow a purchaser
to terminate its contract if legislation is passed that either restricts the use
or type of coal permissible at the purchaser's plant or results in specified
increases in the cost of coal or its use. These factors and legislation, if
enacted, could have a material adverse effect on our financial condition and
results of operations.
In addition, the United States and over 160 other nations are signatories
to the 1992 Framework Convention on Climate Change, which is intended to limit
emissions of greenhouse gases, such as carbon dioxide. In December 1997, in
Kyoto, Japan, the signatories to the convention established a binding set of
emission targets for developed nations. Although the specific emission targets
vary from country to country, the United States would be required to reduce
emissions to 93% of 1990 levels over a five-year budget period from 2008 through
2012. Although the United States has not ratified the emission targets and no
comprehensive regulations focusing on U.S. greenhouse gas emissions are in
place, these restrictions, whether through ratification of the emission targets
or other efforts to stabilize or reduce greenhouse gas emissions, could
adversely impact the price of and demand for coal. According to the Energy
Information Administration's Emissions of Greenhouse Gases in the United States
2001, coal accounts for 32% of greenhouse gas emissions in the United States,
and efforts to control greenhouse gas emissions could result in reduced use of
coal if electricity generators switch to sources of fuel with lower carbon
dioxide emissions. Further developments in connection with regulations or other
limits on carbon dioxide emissions could have a material adverse effect on our
financial condition or results of operations.
4
OUR EXPENDITURES FOR POSTRETIREMENT BENEFIT AND PENSION OBLIGATIONS COULD BE
MATERIALLY HIGHER THAN WE HAVE PREDICTED IF OUR UNDERLYING ASSUMPTIONS PROVE TO
BE INCORRECT.
We provide postretirement health and life insurance benefits to eligible
union and non-union employees. We calculated the total accumulated
postretirement benefit obligation under Statement of Financial Accounting
Standards No. 106, "Employers' Accounting for Postretirement Benefits Other Than
Pensions," which we estimate had a present value of $1,032.4 million as of
September 30, 2002, $70.4 million of which was a current liability. We have
estimated these unfunded obligations based on assumptions described in Note 18
to our audited financial statements incorporated by reference in this
prospectus. If our assumptions do not materialize as expected, cash expenditures
and costs that we incur could be materially higher. Moreover, regulatory changes
could increase our obligations to provide these or additional benefits.
We are party to an agreement with the Pension Benefit Guaranty Corporation,
or the PBGC, and TXU Europe Limited, an affiliate of our former parent
corporation, under which we are required to make specified contributions to two
of our defined benefit pension plans and to maintain a $37.0 million letter of
credit in favor of the PBGC. If we or the PBGC gives notice of an intent to
terminate one or more of the covered pension plans in which liabilities are not
fully funded, or if we fail to maintain the letter of credit, the PBGC may draw
down on the letter of credit and use the proceeds to satisfy liabilities under
the Employee Retirement Income Security Act of 1974, as amended. The PBGC,
however, is required to first apply amounts received from a $110.0 million
guaranty in place from TXU Europe Limited in favor of the PBGC before it draws
on our letter of credit. On November 19, 2002 TXU Europe Limited was placed
under the administration process in the United Kingdom (a process similar to
bankruptcy proceedings in the United States). As a result of these proceedings,
TXU Europe Limited may be liquidated or otherwise reorganized in such a way as
to relieve it of its obligations under its guaranty.
OUR FUTURE SUCCESS DEPENDS UPON OUR ABILITY TO CONTINUE ACQUIRING AND DEVELOPING
COAL RESERVES THAT ARE ECONOMICALLY RECOVERABLE.
Our recoverable reserves decline as we produce coal. We have not yet
applied for the permits required or developed the mines necessary to use all of
our reserves. Furthermore, we may not be able to mine all of our reserves as
profitably as we do at our current operations. Our future success depends upon
our conducting successful exploration and development activities or acquiring
properties containing economically recoverable reserves. Our current strategy
includes increasing our reserve base through acquisitions of government and
other leases and producing properties and continuing to use our existing
properties. The federal government also leases natural gas and coalbed methane
reserves in the west, including in the Powder River Basin. Some of these natural
gas and coalbed methane reserves are located on, or adjacent to, some of our
Powder River Basin reserves, potentially creating conflicting interests between
us and lessees of those interests. Other lessees' rights relating to these
mineral interests could prevent, delay or increase the cost of developing our
coal reserves. These lessees may also seek damages from us based on claims that
our coal mining operations impair their interests. Additionally, the federal
government limits the amount of federal land that may be leased by any company
to 150,000 acres nationwide. As of September 30, 2002, we leased or had applied
to lease a total of 66,797 acres from the federal government. The limit could
restrict our ability to lease additional federal lands.
Our planned development and exploration projects and acquisition activities
may not result in significant additional reserves and we may not have continuing
success developing additional mines. Most of our mining operations are conducted
on properties owned or leased by us. Because title to most of our leased
properties and mineral rights are not thoroughly verified until a permit to mine
the property is obtained, our right to mine some of our reserves may be
materially adversely affected if defects in title or boundaries exist. In
addition, in order to develop our reserves, we must receive various governmental
permits. We cannot predict whether we will continue to receive the permits
necessary for us to operate profitably in the future. We may not be able to
negotiate new leases from the government or from private parties or obtain
mining contracts for properties containing additional reserves or maintain our
leasehold interest in properties on which mining operations are not commenced
during the term of the lease. From time to time, we have experienced litigation
with lessors of our coal properties and with royalty holders.
5
IF THE COAL INDUSTRY EXPERIENCES OVERCAPACITY IN THE FUTURE, OUR PROFITABILITY
COULD BE IMPAIRED.
During the mid-1970s and early 1980s, a growing coal market and increased
demand for coal attracted new investors to the coal industry, spurred the
development of new mines and resulted in added production capacity throughout
the industry, all of which led to increased competition and lower coal prices.
Similarly, an increase in future coal prices could encourage the development of
expanded capacity by new or existing coal producers. Any overcapacity could
reduce coal prices in the future.
OUR FINANCIAL CONDITION COULD BE NEGATIVELY AFFECTED IF WE FAIL TO MAINTAIN
SATISFACTORY LABOR RELATIONS.
