EXHIBIT 10.49

                             FIRST AMENDMENT TO THE
                           PEABODY ENERGY CORPORATION
                           DEFERRED COMPENSATION PLAN


        WHEREAS, Peabody Energy Corporation (the "Company") previously
established, and currently maintains, the Peabody Energy Corporation Deferred
Compensation Plan (the "Plan") for the benefit of a select group of management
or highly compensated employees;

        WHEREAS, as a result of new tax legislation, the Company deems it
desirable to no longer allow employees to begin participation in the Plan and to
no longer allow new contributions to be made to the Plan on or after the
effective date of such new tax legislation;

        WHEREAS, pursuant to Section 10.1 of the Plan, the Company, through
action of the Board, has the power to amend the Plan to effectuate the
foregoing;

        NOW, THEREFORE, BE IT RESOLVED that the Plan be, and it hereby is,
amended as follows:

                                       I.

        Article II of the Plan is amended by adding a new Section 2.3 at the end
thereof to read as follows:

                "2.3 NO NEW PARTICIPANT. Notwithstanding anything herein to the
        contrary, the Committee shall not select any additional Employees to
        become Eligible Employees or otherwise allow Employees previously
        selected as Eligible Employees to become Participants in the Plan for
        purposes of deferring compensation on or after the effective date of
        Section 409A of the Code."

                                       II.

        Article III, Section 3.1 of the Plan is amended by adding the following
at the end thereof:

                "Notwithstanding anything herein to the contrary, no additional
        Employee Deferral Election shall be allowed to be filed under the Plan
        for purposes of deferring compensation on or after the effective date of
        Section 409A of the Code."




                                      III.

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


        IN WITNESS WHEREOF, the Company has caused this First Amendment to be
signed by its duly authorized officer this __ day of December 2004.


                                  PEABODY ENERGY CORPORATION


                                  By:
                                     --------------------------
                                        Sharon D. Fiehler
                                        Executive Vice President