8-K

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): October 29, 2007

Patriot Coal Corporation

(Exact name of registrant as specified in its charter)

Delaware	001-33466	20-5622045
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)
12312 Olive Boulevard, Suite 400 St. Louis, Missouri		63141
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (314) 542-2109

Not Applicable

Former name or former address, if changed since last report

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))

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Item 5.02. Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers

Appointment of John E. Lushefski to the Board of Directors

     On October 29, 2007, the Board of Directors of Patriot Coal Corporation (the “Company”) elected John E. Lushefski to serve as a director of the Company, effective immediately. There is no arrangement or understanding between Mr. Lushefski and any other person pursuant to which Mr. Lushefski was selected as a director. In connection with this election, the Board of Directors also appointed Mr. Lushefski as a member of the Audit Committee. The Board of Directors of the Company found that Mr. Lushefski is an independent director under Rule 303A.02 of the NYSE Listed Company Manual.

     We expect that Patriot will enter into indemnification agreements with each of the Company’s directors, including Mr. Lushefski, upon consummation of the spin-off of Patriot from Peabody Energy Corporation (“Peabody”). Consistent with the indemnification rights provided to directors under Patriot’s amended and restated certificate of incorporation, Patriot will indemnify and hold harmless each director to the fullest extent permitted or authorized by the General Corporation Law of the State of Delaware in effect on the date of the agreement or as such laws may be amended or replaced to increase the extent to which a corporation may indemnify its directors.

     Biographical information on Mr. Lushefski has previously been reported by the Company under the heading “Management” in the Company’s Information Statement, filed as Exhibit 99.1 to its Current Report on Form 8-K dated October 22, 2007.

Item 8.01. Other Events

Form of Extended Long-Term Incentive Restricted Stock Units Agreement

     The Company approved a form of Extended Long-Term Incentive Restricted Stock Units Agreement for grants to employees and service providers of Patriot, which grants are to be made after Patriot’s spin-off from Peabody. The agreement grants restricted stock units that vest over time as well as restricted stock units that vest based upon Patriot’s financial performance. The restricted stock units that vest over time will be 50% vested on the fifth anniversary of the date of grant, 75% vested on the sixth such anniversary and 100% vested on the seventh such anniversary. However, the restricted stock units that vest over time will fully vest sooner if a grantee terminates employment with or stops providing services to Patriot because of death or disability, or if a change in control occurs (as such term is defined in the Patriot Coal Corporation 2007 Long-Term Equity Incentive Plan (the “Equity Plan”)). The restricted stock units that vest according to Patriot’s financial performance vest according to a formula described in the form of Extended Long-Term Incentive Restricted Stock Units Agreement, the results of which are calculated on the December 31 following the fifth, sixth and seventh anniversaries of the grant date. All restricted stock units, regardless of whether they vest over time or based upon Patriot’s financial performance, will be forfeited if a grantee terminates employment with or stops providing services to Patriot for any reason other than death or disability prior to the time such restricted stock units become vested.

     A copy of the form of Extended Long-Term Incentive Restricted Stock Units Agreement is attached hereto as Exhibit 10.1 and is incorporated herein by reference.

Form of Extended Long-Term Incentive Non-Qualified Stock Option Agreement

     The Company approved a form of Extended Long-Term Incentive Non-Qualified Stock Option Agreement for grants to employees and service providers of Patriot to be made after Patriot’s spin-off from Peabody. The agreement provides that the option will become exercisable in three installments. The option shall be 50% exercisable on the fifth anniversary of the date of grant, 75% exercisable on the sixth such anniversary and 100% exercisable on the seventh such anniversary. However, the option will become fully exercisable sooner if a grantee terminates employment with or stops providing services to Patriot because of death or disability, or if a change in control occurs (as such term is defined in the Equity Plan). Any part of the option that is not exercisable will be terminated if a grantee terminates employment with or stops providing services to Patriot for any reason other than

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death or disability prior to the time such options have become vested and exercisable. No option can be exercised more than ten years after the date of grant, but the ability to exercise the option may terminate sooner upon the occurrence of certain events detailed in the form extended long-term incentive non-qualified stock option agreement.

     A copy of the form of Extended Long-Term Incentive Non-Qualified Stock Option Agreement is attached hereto as Exhibit 10.2 and is incorporated herein by reference.

Form of Restricted Stock Agreement

     The Company approved a form of Restricted Stock Agreement for grants to employees and service providers of Patriot and its subsidiaries and affiliates, which grants are to be made after the spin-off of Patriot from Peabody. The agreement provides that the restricted stock will fully vest on the third anniversary of the date the restricted stock was granted to the employee or service provider. However, the restricted stock will fully vest sooner if a grantee terminates employment with or stops providing services to Patriot because of death or disability, or if a change in control occurs (as such term is defined in the Equity Plan). Any unvested restricted stock will be forfeited if a grantee terminates employment with or stops providing services to Patriot for any reason other than death or disability prior to the third anniversary of the grant date.

     A copy of the Form of Restricted Stock Agreement is attached hereto as Exhibit 10.3 and is incorporated herein by reference.

Form of Deferred Stock Units Agreement

     The Company approved a form of Deferred Stock Units Agreement for grants to non-employee directors of Patriot to be made after the spin-off of Patriot from Peabody. The agreement provides that the deferred stock units will fully vest on the first anniversary of the date of grant, but only if the non-employee director served as a director for the entire one-year period between the date of grant and the first anniversary of such grant. However, the deferred stock units will fully vest sooner if a non-employee director ceases to be a Patriot director due to death or disability, or if a change in control occurs (as such term is defined in the Equity Plan). Any unvested deferred stock units will be forfeited if a non-employee director terminates service with Patriot for any reason other than death or disability prior to the first anniversary of the grant date. After vesting, the deferred stock units will be settled by issuing shares of Patriot common stock equal to the number of deferred stock units, and such settlement will occur upon the earlier of (i) the non-employee director’s termination of service as a director or (ii) the third anniversary of the grant date or a different date chosen by the non-employee director, provided such date was chosen by the non-employee director prior to January 1 of the year in which such director received the grant.

     A copy of the form of Deferred Stock Units Agreement is attached hereto as Exhibit 10.4 and is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits

Exhibit No.	Description of Exhibit
10.1	Form of Extended Long-Term Incentive Restricted Stock Units Agreement
10.2	Form of Extended Long-Term Incentive Non-Qualified Stock Option Agreement
10.3	Form of Restricted Stock Agreement
10.4	Form of Deferred Stock Units Agreement

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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.

PATRIOT COAL CORPORATION
By:	/s/ Joseph W. Bean
	Name:	Joseph W. Bean
	Title:	Senior Vice President, General Counsel & Corporate Secretary

Dated: October 29, 2007

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Exhibit Index

Exhibit No.	Description of Exhibit
10.1	Form of Extended Long-Term Incentive Restricted Stock Units Agreement
10.2	Form of Extended Long-Term Incentive Non-Qualified Stock Option Agreement
10.3	Form of Restricted Stock Agreement
10.4	Form of Deferred Stock Units Agreement

EX-10.1

EXHIBIT 10.1
2007 Award

EXTENDED LONG-TERM INCENTIVE AWARD
RESTRICTED STOCK UNITS AGREEMENT

     THIS AGREEMENT, dated                           , 2007 (the “Grant Date”), is made by and between PATRIOT COAL CORPORATION, a Delaware corporation (the “Company”), and the undersigned employee or other service provider of the Company or a Subsidiary (as defined below) or an Affiliate (as defined below) of the Company (the “Grantee”).

     WHEREAS, the Company wishes to afford the Grantee the opportunity to own shares of its $.01 par value common stock (the “Common Stock”);

     WHEREAS, the Company wishes to carry out the Plan (as hereinafter defined), the terms of which are hereby incorporated by reference and made a part of this Agreement; and

     WHEREAS, the Administrator appointed to administer the Plan has determined that it would be to the advantage and best interest of the Company and its stockholders to grant the restricted stock units provided for herein to the Grantee as an incentive for increased efforts during his or her term of office with the Company or its Subsidiaries or Affiliates, and has advised the Company thereof and instructed the undersigned officer to grant the award;

     NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto agree as follows:

ARTICLE 1
DEFINITIONS

     Whenever the following terms are used in this Agreement, they shall have the meanings specified below. Capitalized terms that are not defined in this Agreement shall have the meanings specified in the Plan.

