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                                                               EXHIBIT 10(xxxvi)

                                 AMENDMENT NO. 1
                     TO THE NORTH AMERICAN COAL CORPORATION
               DEFERRED COMPENSATION PLAN FOR MANAGEMENT EMPLOYEES
           (AS AMENDED AND RESTATED EFFECTIVE AS OF NOVEMBER 1, 2001)

         The North American Coal Corporation hereby adopts this Amendment No. 1
to The North American Coal Corporation Deferred Compensation Plan for Management
Employees (As Amended and Restated Effective November 1, 2001) (the "Plan"), to
be effective as of January 1, 2002. Words used herein with initial capital
letters which are defined in the Plan are used herein as so defined.

                                    SECTION 1

         Section 3.1(a) of the Plan is hereby amended in its entirety to read as
follows:

         "(a) Amount of Excess 401(k) Benefits. Each Participant may, prior to
the first day of any Plan Year or within 30 days of becoming a Participant
hereunder, by completing a "Deferral Election Form" direct his Employer to
reduce his Compensation for such Plan Year and, subject to Subsection (e) below,
subsequent Plan Years, by an amount equal to the difference between (i) a
certain percentage, in 1% increments, with a maximum of 25%, of his Compensation
for the Plan Year, and (ii) the maximum Before-Tax Contributions actually
permitted to be contributed for him to the Savings Plan by reason of the
application of the limitations under Sections 402(g), 401(a)(17), 401(k)(3) and
415 of the Code (which amounts shall be referred to as the "Excess 401(k)
Benefits")."

         EXECUTED this 21st day of December, 2001.

                                    THE NORTH AMERICAN COAL CORPORATION

                                    By: /s/ Charles A. Bittenbender
                                        ---------------------------------------
                                    Title: Assistant Secretary<PAGE>
                                                                 EXHIBIT 10(xlv)

                       THE NORTH AMERICAN COAL CORPORATION
                        2002 INCENTIVE COMPENSATION PLAN

SUMMARY

The Incentive Compensation Plan (Plan) offers a highly attractive incentive
compensation opportunity to senior managers when all performance objectives
under their control or influence are achieved. This is accomplished through a
structure containing the following elements:

         o        Each participant is assigned an individual incentive target,
                  stated as a percentage of their salary midpoint, that
                  establishes the incentive compensation amount they will
                  receive when performance objectives are met.

         o        The individual target amount is allocated among the following
                  performance components:

                  -        North American Coal (NAC) corporate performance.

                  -        Bellaire Corporation cash flow.

                  -        Business unit results.

                  -        Individual achievement.

         o        Percentage weightings are assigned to each component, based on
                  the participant's accountabilities and their impact on each
                  component.

         o        One or more performance objectives will be established at the
                  beginning of the year for each performance component.

         o        A performance range, which defines the acceptable level of
                  results, from threshold to maximum, is created for each
                  performance objective.

         o        A payout range is defined, which provides for incentive
                  payments of up to 150 percent of the incentive target, except
                  to the extent the Committee elects to increase the actual pool
                  by up to 10 percent, as described below.

         o        A performance/payout schedule combines the two ranges into a
                  matrix that defines the level of incentive compensation
                  payment that will result from each level of performance.

         o        After audited financials are available, awards will be
                  calculated based on actual results against the established
                  objectives.

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         o        A final individual performance adjustment may be made, within
                  a range of +/-10 percent of the calculated award, based on a
                  judgment of the participant's overall performance.

This Incentive Compensation Plan will allow management and the Board to
establish, in advance, the performance expectations and related incentive
compensation potential that NAC's executives can expect for the year. At
year-end, the Plan focuses judgment of the management team's performance on
predetermined objectives that should produce fairness in the determination of
rewards.

PLAN STRUCTURE

         INDIVIDUAL INCENTIVE TARGETS

         The primary focus of the proposed Plan is the individual incentive
         compensation target. Each participant is assigned a target, stated as a
         percentage of the mid-point of base salary, which will be paid when all
         relevant performance objectives are achieved. The Plan provides for
         payments above or below the target to reflect acceptable variances from
         performance objectives.

         PERFORMANCE GOALS

         Four sets of goals are proposed:

                            INTENTIONALLY LEFT BLANK

         INCENTIVE AWARD RANGE

         Actual performance results attained probably will not match the
         established performance goals exactly. Therefore, the Plan is designed
         to provide incentive compensation payouts of up to 150 percent of the
         target award if actual results fall within a predetermined range of
         acceptable performance.

