As filed with the Securities and Exchange Commission on March 12, 2002.
Registration No. 333-
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Form S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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PEABODY ENERGY CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
Delaware 1222 13-4004153
(State or Other (Primary Standard (I.R.S. Employer
Jurisdiction of Incorporation Industrial Classification Identification
or Organization) 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
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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. /_/
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CALCULATION OF REGISTRATION FEE
=====================================================================================================================
Proposed Maximum Proposed Maximum Amount of
Title of Each Class of Securities to be Amount to be Offering Price Aggregate Registration
Registered Registered(1) Per Unit(2) Offering Price(2) Fee
----------------------------------------------- ---------------- ------------------- ------------------- -------------
Common stock, par value $0.01 per share..... 10,000,000 $27.19 $271,900,000 $25,015
=============================================== ================ =================== =================== =============
(1) Includes shares subject to over-allotment options that may be issued to underwriters.
(2) 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 March 6, 2002, solely for purposes of calculating the registration
fee.
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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.
===============================================================================
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 March 12, 2002
PROSPECTUS
8,700,000 Shares
Peabody
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 March 11, 2002, the last reported sale price of our common
stock on the New York Stock Exchange was $29.45 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.
, 2002
TABLE OF CONTENTS
Page
About This Prospectus........................................................i
Cautionary Notice Regarding Forward-Looking Statements.......................i
The Company..................................................................1
Recent Developments..........................................................1
Risk Factors.................................................................2
Use of Proceeds.............................................................12
Selling Stockholders........................................................12
Description of Capital Stock................................................13
Plan of Distribution........................................................18
Validity of Our Common Stock................................................19
Experts.....................................................................19
Where You Can Find Additional Information...................................19
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:
o future outlook;
o anticipated capital expenditures;
o future cash flows and borrowings; and
o 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
i
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:
o general economic conditions;
o modification or termination of our long-term coal supply
agreements;
o reduction of purchases by major customers;
o transportation costs;
o risks inherent to mining;
o government regulation of the mining industry;
o replacement of recoverable reserves;
o implementation of new accounting standards;
o inflationary trends and interest rates; and
o other factors, including those discussed in "Risk Factors" and
"Recent Developments."
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 December 31, 2001, we sold 146.5 million tons of coal.
During this period, we sold coal to more than 250 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 December 31,
2001, we had 9.1 billion tons of proven and probable coal reserves,
approximately double the reserves of any other U.S. coal company.
We own majority interests in 33 coal operations located throughout
all major U.S. coal producing regions, with 72% of our coal sales in the nine
months ended December 31, 2001 shipped from the western United States and the
remaining 28% 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
79% of our sales volume in the nine months ended December 31, 2001 from
non-union mines.
For the nine months ended December 31, 2001, 94% of our sales were
to U.S. electricity generators, 4% were to the U.S. industrial sector and 2%
were to customers outside the United States. Approximately 83% of our coal
sales during the nine months ended December 31, 2001 were under long-term
contracts. As of December 31, 2001, nearly one billion tons of our future coal
production were committed under long-term contracts, with remaining terms
ranging from 1 to 14 years and an average volume-weighted remaining term of
approximately four years. As of March 1, 2002, we had 6 million tons and 65
million tons of expected production available for sale at market-based prices
in calendar year 2002 and 2003, respectively.
In addition to our mining operations, we market and trade coal and
emission allowances. Our total tons traded were 39.4 million for the nine
months ended December 31, 2001. Also, we are expanding in related energy
businesses that include coalbed methane production, transportation-related
services, third-party coal contract restructuring and participation in the
development of coal-based generating plants.
Our principal executive offices are located at 701 Market Street, St.
Louis, Missouri 63101-1826, telephone (314) 342-3400.
Recent Developments
On January 30, 2002, we announced our expectations that Adjusted
EBITDA for calendar year 2002 would be $475 million to $500 million and our
earnings per share would be $1.60 to $2.00 per share. These are
forward-looking statements and we refer you to page i for further information
about these kinds of statements.
In July 2001, we announced a change in our fiscal year end from
March 31 to December 31. This change became effective with respect to the
nine-month transition period ending December 31, 2001. References to "fiscal
year 2001" in this prospectus are to the year ended March 31, 2001.