As of September 30, 2002, the United Mine Workers of America represented
approximately 33% of our employees, who produced 20% of our coal sales volume
during the nine months ended September 30, 2002. An additional 4% of our
employees are represented by labor unions other than the United Mine Workers of
America. These employees produced 3% of our coal sales volume during the nine
months ended September 30, 2002. Because of the higher labor costs and the
increased risk of strikes and other work-related stoppages that may be
associated with union operations in the coal industry, our non-unionized
competitors may have a competitive advantage in areas where they compete with
our unionized operations. If some or all of our current non-union operations
were to become unionized, we could incur an increased risk of work stoppages,
reduced productivity and higher labor costs. The ten-month United Mine Workers
of America strike in 1993 had a material adverse effect on us. Two of our
subsidiaries, Peabody Coal Company and Eastern Associated Coal Corp., operate
under a union contract that is in effect through December 31, 2006. Peabody
Western Coal Company operates under a union contract that is in effect through
September 1, 2005.
OUR OPERATIONS COULD BE ADVERSELY AFFECTED IF WE FAIL TO MAINTAIN REQUIRED
SURETY BONDS.
Federal and state laws require bonds to secure our obligations to reclaim
lands used for mining, to pay federal and state workers' compensation, to secure
coal lease obligations and to satisfy other miscellaneous obligations. As of
September 30, 2002, we had outstanding surety bonds with third parties for
post-mining reclamation totaling $682.3 million. Furthermore, we had an
additional $194.2 million of surety bonds in place for workers' compensation and
retiree healthcare obligations and $68.8 million of surety bonds securing coal
leases. These bonds are typically renewable on a yearly basis. It has become
increasingly difficult for us to secure new surety bonds or renew bonds without
the posting of partial collateral. In addition, surety bond costs have increased
while the market terms of surety bonds have generally become less favorable to
us. Surety bond issuers and holders may not continue to renew the bonds or may
demand additional collateral upon those renewals. Our failure to maintain, or
inability to acquire, surety bonds that are required by state and federal law
would have a material adverse effect on us. That failure could result from a
variety of factors including the following:
- lack of availability, higher expense or unfavorable market terms of new
surety bonds;
- restrictions on the availability of collateral for current and future
third-party surety bond issuers under the terms of our indentures or
senior credit facility; and
- the exercise by third-party surety bond issuers of their right to refuse
to renew the surety.
LEHMAN BROTHERS MERCHANT BANKING HAS SIGNIFICANT INFLUENCE ON ALL STOCKHOLDER
VOTES AND MAY HAVE CONFLICTS OF INTEREST WITH OTHER STOCKHOLDERS IN THE FUTURE.
Prior to the offering of any of the shares offered in this prospectus,
Lehman Brothers Merchant Banking and its affiliates beneficially owned
approximately 41% of our common stock. As a result, Lehman Brothers Merchant
Banking will effectively continue to be able to influence the election of our
directors and determine our corporate and management policies and actions,
including potential mergers or acquisitions, asset sales and other significant
corporate transactions. The interests of Lehman Brothers Merchant Banking may
not coincide with the interests of other holders of our common stock. We have
retained affiliates of Lehman Brothers Merchant Banking to perform advisory and
financing services for us in the past, and may continue to do so in the future.
6
OUR ABILITY TO OPERATE OUR COMPANY EFFECTIVELY COULD BE IMPAIRED IF WE LOSE KEY
PERSONNEL.
We manage our business with a number of key personnel, the loss of a number
of whom could have a material adverse effect on us. In addition, as our business
develops and expands, we believe that our future success will depend greatly on
our continued ability to attract and retain highly skilled and qualified
personnel. We cannot assure you that key personnel will continue to be employed
by us or that we will be able to attract and retain qualified personnel in the
future. We do not have "key person" life insurance to cover our executive
officers. Failure to retain or attract key personnel could have a material
adverse effect on us.
TERRORIST ATTACKS AND THREATS, ESCALATION OF MILITARY ACTIVITY IN RESPONSE TO
SUCH ATTACKS OR ACTS OF WAR MAY NEGATIVELY AFFECT OUR BUSINESS, FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Terrorist attacks and threats, escalation of military activity in response
to such attacks or acts of war may negatively affect our business, financial
condition and results of operations. Our business is affected by general
economic conditions, fluctuations in consumer confidence and spending, and
market liquidity, which can decline as a result of numerous factors outside of
our control, such as terrorist attacks and acts of war. The 2001 terrorist
attacks in the United States, as well as future events occurring in response to,
or in connection with, the attacks, including future terrorist attacks against
U.S. targets, rumors or threats of war, actual conflicts involving the United
States or its allies, or military or trade disruptions affecting our customers,
may materially adversely affect our operations. As a result, there could be
delays or losses in transportation and deliveries of coal to our customers,
decreased sales of our coal and extension of time for payment of accounts
receivable from our customers. Strategic targets such as energy-related assets
may be at greater risk of future terrorist attacks than other targets in the
United States. In addition, disruption or significant increases in energy prices
could result in government-imposed price controls. It is possible that any, or a
combination, of these occurrences could have a material adverse effect on our
business, financial condition and results of operations.
OUR ABILITY TO COLLECT PAYMENTS FROM OUR CUSTOMERS COULD BE IMPAIRED IF THEIR
CREDITWORTHINESS DETERIORATES.
Our ability to receive payment for coal sold and delivered depends on the
continued creditworthiness of our customers. Our customer base is changing with
deregulation as utilities sell their power plants to their non-regulated
affiliates or third parties. These new power plant owners may have credit
ratings that are below investment grade. In addition, the creditworthiness of
certain of our customers and trading counterparties has deteriorated due to
lower than anticipated demand for energy and lower volume and volatility in the
traded energy markets in 2002.
We have taken steps to reduce our credit exposure to customers or
counterparties whose credit has deteriorated and who may pose a higher risk, as
determined by our credit management function, of failure to perform under their
contractual obligations. These steps include obtaining letters of credit, cash
collateral, prepayments for shipments or the creation of customer trust accounts
held for our benefit to fund the payment for coal under existing coal supply
agreements. While these steps can mitigate or eliminate losses related to
existing amounts due from these customers, should a customer become unable to
perform in the future under an existing coal supply agreement, our business
could be adversely affected.
If deterioration of the creditworthiness of other electric power generator
customers or trading counterparties continues, our $140.0 million accounts
receivable securitization program and our business could be adversely affected.
RISKS RELATED TO THIS REGISTRATION STATEMENT
IF WE OR OUR EXISTING STOCKHOLDERS SELL ADDITIONAL SHARES OF OUR COMMON STOCK
AFTER THE EFFECTIVENESS OF THIS REGISTRATION STATEMENT, THE MARKET PRICE OF OUR
COMMON STOCK COULD DECLINE.
