SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal period May 22, 2001 (date of inception) through December 31, 2001
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Commission File Number 1-16463
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Full title of the plan and the address of the plan, if different from that of
the issuer named below:
PEABODY ENERGY CORPORATION EMPLOYEE STOCK PURCHASE PLAN
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Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office:
PEABODY ENERGY CORPORATION
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701 MARKET STREET, ST. LOUIS, MISSOURI 63101-1826
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(Address of principal executive offices) (Zip Code)
TABLE OF CONTENTS
PAGE
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Report of Independent Auditors....................................................................................2
Financial Statements:
Statement of Net Assets Available for Benefits -
December 31, 2001...........................................................................................3
Statement of Changes in Net Assets Available for Benefits -
Period from May 22, 2001 (date of inception) through December 31, 2001......................................4
Notes to Financial Statements...............................................................................5
Signatures........................................................................................................9
Exhibit Index....................................................................................................10
Exhibit 23 - Consent of Independent Auditors.....................................................................11
REPORT OF INDEPENDENT AUDITORS
Plan Administrators and Participants
Peabody Energy Corporation Employee Stock Purchase Plan
We have audited the accompanying statement of net assets available for benefits
of the Peabody Energy Corporation Employee Stock Purchase Plan as of December
31, 2001 and the related statement of changes in net assets available for
benefits for the period from May 22, 2001 (date of inception) through December
31, 2001. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 2001 and the changes in its net assets available for benefits for
the period from May 22, 2001 (date of inception) through December 31, 2001, in
conformity with accounting principles generally accepted in the United States.
/s/ ERNST & YOUNG LLP
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Ernst & Young LLP
St. Louis, Missouri
June 14, 2002
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PEABODY ENERGY CORPORATION EMPLOYEE STOCK PURCHASE PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2001
ASSETS
Participant deposits due from Peabody Energy Corporation $ 1,048,492
LIABILITIES
Stock purchase payable 1,048,492
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NET ASSETS AVAILABLE FOR BENEFITS $ --
============
See accompanying notes to financial statements
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PEABODY ENERGY CORPORATION EMPLOYEE STOCK PURCHASE PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
PERIOD FROM MAY 22, 2001 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2001
ADDITIONS TO NET ASSETS:
Participant contributions $ 2,352,066
DEDUCTIONS FROM NET ASSETS:
Contributions held for future stock purchases (1,048,492)
Contributions used for stock purchases (1,303,574)
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NET CHANGE --
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of period --
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End of period $ --
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See accompanying notes to financial statements
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PEABODY ENERGY CORPORATION EMPLOYEE STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001
1. DESCRIPTION OF PLAN
The following general description of the Peabody Energy Corporation Employee
Stock Purchase Plan (the Plan) is provided for general information purposes
only. Participants should refer to the Plan document for complete information.
Peabody Energy Corporation (the Company) is the Plan sponsor.
The Plan is an employee stock purchase plan, established on May 22, 2001, to
enable eligible employees of the Company and certain of its subsidiaries to
purchase Peabody Energy Corporation common stock at a discount from the fair
market value. The purchase price is equal to 85 percent of the lower of the fair
market value of the stock as of the first business day or the last business day
of an offering period. Fair market value is determined as the closing price on
each of the applicable dates, as quoted on the NYSE. Purchased shares of common
stock are issued by the Company and are transferred to a brokerage account
(maintained by the Plan's custodian) outside of the Plan in the name of the
participant.
The year is divided into two offering periods, each six months in duration, the
first of which is April 1 through September 30 followed by October 1 through
March 31. The first offering period was May 22, 2001 through September 30, 2001,
with six-month offering periods thereafter. Subsequent offering periods
automatically commence unless otherwise specified by the Plan Administrator.
The Plan expires on May 22, 2011 and provides for the issuance of no more than
1,500,000 shares of the Company's common stock. The Plan, however, will
terminate when all shares available for issuance, as amended from time to time,
have been sold. The shares may be unissued shares or reacquired shares,
including shares purchased on the open market.
The Plan is intended to qualify as an "employee stock purchase plan" under
Section 423 of the U.S. Internal Revenue Code of 1986, as amended (the Code).
The Plan is not intended to be a qualified pension, profit-sharing or stock
bonus plan under Code Section 401(a), nor is it subject to the provisions of the
Employee Retirement Income Security Act of 1974, as amended.
Administration of the Plan
The Plan is administered by a committee appointed by the Peabody Energy
Corporation Board of Directors. Allecon Stock Associates, L.L.C. functions as
the recordkeeper and A.G. Edwards & Sons, Inc. functions as the custodian for
the Plan.
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Eligibility
Currently, employees of the Company or a participating subsidiary of the Company
are eligible to participate in the Plan if:
- their customary employment is more than 20 hours per week and they are
employed more than five months per year; and
- they own less than five percent of the total combined voting power of
all outstanding shares of all classes of securities of the Company.
Participation begins on the first day of the offering period.
Participant Accounts
A separate account is maintained by the custodian for each participant in the
Plan, reflecting that participant's share purchases and sales, purchase or sale
prices, dividends reinvested and investment gains and losses. Assets held in
participant accounts are neither assets of the Plan or the Company.
