EXHIBIT 10.1

CONFIDENTIAL SEVERANCE AGREEMENT AND FULL AND GENERAL RELEASE

The purpose of this Confidential Severance Agreement and Full and General
Release (this “Agreement”) is to set forth the terms and conditions of
Executive’s separation from employment with The Kansas City Southern Railway
Company, a Missouri Corporation (the “Company”).
The Company and Arthur L. Shoener (“Executive”) agree as follows:

1. Separation Date: Executive’s separation from employment with the Company is
effective June 6, 2008, at the close of business (the “Separation Date”).

2. Benefits Payable: In addition to Executive’s regular compensation through the
Separation Date, the Company will provide the following consideration,
collectively referred to as the “Severance”:

(a) Per Section 4(d) of the Executive’s Employment Agreement dated January 1,
2005 (the “Employment Agreement”), one (1) year of monthly cash payments, less
applicable taxes and withholdings, each in the amount of one-twelfth (1/12th) of
Executive’s annual base salary in effect on the Separation Date ($537,313), to
be paid on regular monthly payroll dates through Executive’s normal payroll
method and commencing on the July monthly payroll date; provided, however, that
in order to comply with Section 409A of the Internal Revenue Code of 1986, as
amended (“Code Section 409A”) in light of Executive’s status as a “specified
employee” within the meaning of Code Section 409A, the first six months of such
payments ($268,657) shall be paid on the December monthly payroll date, and six
monthly payments each in the amount of $44,776 shall be paid on the normal
monthly payroll dates in January 2009 through June 2009.

(b) Twenty-four (24) monthly cash payments, less applicable taxes and
withholdings, to be paid on regular monthly payroll dates through Executive’s
normal payroll method as follows:

(i) Six (6) months of monthly cash payments each in the amount of $55,970,
commencing on the July monthly payroll date; and

(ii) Six (6) months of monthly cash payments each in the amount of $11,194,
commencing on the first monthly payroll date following the end of the period set
forth in Section 2(b)(i) above; and

(iii) Twelve (12) months of monthly cash payments each in the amount of $55,970,
commencing on the first monthly payroll date following the end of the period set
forth in Section 2(b)(ii) above.

(c) A lump sum cash payment of $371,903 to be used to assist Executive with the
payment of relocation expenses and the replacement of term life insurance, and
as consideration for all other amounts to which Executive may have become
entitled under the Employment Agreement had he remained employed. This payment
shall be made within fourteen (14) days after the expiration of the Revocation
Period set out in Section 15(f) of this Agreement. This is the exclusive payment
to be made to Executive with respect to relocation-related costs and expenses
and Executive shall not be entitled to any additional payments or reimbursements
of such expenses.

(d) Continuing group health coverage for Executive and/or his eligible
dependents, provided Executive timely elects to continue such coverage for
himself and/or his eligible dependents pursuant to the Consolidated Omnibus
Budget Reconciliation Act of 1985 (“COBRA”) and continues to timely pay the cost
of such coverage at the rate that would be charged to an active employee with
similar coverage. Such subsidy shall continue for as long as the Executive
and/or his eligible dependents remain covered by COBRA coverage or, if earlier,
upon the Executive becoming eligible for comparable health coverage in
connection with other employment. In no event shall this subsidy continue beyond
the initial eighteen (18)-month COBRA period. Executive shall receive, under
separate cover, information concerning rights to continue participation in the
Company-sponsored group health plan, in accordance with COBRA.

Executive’s benefits in all other Company-sponsored benefit plans shall
terminate in accordance with the terms and conditions of such plans. To the
extent Executive is not vested in any equity awards as of the Separation Date,
including without limitation, with respect to stock options, restricted stock or
performance shares, such unvested equity awards shall be forfeited as of the
Separation Date. Nothing herein shall extend the exercise period applicable to
any vested options outstanding as of the Separation Date. Executive acknowledges
that the Severance is good and valuable consideration in exchange for this
Agreement, and further acknowledges and agrees that: (i) other than the
Severance, the Company has paid Executive all compensation due and owing to
Executive related to any employment relationship between Executive and the
Company, including, without limitation, all salary, pay, commissions, bonuses,
vacation pay, paid time off, and (ii) that, as of the Separation Date, Executive
is no longer an employee of the Company and may under no circumstance represent
him/herself to be in any way connected with or a representative of such company.