The market price of our common stock could decline as a result of sales of
a large number of shares of common stock in the public market or the perception
that such sales could occur. These sales, or the
7
possibility that these sales may occur, also might make it more difficult for us
to sell equity securities in the future at a time and at a price that we deem
appropriate.
Sales of our common stock are restricted by lock-up agreements that our
directors, officers and all of our stockholders who acquired shares prior to our
initial public offering have entered into with us. The lock-up agreements
restrict our directors, certain of our officers and those stockholders, subject
to specified exceptions, from selling or otherwise disposing of any shares for a
period of 14 days prior to and 90 days after the date of any offering under the
registration statement of which this prospectus forms a part without the prior
written consent of the managing underwriter in the context of an underwritten
offering. The managing underwriter, in the case of an underwritten offering may,
however, in its sole discretion and without notice, release all or any portion
of the shares from the restrictions in the lock-up agreements.
As of January 1, 2003, we had approximately 52.4 million shares of common
stock outstanding. Of those shares, 39.7 million shares will be freely tradeable
if all of the shares registered under this registration statement are sold. Of
the remaining 12.7 million restricted shares, 200,000 may be resold under Rule
144(k) without regard to volume limitations and approximately 12.5 million
shares may be sold subject to the volume, manner of sale and other conditions of
Rule 144. Lehman Brothers Merchant Banking and its affiliates, which will
collectively own 11.3 million shares after the sale of all shares of common
stock being registered under this registration statement, will have the ability
to cause us to register the resale of their shares under their registration
rights agreement.
In addition, approximately 5.8 million shares are issuable upon the
exercise of presently outstanding stock options under our 1998 Stock Purchase
and Option Plan and our Long-Term Equity Incentive Plan. Shares acquired upon
the exercise of vested options under our 1998 Stock Purchase and Option Plan for
Key Employees will first become eligible for resale in May 2003. In addition,
awards that have been granted under our Long-Term Equity Incentive Plan already
have begun to vest. We plan to file a registration statement to register the
shares issuable upon the exercise of all stock options under our 1998 Stock
Purchase and Option Plan for Key Employees. We filed a registration statement
registering the shares issuable upon the exercise of all stock options under our
Long-Term Equity Incentive Plan on May 22, 2001.
OUR CERTIFICATE OF INCORPORATION AND BY-LAWS INCLUDE PROVISIONS THAT MAY
DISCOURAGE A TAKEOVER ATTEMPT.
Provisions contained in our certificate of incorporation and by-laws and
Delaware law could make it more difficult for a third party to acquire us, even
if doing so might be beneficial to our stockholders. Provisions of our by-laws
and certificate of incorporation impose various procedural and other
requirements that could make it more difficult for stockholders to effect
certain corporate actions. For example, a change of control of our company may
be delayed or deterred as a result of the stockholders' rights plan adopted by
our board of directors. These provisions could limit the price that certain
investors might be willing to pay in the future for shares of our common stock
and may have the effect of delaying or preventing a change in control.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of shares by the
selling stockholders. The selling stockholders will receive all net proceeds
from the sale of shares of our common stock offered in this prospectus.
8
SELLING STOCKHOLDERS
The following table sets forth information concerning ownership of our
capital stock as of January 1, 2003 by each selling stockholder. As of January
1, 2003, there were 52.4 million shares of our common stock outstanding.
NUMBER OF SHARES TO BE
BENEFICIALLY OWNED AFTER
AS OF MAXIMUM THE SALE OF THE MAXIMUM
JANUARY 1, 2003 NUMBER NUMBER OF SHARES
---------------------- OF SHARES ------------------------
NAME AND ADDRESS OF BENEFICIAL OWNER SHARES(1) PERCENT TO BE SOLD SHARES(1) PERCENT
------------------------------------ ---------- ------- ------------ ----------- --------
Lehman Brothers Merchant Banking
Partners II L.P. and affiliates(2)
c/o Lehman Brothers Holdings Inc
745 Seventh Avenue, 25th Floor,
New York, NY 10019................. 21,284,994 40.6% 10,000,000 11,284,994 21.5%
Co-Investment Partners, L.P.
c/o Lexington Partners Inc.
660 Madison Avenue, 23rd Floor
New York, NY 10021................. 1,000,000 1.9% 1,000,000 0 0%
Michael V. Altrudo(3)(5)............. 35,798 * 1,435 34,363 *
Ian S. Craig(3)(4)................... 95,197 * 34,919 60,278 *
Irl F. Engelhardt(3)(6).............. 703,260 1.3 100,000 603,260 1.1
Sharon D. Fiehler(3)(7).............. 144,025 * 15,000 129,025 *
Jeffery L. Klinger(3)(4)............. 143,178 * 15,000 128,178 *
Richard A. Navarre(3)(8)............. 194,550 * 20,000 174,550 *
Jiri Nemec(3)(4)..................... 64,630 * 9,164 55,466 *
Dianna K. Tickner(3)(4).............. 50,874 * 10,035 40,839 *
Roger B. Walcott, Jr.(3)(9).......... 224,575 * 20,000 204,575 *
John L. Wasik(3)(4).................. 74,894 * 5,498 69,396 *
Richard M. Whiting(3)(10)............ 223,671 * 19,675 203,996 *
Gregg P. Wickstra(3)(11)............. 43,466 * 4,935 38,531 *
---------------
* Less than 1%.
(1) Beneficial ownership is determined in accordance with the rules of the SEC
and includes voting and investment power with respect to shares. Unless
otherwise indicated, the persons named in the table have sole voting and
sole investment control with respect to all shares beneficially owned.
(2) An aggregate of 21,284,994 shares (before the offering) are held by Lehman
Brothers Merchant Banking Partners II L.P., Lehman Brothers Offshore
Investment Partners II L.P., Lehman Brothers Capital Partners III L.P.,
Lehman Brothers Capital Partners IV L.P., Lehman Brothers MBG Partners 1998
(A) L.P., Lehman Brothers MBG Partners 1998 (B) L.P., Lehman Brothers MBG
Partners 1998 (C) L.P. and LB I Group Inc. Affiliates of Lehman Brothers
Merchant Banking Partners II L.P. have provided various services to us in
the past.
(3) Includes options exercisable within 60 days after January 1, 2003.
(4) Member of our management.
(5) All of the shares are held by the Altrudo Living Trust. Mr. Altrudo is the
beneficial owner of all of the shares. Mr. Altrudo is also a member of our
management team.
