Exhibit 10.51.1
ADDENDUM TO EMPLOYMENT AGREEMENT
     This Addendum to Employment Agreement (“Addendum”) dated the day of
August 18, 2004 is between Kansas City Southern, a Delaware corporation (“KCS”),
formerly known as Kansas City Southern Industries, Inc. or KCSI, and Larry M.
Lawrence, an individual (“Executive”).
     WHEREAS, Executive is currently employed by KCS, and KCS and Executive
previously entered into an Employment Agreement dated April 1, 2003
(“Agreement”), which sets forth terms and conditions of Executive’s employment;
and
     WHEREAS, the parties desire to amend certain of those terms and conditions
in the Agreement as set forth below without amending the remaining terms of the
Agreement.
     NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, it is agreed by and between KCS and Executive that the
Agreement is amended as follows:
1. Paragraphs 4(c) and 4(d) of the Agreement.
Paragraphs 4(c) and 4(d) of the Agreement are hereby deleted and replaced in
their entirety with the following:
     (c) Termination by KCS For Cause. KCS may terminate this Agreement and
Executive’s employment “for cause” immediately upon notice to Executive. For
purposes of this Agreement (except for Paragraph 7), termination “for cause”
shall mean termination based upon any one or more of the following:
          (i) Any material breach of this Agreement by Executive;
          (ii) Executive’s dishonesty involving KCS, or any affiliate of KCS;
          (iii) Gross negligence or willful misconduct in the performance of
Executive’s duties as determined in good faith by the KCS Board;
          (iv) Executive’s failure to substantially perform his duties and
responsibilities hereunder, including without limitation Executive’s willful
failure to follow reasonable instructions of the President or other officer to
whom Executive reports;
          (v) Executive’s breach of an express employment policy of KCS or its
affiliates;
          (vi) Executive’s fraud or criminal activity;
          (vii) Embezzlement or misappropriation by Executive; or

 

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          (viii) Executive’s breach of his fiduciary duty to KCS or its
affiliates.
     (d) Termination by KCS Other Than For Cause
               (i) KCS may terminate this Agreement and Executive’s employment
other than for cause immediately upon notice to Executive, and in such event,
KCS shall provide severance benefits to Executive in accordance with
Paragraph 4(d)(ii). Executive acknowledges and agrees that such severance
benefits constitute the exclusive remedy of Executive upon termination of
employment other than for cause. Notwithstanding any other provision of this
Agreement, as a condition to receiving such severance benefits, Executive shall
be required to execute a full release of claims in favor of KCS and its
affiliates in the form attached hereto and incorporated herein by reference as
Attachment A.
               (ii) Unless the provisions of Paragraph 7 of this Agreement are
applicable, if Executive’s employment is terminated under Paragraph 4(d)(i), KCS
shall: (1) continue for a period of one (1) year following such termination, to
pay to Executive as severance pay a monthly amount equal to one-twelfth (1/12th)
of the annual base salary referenced in Paragraph 2(a), at the rate in effect
immediately prior to termination, and, (2) for a period of fifteen (15) months
following such termination, reimburse Executive for the cost (including state
and federal income taxes payable with respect to this reimbursement) of
continuing the health insurance coverage provided pursuant to this Agreement or
obtaining health insurance coverage comparable to the health insurance provided
pursuant to this Agreement, and obtaining coverage comparable to the life
insurance provided pursuant to this Agreement, unless Executive is provided
comparable health or life insurance coverage in connection with other
employment. The foregoing obligations of KCS shall continue until the end of
such respective one (1) year and fifteen (15)-month periods notwithstanding the
death or disability of Executive during said period (except, in the event of
death, the obligation to reimburse Executive for the cost of life insurance
shall not continue). In the year in which termination of employment occurs,
Executive shall be eligible to receive benefits under the KCS Incentive
Compensation Plan and any Executive Plan in which Executive participates (the
“Executive Plan”) (if such Plans then are in existence and Executive was
entitled to participate immediately prior to termination) in accordance with the
provisions of such plans then applicable, and severance pay received in such
year shall be taken into account for the purpose of determining benefits, if
any, under the KCS Incentive Compensation Plan but not under the Executive Plan.
After the year in which termination occurs, Executive shall not be entitled to
accrue or receive benefits under the KCS Incentive Compensation Plan or the
Executive Plan with respect to the severance pay provided herein,
notwithstanding that benefits under such plan there are still generally
available to executive employees of KCS. After termination of employment,
Executive shall not be entitled to accrue or receive benefits under any other
employee benefit plan or program, except that Executive shall be entitled to
participate in the KCS Profit Sharing Plan, the KCS Employee Stock Ownership
Plan and the KCS Section 401(k) Plan (if KCS employees then still participate in
such plans) in the year of termination of employment only if Executive meets all
requirements of such plans for participation in such year.