3. Release: In consideration of the Severance set forth above, and as a material
inducement to the Company to enter into this Agreement, Executive agrees, for
him/herself, Executive’s heirs, executors, administrators, representatives,
successors and assigns and anyone claiming by, through or for Executive, or
anyone making a claim on Executive’s behalf (for purposes of this Section,
“Executive”), to irrevocably and unconditionally waive, release and forever
discharge the Company, and its respective present, past, and future parents,
subsidiaries, and affiliated corporations, divisions, affiliates, predecessors,
principals, partners, joint venturers, representatives, successors, and assigns,
and its past and present owners, directors, officers, employees, stockholders,
attorneys, agents, and insurers, and all persons acting by, through, under or in
concert with any of them and all other persons, firms and corporations
whomsoever (collectively “Released Parties”) from any and all liability,
actions, causes of actions, common law claims, statutory claims under local,
state or federal law including but not limited to any rights and claims under
any state’s human rights act, civil rights laws, or similar law, any state’s
wage payment act or similar law, any wage payment act or similar law, any law
governing any aspect of employment, Title VII of the Civil Rights Act of 1964,
42 U.S.C. § 1981, the Employee Retirement Income Security Act, the Consolidated
Omnibus Budget Reconciliation Act, the Americans with Disabilities Act of 1990,
the Fair Labor Standards Act of 1938, the Family & Medical Leave Act of 1993,
the Age Discrimination in Employment Act of 1967, the Age Discrimination in
Employment Act Amendments of 1990 (sometimes known as the “Older Workers Benefit
Protection Act”), the Equal Pay Act of 1963, the Worker Adjustment Retraining
Notification Act of 1988, and any amendment thereto, the Federal Employer’s
Liability Act; all claims arising from labor protective conditions imposed by
the Interstate Commerce Commission or the Surface Transportation Board; all oral
or written contract rights, including any rights under an employment agreement,
any Company incentive or benefit plan or program, including unvested stock
options, and ANY RIGHTS UNDER ANY COLLECTIVE BARGAINING AGREEMENT, INCLUDING ANY
SENIORITY RIGHTS, BUMPING RIGHTS AND REINSTATEMENT RIGHTS, RIGHTS TO FILE OR
ASSERT A GRIEVANCE OR OTHER COMPLAINT, 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), OR RIGHTS TO
ARBITRATION UNDER SUCH AGREEMENT; and any claim under any local, state or
federal statute, regulation, rule, ordinance or common law, breach of contract
claims, breach of any collective bargaining agreement claims, and all demands,
damages, expenses, fees (including attorney’s fees, court costs, expert witness
fees, etc.), which Executive may now have against the Released Parties and/or
have on account of, arising out of, or in connection with all interactions,
transactions or contracts, express or implied, between Executive and the
Released Parties, including, but not limited to Executive’s employment and the
termination thereof, through the date of this Agreement.

Nothing in this Agreement shall limit or impede Executive’s right to file or
pursue an administrative charge with, or participate in, any investigation
before the Equal Employment Opportunity Commission (“EEOC”), any Federal, State,
or Local Agency, or to file a claim for unemployment benefits, and/or any causes
of action which by law Executive may not legally waive. Executive agrees,
however, that if Executive or anyone on Executive’s behalf, brings any action
concerning or related to any cause of action or liability released in this
agreement, Executive waives Executive’s right to, and will not accept, any
payments, monies, damages, or other relief, awarded in connection therewith.