     Section 1.1 — “Affiliate” means any Person that (i) is directly or indirectly controlling, controlled by, or under common control with the Company and (ii) would, together with the Company, be classified as the “service recipient” (as defined in the regulations under Code Section 409A) with respect to the Grantee. For purposes of this definition, the term “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities, by contract or otherwise.

     Section 1.2 — “Code” means the Internal Revenue Code of 1986, as amended.

     Section 1.3 — “Person” means an individual, partnership, corporation, business trust, joint stock company, trust, unincorporated association, joint venture, governmental authority or other entity of whatever nature.

     Section 1.4 — “Plan” means the Patriot Coal Corporation 2007 Long-Term Equity Incentive Plan, as it may be amended from time to time.

     Section 1.5 — “Restricted Stock Units” means hypothetical shares of Common Stock granted to the Grantee as set forth on the signature page hereof upon the terms and subject to the conditions set forth in this Agreement.

     Section 1.6 — “Subsidiary” means any corporation that (i) is in an unbroken chain of corporations beginning with the Company if each of the corporations, or group of commonly controlled corporations, other than the last corporation in the unbroken chain, then owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain and (ii) would, together with the Company, be classified as a “service recipient” (as defined in the regulations under Code Section 409A) with respect to the Grantee.

     Section 1.7 — “Super-Performance Restricted Stock Units” means the Restricted Stock Units granted to the Grantee which shall vest, if at all, in accordance with Section 3.1(b).

     Section 1.8 — “Time-Based Restricted Stock Units” means the Restricted Stock Units granted to the Grantee which shall vest, if at all, in accordance with Section 3.1(a).

     Section 1.9 — Vesting Date” means the December 31st on or next following each of the Fifth, Sixth and Seventh anniversaries of the Grant Date.

ARTICLE 2
GRANT OF RESTRICTED STOCK UNITS

     Section 2.1 — Grant of Restricted Stock Units. For good and valuable consideration, the Company hereby grants to the Grantee the number Restricted Stock Units set forth on the signature page hereof upon the terms and subject to the conditions set forth in this Agreement. Each Restricted Stock Unit covered by this Agreement represents an unfunded and unsecured promise of the Company to issue to the Grantee, on or after the date the Restricted Stock Unit becomes fully vested, the Fair Market Value of one share of Common Stock.

     Section 2.2 — Transfer Restrictions. At any time prior to vesting in accordance with Article 3, the Restricted Stock Units or any interest therein cannot be directly or indirectly transferred, sold, assigned, pledged, hypothecated or otherwise disposed of. Upon vesting in accordance with Article 3, the Restricted Stock Units shall cease to be restricted and the Grantee shall have a non-forfeitable right to the number of shares of Common Stock that corresponds to the number of vested Restricted Stock Units.

     Section 2.3 — No Obligation of Employment or Service. Nothing in this Agreement or in the Plan shall confer upon the Grantee any right to continue in the service of the Company or any Subsidiary or Affiliate or interfere with or restrict in any way the rights of the Company and its Subsidiaries or Affiliates, which are hereby expressly reserved, to terminate the service of the Grantee at any time for any reason whatsoever.

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ARTICLE 3
VESTING OF RESTRICTED STOCK UNITS

     Section 3.1 — Restricted Stock Unit Vesting. The Grantee shall have a non-forfeitable right to a number of shares of Common Stock of a Fair Market Value equal to the value of his or her Restricted Stock Units upon the vesting of such Restricted Stock Units in accordance with this Section 3.

     (a) Time Vesting. Unless otherwise provided in this Agreement, the Time-Based Restricted Stock Units shall become vested as follows:

Date Time-Based Restricted	Percentage of Time-Based Restricted
Stock Units Become Vested	Stock Units That Become Vested
Fifth Anniversary of Grant Date		50	%
Sixth Anniversary of Grant Date		25	%
Seventh Anniversary of Grant Date		25	%

     (b) Super-Performance Vesting. Unless otherwise provided in this Agreement, as of any Vesting Date, the number of Super-Performance Restricted Stock Units that become vested shall equal the sum of (X) plus (Y) where:

     (X) equals the product of:

     (i) The number of Time-Based Restricted Stock Units that vest on the anniversary of the Grant Date on or immediately preceding such Vesting Date, as specified in Section 3.1(a); multiplied by

     (ii) The percentage, expressed as a decimal, of the performance grid achieved by the Grantee with respect to such Vesting Date, as determined by the Administrator pursuant to Exhibit A hereto; multiplied by

     (iii) The Multiplier applicable to the Grantee, determined in accordance with Section 3.1(c) below; and

     (Y) equals, in the case of the Vesting Dates on or next following the sixth and seventh anniversaries of the Grant Date, the number of additional Restricted Stock Units, if any, that would have vested on a prior Vesting Date had the Percentage of the Performance Grid achieved with respect to the current Vesting Date been achieved with respect to such prior Vesting Date.

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     (c) Multiplier Table:

	Number of Time-	Percentage of the
	Based Restricted	Performance Grid	Multiplier
Vesting Date	Stock Units that	Achieved on Such
	Become Vested on	Vesting Date
	Such Vesting Date
December 31st following fifth anniversary of Grant Date	Determined under Section 3.1(a)	0-100% as determined by the Administrator pursuant to Exhibit A		0.5
December 31st following sixth anniversary of Grant Date	Determined under Section 3.1(a)	0-100% as determined by the Administrator pursuant to Exhibit A		2.0
December 31st following seventh anniversary of Grant Date	Determined under Section 3.1(a)	0-100% as determined by the Administrator pursuant to Exhibit A		3.0

     The Administrator shall determine the percentage of the performance grid achieved with respect to any Vesting Date and specify such percentage in writing no later than two (2) months following such Vesting Date. The calculation used to determine the percentage of the performance grid achieved is set forth in Exhibit A hereto and is based on the percentage of the attainment of the EBITDA Goal, ROIC Goal and Leverage Goal, as determined by the Administrator.

     (d) For the avoidance of any doubt of the application of the vesting provisions contained in this Section 3.1, Exhibit B contains an example of a hypothetical calculation of the vesting provisions.

     Section 3.2 — Acceleration Events. Notwithstanding anything in this Article 3 to the contrary, the Time-Based Restricted Stock Units shall become fully vested (but only to the extent the Award has not otherwise terminated) upon (i) the Grantee’s Termination of Employment due to death or Disability or (ii) a Change of Control.

     Section 3.3 — Effect of Termination of Employment; Forfeiture. Except as otherwise provided in Section 3.2, no unvested Restricted Stock Unit shall become vested following the Grantee’s Termination of Employment, and any unvested Restricted Stock Units shall be immediately and automatically forfeited upon the earlier to occur of (a) Termination of Employment, or (b) the Vesting Date on or next following the seventh anniversary of the Grant Date.

ARTICLE 4
ISSUANCE OF STOCK

     Section 4.1 — Payment upon Vesting of Restricted Stock Units. Subject to the terms of this Agreement, following the vesting of Restricted Stock Units hereunder the Company shall

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issue to the Grantee (or, in the event of the Grantee’s death, to his or her estate or beneficiary) the number of shares of Common Stock of a Fair Market Value equal to the value of to the number of vested Restricted Stock Units (with one Restricted Stock Unit having a value equal to the Fair Market Value of one share of Common Stock). Such issuance shall be made to the Grantee in the form of shares of Common Stock (or cash only if required by Section 4.2) as soon as administratively practicable and, in no event later than two and one-half months following the end of the calendar year in which the Restricted Stock Units vest pursuant to Section 3 above.