(6) All of the shares are held by the Irl Fredrick Engelhardt Revocable Trust.
Mr. Engelhardt is the beneficial owner of all of the shares and also our
Chief Executive Officer and a Director.
(7) All of the shares are held by the Sharon D. Fiehler Trust. Ms. Fiehler is
the beneficial owner of all of the shares. Ms. Fiehler is also an executive
officer of our company.
(8) All of the shares are held by the Richard A. Navarre Revocable Trust. Mr.
Navarre is the beneficial owner of all of the shares. Mr. Navarre is also
an executive officer of our company.
(9) All of the shares are held by the Roger B. Walcott, Jr. Revocable Trust.
Mr. Walcott and his spouse, as co-trustees, are the beneficial owners of
all of the shares. Mr. Walcott is also an executive officer of our company.
(10) All of the shares are held by the Indenture of Trust of Richard M. Whiting.
Mr. Whiting is the beneficial owner of all of the shares and also an
executive officer of our company.
(11) All of the shares are held by the Wickstra Living Trust. Mr. Wickstra and
his spouse, as co-trustees, are the beneficial owners of all of the shares.
Mr. Wickstra is also a member of our management team.
9
DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock consists of (1) 150 million shares of common
stock, par value $.01 per share, of which 52.4 million shares were outstanding
on January 1, 2003, (2) 10 million shares of preferred stock, par value $.01 per
share, of which no shares are issued or outstanding, (3) 40 million shares of
series common stock, par value $.01 per share, of which no shares are issued or
outstanding and (4) 1.5 million shares of Series A Junior Participating
Preferred Stock of which no shares are issued or outstanding. As of January 2,
2003, there were 123 holders of our common stock. The following description of
our capital stock and related matters is qualified in its entirety by reference
to our certificate of incorporation and by-laws.
The following summary describes elements of our certificate of
incorporation and by-laws.
COMMON STOCK
Holders of common stock are entitled to one vote per share on all matters
to be voted upon by the stockholders and vote together, as one class, with the
holders of our Series A Junior Participating Preferred Stock. The holders of
common stock do not have cumulative voting rights in the election of directors.
Holders of common stock are entitled to receive ratably dividends if, as and
when dividends are declared from time to time by our board of directors out of
funds legally available for that purpose, after payment of dividends required to
be paid on outstanding preferred stock or series common stock, as described
below. Upon liquidation, dissolution or winding up, any business combination or
a sale or disposition of all or substantially all of the assets, the holders of
common stock are entitled to receive ratably the assets available for
distribution to the stockholders after payment of liabilities and accrued but
unpaid dividends and liquidation preferences on any outstanding preferred stock
or series common stock. The common stock has no preemptive or conversion rights
and is not subject to further calls or assessment by us. There are no redemption
or sinking fund provisions applicable to the common stock.
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
Holders of shares of Series A Junior Participating Preferred Stock are
entitled to receive quarterly dividend payments equal to the greater of $1.00
per share or 100 times the per share dividend declared on our common stock.
Holders of Series A preferred stock are entitled to 100 votes per share on all
matters to be voted upon by the stockholders and vote together, as one class,
with the holders of common stock. Upon liquidation, dissolution or winding up,
holders of our Series A preferred stock are entitled to a liquidation preference
of $100 per share plus all accrued and unpaid dividends and distributions on the
Series A preferred stock or 100 times the amount to be distributed per share on
our common stock, whichever is greater. Liquidation distributions will be made
ratably with all shares ranking on parity with the Series A preferred stock. In
the event of any merger, consolidation, combination or other transaction in
which shares of our common stock are exchanged for other securities, cash or
property, each share of the Series A preferred stock will be exchanged for 100
times the amount received per share on our common stock. Each of these rights of
our Series A preferred stock is protected by customary anti-dilution provisions.
The Series A preferred stock is not redeemable and it will rank junior to any
other series of our preferred stock with respect to the payment of dividends and
the distribution of assets.
PREFERRED STOCK AND SERIES COMMON STOCK
Our certificate of incorporation authorizes our board of directors to
establish one or more series of preferred stock or series common stock. With
respect to any series of series common stock, our board of directors is
authorized to determine the terms and rights of that series, including:
- the designation of the series;
- the number of shares of the series, which our board may, except where
otherwise provided in the preferred stock or series common stock
designation, increase or decrease, but not below the number of shares
then outstanding;
- whether dividends, if any, will be cumulative or non-cumulative and the
dividend rate of the series;
10
- the dates at which dividends, if any, will be payable;
- the redemption rights and price or prices, if any, for shares of the
series;
- the terms and amounts of any sinking fund provided for the purchase or
redemption of shares of the series;
- the amounts payable on shares of the series in the event of any voluntary
or involuntary liquidation, dissolution or winding-up of the affairs of
our company;
- whether the shares of the series will be convertible into shares of any
other class or series, or any other security, of our company or any other
corporation, and, if so, the specification of the other class or series
or other security, the conversion price or prices or rate or rates, any
rate adjustments, the date or dates as of which the shares will be
convertible and all other terms and conditions upon which the conversion
may be made;
- restrictions on the issuance of shares of the same series or of any other
class or series; and
- the voting rights, if any, of the holders of the series.
Unless required by law or by any stock exchange, the authorized shares of
preferred stock and series common stock, as well as shares of common stock, are
available for issuance without further action by you.
Although we have no intention at the present time of doing so, we could
issue a series of preferred stock or series common stock that could, depending
on the terms of the series, impede the completion of a merger, tender offer or
other takeover attempt. We will make any determination to issue preferred stock
or series common stock based on our judgment as to the best interests of the
company and our stockholders. We, in so acting, could issue preferred stock or
series common stock having terms that could discourage an acquisition attempt or
other transaction that some, or a majority, of you might believe to be in your
best interests or in which you might receive a premium for your common stock
over the market price of the common stock.
AUTHORIZED BUT UNISSUED CAPITAL STOCK
Delaware law does not require stockholder approval for any issuance of
authorized shares. However, the listing requirements of the New York Stock
Exchange, which would apply so long as the common stock remains listed on the
New York Stock Exchange, require stockholder approval of certain issuances equal
to or exceeding 20% of the then-outstanding voting power or then-outstanding
number of shares of common stock. These additional shares may be used for a
variety of corporate purposes, including future public offerings, to raise
additional capital or to facilitate acquisitions.