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 December
31, 2001, 83% of our sales volume was sold under long-term coal supply
agreements. At December 31, 2001, our coal supply agreements had remaining
terms ranging from one to 14 years and an average volume-weighted remaining
term of approximately four 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. Failure of the parties to agree on a price under those provisions
may allow either party to terminate the contract. In past years, several of
our coal supply agreements have been renegotiated, resulting in the contract
prices being closer to the then-current market prices, thus leading to a
reduction in the revenues from those contracts. 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, a majority 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
2
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, we cannot predict whether the strength in
the coal market will continue. As a result, we 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, three 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 December 31, 2001, we derived 33% of our
total coal revenues from sales to our five largest customers. At December 31,
2001, we had 20 coal supply agreements with these customers that expire at
various times from 2002 to 2015. We are currently discussing the extension of
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.
Our financial performance could be adversely affected by our substantial debt.
Our financial performance could be affected by our substantial
indebtedness. As of December 31, 2001, we had total indebtedness of $1,031.1
million. We currently have total borrowing capacity under our and Black
Beauty's revolving credit facilities of $470.0 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
3
which, if not cured or waived, could have a material adverse effect on us.
Furthermore, substantially all of our assets 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 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.
4
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 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 2000, 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 the Kyoto Protocol could have a material adverse effect on our financial
condition or results of operations.
5
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 $1,032.5 million as
of December 31, 2001, $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 three 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.
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
December 31, 2001, we leased or had applied to lease a total of 66,796 acres
from the federal government. The limit could restrict our ability to lease
additional federal lands.
6
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.
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. Recent increases in coal prices could similarly 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 December 31, 2001, the United Mine Workers of America
represented approximately 35% of our employees, who produced 21% of our coal
sales volume in the United States during the nine months ended December 31,
2001. 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
7
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 December 31, 2001, we had outstanding surety bonds with
third parties for post-mining reclamation totaling $684.9 million.
Furthermore, we have an additional $223.7 million of surety bonds in place for
workers' compensation and retiree health care obligations and $111.6 million of
surety bonds securing coal leases. These bonds are typically renewable on a
yearly basis. Surety bond issuers and holders may not continue to renew the
bonds or refrain from demanding 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:
o lack of availability, higher expense or unfavorable market
terms of new surety bonds;
o 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
o the exercise by third-party surety bond issuers of their right
to refuse to renew the surety.
8
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 57% of our common stock. As a result, Lehman Brothers Merchant Banking
will continue to be able to control 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.
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. Recent 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 United States 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.
9
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.
One of our customers, Southern California Edison Company, had its
credit rating downgraded to non-investment grade as a result of the
electricity crisis in California in 2001. Southern California Edison, which
owns 56% of the Mohave Generating Station, and the other owners of the Mohave
Generating Station have a coal supply agreement that expires in 2005. For
fiscal year 2001 and the nine months ended December 31, 2001, we sold 4.8
million and 3.6 million tons of coal, respectively, to the Mohave Generating
Station. The owners of the Mohave Generating Station created a trust account
in early 2001 to fund the payment of coal under the coal supply agreement and
have advised us of their obligation, subject to certain conditions, to cure
any defaults of another owner. Our ability to continue to receive payment from
the Mohave Generating Station depends, in part, on the creditworthiness of
Southern California Edison. Failure to receive payment for Southern California
Edison's share of the Mohave Generating Station deliveries could adversely
affect our financial condition and results of operations. If the
creditworthiness of California utilities causes a general deterioration of the
creditworthiness of other utilities, our accounts receivable securitization
program could be adversely affected.
On April 6, 2001, Pacific Gas and Electric Company filed for Chapter
11 reorganization. We do not have any coal supply agreements with that
utility.
One of our trading counterparties, Enron North America, filed for
bankruptcy in December 2001. At December 31, 2001, we recorded a $6.6 million
pre-tax charge for trades with Enron North America. Subsequent to Enron's
bankruptcy, the creditworthiness of other trading counterparties has
deteriorated. If deterioration of the creditworthiness of other counterparties
continues, we 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 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.
10
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 March 8, 2002, we had approximately 52.0 million shares of
common stock outstanding. Of those shares, 27.1 million shares will be freely
tradeable after the effectiveness of this registration statement, assuming that
no over-allotment option is exercised by the underwriters in an underwritten
offering. 350,000 of those shares may be resold under Rule 144(k)
without regard to volume limitations and approximately 24.6 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 23.5 million shares after the sale of all shares of common stock being
registered in this registration statement, will have the ability to cause us to
register the resale of its shares under its registration rights agreement.