     Section 4.2 — Conditions to Issuance of Stock Certificates. Shares of Common Stock that may be issued in accordance with Section 4.1 may be either previously authorized but unissued shares or issued shares that have been reacquired by the Company. In accordance with Treasury Regulation Section 1.409A-2(b)(7)(ii)), if the Administrator reasonably anticipates that issuing Common Stock on the Payment Date will violate federal securities laws or other applicable laws, the Company may delay issuing such Common Stock, provided that the Company issues such Common Stock on the earliest date at which the Administrator reasonably anticipates that such issuance will not violate federal securities laws or other applicable laws; provided, however that if such issuance will not occur within the time required by Section 4.1, the Company will pay such vested amount in the form of cash rather than shares of Common Stock no later than required by Section 4.1.

     Section 4.3 — Rights as Stockholder. The Grantee shall not be, and shall not have any of the rights or privileges of, a stockholder of the Company in respect of any shares of Common Stock corresponding to vested Restricted Stock Units granted hereunder unless and until the date (the “Issuance Date”) on which certificates representing such shares have been issued by the Company to or in the name of such Grantee. The Grantee shall not be entitled to receive any dividends paid with respect to the shares of Common Stock with respect to record dates occurring prior to the Issuance Date, and the Grantee shall not be entitled to vote the shares of Common Stock with respect to record dates for such voting rights occurring prior to the Issuance Date.

ARTICLE 5
MISCELLANEOUS

     Section 5.1 — Tax Consequences. Unless otherwise specifically provided in another agreement between the Company and the Grantee, the Company shall not be liable or responsible in any way for any tax consequences to the Grantee relating to the Restricted Stock Units, and the Grantee agrees to be responsible for, any and all taxes with respect to the Restricted Stock Units. The Company shall be entitled to require payment in cash or deduction from other compensation payable to Grantee of any sums required by Federal, state or local law to be withheld with respect to the Restricted Stock Units. The Administrator may, in its discretion and in satisfaction of the foregoing requirement, allow the Company to withhold shares of Common Stock issued pursuant to Article 4 (or allow the return of Shares) having a Fair Market Value equal to the sums required to be so withheld.

     Section 5.2 — Administration. The Administrator has the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules. All actions taken

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and all interpretations and determinations made by the Administrator in good faith shall be final and binding upon the Grantee, the Company and all other interested persons. No member of the Administrator shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan or the shares of Restricted Stock. In its absolute discretion, the Board of Directors may at any time and from time to time exercise any and all rights and duties of the Administrator under the Plan and this Agreement.

     Section 5.3 — Notices. Any notice to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of its Secretary, and any notice to be given to the Grantee shall be addressed to him or her at the address given beneath his or her signature hereto. By a notice given pursuant to this Section 5.3, either party may hereafter designate a different address for notices to be given to him, her or it. Any notice that is required to be given to the Grantee shall, if the Grantee is then deceased, be given to the Grantee’s personal representative if such representative has previously informed the Company of his, her or its status and address by written notice under this Section 5.3. Any notice shall be deemed duly given when enclosed in a properly sealed envelope or wrapper addressed as aforesaid, deposited (with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service.

     Section 5.4 — Titles. Titles and headings are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

     Section 5.5 — Pronouns. The masculine pronoun shall include the feminine and neuter, and the singular the plural, where the context so indicates.

     Section 5.6 — Applicability of Plan. The shares of Common Stock issued to the Grantee hereunder shall be subject to all of the terms and provisions of the Plan, to the extent applicable to such shares. In the event of any conflict between this Agreement and the Plan, the terms of the Plan shall control.

     Section 5.7 — Amendment. This Agreement may be amended only by a writing executed by the parties hereto that specifically states that it is amending this Agreement.

     Section 5.8 — Dispute Resolution. Any dispute or controversy arising under or in connection with this Agreement shall be resolved by arbitration. Arbitrators shall be selected, and arbitration shall be conducted, in accordance with the rules of the American Arbitration Association. The Company shall pay any legal fees in connection with such arbitration in the event that the Grantee prevails on a material element of his or her claim or defense. Notwithstanding anything in this Section 5.9 to the contrary, payments made under this Section 5.9 that are provided during one calendar year shall not affect the amount of such payments provided during a subsequent calendar year, payments under this Section 5.9 may not be exchanged or substituted for other forms of compensation to the Grantee, and any such reimbursement or payment will be paid within sixty (60) days after the Grantee prevails, but in no later than the last day of Grantee’s taxable year following the taxable year in which he incurred the expense giving rise to such reimbursement or payment. This Section 5.9 shall remain in effect throughout the Grantee’s employment and for a period of five (5) years following the Grantee’s Termination of Employment.

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     Section 5.9 — Governing Law. The laws of the State of Delaware shall govern the interpretation, validity and performance of the terms of this Agreement regardless of the law that might be applied under principles of conflicts of laws.

[SIGNATURE PAGE FOLLOWS]

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     IN WITNESS WHEREOF, this Agreement has been executed and delivered by the parties hereto, effective on the Grant Date.

GRANTEE	PATRIOT COAL CORPORATION
	By
[Grantee]
	Its
Address
Grantee’s Taxpayer Identification Number:	Aggregate number of Time-Based Restricted Stock Units granted hereunder:
-     -	Aggregate number of Super-Performance Restricted Stock Units granted hereunder:                      (this number will always equal 1.5 times the number of Time-Based Restricted Stock Units)
	The Time-Based Restricted Stock Units and Super-Performance Restricted Stock Units under this Agreement shall collectively be referred to as the Restricted Stock Units.

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EXHIBIT A

The percentage of the performance grid achieved as of the Vesting Date for each year is determined as follows:

(A) The percentage of the EBITDA Goal achieved multiplied by 1/3; plus
(B) The percentage of the ROIC Goal achieved multiplied by 1/3; plus
(C) The percentage of the Leverage Goal achieved multiplied by 1/3;

provided that the level achieved for any goal shall equal 0 if the level of achievement is less than 25%; provided further that 100% is the maximum level of achievement for any goal; provided further that the level of achievement between 25% and 100% is to be interpolated by the Administrator. For example, if the ROIC for a given year is 15%, the level of achievement of the ROIC Goal is 75% per the table below.

Patriot Extended LTIP
Performance Grid

	Achievement			Year 5			Year 6			Year 7
	%			2012			2013			2014
EBITDA Goal (1/3 weight)		25	%	$	798.5		$	1,028.5		$	1,281.5
(5,6 and 7 year cumulative)		50	%	$	871.1		$	1,122.0		$	1,398.0
(in millions)1		100	%	$	943.6		$	1,215.5		$	1,514.5
ROIC Goal (1/3 weight)		25	%		12	%		12	%		12	%
(5,6 and 7 Yr. EBITDA ROIC2)		50	%		14	%		14	%		14	%
		100	%		16	%		16	%		16	%

¹ EBITDA (also known as Adjusted EBITDA) — Income from continuing operations before deducting depreciation, depletion and amortization; asset retirement obligation expense; interest income and expense, income taxes and minority interests. For each of the years, EBITDA is determined as follows:

• 5-Yr Cumulative EBITDA — EBITDA as reported for fiscal/calendar years 2008 — 2012, on a cumulative basis

• 6 -Yr Cumulative EBITDA — EBITDA as reported for fiscal/calendar years 2008 — 2013, on a cumulative basis

• 7 -Yr Cumulative EBITDA — EBITDA as reported for fiscal/calendar years 2008 — 2014, on a cumulative basis

² EBITDA ROIC is calculated for 2008-2012, 2008-2013 and 2008-2014, as follows:

• 2008-2012 — 5-Yr Cumulative EBITDA divided by 5-years (2008 — 2012) Total Invested Capital

• 2008-2013 — 6-Yr Cumulative EBITDA divided by 6-years (2008 — 2013) Total Invested Capital.

• 2008-2014 — 7-Yr Cumulative EBITDA divided by 7-years (2008 — 2014) Total Invested Capital.