One of the effects of the existence of unissued and unreserved common
stock, preferred stock or series common stock may be to enable our board of
directors to issue shares to persons friendly to current management, which
issuance could render more difficult or discourage an attempt to obtain control
of our company by means of a merger, tender offer, proxy contest or otherwise,
and thereby protect the continuity of our management and possibly deprive the
stockholders of opportunities to sell their shares of common stock at prices
higher than prevailing market prices.
ANTI-TAKEOVER EFFECTS OF PROVISIONS OF DELAWARE LAW AND OUR CHARTER AND BY-LAWS
Delaware Law
Our company is a Delaware corporation subject to Section 203 of the
Delaware General Corporation Law. Section 203 provides that, subject to certain
exceptions specified in the law, a Delaware corporation
11
shall not engage in certain "business combinations" with any "interested
stockholder" for a three-year period following the time that the stockholder
became an interested stockholder unless:
- prior to such time, our board of directors approved either the business
combination or the transaction which resulted in the stockholder becoming
an interested stockholder;
- upon consummation of the transaction which resulted in the stockholder
becoming an interested stockholder, the interested stockholder owned at
least 85% of our voting stock outstanding at the time the transaction
commenced, excluding certain shares; or
- at or subsequent to that time, the business combination is approved by
our board of directors and by the affirmative vote of holders of at least
66 2/3% of the outstanding voting stock which is not owned by the
interested stockholder.
Generally, a "business combination" includes a merger, asset or stock sale
or other transaction resulting in a financial benefit to the interested
stockholder. Subject to certain exceptions, an "interested shareholder" is a
person who together with that person's affiliates and associates owns, or within
the previous three years did own, 15% or more of our voting stock.
Under certain circumstances, Section 203 makes it more difficult for a
person who would be an "interested stockholder" to effect various business
combinations with a corporation for a three-year period. The provisions of
Section 203 may encourage companies interested in acquiring our company to
negotiate in advance with our board of directors because the stockholder
approval requirement would be avoided if our board of directors approves either
the business combination or the transaction which results in the stockholder
becoming an interested stockholder. These provisions also may have the effect of
preventing changes in our board of directors and may make it more difficult to
accomplish transactions which stockholders may otherwise deem to be in their
best interests.
Certificate of Incorporation; By-laws
Our certificate of incorporation and by-laws contain provisions that could
make more difficult the acquisition of the company by means of a tender offer, a
proxy contest or otherwise.
Classified Board. Our certificate of incorporation provides that our board
of directors will be divided into three classes of directors, with the classes
to be as nearly equal in number as possible. As a result, approximately
one-third of the board of directors will be elected each year. The
classification of directors will have the effect of making it more difficult for
stockholders to change the composition of our board. Our certificate of
incorporation provides that, subject to any rights of holders of preferred stock
or series common stock to elect additional directors under specified
circumstances, the number of directors will be fixed in the manner provided in
our by-laws. Our certificate of incorporation and by-laws provide that the
number of directors will be fixed from time to time exclusively pursuant to a
resolution adopted by the board, but must consist of not less than three
directors. In addition, our certificate of incorporation provides that, subject
to any rights of holders of preferred stock or series common stock and unless
the board otherwise determines, any vacancies will be filled only by the
affirmative vote of a majority of the remaining directors, though less than a
quorum.
Removal of Directors. Under Delaware General Corporation Law, unless
otherwise provided in our certificate of incorporation, directors serving on a
classified board may only be removed by the stockholders for cause. In addition,
our certificate of incorporation and by-laws provide that directors may be
removed only for cause and only upon the affirmative vote of holders of at least
75% of the voting power of all the outstanding shares of stock entitled to vote
generally in the election of directors, voting together as a single class.
Stockholder Action. Our certificate of incorporation and by-laws provide
that stockholder action can be taken only at an annual or special meeting of
stockholders and may not be taken by written consent in lieu of a meeting. Our
certificate of incorporation and by-laws provide that special meetings of
stockholders can be called only by our chief executive officer or pursuant to a
resolution adopted by our
12
board of directors. Stockholders are not permitted to call a special meeting or
to require that the board of directors call a special meeting of stockholders.
Advance Notice Procedures. Our by-laws establish an advance notice
procedure for stockholders to make nominations of candidates for election as
directors, or bring other business before an annual or special meeting of our
stockholders. This notice procedure provides that only persons who are nominated
by, or at the direction of our board of directors, the chairman of the board, or
by a stockholder who has given timely written notice to the secretary of our
company prior to the meeting at which directors are to be elected, will be
eligible for election as directors. This procedure also requires that, in order
to raise matters at an annual or special meeting, those matters be raised before
the meeting pursuant to the notice of meeting we deliver or by, or at the
direction of, our chairman or by a stockholder who is entitled to vote at the
meeting and who has given timely written notice to the secretary of our company
of his intention to raise those matters at the annual meeting. If our chairman
or other officer presiding at a meeting determines that a person was not
nominated, or other business was not brought before the meeting, in accordance
with the notice procedure, that person will not be eligible for election as a
director, or that business will not be conducted at the meeting.
Amendment. Our certificate of incorporation provides that the affirmative
vote of the holders of at least 75% of the voting power of the outstanding
shares entitled to vote, voting together as a single class, is required to amend
provisions of our certificate of incorporation relating to the prohibition of
stockholder action without a meeting, the number, election and term of our
directors and the removal of directors. Our certificate of incorporation further
provides that our by-laws may be amended by our board or by the affirmative vote
of the holders of at least 75% of the outstanding shares entitled to vote,
voting together as a single class.
Rights Agreement
On July 23, 2002, our board of directors adopted a preferred share purchase
rights plan. In connection with the rights plan, our board of directors declared
a dividend of one preferred share purchase right for each outstanding share of
our common stock. The rights dividend was paid on August 12, 2002 to the
stockholders of record on that date.
Purchase Price. Each right entitles the registered holder to purchase from
us one one-hundredth of a share of our Series A Junior Participating Preferred
Stock, or preferred shares, par value $0.01 per share, at a price of $110 per
one one-hundredth of a preferred share, subject to adjustment.
Flip-In. In the event that any person or group of affiliated or associated
persons acquires beneficial ownership of 15% or more of our outstanding common
stock, each holder of a right, other than rights beneficially owned by the
acquiring person (which will thereafter be void), will thereafter have the right
to receive upon exercise that number of shares of our common stock having a
market value of two times the exercise price of the right.