Contributions
The Plan allows participants to elect an after-tax contribution rate of 1% to
15% of the employee's eligible compensation, which includes straight time wages
or base salary (inclusively). Bonuses, incentive compensation, overtime,
commissions and shift premiums paid to an employee are not included in eligible
compensation. Plan participants may modify their contribution rate once during
each offering period. Contributions are made through payroll deductions and are
held by the Company until shares are purchased. Employees may not purchase more
than $25,000 worth of stock through the Plan in any one year; any contributions
in excess of this amount are refunded to the employee. No interest is paid on
contributions made during a purchase period. The Company does not make
contributions to the Plan.
Employee contributions are used to purchase shares of the Company's stock on the
purchase date, or the last business day of each offering period (each March 31
and September 30). If the purchase date is on a weekend or is a U.S. holiday on
which the NYSE is closed, the purchase date will be the previous business day of
the offering period in which the NYSE was open. Purchases are made in whole and
fractional shares. Purchases are made automatically, unless a participant
withdrawal is executed prior to the purchase date.
A participant may withdraw or discontinue their contributions to the Plan prior
to 15 days before the purchase date. When a withdrawal occurs, the participant
may either elect to have all contributions made during the offering period
refunded or leave all contributions deducted during the current offering period
to purchase stock at the end of the offering period. Any shares previously
purchased remain in the participant's account despite discontinuing
contributions or withdrawing from the Plan.
Sale of Stock
Shares purchased under the Plan are currently subject to a restriction period of
18 months from the date the shares are purchased. Shares may not be sold,
pledged or otherwise transferred during this 18-month restriction period.
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Dividends
Dividends paid on stock held in participant accounts are automatically
reinvested in additional shares or fractional shares of the Company's stock.
Shares purchased with dividends are priced at 100 percent of the fair market
value of the stock as of the date dividends are paid. There is no time
requirement for holding shares purchased with dividends.
2. ACCOUNTING POLICIES
Basis of Accounting
The financial statements of the Plan are maintained on the accrual basis of
accounting.
Plan Expense
Administrative fees and expenses of the Plan are paid by the Company.
Use of Estimates in Preparation of Financial Statements
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires the Plan Administrator and the
Company to make estimates and assumptions that affect the amounts reported in
the financial statements and accompanying notes. Actual results may differ from
these estimates.
3. PARTICIPANT DEPOSITS DUE FROM PEABODY ENERGY CORPORATION AND STOCK PURCHASE
PAYABLE
At December 31, 2001, the Plan had an obligation to purchase the Company's
common stock on behalf of the participants in an amount equal to the participant
contributions held on deposit by the Company. The liability is reflected in the
accompanying Statement of Net Assets Available for Benefits as "Stock purchase
payable." Amounts contributed by plan participants during the offering period
from October 1, 2001 to December 31, 2001 are reflected as "Participant deposits
due from Peabody Energy Corporation."
The offering period in place at December 31, 2001 terminated on March 31, 2002.
On April 1, 2002, the Plan purchased 94,869 shares of common stock at a total
cost of $1.9 million. All shares purchased were deposited directly to the
participants' accounts.
The Plan's initial offering period ran from May 22, 2001 through September 30,
2001. On October 1, 2001, the Plan purchased 63,636 shares of common stock at a
total cost of $1.3 million. All shares purchased were deposited directly to the
participants' accounts.
4. TAX STATUS
The Plan, and the rights of participants to make purchases thereunder, is
intended to qualify as an "employee stock purchase plan" under Section 423 of
the Code. The Plan is not qualified under Section 401(a) of the Code. Pursuant
to Section 423 of the Code, no income (other than dividends on shares held in
participant accounts) will be taxable to a participant until disposition of the
shares purchased under the Plan. Upon the disposition of the shares, the
participant will generally be subject to tax and the amount and character of the
tax will depend upon the holding
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period and disposition price. Dividends received on shares held in the
participant's account are taxable to the participant as ordinary income. The
Plan does not provide for income taxes.
5. PLAN MODIFICATIONS
The Peabody Energy Corporation Board of Directors may amend or suspend the Plan
at any time. However, no amendment can adversely affect participant rights under
the Plan in the current offering period.
Although it has not expressed any intent to do so, the Peabody Energy
Corporation Board of Directors may terminate the Plan at any time. If it does,
the Plan will terminate in its entirety, and no further purchase rights will be
granted or exercised and no further payroll contributions will be collected. In
the event of a termination of the Plan, all contributions held by the Plan would
be refunded to the Plan participants at the time of termination.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the plan
administrator of the Peabody Energy Corporation Employee Stock Purchase Plan has
duly caused this annual report to be signed on its behalf by the undersigned,
hereunto duly authorized.
Peabody Energy Corporation
Employee Stock Purchase Plan
Date: June 28, 2002 By: /s/ Sharon D. Fiehler
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Sharon D. Fiehler
Peabody Energy Corporation
Executive Vice President,
Human Resources & Administration
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EXHIBIT INDEX
The exhibits below are numbered in accordance with the Exhibit Table of Item 601
of Regulation S-K.
EXHIBIT
NUMBER DESCRIPTION
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23 Consent of Ernst & Young LLP, Independent Auditors
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