Total Invested Capital includes: Total Debt, Total Stockholder’s Equity, and Legacy Liabilities. Legacy Liabilities include the long-term portions of: asset retirement obligations, workers’ compensation liabilities (including traumatic and black lung liabilities), post-retirement benefit obligations, pension obligations and Combined Benefit Fund obligations.

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	Achievement			Year 5		Year 6		Year 7
	%			2012		2013		2014
Leverage Goal (1/3 weight)		25	%		< 2.50		< 2.50		< 2.50
(Debt/EBITDA)3		50	%		< 2.00		< 2.00		< 2.00
		100	%		< 1.50		< 1.50		< 1.50

³ Leverage Goal is calculated for 2012, 2013 and 2014 as follows:

• Year 5 (2012)- Total debt as of fiscal year/calendar year end 2012 divided by EBITDA as reported for the year ended 2012 as adjusted per the definition for EBITDA (in footnote 1).

• Year 6 (2013)- Total debt as of fiscal year/calendar year end 2013 divided by EBITDA as reported for the year ended 2013 5 as adjusted per the definition for EBITDA (in footnote 1).

• Year 7 (2014)- Total debt as of fiscal year/calendar year end 2014 divided by EBITDA as reported for the year ended 2014 as adjusted per the definition for EBITDA (in footnote 1).

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EXHIBIT B

Vesting Calculation Example

     Joe Smith is granted 1000 Time-Based Restricted Stock Units plus 1500 Super-Performance Restricted Stock Units for a total of 2500 Restricted Stock Units. Joe Smith works for Patriot for 10 years following the date of such grant so that all of the Time-Based Restricted Stock Units vest as follows in accordance with Section 3.1(a):

Date Time-Based	Percentage of Time-Based			Number of Time-Based Restricted Stock Units that
Restricted	Restricted			become vested on such anniversary of the Grant
Stock Units become	Stock Units that become			Date
vested	vested
Fifth anniversary of Grant Date		50	%		500
Sixth anniversary of Grant Date		25	%		250
Seventh anniversary of Grant Date		25	%		250
Total				1000 Time-Based Restricted Stock Units vest

     For the Super-Performance Restricted Stock Units, the Administrator certifies that 50% of the performance grid is achieved in accordance with Exhibit A as of the Vesting Date following the Fifth Anniversary of the Grant Date, 50% of the performance grid is achieved in accordance with Exhibit A as of the Vesting Date following the Sixth Anniversary of the Grant Date, and 100% of the performance grid is achieved in accordance with Exhibit A as of the Vesting Date following the Seventh Anniversary of the Grant Date. Joe Smith’s Super-Performance Restricted Stock Units shall vest as follows in accordance with Sections 3.1(b):

Vesting Date	Number of Time-		Percentage	Multiplier for number		Number of Super-Performance
	Based Restricted		of the	of Restricted		Restricted Stock Units that
	Stock Units that		Performance	Stock Units that		become vested pursuant to
	become vested on		Grid	become vested		calculation in Section 3.1(b)
	such anniversary		Achieved
December 31st following Fifth anniversary of Grant Date		500	50% (expressed as 0.5 for calculation)		0.5		125
December 31st following Sixth anniversary of Grant Date		250	50% (expressed as 0.5 for calculation)		2.0		250
December 31st following Seventh anniversary of Grant Date		250	100% (expressed as 1.0 for calculation)		3.0	750 for Seventh Year + additional 250 for Sixth Year* + additional 125 for Fifth Year*
Total						1500 Super-Performance Restricted Stock Units Vest

* The additional vesting in the Seventh Year for the two previous years occurs pursuant to the Section 3.1(b)(Y), which recalculates previous years vesting for Super-Performance Restricted Stock Units based on a higher percentage of the performance grid achieved in a subsequent year.

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EX-10.2

Exhibit 10.2

2007 Patriot Award

EXTENDED LONG-TERM INCENTIVE AWARD
NON-QUALIFIED STOCK OPTION AGREEMENT

     THIS AGREEMENT, dated                      ___, 2007 (the “Grant Date”) is made by and between PATRIOT COAL CORPORATION, a Delaware corporation (the “Company”), and the undersigned employee or other service provider of the Company or a Subsidiary (as defined below) or an Affiliate (as defined below) of the Company (the “Optionee”).

     WHEREAS, the Company wishes to afford the Optionee the opportunity to purchase shares of its $.01 par value common stock (the “Common Stock”);

     WHEREAS, the Company wishes to carry out the Plan (as hereinafter defined), the terms of which are hereby incorporated by reference and made a part of this Agreement; and

     WHEREAS, the Administrator appointed to administer the Plan has determined that it would be to the advantage and best interest of the Company and its stockholders to grant the Options provided for herein to the Optionee as an incentive for increased efforts during his or her term of office with the Company or its Subsidiaries or Affiliates, and has advised the Company thereof and instructed the undersigned officer to issue the options;

     NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto agree as follows:

ARTICLE 1
DEFINITIONS

     Whenever the following terms are used in this Agreement, they shall have the meanings specified below. Capitalized terms that are not defined in this Agreement shall have the meanings specified in the Plan.

     Section 1.1 — “Affiliate” means any Person that (i) is directly or indirectly controlling, controlled by, or under common control with the Company and (ii) would, together with the Company, be classified as the “service recipient” (as defined in the regulations under Code Section 409A) with respect to the Optionee. For purposes of this definition, the term “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities, by contract or otherwise.

     Section 1.2 — “Cause” means (i) any material and uncorrected breach by Optionee of the terms of his or her employment or service agreement with the Company, if any, including, but not limited to, engaging in action in violation of any restrictive covenants therein, (ii) any willful fraud or dishonesty of Optionee involving the property or business of the Company, (iii) a deliberate or willful refusal or failure of Optionee to comply with any major corporate policy of the Company which is communicated to Optionee in writing or (iv) Optionee’s conviction of, or plea of nolo contendere to, any felony if such conviction results in his or her imprisonment;

provided that with respect to clauses (i), (ii) or (iii) above, Optionee shall have 10 days following written notice of the conduct that is the basis for the potential termination for Cause within which to cure such conduct to prevent termination for Cause by the Company.

     Section 1.3 — “Code” means the Internal Revenue Code of 1986, as amended.

     Section 1.4 — “Good Reason” means (i) a reduction by the Company in Optionee’s base salary, (ii) a material reduction in the aggregate program of employee benefits and perquisites to which Optionee is entitled (other than a reduction which affects all executives), (iii) relocation by more than 50 miles from Optionee’s workplace, (iv) any material diminution or material adverse change in Optionee’s duties, responsibilities or reporting relationships, which causes Optionee to fall below the level of the executive team, or (v) a material decline in Optionee’s bonus opportunity.

     Section 1.5 — “Options” means the non-qualified options to purchase Common Stock granted under this Agreement.

     Section 1.6 — “Person” means an individual, partnership, corporation, business trust, joint stock company, trust, unincorporated association, joint venture, governmental authority or other entity of whatever nature.

     Section 1.7 — “Plan” means the Patriot Coal Corporation 2007 Long-Term Equity Incentive Plan, as it may be amended from time to time.

     Section 1.8 — “Retirement” means retirement at or after age 55 with at least ten (10) years of service with the Company.

     Section 1.9 — “Subsidiary” means any corporation that (i) is in an unbroken chain of corporations beginning with the Company if each of the corporations, or group of commonly controlled corporations, other than the last corporation in the unbroken chain, then owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain and (ii) would, together with the Company, be classified as a “service recipient” (as defined in the regulations under Code Section 409A) with respect to the Optionee.

ARTICLE 2
GRANT OF OPTIONS

     Section 2.1 — Grant of Options. For good and valuable consideration, the Company hereby grants to the Optionee an Option to purchase any part or all of the number of shares of Common Stock set forth on the signature page hereof upon the terms and subject to the conditions set forth in this Agreement.