THIS MEANS THAT BY SIGNING THIS AGREEMENT EXECUTIVE WILL HAVE WAIVED ANY RIGHT
EXECUTIVE MAY HAVE TO RECOVER IN A LAWSUIT OR OTHER ACTION AGAINST RELEASED
PARTIES, INCLUDING BUT NOT LIMITED TO THE COMPANY, BASED ON ANY ACTIONS OR
OMISSIONS MADE BY THE RELEASED PARTIES, INCLUDING BUT NOT LIMITED TO CLAIMS
WHICH IN ANY WAY ARISE FROM OR RELATE TO EXECUTIVE’S EMPLOYMENT RELATIONSHIP AND
THE SEPARATION OF EXECUTIVE’S EMPLOYMENT WITH THE COMPANY, UP TO THE DATE OF THE
SIGNING OF THIS AGREEMENT.

4. Covenant Not to Sue: Executive agrees and covenants, except as allowed by law
with regard to this Agreement, not to sue or file any claims against the
Released Parties with regard to any matters arising prior to the execution of
this Agreement. Executive represents and warrants that no such claim has been
filed to date.

5. Non-Disparagement: Executive agrees not to in any way or to any extent
slander, libel, disparage, or otherwise impair the reputation, goodwill, or
commercial interest of the Company and the Released Parties, including but not
limited to their employees, officers, directors, management, shareholders,
and/or the Company’s or the Released Parties’ performance, work product or
method of operating. Executive represents and warrants that no such
disparagement has occurred to date. Executive agrees that he will not, without
first obtaining written approval from the Company: (i) make any public statement
in the nature of a press release or media interview with respect to any aspect
of Executive’s employment with the Company or any of its operating units,
affiliates or subsidiaries, or (ii) make any statement, written or oral, with
respect to past or projected future financial performance of the Company or any
of its operating units, affiliates or subsidiaries.

6. Non-Competition: During the period Executive receives Severance hereunder,
Executive shall not:

(a) Become employed by or affiliated in any capacity with (including, but not
limited to, that of director, officer, partner, joint venturer or investor,
except as the holder of less than five percent (5%) of the publicly traded
voting securities of any issuer) in any Competitor of the Company or any
subsidiary or other affiliate of the Company. As used herein “Competitor” shall
mean any company or other entity which operates a Class 1 railroad in the United
States (or in Mexico or Canada, which if operated in the United States would be
regarded as a Class 1 railroad), including, but not limited to, Canadian
National Railway, Canadian Pacific Railway Company, Union Pacific Corporation,
Burlington Northern Santa Fe Corporation, CSX Corporation, Norfolk Southern
Corp., Ferrocarril Mexicano, S.A. de C.V. and Ferrocarril del Sureste, S.A. de
C.V.; or

(b) Acquire or agree to acquire, alone or in concert with any other person,
directly or indirectly, any voting securities of Kansas City Southern (“KCS”)
(or any rights or options to acquire beneficial ownership of such voting
securities) if after such acquisition Executive and such person would
beneficially own in the aggregate more than five percent (5%) of the number of
such voting securities then outstanding; or participate in any way with respect
to any acquisition or proposal not approved by the Board of Directors of KCS for
any purchase of more than five percent (5%) of the then outstanding voting
securities of KCS or any merger, consolidation or business combination involving
KCS, the Company or their respective subsidiaries (collectively, the “KCS
Group”), or with respect to any purchase of a substantial portion of the assets
of the KCS Group; or participate in any solicitation of proxies to vote any
voting securities of KCS, or grant any proxy with respect to any voting
securities of KCS owned by such Executive to any person, other than in each case
as authorized or solicited by or on behalf of the KCS Board of Directors; or
participate in any negotiations or arrangements with any person with respect to
any of the foregoing or provide any information or take any action designed to
advise, assist, encourage or act in concert with any person in connection with
any of the foregoing; or otherwise act alone or in concert with others, to seek
to control or influence materially the management, Board of Directors or
policies of the KCS Group.