Flip-Over. If we are acquired in a merger or other business combination
transaction or 50% or more of our consolidated assets or earning power are sold
after a person or group acquires beneficial ownership of 15% or more of our
outstanding common stock, each holder of a right (other than rights beneficially
owned by the acquiring person, which will be void) will thereafter have the
right to receive that number of shares of common stock of the acquiring company
which at the time of such transaction will have a market value of two times the
exercise price of the right.
None of Lehman Brothers Holdings Inc., a Delaware corporation, Lehman
Brothers Inc., a Delaware corporation, LB I Group Inc., a Delaware corporation,
Lehman Brothers Merchant Banking Partners II Inc., a Delaware corporation,
Lehman Brothers Offshore Partners II Ltd, a Bermuda company, Lehman Brothers
Merchant Banking Partners II L.P., a Delaware limited partnership, Lehman
Brothers Offshore Investment Partners II L.P., a Bermuda exempted limited
partnership, Lehman Brothers Capital Partners III, L.P., a Delaware limited
partnership, Lehman Brothers Capital Partners IV, L.P., a Delaware limited
partnership, Lehman Brothers MBG partners 1998 (A) L.P., a Delaware limited
partnership,
13
Lehman Brothers MBG partners 1998 (B) L.P., a Delaware limited partnership, and
Lehman Brothers MBG partners 1998 (C) L.P., a Delaware limited partnership,
shall be deemed to be an acquiring person, as long as the Lehman parties and
their affiliates in the aggregate beneficially own no more than the greater of
(1) 15% or more of our common stock then outstanding and (2) 21,284,994 shares
of our common stock less the sum of all of our common stock disposed of by the
Lehman parties to non-affiliates after July 24, 2002.
Distribution Date. The distribution date is the earlier of
(1) 10 days following a public announcement that a person or group of
affiliated or associated persons have acquired beneficial ownership of 15%
or more of our outstanding common stock; or
(2) 10 business days (or such later date as may be determined by
action of our board of directors prior to such time as any person or group
of affiliated persons acquires beneficial ownership of 15% or more of our
outstanding common stock) following the commencement of, or announcement of
an intention to make, a tender offer or exchange offer the consummation of
which would result in the beneficial ownership by a person or group of 15%
or more of our outstanding common stock.
Transfer and Detachment. Until the distribution date, the rights will be
evidenced either by book entry in our direct registration system or, with
respect to any of our common stock certificates outstanding as of August 12,
2002, by such common stock certificate with a copy of the Summary of Rights
attached thereto. Until the distribution date (or earlier redemption or
expiration of the rights), the rights will be transferred with and only with the
common stock, and transfer of those shares will also constitute transfer of the
rights.
As soon as practicable following the distribution date, separate
certificates evidencing the rights will be mailed to holders of record of our
common stock as of the close of business on the distribution date and the
separate certificates evidencing the rights alone will thereafter evidence the
rights.
Exercisability. The rights are not exercisable until the distribution
date. The rights will expire at the earliest of (1) August 11, 2012, unless that
date is extended, (2) the time at which we redeem the rights, as described
below, or (3) the time at which we exchange the rights, as described below.
Adjustments. The purchase price payable, and the number of preferred
shares or other securities or property issuable, upon exercise of the rights are
subject to adjustment from time to time to prevent dilution in the event of
stock dividends, stock splits, reclassifications, or certain distributions with
respect to the preferred shares. The number of outstanding rights and the number
of one one-hundredths of a preferred share issuable upon exercise of each right
are also subject to adjustment if, prior to the distribution date, there is a
stock split of our common stock or a stock dividend on our common stock payable
in common stock or subdivisions, consolidations or combinations of our common
stock. With certain exceptions, no adjustment in the purchase price will be
required until cumulative adjustments require an adjustment of at least 1% in
the purchase price. No fractional preferred shares will be issued (other than
fractions which are integral multiples of one one-hundredth of a preferred
share, which may, at our election, be evidenced by depositary receipts) and, in
lieu thereof, an adjustment in cash will be made based on the market price of
the preferred shares on the last trading day prior to the date of exercise.
Preferred Shares. Preferred shares purchasable upon exercise of the rights
will not be redeemable. Each preferred share will be entitled to a minimum
preferential quarterly dividend payment of $1.00 per share but will be entitled
to an aggregate dividend of 100 times the dividend declared per share of common
stock. In the event of liquidation, the holders of the preferred shares will be
entitled to a minimum preferential liquidation payment of $100 per share but
will be entitled to an aggregate payment of 100 times the payment made per share
of common stock. Each preferred share will have 100 votes, voting together with
the common stock. Finally, in the event of any merger, consolidation or other
transaction in which shares of our common stock are exchanged, each preferred
share will be entitled to receive 100 times the amount received per share of
common stock. These rights are protected by customary anti-dilution provisions.
14
The value of the one one-hundredth interest in a preferred share
purchasable upon exercise of each right should, because of the nature of the
preferred shares' dividend, liquidation and voting rights, approximate the value
of one share of our common stock.
Exchange. At any time after any person or group acquiring beneficial
ownership of 15% or more of our outstanding common stock, and prior to the
acquisition by such person or group of beneficial ownership of 50% or more of
our outstanding common stock, our board of directors may exchange the rights
(other than rights owned by the acquiring person, which will have become void),
in whole or in part, at an exchange ratio of one share of our common stock, or
one one-hundredth of a preferred share (subject to adjustment).
Redemption. At any time prior to any person or group acquiring beneficial
ownership of 15% or more of our outstanding common stock, our board of directors
may redeem the rights in whole, but not in part, at a price of $0.001 per right.
The redemption of the rights may be made effective at such time on such basis
with such conditions as our board of directors in its sole discretion may
establish. Immediately upon any redemption of the rights, the right to exercise
the rights will terminate and the only right of the holders of rights will be to
receive the redemption price.
Amendments. The terms of the rights may be amended by our board of
directors without the consent of the holders of the rights, including an
amendment to lower certain thresholds described above to not less than the
greater of (1) the sum of .001% and the largest percentage of our outstanding
common stock then known to us to be beneficially owned by any person or group of
affiliated or associated persons and (2) 10%, except that from and after such
time as any person or group of affiliated or associated persons acquires
beneficial ownership of 15% or more of our outstanding common stock, no such
amendment may adversely affect the interests of the holders of the rights.
Rights and Holders. Until a right is exercised, the holder thereof, as
such, will have no rights as a stockholder of our company, including, without
limitation, the right to vote or to receive dividends.