     Section 2.2 — Exercise Price. The exercise price of the shares of Common Stock covered by the Option shall be such amount per share as set forth on the signature page hereof (which shall not be less than the Fair Market Value (as determined in accordance with guidance issued under Code Section 409A) of a share of Common Stock on the Grant Date), subject to adjustment pursuant to Section 6.1 of the Plan without commission or other charge.

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     Section 2.3 — No Obligation of Employment or Service. Nothing in this Agreement or in the Plan shall confer upon the Optionee any right to continue in the service of the Company or any Subsidiary or Affiliate or interfere with or restrict in any way the rights of the Company and its Subsidiaries or Affiliates, which are hereby expressly reserved, to terminate the service of the Optionee at any time for any reason whatsoever, with or without Cause.

ARTICLE 3
EXERCISABILITY OF OPTIONS

     Section 3.1 — Option Vesting. Unless otherwise provided in this Agreement, this Option shall become exercisable as follows:

Date Option	Percentage of shares of Common
becomes exercisable	Stock as to which Option is exercisable
Fifth anniversary of Grant Date		50	%
Sixth anniversary of Grant Date		75	%
Seventh anniversary of Grant Date		100	%

This Option shall become exercisable, pursuant to the schedule above, with respect to the nearest whole number of shares of Common Stock, as determined by the Administrator in its sole discretion.

     Section 3.2 — Acceleration Events. Notwithstanding anything in this Article 3 to the contrary, this Option shall become exercisable with respect to 100% of the shares of Common Stock (but only to the extent such Option has not otherwise terminated or become exercisable) upon (i) the Optionee’s Termination of Employment due to death or Disability, or (ii) a Change of Control.

     Section 3.3 — Effect of Termination of Employment. Except as otherwise provided in Section 3.2, the Option shall not become exercisable as to any additional shares of Common Stock following the Optionee’s Termination of Employment, and the portion of the Option which is then unexercisable shall terminate immediately.

     Section 3.4 — Expiration of Options. This Option may not be exercised to any extent by the Optionee after the first to occur of the following events:

     (a) The tenth anniversary of the date hereof; or

     (b) The first anniversary of the date of Termination of Employment (i) by reason of death or Disability; (ii) by the Company without Cause or (iii) by the Optionee for Good Reason; or

     (c) The fifth anniversary of the date of Termination of Employment by reason of Retirement; or

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     (d) The date of a Termination of Employment by the Company for Cause or by the Optionee without Good Reason; or

     (e) The date of a Termination of Employment for any reason if the Option exercise price per share of Common Stock, as set forth on the signature page hereof, is higher than the fair market value per share of Common Stock on the date of the Termination of Employment; or

     (f) Upon a Change of Control, if either

     (i) the Administrator terminates this Option by paying the Optionee an amount equal to the product of (x) the difference between the Change of Control price and the Exercise Price (unless the Exercise Price is greater than the Change in Control price, in which case this Option shall be terminated) and (y) the aggregate number of shares of Common Stock for which the Option is exercisable, or

     (ii) the Optionee is permitted to exercise his or her Option prior to the Change of Control.

ARTICLE 4
EXERCISE OF OPTION

     Section 4.1 — Person Eligible to Exercise. During the lifetime of the Optionee, only he or she, or in the event of Disability his or her representative or conservator, may exercise this Option or any portion thereof. After the death of the Optionee, the Option may, prior to the time when the Option becomes unexercisable under Section 3.4, be exercised by his or her beneficiary or estate or Permitted Transferee.

     Section 4.2 — Partial Exercise. Any exercisable portion of this Option or the entire Option, if then wholly exercisable, may be exercised in whole or in part at any time prior to the time when the Option or portion thereof becomes unexercisable under Section 3.4; provided, however, that any partial exercise shall be for whole shares of Common Stock only.

     Section 4.3 — Manner of Exercise. The Option, or any exercisable portion thereof, may be exercised solely by delivery to the Secretary of the Company or designatee or his or her office (or any third party designated by the Secretary of the Company to that effect) of all of the following prior to the time when the Option or such portion becomes unexercisable under Section 3.4:

     (a) Notice in writing signed by the Optionee or another person then entitled to exercise the Option or portion thereof, stating that the Option or portion thereof is thereby exercised, such notice complying with all applicable rules established by the Administrator;

     (b) Full payment (in cash, in shares of Common Stock, by check or by a combination thereof) for the shares with respect to which such Option or portion thereof is exercised;

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     (c) Full payment to the Company of all amounts which, under federal, state or local law, it is required to withhold upon exercise of the Option; and

     (d) In the event the Option or portion thereof is exercised pursuant to Section 4.1 by any person or persons other than the Optionee, appropriate proof of the right of such person or persons to exercise the option.

     Section 4.4 — Conditions to Issuance of Stock Certificates. The shares of Common Stock deliverable upon the exercise of an Option, or any portion thereof, may be either previously authorized but unissued shares or issued shares that have been reacquired by the Company. Such shares shall be fully paid and nonassessable. The Company shall not be required to issue or deliver any certificate or certificates for shares of Common Stock purchased upon the exercise of an Option or portion thereof prior to fulfillment of both of the following conditions:

     (a) The obtaining of approval or other clearance from any state or federal governmental agency that the Administrator, in its absolute discretion, determines to be necessary or advisable; and

     (b) The lapse of such reasonable period of time following the exercise of the Option as the Administrator may establish from time to time for administrative convenience.

     Section 4.5 — Rights as Stockholder. The holder of an Option shall not be, and shall not have any of the rights or privileges of, a stockholder of the Company in respect of any shares purchasable upon the exercise of the Option or any portion thereof unless and until the Option has been properly exercised and certificates representing such shares have been issued by the Company to such holder.

ARTICLE 5
MISCELLANEOUS

     Section 5.1 — Tax Consequences. Unless otherwise specifically provided in another agreement between the Company and the Optionee, the Company shall not be liable or responsible in any way for any tax (including any withholding tax) consequences relating to the Options, and the Optionee agrees to undertake to determine, and be responsible for, any and all tax (including any withholding tax) consequences to himself or herself with respect to the Options. Notwithstanding any other provision of this Agreement, shares of Common Stock shall not be released to the Optionee unless the Optionee has paid to the Company, or made arrangements satisfactory to the Company regarding the payment of, any federal, state, local or foreign taxes of any kind required by law to be withheld with respect to the Options.

     Section 5.2 — Administration. The Administrator has the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules. All actions taken and all interpretations and determinations made by the Administrator in good faith shall be final and binding upon the Optionee, the Company and all other interested persons. No member of the Administrator shall be personally liable for any action, determination or interpretation made in

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good faith with respect to the Plan or the Options. In its absolute discretion, the Board of Directors may at any time and from time to time exercise any and all rights and duties of the Administrator under the Plan and this Agreement.

     Section 5.3 — Options Not Transferable. Neither the Option nor any interest or right therein or part thereof shall be liable for the debts, contracts or engagements of the Optionee or his or her successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect; provided, however, that this Section 5.3 shall not prevent transfers by will or by the applicable laws of descent and distribution or transfers without consideration to a Permitted Transferee to the extent permitted by the Plan.

     Section 5.4 — Shares to Be Reserved. The Company shall at all times during the term of the Option reserve and keep available such number of shares of Common Stock as will be sufficient to satisfy the requirements of this Agreement.

     Section 5.5 — Notices. Any notice to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of its Secretary, and any notice to be given to the Optionee shall be addressed to him or her at the address given beneath his or her signature hereto. By a notice given pursuant to this Section 5.5, either party may hereafter designate a different address for notices to be given to him, her or it. Any notice that is required to be given to the Optionee shall, if the Optionee is then deceased, be given to the Optionee’s personal representative if such representative has previously informed the Company of his, her or its status and address by written notice under this Section 5.5. Any notice shall be deemed duly given when enclosed in a properly sealed envelope or wrapper addressed as aforesaid, deposited (with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service.

     Section 5.6 — Titles. Titles and headings are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

     Section 5.7 — Pronouns. The masculine pronoun shall include the feminine and neuter, and the singular the plural, where the context so indicates.