7. Confidential Information: Pursuant to Executive’s Employment Agreement:

(a) Executive understands and agrees that Executive was given Confidential
Information (as defined below) during Executive’s employment with the Company
relating to the business of the Company and its affiliates. Executive shall
maintain in strictest confidence and not use in any way (including without
limitation in any future business relationship of Executive), publish, disclose
or authorize anyone else to use in any way, publish or disclose, any
Confidential Information relating in any manner to the business or affairs of
the Company or any of its affiliates or customers. Executive further agrees not
to remove or retain any calculations, letters, documents, lists, papers, or
copies thereof, which embody Confidential Information of the Company or any of
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 Executive’s
termination, Executive shall promptly return it to the Company.

(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 the Company or any of its affiliates or
customers and (i) is proprietary to, about, or created by the Company or any of
its affiliates or customers; (ii) gives the Company or any of 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 the
Company or any of its affiliates or customers; and (iii) is not typically
disclosed by the Company or any of its affiliates or customers, or known by
persons who are not employed by the Company or any of its affiliates or
customers. Without in any way limiting the foregoing and by way of example,
Confidential Information shall include: information pertaining to business
operations of the Company or any of its affiliates or customers 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. Upon
separation from employment, Executive shall notify Human Resources in writing of
the name and address of Executive’s intended future employer.

8. Injunctive Relief/Breach of This Agreement: In the event of any breach of
this Agreement by Executive, the Company shall be entitled to terminate any and
all remaining Severance hereunder and shall be entitled to pursue such other
legal and equitable remedies as may be available. Executive acknowledges,
understands and agrees that the Company and its affiliates will suffer immediate
and irreparable harm if Executive fails to comply with any of Executive’s
obligations under this Agreement, and that monetary damages alone will be
inadequate to compensate the Company or any of its affiliates for such breach.
Accordingly, Executive agrees that the Company and 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 this Agreement without the necessity of
proving inadequacy of legal remedies or irreparable harm or posting bond.

9. Property: Executive agrees that Executive has returned all tangible and
intangible property and Confidential Information, as defined in Section 7,
belonging to the Company. Such property includes but is not limited to any and
all financial records and data; any written material in Executive’s possession
including but not limited to product information, engineering information,
customer lists, and the Company policies and procedures; automobiles; credit
cards; keys; equipment; product and/or customer lists and data; contracts;
personnel information; project development information; written proposals and
studies; and proprietary software purchased or developed by or for the benefit
and use of the Company. Executive further represents and warrants that Executive
has not retained any copies, electronic or otherwise, of such property.

10. Miscellaneous: Executive agrees to make himself reasonably available to the
Company to respond to requests by the Company for information pertaining to or
relating to the Company, any entity related to the Company, or any of its
agents, officers, directors, or employees. Executive will cooperate fully with
the Company in connection with any and all existing or future depositions,
litigation, or investigations brought by or against the Company, or any entity
related to the Company, or any of its agents, officers, directors, or employees,
whether administrative, civil, criminal in nature, in which and to the extent
the Company deems Executive’s cooperation necessary. In the event Executive is
subpoenaed in connection with any litigation or investigation, Executive will
immediately notify the Company. Reasonable actual expenses incurred by the
Executive and pre-approved by the Company arising from these matters will be
reimbursed by the Company upon sufficient proof. Should Executive provide such
services after the period of severance payments under this Agreement is
completed, Executive will be compensated for his/her time at the same daily rate
earned by Executive at the time of his/her separation.

11. Successors: This Agreement binds and inures to the benefit of Executive’s
heirs, administrators, representatives, executors, successors and assigns, and
all Released Parties and their heirs, administrators, representatives,
executors, successors and assigns.

12. Entire Agreement/Modification: This Agreement shall be construed as a whole
according to its fair meaning and not strictly for or against Executive, the
Company or any Released Party. This Agreement sets forth the entire Agreement
between Executive and the Company, superseding all previous agreements and may
not be modified except by a writing signed by both Executive and an authorized
official of the Company. The parties agree that this Agreement shall be
interpreted at all times in a manner compliant with Code Section 409A.

