EXHIBIT 10.8.1
ADDENDUM TO EMPLOYMENT AGREEMENT
     This Addendum to Employment Agreement (“Addendum”) dated the day of
August 18, 2004 is between The Kansas City Southern Railway Company, a Missouri
corporation (“Railway”), Kansas City Southern, a Delaware corporation (“KCS”)
(“formerly known as Kansas City Southern Industries, Inc.”) and Michael R.
Haverty, an individual (“Executive”).
     WHEREAS, Executive is currently employed by Railway, and Railway, KCSI and
Executive previously entered into an Employment Agreement dated January 1, 2001
(“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 Railway, KCSI 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 Railway for Cause. Railway 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 Railway, KCSI, or any affiliate of
Railway or KCSI;
     (iii) Gross negligence or willful misconduct in the performance of
Executive’s duties as determined in good faith by the Railway 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 Railway 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 Railway, or KCSI or
their affiliates.
(d) Termination by Railway Other Than For Cause.
     (i) Railway may terminate this Agreement and Executive’s employment other
than for cause immediately upon notice to Executive, and in such event, Railway
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 Railway and KCSI and
their 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), Railway 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 Railway 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 Railway 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 Railway 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 Railway 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 Railway. 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 Railway employees then still
participate in such plans) in the year

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of termination of employment only if Executive meets all requirements of such
plans for participation in such year.
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
Railway relating to the business of Railway, KCSI and/or their 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 Railway, KCSI
and/or their affiliates. Executive agrees further not to remove or retain any
figures, calculations, letters, documents, lists, papers, or copies thereof,
which embody Confidential Information of Railway, KCSI and/or their 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 Railway. Executive acknowledges that the provisions of this
paragraph are consistent with Railway’s policies and procedures to which
Executive, as an employee of Railway, 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 Railway, KCSI or their affiliates or
customers, and (1) is proprietary to, about, or created by Railway, KCSI or
their affiliates or customers; (2) gives Railway, KCSI or their affiliates or
customers some competitive business advantage, the opportunity of obtaining such
advantage, or disclosure of which might be detrimental to the interest of
Railway, KCSI or their affiliates or customers; and (3) is not typically
disclosed by Railway, KCSI or their affiliates or customers, or known by persons
who are not employed by Railway, KCSI or their affiliates or customers. Without
in any way limiting the foregoing and by way of example, Confidential
Information shall include: information pertaining to Railway’s, KCSI’s or their
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 Railway, KCSI and/or their 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 Railway, KCSI or their affiliates for such breach. Accordingly,
Executive agrees that Railway, KCSI and/or their 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

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specific performance to enforce the terms of Paragraph 5 without the necessity
of proving inadequacy of legal remedies or irreparable harm or posting bond.
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 Railway 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 Railway
and all direct and indirect subsidiaries and affiliates of Railway as may be
requested by Railway and shall sign such other documents and papers relating to
Executive’s employment, benefits and benefit plans as Railway may reasonably
request.
4. Paragraph 7(c) of the Agreement.
The parenthetical “(discounted to the then present value of 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 19th day of August 2004.

              EXECUTIVE   CHAIRMAN, COMPENSATION COMMITTEE         BOARD OF
DIRECTORS         KANSAS CITY SOUTHERN    
 
           
          /s/ Michael R. Haverty
  By:              /s/ A. Edward Allinson    
 
          Michael R. Haverty
     
 
A. Edward Allinson    

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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 The Kansas City Southern Railway
Company (KCSR), 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 or KCSR. 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; all any
KCSR 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, the Railway 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 Agreement 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.

         
 
       
Employee Signature
  Date    
 
       
 
Employee Name(Please Print)
 
 
Social Security Number    

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