     Section 5.8 — Applicability of Plan. The Option and the shares of Common Stock issued to the Optionee upon exercise of the Option shall be subject to all of the terms and provisions of the Plan, to the extent applicable to the Option and such shares. In the event of any conflict between this Agreement and the Plan, the terms of the Plan shall control.

     Section 5.9 — Amendment. This Agreement may be amended only by a writing executed by the parties hereto that specifically states that it is amending this Agreement.

     Section 5.10 — Dispute Resolution. Any dispute or controversy arising under or in connection with this Agreement shall be resolved by arbitration. Arbitrators shall be selected, and arbitration shall be conducted, in accordance with the rules of the American Arbitration Association. The Company shall pay any legal fees in connection with such arbitration in the

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event that the Optionee prevails on a material element of his or her claim or defense. Notwithstanding anything in this Section 5.10 to the contrary, payments made under this Section 5.10 that are provided during one calendar year shall not affect the amount of such payments provided during a subsequent calendar year, payments under this Section 5.10 may not be exchanged or substituted for other forms of compensation to the Optionee, and any such reimbursement or payment will be paid within sixty (60) days after the Optionee prevails, but in no later than the last day of Optionee’s taxable year following the taxable year in which he incurred the expense giving rise to such reimbursement or payment. This Section 5.10 shall remain in effect throughout the Optionee’s employment and for a period of five (5) years following the Optionee’s Termination of Employment.

     Section 5.11 — Governing Law. The laws of the State of Delaware shall govern the interpretation, validity and performance of the terms of this Agreement regardless of the law that might be applied under principles of conflicts of laws.

[SIGNATURE PAGE FOLLOWS]

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     IN WITNESS WHEREOF, this Agreement has been executed and delivered by the parties hereto, effective on the Grant Date.

OPTIONEE	PATRIOT COAL CORPORATION
	By
[Optionee Name]
	Its
Address
Optionee’s Taxpayer Identification Number:	Aggregate number of shares of Common Stock for which the Option granted hereunder is exercisable:
-                    -
	Exercise Price per share of Common Stock: $

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EX-10.3

Exhibit 10.3

2007 Patriot Award

RESTRICTED STOCK AGREEMENT

     THIS AGREEMENT, dated                      ___, 2007 (the “Grant Date”), is made by and between PATRIOT COAL CORPORATION, a Delaware corporation (the “Company”), and the undersigned employee or other service provider of the Company or a Subsidiary (as defined below) or an Affiliate (as defined below) of the Company (the “Grantee”).

     WHEREAS, the Company wishes to afford the Grantee the opportunity to own shares of its $.01 par value common stock (the “Common Stock”);

     WHEREAS, the Company wishes to carry out the Plan (as hereinafter defined), the terms of which are hereby incorporated by reference and made a part of this Agreement; and

     WHEREAS, the Administrator appointed to administer the Plan has determined that it would be to the advantage and best interest of the Company and its stockholders to grant the shares of Common Stock provided for herein to the Grantee, on a restricted basis, as an incentive for increased efforts during his or her term of office with the Company or its Subsidiaries or Affiliates, and has advised the Company thereof and instructed the undersigned officer to grant the award;

     NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto agree as follows:

ARTICLE 1
DEFINITIONS

     Whenever the following terms are used in this Agreement, they shall have the meanings specified below. Capitalized terms that are not defined in this Agreement shall have the meanings specified in the Plan.

     Section 1.1 — “Affiliate” means any Person that (i) is directly or indirectly controlling, controlled by, or under common control with the Company and (ii) would, together with the Company, be classified as the “service recipient” (as defined in the regulations under Code Section 409A) with respect to the Grantee. For purposes of this definition, the term “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities, by contract or otherwise.

     Section 1.2 — “Code” means the Internal Revenue Code of 1986, as amended.

     Section 1.3 — “Person” means an individual, partnership, corporation, business trust, joint stock company, trust, unincorporated association, joint venture, governmental authority or other entity of whatever nature.

     Section 1.4 — “Plan” means the Patriot Coal Corporation 2007 Long-Term Equity Incentive Plan, as it may be amended from time to time.

     Section 1.5 — “Subsidiary” means any corporation that (i) is in an unbroken chain of corporations beginning with the Company if each of the corporations, or group of commonly controlled corporations, other than the last corporation in the unbroken chain, then owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain and (ii) would, together with the Company, be classified as a “service recipient” (as defined in the regulations under Code Section 409A) with respect to the Grantee.

ARTICLE 2
GRANT OF RESTRICTED STOCK

     Section 2.1 — Grant of Restricted Stock. For good and valuable consideration, the Company hereby grants to the Grantee the number of restricted shares of its Common Stock (the “Restricted Stock”) set forth on the signature page hereof upon the terms and subject to the conditions set forth in this Agreement.

     Section 2.2 — Transfer Restrictions. At any time prior to vesting in accordance with Article 3, the shares of Restricted Stock or any interest therein cannot be directly or indirectly transferred, sold, assigned, pledged, hypothecated or otherwise disposed of. Upon vesting in accordance with Article 3, the shares of Restricted Stock shall cease to be restricted and shall become non-forfeitable, and the Grantee shall own such shares free of all restrictions otherwise imposed by this Agreement.

     Section 2.3 — No Obligation of Employment or Service. Nothing in this Agreement or in the Plan shall confer upon the Grantee any right to continue in the service of the Company or any Subsidiary or Affiliate or interfere with or restrict in any way the rights of the Company and its Subsidiaries or Affiliates, which are hereby expressly reserved, to terminate the service of the Grantee at any time for any reason whatsoever.

ARTICLE 3
VESTING OF RESTRICTED STOCK

     Section 3.1 — Restricted Stock Vesting. Unless otherwise provided in this Agreement, the shares of Restricted Stock shall become vested and non-forfeitable on the third anniversary of the Grant Date.

     Section 3.2 — Acceleration Events. Notwithstanding anything in this Article 3 to the contrary, the shares of Restricted Stock shall become fully vested and non-forfeitable (but only to the extent the Award has not otherwise terminated) upon (i) the Grantee’s Termination of Employment due to death or Disability or (ii) a Change of Control.

     Section 3.3 — Effect of Termination of Employment. Except as otherwise provided in Section 3.2, no share of Restricted Stock shall become vested and non-forfeitable following the Grantee’s Termination of Employment, and any unvested and forfeitable share of Restricted Stock shall be immediately and automatically forfeited upon Termination of Employment.

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ARTICLE 4
RECEIPT OF STOCK

     Section 4.1 — Conditions to Issuance of Stock Certificates. The shares of Common Stock deliverable hereunder may be either previously authorized but unissued shares or issued shares that have been reacquired by the Company. Such shares shall be fully paid and nonassessable. The Company shall not be required to issue or deliver any certificate or certificates for shares of Common Stock granted hereunder prior to fulfillment of both of the following conditions:

     (a) The obtaining of approval or other clearance from any state or federal governmental agency that the Administrator, in its absolute discretion, determines to be necessary or advisable; and

     (b) The lapse of such reasonable period of time following the grant as the Administrator may establish from time to time for administrative convenience.

     Section 4.2 — Escrow. Upon issuance, the certificates for the shares of Restricted Stock shall be held in escrow by the Company until, and to the extent, the shares of Restricted Stock cease to be restricted and become non-forfeitable and the Grantee owns such shares free of all restrictions otherwise imposed by this Agreement. Any new, substituted or additional securities or other property described in and issued under Section 6.1 of the Plan shall immediately be delivered to the Company to be held in such escrow. Shares of Restricted Stock, together with any other assets or securities held in escrow hereunder, shall be (i) surrendered to the Company for cancellation upon forfeiture, if any, of such shares of Restricted Stock by the Grantee hereunder or (ii) subject to the provisions of Section 5.1, released to the Grantee to the extent the shares of Restricted Stock are no longer subject to any of the restrictions otherwise imposed by this Agreement or the Plan.