Anti-takeover Effects. The rights have certain anti-takeover effects. The
rights will cause substantial dilution to a person or group that attempts to
acquire us on terms not approved by our board of directors, except pursuant to
any offer conditioned on a substantial number of rights being acquired. The
rights should not interfere with any merger or other business combination
approved by our board of directors since the rights may be redeemed by us at the
redemption price prior to the time that a person or group has acquired
beneficial ownership of 15% or more of our common stock.
REGISTRAR AND TRANSFER AGENT
The registrar and transfer agent for the common stock is EquiServe Trust
Company, N.A.
LISTING
The common stock is listed on the New York Stock Exchange under the symbol
"BTU."
15
PLAN OF DISTRIBUTION
We are registering the shares of our common stock on behalf of the selling
stockholders. The selling stockholders may offer their shares of our common
stock at various times in one or more of the following transactions:
- to or through underwriting syndicates represented by managing
underwriters;
- through one or more underwriters without a syndicate for them to offer
and sell to the public;
- through dealers or agents; or
- to investors directly in negotiated sales or in competitively bid
transactions.
The prospectus supplement for the shares of common stock the selling
stockholders sell will describe that offering, including:
- the name or names of any underwriters;
- the purchase price and the proceeds to the selling stockholders from that
sale;
- any underwriting discounts and other items constituting underwriters'
compensation; and
- any discounts or concessions allowed or reallowed or paid to dealers.
UNDERWRITERS
If underwriters are used in the sale, we and the selling stockholders will
execute an underwriting agreement with those underwriters relating to the shares
of common stock that the selling stockholders will offer. Unless otherwise set
forth in the prospectus supplement, the obligations of the underwriters to
purchase the shares of common stock will be subject to conditions. The
underwriters will be obligated to purchase all of the shares of common stock if
any are purchased.
The shares of common stock subject to the underwriting agreement will be
acquired by the underwriters for their own account and may be resold by them
from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale. Underwriters may be deemed to have received compensation
from the selling stockholders in the form of underwriting discounts or
commissions and may also receive commissions from the purchasers of the common
stock for whom they may act as agent. Underwriters may sell the shares of common
stock to or through dealers. These dealers may receive compensation in the form
of discounts, concessions or commissions from the underwriters and/or
commissions from the purchasers for whom they may act as agent. Any discounts or
concessions allowed or reallowed or paid to dealers may be changed from time to
time.
AGENTS
The selling stockholders may also sell the shares of common stock through
agents designated by the selling stockholders from time to time. The selling
stockholders will name any agent involved in the offer or sale of the common
stock and will list commissions payable by the selling stockholders to these
agents in the prospectus supplement. These agents will be acting on a best
efforts basis to solicit purchases for the period of their appointment, unless
the selling stockholders state otherwise in the prospectus supplement.
DIRECT SALES
The selling stockholders may sell the shares of common stock directly to
purchasers. In this case, the selling stockholders will not engage underwriters
or agents in the offer and sale of the shares of common stock.
16
RULE 144
The selling stockholders also may sell all or a portion of their shares in
open market transactions in reliance upon Rule 144 under the Securities Act,
provided they meet the criteria and conform to the requirements of that rule.
INDEMNIFICATION
The selling stockholders may indemnify underwriters, dealers or agents, or
the controlling persons of any of them, who participate in the distribution of
common stock against certain liabilities, including liabilities under the
Securities Act of 1933 and agree to contribute to payments which these
underwriters, dealers or agents, or the controlling persons of any of them, may
be required to make.
VALIDITY OF OUR COMMON STOCK
The validity of the shares of common stock to be offered in this prospectus
will be passed upon for us by our counsel, Simpson Thacher & Bartlett, New York,
New York.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements and schedule included or incorporated by reference in our
annual report on Form 10-K for the nine months ended December 31, 2001, as set
forth in their report, which are incorporated by reference in this prospectus
and elsewhere in the registration statement. Our financial statements and
schedule are incorporated by reference in reliance on Ernst & Young LLP's
reports, given on their authority as experts in accounting and auditing.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We file annual, quarterly and current reports and other information with
the SEC. You may access and read our SEC filings, including the complete
registration statement of which this prospectus is a part and all of the
exhibits to it, through the SEC's Internet site at www.sec.gov. This site
contains reports and other information that we file electronically with the SEC.
You may also read and copy any document we file at the SEC's public reference
room located at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the
SEC at 1-800-SEC-0330 for further information on the public reference room.
We have filed with the SEC a registration statement under the Securities
Act with respect to the common stock offered by this prospectus. This
prospectus, which constitutes part of the registration statement, does not
contain all of the information presented in the registration statement and its
exhibits and schedules. Our descriptions in this prospectus of the provisions of
documents filed as exhibits to the registration statement or otherwise filed
with the SEC are only summaries of the terms of those documents that we consider
material. If you want a complete description of the content of the documents,
you should obtain the documents yourself by following the procedures described
above.
We have elected to "incorporate by reference" certain information into this
prospectus, which means we can disclose important information to you by
referring you to another document filed separately with the SEC. The information
incorporated by reference is deemed to be part of this prospectus.
We incorporate by reference our:
- annual report on Form 10-K for the nine months ended December 31, 2001,
filed with the SEC on March 12, 2002;
- quarterly report on Form 10-Q for the quarter ended March 31, 2002, filed
with the SEC on May 13, 2002;
17
- quarterly report on Form 10-Q for the quarter ended June 30, 2002, filed
with the SEC on August 7, 2002;
- quarterly report on Form 10-Q/A for the quarter ended September 30, 2002,
filed with the SEC on November 18, 2002;
- current reports on Form 8-K, filed with the SEC on April 9, 2002, July
23, 2002, July 23, 2002, July 24, 2002, October 17, 2002 and December 23,
2002;
- registration statement on Form 8-A filed with the SEC on July 24, 2002;
and
- proxy statement on Schedule 14A, filed with the SEC on April 1, 2002.
We are also incorporating by reference all other reports that we file with
the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
between the date of this prospectus and the date of the completion of any
offering. Any statement contained in a document incorporated or deemed to be
incorporated by reference in this prospectus will be deemed to be modified or
superseded for purposes of this prospectus to the extent that a statement
contained in this prospectus or in any other subsequently filed document which
also is or is deemed to be incorporated by reference in this prospectus modifies
or supersedes that statement. Any statement that is modified or superseded will
not be deemed, except as so modified or superseded, to constitute a part of this
prospectus.
You may request copies of the filings, at no cost, by telephone at (314)
342-3400 or by mail at: Peabody Energy Corporation, 701 Market Street, Suite
700, St. Louis, Missouri 63101, attention: Investor Relations.
