UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 20, 2015
PEABODY ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
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Delaware | | 1-16463 | | 13-4004153 |
(State or other jurisdiction of incorporation or organization) | | (Commission File Number) | | (I.R.S. Employer Identification No.) |
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701 Market Street, St. Louis, Missouri | | 63101-1826 |
(Address of principal executive offices) | | (Zip Code) |
Registrant’s telephone number, including area code (314) 342-3400
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
In light of current business conditions and to align on a personal level with the Company’s ongoing cost reduction strategies, Gregory H. Boyce, the Chairman and Chief Executive Officer, and Glenn L. Kellow, the President and Chief Executive Officer-elect, requested a voluntary and temporary base salary reduction for the remainder of calendar year 2015. Following those requests, on April 21, 2015 and April 20, 2015, respectively, Peabody Energy Corporation (the “Company”) entered into letter agreements (the “Letter Agreements”) with each of Messrs. Boyce and Kellow to temporarily reduce his base salary by 10 percent for the period from May 1, 2015 through December 31, 2015.
As provided in his Letter Agreement, Mr. Boyce’s base salary will be reduced from $1,225,660 per annum to $1,103,094 per annum for the period from May 1, 2015 through June 30, 2015, and from $900,000 per annum to $810,000 per annum for the period from July 1, 2015 through December 31, 2015. As provided in his Letter Agreement, Mr. Kellow’s base salary will be reduced from $950,000 per annum to $855,000 per annum for the period from May 1, 2015 through December 31, 2015. Both Letter Agreements provide that the temporary base salary reductions will automatically end on December 31, 2015, and thereafter the base salary amounts payable pursuant to existing agreements with Messrs. Boyce and Kellow will be paid in an unreduced manner.
The temporary base salary reductions contemplated by the Letter Agreements will also have an ancillary effect on the benefits available to Messrs. Boyce and Kellow under certain of the Company’s salary-based benefit plans and programs.
The foregoing description is only a summary of certain provisions of the Letter Agreements, and is qualified in its entirety by reference to the Letter Agreements themselves, which are filed as Exhibit 10.1 and 10.2, respectively, and which are incorporated by reference herein.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
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Exhibit No. | Description of Exhibit |
10.1 | Letter Agreement between Peabody Energy Corporation and Gregory H. Boyce dated April 21, 2015. |
10.2 | Letter Agreement between Peabody Energy Corporation and Glenn L. Kellow dated April 20, 2015. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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April 21, 2015 | By: | /s/ Bryan L. Sutter | |
| | Name: | Bryan L. Sutter | |
| | Title: | Assistant Secretary | |
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EXHIBIT INDEX
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Exhibit No. | Description of Exhibit |
10.1 | Letter Agreement between Peabody Energy Corporation and Gregory H. Boyce dated April 21, 2015. |
10.2 | Letter Agreement between Peabody Energy Corporation and Glenn L. Kellow dated April 20, 2015. |
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PEABODY ENERGY |
Peabody Plaza |
701 Market Street |
St. Louis, MO 63101-1826 |
314.342.3478 |
ANDREW P. SLENTZ
Executive Vice President
Chief Human Resources Officer
April 20, 2015
Mr. Gregory H. Boyce
Chairman and CEO
Peabody Energy Corporation
701 Market Street
St. Louis, MO 63101
Dear Greg,
The purpose of this letter (this “Letter”) is to inform you of changes to your compensation effective May 1, 2015 (the “Effective Date”). As of the date hereof, your “CEO Base Salary” (as defined in Section 3(a) of your Amended and Restated Transition Agreement with Peabody Energy Corporation (the “Company”) dated as of May 8, 2014 (your “Transition Agreement”)) is $1,225,660 per annum (your “Current CEO Base Salary”). As of July 1, 2015, your “Executive Chairman Base Salary” (as defined in Section 3(a) of your Transition Agreement) is $900,000 per annum (your “Current Executive Chairman Base Salary”). The Current CEO Base Salary and the Current Executive Chairman Base Salary are referred to herein together as your “Base Salary.” Any capitalized terms not otherwise defined herein shall have the same meaning given to such terms in your Transition Agreement.
As you know, the Transition Agreement extends the Term of Employment set forth in your 2009 Restated Employment Agreement with the Company effective December 31, 2009 (your “Employment Agreement”). Section 3(d) of your Transition Agreement states that in all respects not specifically described otherwise in Sections 3(a), 3(b), or 3(c) of your Transition Agreement, your Base Salary shall be governed by the terms of Section 3.1, 3.2 and 3.3 of your Employment Agreement. Section 3.1 of your Employment Agreement permits a Special Committee of the Board (the “Special Committee”) to review your Base Salary, in good faith, at least annually in accordance with the Company’s customary procedures and practices regarding the salaries of senior executives. The Special Committee may also adjust your Base Salary following such review.
Based upon your request for a temporary reduction of your base salary, the Special Committee reviewed your CEO Base Salary and Executive Chairman Base Salary. Subject to your approval (which shall be evidenced by signing below), beginning on the Effective Date, each of your CEO Base Salary and Executive Chairman Base Salary shall be reduced by ten percent (10%) for the remainder of the 2015 calendar year, so that your Base Salary for the period from May 1, 2015 through June 30, 2015 shall be $1,103,094 per annum (your “New CEO Base Salary”) and your Base Salary from July 1,
Mr. Gregory H. Boyce
April 20, 2015
Page 2
2015 through December 31, 2015 shall be $810,000 per annum (your “New Executive Chairman Base Salary”). Your New CEO Base Salary and New Executive Chairman Base Salary will each be effective on a prospective basis. Effective as of January 1, 2016, the reduction in Base Salary described in this Letter shall end and the compensation set forth in the Transition Agreement shall once again be in effect.