     Section 4.3 — Rights as Stockholder. The Grantee shall not be, and shall not have any of the rights or privileges of, a stockholder of the Company in respect of any shares of Common Stock granted hereunder unless and until the date (the “Issuance Date”) on which certificates representing such shares have been issued by the Company to or in the name of such Grantee (including certificates held in escrow by the Company in accordance with Section 4.2). The Grantee shall be entitled to receive any dividends paid with respect to the shares of Restricted Stock that become payable on or after the Issuance Date; provided, however, that no dividends shall be payable to or for the benefit of the Grantee for shares of Restricted Stock with respect to record dates occurring prior to the Issuance Date, or with respect to record dates occurring on or after the date, if any, on which the Grantee has forfeited those shares of Restricted Stock. Any dividends payable in accordance with this Section 4.3 shall be paid as soon as practicable after the date on which such dividends are declared and in no event later than the later of (i) the end of the calendar year in which such dividends are paid to shareholders of the same class of stock, or (ii) the fifteenth day of the third month following the date on which such dividends are paid to shareholders of the same class of stock.

     The Grantee shall be entitled to vote the shares of Restricted Stock on or after the Issuance Date to the same extent as would have been applicable to the Grantee if the shares of

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Restricted Stock had then been fully vested and non-forfeitable; provided, however, that the Grantee shall not be entitled to vote the shares of Restricted Stock with respect to record dates for such voting rights occurring prior to the Issuance Date, or with respect to record dates occurring on or after the date, if any, on which the Grantee forfeited those shares of Restricted Stock.

ARTICLE 5
MISCELLANEOUS

     Section 5.1 — Tax Consequences. Unless otherwise specifically provided in another agreement between the Company and the Grantee, the Company shall not be liable or responsible in any way for any tax (including any withholding tax) consequences relating to the shares of Restricted Stock, and the Grantee agrees to undertake to determine, and be responsible for, any and all tax (including any withholding tax) consequences to himself or herself with respect to the shares of Restricted Stock. Notwithstanding any other provision of this Agreement, the shares of Restricted Stock, together with any other assets or securities held in escrow hereunder, shall not be released to the Grantee unless the Grantee has paid to the Company, or made arrangements satisfactory to the Company regarding the payment of, any federal, state, local or foreign taxes of any kind required by law to be withheld with respect to the grant of the shares of Restricted Stock or the lapse of restrictions imposed by this Agreement.

     Section 5.2 — Section 83(b) Election. The Grantee understands that Code Section 83 may tax as compensation income the difference between the amount paid for the shares of Restricted Stock, if any, and the fair market value of the shares of Restricted Stock as of the date any restrictions on the shares of Restricted Stock lapse in the absence of an election under Code Section 83(b). In this context, “restriction” means the forfeitability of the shares of Restricted Stock pursuant to the terms of this Agreement.

     The Grantee understands that he or she may elect to be taxed at the time he or she receives the shares of Restricted Stock and while the shares of Restricted Stock are subject to restrictions rather than waiting to be taxed on the shares of Restricted Stock when and as the restrictions lapse. The Grantee realizes that he or she may choose this tax treatment by filing an election under Code Section 83(b) with the Internal Revenue Service within thirty (30) days after the Grant Date and by filing a copy of such election with his or her tax return for the tax year in which the Restricted Shares were subjected to the restrictions. THE GRANTEE UNDERSTANDS THAT FAILURE TO MAKE THIS FILING IN A TIMELY MANNER MAY RESULT IN THE RECOGNITION OF COMPENSATION INCOME BY THE GRANTEE, AS THE RESTRICTIONS LAPSE, ON ANY DIFFERENCE BETWEEN THE PURCHASE PRICE, IF ANY, AND THE FAIR MARKET VALUE OF THE SHARES OF RESTRICTED STOCK AT THE TIME SUCH RESTRICTIONS LAPSE. THE GRANTEE ACKNOWLEDGES THAT IT IS THE GRANTEE’S SOLE RESPONSIBILITY AND NOT THE COMPANY’S TO TIMELY FILE THE ELECTION UNDER CODE SECTION 83(b). THE GRANTEE ACKNOWLEDGES THAT HE OR SHE SHALL CONSULT HIS OR HER OWN TAX ADVISERS REGARDING THE ADVISABILITY OR NON-ADVISABILITY OF MAKING THE ELECTION UNDER CODE SECTION 83(b) AND ACKNOWLEDGES THAT HE OR SHE SHALL NOT RELY ON THE COMPANY OR ITS ADVISERS FOR SUCH ADVICE.

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     Section 5.3 — Administration. The Administrator has the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules. All actions taken and all interpretations and determinations made by the Administrator in good faith shall be final and binding upon the Grantee, the Company and all other interested persons. No member of the Administrator shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan or the shares of Restricted Stock. In its absolute discretion, the Board of Directors may at any time and from time to time exercise any and all rights and duties of the Administrator under the Plan and this Agreement.

     Section 5.4 — Notices. Any notice to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of its Secretary, and any notice to be given to the Grantee shall be addressed to him or her at the address given beneath his or her signature hereto. By a notice given pursuant to this Section 5.4, either party may hereafter designate a different address for notices to be given to him, her or it. Any notice that is required to be given to the Grantee shall, if the Grantee is then deceased, be given to the Grantee’s personal representative if such representative has previously informed the Company of his, her or its status and address by written notice under this Section 5.4. Any notice shall be deemed duly given when enclosed in a properly sealed envelope or wrapper addressed as aforesaid, deposited (with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service.

     Section 5.5 — Titles. Titles and headings are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

     Section 5.6 — Pronouns. The masculine pronoun shall include the feminine and neuter, and the singular the plural, where the context so indicates.

     Section 5.7 — Applicability of Plan. The shares of Common Stock issued to the Grantee hereunder shall be subject to all of the terms and provisions of the Plan, to the extent applicable to such shares. In the event of any conflict between this Agreement and the Plan, the terms of the Plan shall control.

     Section 5.8 — Amendment. This Agreement may be amended only by a writing executed by the parties hereto that specifically states that it is amending this Agreement.

     Section 5.9 — Dispute Resolution. Any dispute or controversy arising under or in connection with this Agreement shall be resolved by arbitration. Arbitrators shall be selected, and arbitration shall be conducted, in accordance with the rules of the American Arbitration Association. The Company shall pay any legal fees in connection with such arbitration in the event that the Grantee prevails on a material element of his or her claim or defense. Notwithstanding anything in this Section 5.9 to the contrary, payments made under this Section 5.9 that are provided during one calendar year shall not affect the amount of such payments provided during a subsequent calendar year, payments under this Section 5.9 may not be exchanged or substituted for other forms of compensation to the Grantee, and any such reimbursement or payment will be paid within sixty (60) days after the Grantee prevails, but in no later than the last day of Grantee’s taxable year following the taxable year in which he

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incurred the expense giving rise to such reimbursement or payment. This Section 5.9 shall remain in effect throughout the Grantee’s employment and for a period of five (5) years following the Grantee’s Termination of Employment.

     Section 5.10 — Governing Law. The laws of the State of Delaware shall govern the interpretation, validity and performance of the terms of this Agreement regardless of the law that might be applied under principles of conflicts of laws.

[SIGNATURE PAGE FOLLOWS]

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     IN WITNESS WHEREOF, this Agreement has been executed and delivered by the parties hereto, effective on the Grant Date.

GRANTEE	PATRIOT COAL CORPORATION
	By
[Grantee]
	Its
Address
Grantee’s Taxpayer Identification Number:                     -          -	Aggregate number of shares of Common Stock granted hereunder:

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EX-10.4

Exhibit 10.4

2008 Patriot Non-Employee
Director Award

DEFERRED STOCK UNITS AGREEMENT

     THIS AGREEMENT, dated                      ___, 2008 (the “Grant Date”), is made by and between PATRIOT COAL CORPORATION, a Delaware corporation (the “Company”), and the undersigned non-employee director of the Company (the “Grantee”).

