SECOND AMENDMENT TO
                           PEABODY ENERGY CORPORATION
                              EMPLOYMENT AGREEMENT
                              (FOR LISTED OFFICERS)

      THIS AMENDMENT (this "Amendment") is entered into as of the date set forth
on the signature page hereof, by and between Peabody Energy Corporation, a
Delaware corporation (the "Company") and Roger B. Walcott, Jr. (the
"Executive").

                                    RECITALS

      WHEREAS, the Company and Executive previously entered into that certain
Employment Agreement dated May 19, 1998 (the "Employment Agreement");

      WHEREAS, the Company deems it appropriate, for purposes of providing
Executive with adequate incentive to continue to serve in Executive's current
position with the Company, to provide Executive with added protection in the
event of certain corporate transactions;

      WHEREAS, pursuant to Section 10 of the Employment Agreement, the
Employment Agreement may be amended by written agreement of the parties thereto;

      NOW, THEREFORE, the parties hereto have agreed to amend the Employment
Agreement as follows:

                                       I.

      Section 6(1)(d)(i) of the Employment Agreement is hereby amended by
deleting the words "; provided, however, that such Gross-Up Payment shall not
exceed $1,217,326" at the end thereof.

                                       II.

      In all other respects, the Employment Agreement shall remain in full force
and effect.

      IN WITNESS WHEREOF, this Amendment has been executed and delivered by the
parties hereto.

                                         PEABODY ENERGY CORPORATION

                                         By: /s/ Irl F. Engelhardt
                                             __________________________________
                                             Irl F. Engelhardt
                                             Chairman & Chief Executive Officer


                                         /s/ Roger B. Walcott, Jr.
                                         ______________________________________
                                         Roger B. Walcott, Jr.

                                         June 15, 2004

Source: OneCLE Business Contracts.