EXHIBIT 10.26 P&L Coal Holdings Corporation First Amendment to the Stockholders Agreement --------------------------------------------- WHEREAS, the parties hereto previously entered into that certain Stockholders Agreement dated as of May 19, 1998...

                                                                   EXHIBIT 10.26

                         P&L Coal Holdings Corporation

                 First Amendment to the Stockholders Agreement
                 ---------------------------------------------

     WHEREAS, the parties hereto previously entered into that certain
Stockholders Agreement dated as of May 19, 1998 (the "Stockholders Agreement");

     WHEREAS, pursuant to Section 4.4(b) of the Stockholders Agreement, the
parties hereto have the power to amend, modify or supplement the Stockholders
Agreement if they deem it appropriate;

     WHEREAS, the parties hereto deem it in their best interest to amend and
clarify certain rights granted under the Stockholders Agreement to Management
Investors and their Permitted Transferees (as such terms are defined in the
Stockholders Agreement);

     NOW, THEREFORE, the Stockholders Agreement is hereby amended as follows:

                                       I.

     The second sentence of Section 2.5(a) of the Stockholders Agreement is
deleted in its entirety and replaced with the following:

     The Management Investors may not Transfer Option Shares prior to the
     earlier of (i) the second anniversary of the Initial Public Offering,
     provided, however, that if at any time prior to that date, Xxxxxx and/or
     any Other Xxxxxx Entity (or their Permitted transferees) sell fifty percent
     (50%) of their Shares, and the IRR (as such term is defined in any
     applicable Non-Qualified Stock Option Agreements between the Management
     Investors and the Company (the "Option Agreements")) at the time of such
     sale equals at least twenty-eight percent (28%), any Option Shares acquired
     by Management Investors upon exercise of Superperformance Options (as such
     term is defined in the Option Agreements) may be Transferred at that time,
     but not earlier than one (1) year after the Initial Public Offering, and
     (ii) the fifth anniversary of the Effective Date, except for Transfers
     referred to in Sections 2.4, 2.6 and 2.7 (the "Option Shares No Transfer
     Period", and, together with the Acquired Shares No Transfer Period, the "No
     Transfer Period").

                                      II.

     Section 2.8(b) of the Stockholders Agreement is deleted in its entirety and
replaced with the following:

     On or about the date one year after an Initial Public Offering, the Company
     agrees to register on Form S-8 (or any replacement form, if such form is
     not then available) all Shares issued to the Management Investors.