     WHEREAS, the Company wishes to afford the Grantee the opportunity to own shares of Common Stock;

     WHEREAS, the Company wishes to carry out the Plan, the terms of which are hereby incorporated by reference and made a part of this Agreement; and

     WHEREAS, the Administrator of the Plan has determined that it would be to the advantage, and in the best interest, of the Company and its stockholders to grant Deferred Stock Units to the Grantee as an incentive for increased efforts during his or her term of office with the Company, and has advised the Company to grant Deferred Stock Units to the Grantee;

     NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto agree as follows:

ARTICLE 1
DEFINITIONS

     The following terms as used in this Agreement shall have the meanings specified below. Capitalized terms that are not defined in this Agreement shall have the meanings specified in the Plan.

     Section 1.1 — “Code” means the Internal Revenue Code of 1986, as amended.

     Section 1.2 — “Common Stock” means common stock, $0.01 par value, of the Company.

     Section 1.3 — Payment Date” means, as used with respect to a Deferred Stock Unit, the earlier of (i) the Specified Distribution Date and (ii) the date that is the thirtieth day following the date of Grantee’s Termination of Employment.

     Section 1.4 — “Plan” means the Patriot Coal Corporation 2007 Long-Term Equity Incentive Plan, as it may be amended from time to time.

     Section 1.5 — “Specified Distribution Date” means, as used with respect to a Deferred Stock Unit granted hereunder, the date that is the third anniversary of the Grant Date; provided that, as used with respect to a Deferred Stock Unit granted hereunder which the Participant has elected to defer in accordance with Section 5.7(d) of the Plan, the date specified as the “Specified Distribution Date” on the Deferral Election Form relating to such Deferred Stock Unit.

ARTICLE 2
GRANT OF DEFERRED STOCK UNITS

     Section 2.1 — Grant of Deferred Stock Units. For good and valuable consideration, the Company hereby grants to the Grantee a number of Deferred Stock Units set forth on the signature page hereof. Each Deferred Stock Unit granted hereunder constitutes a hypothetical share of Common Stock of the Company with a value on any given date equal to the Fair Market Value of a share of Common Stock on such date. Each Deferred Stock Unit granted hereunder represents an unfunded and unsecured promise of the Company to issue, in accordance with Article 4 below, a share of Common Stock for each vested Deferred Stock Unit.

     Section 2.2 — Transfer Restrictions. Prior to the issuance of Common Stock in accordance with Article 4, a Deferred Stock Unit or any interest therein cannot be directly or indirectly transferred, sold, assigned, pledged, hypothecated or otherwise disposed of, and any such attempt to do so shall be null and void.

     Section 2.3 — No Obligation of Service. Nothing in this Agreement or in the Plan shall confer upon the Grantee any right to continue in the service of the Company or interfere with or restrict in any way the rights of the Company to terminate the service of the Grantee.

ARTICLE 3
VESTING OF DEFERRED STOCK UNITS

     Section 3.1 — Deferred Stock Unit Vesting. Subject to Sections 3.2 and 3.3, the Deferred Stock Units shall become vested as follows, provided that the Grantee remains in the service of the Company during the entire period commencing on the Grant Date and ending on the date the Deferred Stock Units become vested:

Date Deferred	Percentage of Deferred
Stock Units become vested	Stock Units that are vested
First anniversary of Grant Date		100	%

     Section 3.2 — Acceleration Events. Notwithstanding the provisions of Section 3.1, the Deferred Stock Units shall become fully vested upon the earlier to occur of (i) the Grantee’s Termination of Employment due to death or Disability or (ii) a Change of Control.

     Section 3.3 — Effect of Termination of Employment. Except as otherwise provided in Section 3.2, no unvested Deferred Stock Unit shall become vested following the Grantee’s Termination of Employment, and unvested Deferred Stock Units shall be immediately and automatically forfeited upon the Grantee’s Termination of Employment.

ARTICLE 4
ISSUANCE OF STOCK

     Section 4.1 — Payment Following Vesting of Deferred Stock Units. Subject to the terms of this Agreement, the Company shall issue to the Grantee (or, in the event of the Grantee’s death, to his or her beneficiary or estate) a number of shares of Common Stock equal to the

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number of vested Deferred Stock Units granted hereunder. Subject to Section 4.2, such shares of Common Stock shall be issued to the Grantee on the Payment Date.

     Section 4.2 — Conditions to Issuance of Stock Certificates. Shares of Common Stock that may be issued in accordance with Section 4.1 may be either previously authorized but unissued shares or issued shares that have been reacquired by the Company. In accordance with Treasury Regulation Section 1.409A-2(b)(7)(ii)), if the Administrator reasonably anticipates that issuing Common Stock on the Payment Date will violate federal securities laws or other applicable laws, the Company may delay issuing such Common Stock, provided that the Company issues such Common Stock on the earliest date at which the Administrator reasonably anticipates that such issuance will not violate federal securities laws or other applicable laws.

     Section 4.3 — Rights as Stockholder. The Grantee shall not be, and shall not have any of the rights or privileges of, a stockholder of the Company in respect of any shares of Common Stock corresponding to Deferred Stock Units granted hereunder unless and until the date (the “Issuance Date”) on which certificates representing such shares have been issued by the Company to or in the name of such Grantee. The Grantee shall not be entitled to receive any dividends paid with respect to the shares of Common Stock with respect to record dates occurring prior to the Issuance Date, and the Grantee shall not be entitled to vote the shares of Common Stock with respect to record dates for such voting rights occurring prior to the Issuance Date.

ARTICLE 5
MISCELLANEOUS

     Section 5.1 — Tax Consequences. Unless otherwise specifically provided in another agreement between the Company and the Grantee, the Company shall not be liable or responsible for any tax of the Grantee relating to the Deferred Stock Units, and the Grantee agrees to be responsible for, any and all such taxes with respect to the Deferred Stock Units.

     Section 5.2 — Administration. The Administrator has the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules. All actions taken and all interpretations and determinations made by the Administrator in good faith shall be final and binding upon the Grantee, the Company and all other interested persons. No member of the Administrator shall be personally liable for any action, determination or interpretation made good faith with respect to the Plan or the Deferred Stock Units.

     Section 5.3 — Notices. Any notice to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of its Secretary, and any notice to be given to the Grantee shall be addressed to him or her at the address given beneath his or her signature hereto. By a notice given pursuant to this Section 5.3, either party may hereafter designate a different address for notices to be given to him, her or it. Any notice that is required to be given to the Grantee shall, if the Grantee is then deceased, be given to the Grantee’s personal representative if such representative has previously informed the Company of his, her or its status and address by written notice under this Section 5.3. Any notice shall be deemed duly given when enclosed in a properly sealed envelope or wrapper addressed as aforesaid, deposited

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(with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service.

     Section 5.4 — Titles. Titles and headings are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

     Section 5.5 — Pronouns. The masculine pronoun shall include the feminine and neuter, and the singular the plural, where the context so indicates.

     Section 5.6 — Applicability of Plan. The shares of Common Stock issued to the Grantee hereunder shall be subject to all of the terms and provisions of the Plan, to the extent applicable to such shares. In the event of any conflict between this Agreement and the Plan, the terms of the Plan shall control.

     Section 5.7 — Amendment. This Agreement may be amended only by a writing executed by the parties hereto that specifically states that it is amending this Agreement.

     Section 5.8 — Dispute Resolution. Any dispute or controversy arising under or in connection with this Agreement shall be resolved by arbitration. Arbitrators shall be selected, and arbitration shall be conducted, in accordance with the rules of the American Arbitration Association.

     Section 5.9 — Governing Law. The laws of the State of Delaware shall govern the interpretation, validity and performance of the terms of this Agreement regardless of the law that might be applied under principles of conflicts of laws.

[Signature Page Follows]

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     IN WITNESS WHEREOF, this Agreement has been executed and delivered by the parties hereto, effective on the Grant Date.

GRANTEE	PATRIOT COAL CORPORATION
	By
[Grantee]
	Its
Address
Grantee’s Taxpayer Identification Number:	Aggregate number of Deferred Stock Units granted hereunder:
-          -

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