         The award range is defined as follows:

<Table>
<Caption>
                                                % OF
               AWARD LEVEL                     TARGET                          DESCRIPTION
               -----------                     ------                          -----------
<S>                                            <C>              <C>

         Maximum                                 150%           Highest level of incentive paid.

         Target                                  100%           Competitive incentive opportunity for
                                                                achieving all-important goals.

         Threshold                                25%           Incentive paid when results meet minimum
                                                                acceptable standards.

         Below threshold                           0%           Performance does not merit incentive payment.
</Table>

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         COMPONENT WEIGHTINGS

         Participants' potential incentive awards will be allocated between
         performance components based on their individual impact on results. The
         allocations allow for awards to be earned based on the achievement of
         the performance objectives over which each executive has the most
         control. Weightings will be stated as a percentage and total 100
         percent for each participant. The weightings will be established each
         year to reflect current organizational accountabilities and the
         relative importance of the various performance components. Our
         recommended weightings are as follows:

                            INTENTIONALLY LEFT BLANK

         When there is more than one goal for a performance component, further
         percentage weightings may be assigned, within the overall weightings,
         to reflect the relative priority of each goal. For example, if the
         individual component has a 40 percent weighting and there are five
         individual goals, each individual goal might be assigned a priority
         weighting of 20 percent.

         PERFORMANCE RANGE

         A range of performance acceptable for incentive compensation payment
         will be established for each performance objective. For quantitative
         goals, the range may be set as a percentage of the objective. For goals
         that cannot be quantified, the range will be defined in narrative form.

         The following general definitions will apply. The percentage ranges
         indicated are only guidelines; specific percentage ranges or narrative
         descriptions should be determined for each goal based on the
         definitions.

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<Table>
<Caption>
                                            PERFORMANCE
               PERFORMANCE                   PERCENTAGE
                  LEVEL                      GUIDELINE                               DEFINITION
               -----------                  -----------                              ----------
<S>                                         <C>                      <C>

         Threshold                               75%                 Minimum acceptable results justifying
                                                                     payment of incentives.

         Objective                              100%                 Results meet high performance demands
                                                                     justifying fully competitive rewards.

         Maximum                                125%                 Highest foreseeable level of performance.
</Table>

         PERFORMANCE/PAYOUT SCHEDULE

         Combining the performance and payout ranges yields a performance/
         payout schedule as in the following example:

<Table>
<Caption>
         PERFORMANCE                   DEFINITION                RESULTS    AWARD LEVELS         PAYOUT
         -----------                   ----------                -------    ------------         ------
<S>                                  <C>                         <C>        <C>                  <C>

         Threshold                   Minimum                        75%     Threshold              50%

         Objective                   On plan                       100%     Target                100%

         Maximum                     Exceeding expectations        125%     Maximum               150%
</Table>

         This schedule is applied separately to the results of each established
         performance element to determine the incentive amount earned in
         accordance with assigned weightings. Performance that falls between the
         defined levels would result in proportionally adjusted payouts, which
         may be calculated mathematically or determined judgmentally.

         CORPORATE PERFORMANCE THRESHOLD

         No incentive compensation awards will be earned under the Plan in any
         year unless the threshold level of the corporate performance component
         is achieved. Once the corporate performance threshold is attained, each
         performance objective is separate and distinct. This means that partial
         awards can be earned for the attainment of one performance objective
         even if another is not sufficient to generate a payout.

         INDIVIDUAL ADJUSTMENT FACTOR

         Each individual award, as calculated above, may be adjusted upward or
         downward by as much as 10 percent of the total award, based on
         management's' perceptions of each individual's overall performance.

         PARTIAL AWARDS

         Executives who are hired or promoted during the year to positions
         eligible for participation in the Plan may be included in the Plan on a
         prorata basis.

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         COMMITTEE DISCRETION

         It is the intent of the Plan that the total incentive compensation, as
         determined above, will be the final total corporate incentive
         compensation to be paid. However, the Committee, in its sole
         discretion, may increase or decrease, by up to 10 percent, the total
         incentive compensation or may approve an incentive compensation payment
         where normally there would be no payment, due to corporate performance
         which is below the criteria established for the year.

2002 PERFORMANCE TARGETS

         See Plan Summary.

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