In addition, approximately 5.7 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 or, under
certain circumstances, in May 2002. We also expect that any awards that have
been or will be granted under our Long-Term Equity Incentive Plan will not
begin to vest until at least May 2002. 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 by May
25, 2002. 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 which could make it more difficult for stockholders to effect
certain corporate actions. 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.
11
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.
Selling Stockholders
The following table sets forth information concerning ownership of
our capital stock as of March 8, 2002 by each selling stockholder. As of March
8, 2002, there were 52.0 million shares of our common stock outstanding.
As of Immediately After
March 8, 2002 Shares to be this Offering
------------------------ sold in -----------------------
Name and Address of Beneficial Owner Shares(1) Percent Offering 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................ 29,399,994 56.5% 5,886,933 23,513,061 45.2%
Co-Investment Partners, L.P.
c/o Lexington Partners Inc.
660 Madison Avenue, 23rd Floor
New York, NY 10021................ 2,693,400 5.2% 2,693,400 0 0%
Ian S. Craig(3)(4)................... 87,173 * 11,639 75,534 *
George J. Holway(3)(4)............... 172,899 * 19,057 153,842 *
Paul H. Vining(3)(4)................. 221,995 * 23,493 198,502 *
Roger B. Walcott, Jr. (3)(4)......... 226,569 * 25,408 201,161 *
Richard M. Whiting(3)(4)(5).......... 226,115 * 25,408 200,707 *
Jiri Nemec(3)(4)..................... 71,430 * 9,164 62,266 *
John L. Wasik(3)(4).................. 66,761 * 5,498 61,263 *
----------------
* 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 29,399,994 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 March 12, 2002.
(4) Member of management.
(5) Director.
12
Description of Capital Stock
Our authorized capital stock consists of (1) 150 million shares of
common stock, par value $.01 per share, of which 52.0 million shares were
outstanding on March 8, 2002, (2) 10 million shares of preferred stock, par
value $.01 per share, of which no shares are issued or outstanding and (3) 40
million shares of series common stock, par value $.01 per share, of which no
shares are issued or outstanding. As of March 8, 2002, there were 161 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. 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.
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:
o the designation of the series;
o 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;
o whether dividends, if any, will be cumulative or non-cumulative
and the dividend rate of the series;
o the dates at which dividends, if any, will be payable;
13
o the redemption rights and price or prices, if any, for shares
of the series;
o the terms and amounts of any sinking fund provided for the
purchase or redemption of shares of the series;
o 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;
o 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;
o restrictions on the issuance of shares of the same series or of
any other class or series; and
o 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
14
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 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:
o 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;
o 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
o 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
15
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 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
16
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.
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."
17
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:
o to or through underwriting syndicates represented by managing
underwriters;
o through one or more underwriters without a syndicate for them
to offer and sell to the public;
o through dealers or agents; or
o 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:
o the name or names of any underwriters;
o the purchase price and the proceeds to the selling stockholders
from that sale;
o any underwriting discounts and other items constituting
underwriters' compensation; and
o 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
18
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.
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
19
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. 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.
20
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..................................... $25,015
Printing Expenses........................................ 50,000
Legal Fees............................................... 75,000
Accounting Fee........................................... 50,000
Miscellaneous............................................ 25,000
-------
Total.................................................... $225,015
=======
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 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 Eleven of the registrant's
certificate of incorporation includes such a provision.
21
Item 16. Exhibits and Financial Statement Schedules.
(a) Exhibits
Exhibit
No. Description of Exhibit
------- ----------------------
1.1* Form of Underwriting Agreement.
4.1 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).
4.2 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).
4.3 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).
4.4 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).
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 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.
22
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 and 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 Securities 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.
23
(c) Insofar as indemnification for liabilities arising under the
Securities 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 Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities 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
Securities Act and will be governed by the final adjudication of such issue.
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 on March 12, 2002.
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.
24
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed on the 12th day of March, 2002 by the
following persons in the capacities indicated:
Signature
/s/ IRL F. ENGELHARDT Chairman, Chief Executive Officer
-------------------------------------- and Director
Irl F. Engelhardt (Principal Executive Officer)
/s/ RICHARD M. WHITING President, Chief Operating Officer
-------------------------------------- and Director
Richard M. Whiting
/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
--------------------------------------
Henry E. Lentz and Director
/s/ BERNARD J. DUROC-DANNER Director
--------------------------------------
Bernard J. Duroc-Danner
/s/ ROGER H. GOODSPEED Director
--------------------------------------
Roger H. Goodspeed
/s/ FELIX P. HERLIHY Director
--------------------------------------
Felix P. Herlihy
/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