Notwithstanding the reductions in your Base Salary described above, (a) your target Bonus opportunity for the first six months of calendar year 2015 will be 120% of your Current CEO Base Salary and your maximum Bonus opportunity for such period will be 240% of your Current CEO Base Salary, and (b) your target Bonus opportunity for the last six months of calendar year 2015 will be 100% of your Current Executive Chairman Base Salary and your maximum Bonus opportunity for such period will be 200% of your Current Executive Chairman Base Salary, each as described in Section 3(b) of your Transition Agreement (and, if applicable, Section 4(d)(iii) of the Transition Agreement).
Your New CEO Base Salary and New Executive Chairman Base Salary, as applicable, will be used to determine your eligibility for benefits and perquisites under Section 3(e) of your Transition Agreement and Section 4 of your Employment Agreement.
Additionally, by signing this Letter, you agree that the reduction in your Base Salary described in this Letter shall not mean that the Company is failing to provide you with any payment or employee benefit or perquisite due pursuant to your Transition Agreement. Furthermore, you agree that the changes described in this Letter constitute an amendment to your Transition Agreement. Except as modified hereby, your Transition Agreement and the surviving provisions of your Employment Agreement remain in full force and effect.
Greg, thank you for your display of leadership and recognition of the Company’s situation in these challenging times. Please indicate your agreement to, and acknowledgement of, the changes described in this Letter by signing below.
Sincerely,
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/s/ William Coley | |
William Coley | |
Chairman of the Compensation Committee of the Board of Directors of Peabody Energy Corporation |
Agreed to and accepted this 21st day of April, 2015.
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By: | /s/ Gregory H. Boyce |
| Gregory H. Boyce |
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PEABODY ENERGY |
Peabody Plaza |
701 Market Street |
St. Louis, MO 63101-1826 |
314.342.3478 |
ANDREW P. SLENTZ
Executive Vice President
Chief Human Resources Officer
April 20, 2015
Mr. Glenn L. Kellow
President & Chief Operating Officer - Elect
Peabody Energy Corporation
701 Market Street
St. Louis, MO 63101
Dear Glenn,
The purpose of this letter (this “Letter”) is to inform you of changes to your compensation effective May 1, 2015 (the “Effective Date”). As of the date hereof, your “Base Salary” (as defined in Section 3.1 of your Employment Agreement with Peabody Energy Corporation (the “Company”) dated as of August 21, 2013, as amended by that certain side letter agreement between you and the Company dated as of January 27, 2015 (collectively, your “Employment Agreement”)) is $950,000 per annum (your “Current Base Salary”). Any capitalized terms not otherwise defined herein shall have the same meaning given to such terms in your Employment Agreement.
As you know, Section 3.1 of your Employment Agreement permits the Compensation Committee, in consultation with the Board, to review your Base Salary, in good faith, at least annually in accordance with the Company’s customary procedures and practices regarding the salaries of senior executives. The Compensation Committee, in consultation with the Designated Person may also adjust your Base Salary following such review.
Based upon your request for a temporary reduction of your base salary, the Compensation Committee, in consultation with the Board, reviewed your Current Base Salary. Subject to your approval (which shall be evidenced by signing below), beginning on the Effective Date, your Current Base Salary shall be reduced by ten percent (10%) for the remainder of the 2015 calendar year, so that your Base Salary for purposes of Section 3.1 of your Employment Agreement for the remainder of 2015 shall be $855,000 per annum (your “New Base Salary”). Your New Base Salary will be effective on a prospective basis. Effective as of January 1, 2016, the reduction in Base Salary described in this Letter shall end and your Base Salary as determined under the Employment Agreement shall once again be in effect.
Mr. Glenn L. Kellow
April 20, 2015
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Notwithstanding the reduction in your Base Salary described above, your target Bonus opportunity for calendar year 2015 will be 110% of your Current Base Salary as described in Section 3.2 of your Employment Agreement. In addition, in the event your employment is terminated by you for Good Reason or by the Company for a reason other than for Cause, any Severance Payment payable to you pursuant to Section 6.2(b) of your Employment Agreement shall be computed using your Current Base Salary. Otherwise, your New Base Salary will be used to determine your eligibility for benefits and perquisites under Section 4.1 of your Employment Agreement.
Additionally, by signing this Letter, you agree that the reduction in your Base Salary described in this Letter shall not constitute Good Reason under Section 6.2(d) of your Employment Agreement. Furthermore, you agree that the changes described in this Letter constitute an amendment (as described in Section 11 of your Employment Agreement) to your Employment Agreement. Except as modified hereby, the Employment Agreement remains in full force and effect.
Glenn, thank you for your display of leadership and recognition of the Company’s situation in these challenging times. Please indicate your agreement to, and acknowledgement of, the changes described in this Letter by signing below.
Sincerely,
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/s/ William Coley | |
William Coley | |
Chairman of the Compensation Committee of the Board of Directors of Peabody Energy Corporation |
Agreed to and accepted this 20 day of April, 2015.
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By: | /s/ Glenn L. Kellow |
| Glenn L. Kellow |