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2. Paragraph 5 of the Agreement.
Paragraph 5 of the Agreement is hereby deleted and replaced in its entirety with
the following:
Confidentiality and Non-Disclosure.
     (a) Executive understands and agrees that he has been and will continue to
be given Confidential Information (as defined below) during his employment with
KCS relating to the business of KCS and/or its affiliates, in exchange for his
agreement herein. Executive hereby expressly agrees to maintain in strictest
confidence and not to use in any way (including without limitation in any future
business relationship of Executive), publish, disclose or authorize anyone else
to use, publish or disclose in any way, any Confidential Information relating in
any manner to the business or affairs of KCS and/or its affiliates. Executive
agrees further not to remove or retain any figures, calculations, letters,
documents, lists, papers, or copies thereof, which embody Confidential
Information of KCS and/or its affiliates, and to return, prior to Executive’s
termination of employment for any reason, any such information in Executive’s
possession. If Executive discovers, or comes into possession of, any such
information after his termination he shall promptly return it to KCS. Executive
acknowledges that the provisions of this paragraph are consistent with KCS’
policies and procedures to which Executive, as an employee of KCS, is
bound.
     (b) For purposes of this Agreement, “Confidential Information” includes,
but is not limited to, information in the possession of, prepared by, obtained
by. compiled by. or that is used by KCS or its affiliates or customers and
(1) is proprietary to, about, or created by KCS or its affiliates or customers;
(2) gives KCS or its affiliates or customers some competitive business
advantage, the opportunity of obtaining such advantage, or disclosure of which
might be detrimental to the interest of KCS or its affiliates or customers; and
(3) is not typically disclosed by KCS or its affiliates or customers, or known
by persons who are not employed by KCS or its affiliates or customers. Without
in any way limiting the foregoing and by way of example, Confidential
Information shall include: information pertaining to KCS or its affiliates’
business operations such as financial and operational information and data,
operational plans and strategies, business and marketing strategies, pricing
information, plans for various products and services, and acquisition and
divestiture planning.
     (c) In the event of any breach of Paragraph 5 by Executive, Railway shall
be entitled to terminate any and all remaining severance benefits under
Paragraph 4(d)(ii) and shall be entitled to pursue such other legal and
equitable remedies as may be available. Executive acknowledges, understands and
agrees that KCS and/or its affiliates will suffer immediate and irreparable harm
if Executive fails to comply with any of his obligations under Paragraph 5 of
the Agreement, and that monetary damages alone will be inadequate to compensate
KCS or its affiliates for such breach. Accordingly, Executive agrees that KCS
and/or its affiliates shall, in addition to any other remedies available to it
at law or in equity, be entitled to temporary, preliminary, and permanent
injunctive relief and specific performance to enforce the terms of Paragraph 5
without the necessity of proving inadequacy of legal remedies or irreparable
harm or posting bond.

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3. Paragraph 6(a) of the Agreement.
Paragraph 6(a) of the Agreement is hereby deleted and replaced in its entirety
with the following:

  (a)   Duties. Upon termination of this Agreement by KCS or Executive for any
reason, Executive shall immediately sign such written resignations from all
positions as an officer, director or member of any committee or board of KCS and
all direct and indirect subsidiaries and affiliates of KCS as may be requested
by KCS and shall sign such other documents and papers relating to Executive’s
employment, benefits and benefit plans as KCS may reasonably request.