18
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The actual and estimated expenses in connection with the offering, all of
which will be borne by Peabody Energy Corporation, are as follows:
SEC Registration Fee........................................ $ 23,298
Printing Expenses........................................... 50,000
Legal Fees.................................................. 75,000
Accounting Fee.............................................. 50,000
Miscellaneous............................................... $ 25,000
--------
Total....................................................... $223,298
========
ITEM 15. 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,
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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 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits
EXHIBIT
NO. DESCRIPTION OF EXHIBIT
------- ----------------------
1.1* Form of Underwriting Agreement.
4.1 Third Amended and Restated Certificate of Incorporation of
the Registrant (Incorporated by reference to Exhibit 3.1 of
the Registrant's Form S-1 Registration Statement No.
333-55412).
4.2 Amended and Restated By-Laws of the Registrant (Incorporated
by reference to Exhibit 3.2 to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended September 30,
2002, filed on November 14, 2002).
4.3 Certificate of Designations of Series A Junior Participating
Preferred Stock of the Registrant, filed with the Secretary
of State of the State of Delaware on July 24, 2002
(Incorporated by reference to Exhibit 3.1 to the
Registrant's Registration Statement on Form 8-A, filed on
July 24, 2002).
4.4 Specimen of stock certificate representing the Registrant's
common stock, $.01 par value (Incorporated by reference to
Exhibit 4.13 of the Registrant's Form S-1 Registration
Statement No. 333-55412).
4.5 Stockholders' Agreement dated as of May 19, 1998 among the
Registrant, Lehman Brothers Merchant Banking Partners II
L.P., Lehman Brothers Offshore Investment Partners II L.P.,
LB I Group Inc., Lehman Brothers Capital Partners III, L.P.,
Lehman Brothers Capital Partners IV, L.P., Lehman Brothers
MBG Partners 1998 (A) L.P. and certain members of the
Registrant's management (Incorporated by reference to
Exhibit 4.14 of the Registrant's Form S-1 Registration
Statement No. 333-55412).
4.6 Stockholders' Agreement dated as of July 23, 1998 among the
Registrant, Lehman Brothers Merchant Banking Partners II
L.P., Lehman Brothers Offshore Investment Partners II L.P.,
LB I Group Inc., Lehman Brothers Capital Partners III, L.P.,
Lehman Brothers Capital Partners IV, L.P., Lehman Brothers
MBG Partners 1998 (A) L.P., Co-Investment Partners, L.P.,
The Mutual Life Insurance Company of New York and Finlayson
Investments Pte Ltd. (Incorporated by reference to Exhibit
4.15 of the Registrant's Form S-1 Registration Statement No.
333-55412).
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EXHIBIT
NO. DESCRIPTION OF EXHIBIT
------- ----------------------
4.7 Registration Rights Agreement, dated as of December 2001,
among the Registrant, Lehman Brothers Merchant Banking
Partners II L.P., Lehman Brothers Offshore Investment
Partners II L.P., LB I Group Inc., Lehman Brothers Capital
Partners III, L.P., Lehman Brothers Capital Partners IV,
L.P., Lehman Brothers MBG Partners (A) L.P., Lehman Brothers
MBG Partners (B) L.P. and Lehman MBG Partners (C) L.P.
(Incorporated by reference to Exhibit 4.16 of the
Registrant's Form 10-K for the nine months ended December
31, 2001).
4.8 Rights Agreement, dated as of July 24, 2002, between the
Registrant 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
Registrant as Exhibit A, the form of Right Certificate as
Exhibit B and the Summary of Rights to Purchase Preferred
Shares as Exhibit C) (Incorporated by reference to Exhibit
4.1 to the Registrant's Registration Statement on Form 8-A,
filed on July 24, 2002).
5.1 Opinion of Simpson Thacher & Bartlett.
23.1 Consent of Simpson Thacher & Bartlett (included in Exhibit
5.1).
23.2 Consent of Ernst & Young LLP, Independent Auditors.
24.1 Power of Attorney (included on signature page).
---------------
* To be filed by a Current Report on Form 8-K pursuant to Regulation S-K, Item
601(b), if the shares of common stock are sold through one or more
underwriters.
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ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(a)(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, as amended (the "Act");
(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 Securities and Exchange Commission (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;
(2) That, for the purpose of determining any liability under the Act,
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.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Act, 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 this 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 Act
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 Commission such
indemnification is against public policy as expressed in the Act 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 Act and will be governed by the final adjudication of such issue.
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SIGNATURES
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-3 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, Missouri on January 15, 2003.
PEABODY ENERGY CORPORATION
BY: /s/ IRL F. ENGELHARDT
------------------------------------
IRL F. ENGELHARDT
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Irl F. Engelhardt, Richard A. Navarre and
Jeffery L. Klinger, or any one of them, his true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign any and all
amendments to the Registration Statement, including post-effective amendments,
and registration statements filed pursuant to Rule 462 under the Securities Act
of 1933, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, and does
hereby grant unto said attorneys in-fact and agents, and each of them, full
power and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys in-fact and agents, or any of them, or their or his
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 on the 15th day of January, 2003 by the
following persons in the capacities indicated:
SIGNATURE TITLE
--------- -----
/s/ IRL F. ENGELHARDT Chairman, Chief Executive Officer
----------------------------------------------------- and Director
Irl F. Engelhardt (Principal Executive Officer)
/s/ RICHARD A. NAVARRE Executive Vice President and
----------------------------------------------------- Chief Financial Officer
Richard A. Navarre (Principal Financial and Accounting Officer)
/s/ HENRY E. LENTZ Vice President, Assistant Secretary
----------------------------------------------------- and Director
Henry E. Lentz
/s/ BERNARD J. DUROC-DANNER Director
-----------------------------------------------------
Bernard J. Duroc-Danner
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SIGNATURE TITLE
--------- -----
/s/ ROGER H. GOODSPEED Director
-----------------------------------------------------
Roger H. Goodspeed
/s/ WILLIAM E. JAMES Director
-----------------------------------------------------
William E. James
/s/ WILLIAM C. RUSNACK Director
-----------------------------------------------------
William C. Rusnack
/s/ JAMES R. SCHLESINGER Director
-----------------------------------------------------
James R. Schlesinger
/s/ BLANCHE M. TOUHILL Director
-----------------------------------------------------
Blanche M. Touhill
/s/ ALAN H. WASHKOWITZ Director
-----------------------------------------------------
Alan H. Washkowitz
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