13. Severability: The parties hereto believe that the provisions of this
Agreement are reasonable and fair in all respects, and are necessary to protect
the interests of the parties. However, in case any one or more of the provisions
or parts of a provision contained in this Agreement shall, for any reason, be
held to be invalid, illegal or unenforceable in any respect in any jurisdiction,
such invalidity, illegality or unenforceability shall not affect any other
provision or part of a provision of this Agreement or any other jurisdiction,
but this Agreement shall be reformed and construed in any such jurisdiction as
if such invalid or illegal or unenforceable provision or part of a provision had
never been contained herein and such provision or part shall be reformed so that
it would be valid, legal and enforceable to the maximum extent permitted in such
jurisdiction.

14. Controlling Law and Jurisdiction. The validity, interpretation and
performance of this Agreement shall be subject to and construed under the laws
of the State of Missouri, without regard to principles of conflicts of law.

15. Provisions Required by the Age Discrimination in Employment Act/Older
Workers Benefit Protection Act: Executive acknowledges that:

(a) Executive is specifically releasing any and all claims, whether known or
unknown, which are based on the Age Discrimination in Employment Act;

(b) This Agreement does not waive rights or claims that arise after the date
this release is executed;

(c) Executive has signed this Agreement of Executive’s own free will in exchange
for the consideration stated above, which Executive acknowledges constitutes
full, fair, reasonable and adequate consideration, to which Executive is not
otherwise entitled, for the affirmations, certifications, representations and
promises made herein;

(d) Executive has carefully read and fully understands all the provisions of
this Agreement, including Section 15 of this Agreement entitled “Provisions
Required by the Age Discrimination in Employment Act/Older Workers Benefit
Protection Act,” and that Executive has been afforded at least twenty-one
(21) days from the date this Agreement was presented to him (i.e. until 5:00
p.m. on June 27, 2008) to consider the terms hereof; Executive agrees that
changes made to this Agreement at Executive’s request do not restart the
twenty-one (21) day period which Executive has to review this Agreement;

(e) Executive has been advised in writing by this Agreement that Executive
should consult with an attorney prior to executing this Agreement;

(f) Executive understands and agrees that this Agreement shall not become
effective or enforceable until seven (7) calendar days after it is executed by
Executive and during that seven (7) day period (the “Revocation Period”)
Executive may revoke this Agreement. If Executive wishes to revoke this
Agreement, Executive agrees to do so in writing within seven (7) days and
deliver such written notice of Executive’s intent to revoke to John Derry, Vice
President Human Resources. If Executive does not timely revoke, this Agreement
goes into force and effect on the eighth day following its execution; and

(g) Executive also understands that should Executive decide to revoke this
Agreement within seven (7) days of signing, the Agreement will not be effective
and the monies and other consideration which the Company has promised to provide
Executive shall not be paid or provided.

16. Corporate Approval: Executive understands that the terms of this Agreement
are conditioned on and subject to approval by the Compensation Committee of the
Company’s Board of Directors and the Company’s Board of Directors and that no
payments shall be made hereunder prior to such approval. Company shall take all
necessary and reasonable actions to obtain such approval prior to the expiration
of the Revocation Period set out in Section 15(f) of this Agreement.

[SIGNATURES ON THE FOLLOWING PAGE]

1

I have carefully read this Agreement; I fully understand the Agreement’s
contents and the effects thereof, including the Release in Section 3; I
understand that I have a right to review this Agreement with an attorney of my
choice; and I have executed the same of my own free will, without any coercion
by the Company, the Released Parties, or any of the Company’s or the Released
Parties’ directors, officers, employees, agents or representatives.

EXECUTIVE

     
By: /s/ Arthur L. Shoener
  6/24/2008
 
   
Arthur L. Shoener
  Date
THE COMPANY
 

By: /s/ Michael R. Haverty
  6/26/2008
 
   
Michael R. Haverty
  Date

    Chairman of the Board,

The Kansas City Southern Railway Company

2