4. Paragraph 7(e) of the Agreement.
The parenthetical “(discounted to the then present value on the basis of a rate
of seven percent (7%) per annum)” is deleted from the first paragraph of
paragraph 7(e).
5. Remainder of Agreement Unchanged.
     Except as otherwise expressly set forth in this Addendum, the Agreement
shall remain unchanged and in full force and effect in accordance with its
terms.
     IN WITNESS WHEREOF, the parties hereto have executed this Addendum to
Employment Agreement as of the 3rd day of September 2004.

                  EXECUTIVE       KANSAS CITY SOUTHERN F/K/A             KANSAS
CITY SOUTHERN INDUSTIRES, INC.    
 
                /s/ Larry M. Lawrence       By:   /s/ Michael R. Haverty    
 
     Larry M. Lawrence
         
 
Michael R. Haverty, Chairman, President & CEO    

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ATTACHMENT A
WAIVER AND RELEASE
In consideration of the benefits described in the Employment Agreement, I do
hereby fully waive all claims and release Kansas City Southern (KCS), and its
affiliates, parents, subsidiaries, successors, assigns, directors and officers,
fiduciaries, employees and agents, as well as any employee benefit plans from
liability and damages related in any way to any claim I may have against KCS.
This Waiver and Release includes, but is not limited to all claims, causes of
action and rights under: Title VII of the Civil Rights Act of 1964, as amended;
the Civil Rights Act of 1991; the Age Discrimination in Employment Act of 1967,
as amended; the Civil Rights Act of 1866; the American with Disabilities Act of
1990; the Rehabilitation Act of 1973; the Older Workers Benefit Protection Act
of 1990; the Employee Retirement Income Security Act of 1974, as amended; the
Worker Adjustment and Retraining Notification Act; the Family and Medical Leave
Act; the Federal Employers’ Liability Act; the Railway Labor Act, including
bumping rights, rights to file a grievance, rights to a hearing (whether before
any company official, any system, group, regional or special adjustment board,
the National Railroad Adjustment Board, or any other entity), and any rights to
arbitration thereunder; the Missouri Human Rights Act, the Kansas Act Against
Discrimination, the Kansas and Missouri Workers’ Compensation acts, and all
local state and federal statutes and regulations; all claims arising from labor
protective conditions imposed by the Interstate Commerce Commission or the
Surface Transportation Board; any KCS incentive or benefit plan or program, and
any rights under any collective bargaining agreement, including seniority
rights, bumping rights and reinstatement rights, rights to file or assert a
grievance or other complaint, rights to a hearing, or rights to arbitration
under such agreement; and all rights under common law such as breach of
contract, tort or personal injury of any sort.
I understand that this Waiver and Release also precludes me from recovering any
relief as a result of any lawsuit, grievance or claims brought on my behalf and
arising out of my employment or resignation of, or separation from employment,
provided that nothing in this Waiver and this Release may affect my entitlement,
if any, to workers’ compensation or unemployment compensation. Additionally,
nothing in this Waiver and Release prohibits me from communications with, filing
a complaint with, or full cooperation in the investigations of, any governmental
agency on matters within their jurisdictions. However, as stated above, this
Waiver and Release does prohibit me from recovering any relief, including
monetary relief, as a result of such activities.
If any term, provision, covenant, or restriction of this Waiver and Release is
held by a court of competent jurisdiction to be invalid, void or unenforceable,
the remainder of this Waiver and Release and the other terms, provisions,
covenants and restrictions hereof shall remain in full force and effect and
shall in no way be affected, impaired or invalidated. I understand and agree
that, in the event of breach by me of any of the terms and conditions of this
Waiver and Release, KCS will be entitled to recover all costs and expenses as a
result of my breach, including but not limited to, reasonable attorneys’ fees
and costs.

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Waiver and Release Page 2
I have read this Waiver and Release and I understand all of its terms. I enter
into and sign this Waiver and Release knowingly and voluntarily, with full
knowledge of what it means.

         
/s/ Larry M. Lawrence
  8/2/04    
 
Employee Signature
 
 
Date    
 
       
Larry M. Lawrence
  On file with company.    
 
Employee Name (Please Print)
 
 
Social Security Number    

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