EX-10.50.2





Exhibit
10.50.2



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 (“formerly known as Kansas City Southern Industries, Inc.”) and Scott E.
Arvidson, an individual (“Executive”).



     WHEREAS, Executive is currently employed by Railway and Railway, KCSI and Executive
previously entered into an Employment Agreement dated  May 1, 2000 (“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 subsidiary 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



 









 






     (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



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401(k) Plan (if Railway 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.



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



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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 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.



3. 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 15 day of September 2004.



	 	 	 	 	 	 
	EXECUTIVE

	 	THE KANSAS CITY
SOUTHERN RAILWAY COMPANY	 
	 	 
	 	 	 	 
	/s/ Scott E. Arvidson
 

Scott E. Arvidson

	 	By:	/s/ Michael R. Haverty
 

Michael R. Haverty, Chairman, President & CEO
	 
	 	 
	 	 	 	 
	KANSAS CITY SOUTHERN F/K/A

KANSAS CITY SOUTHERN INDUSTRIES, INC.
	 	 	 	 
	 	 
	 	 	 	 
	By:	/s/ Michael R. Haverty
 

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 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; 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 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/ Scott Arvidson
 

Employee Signature

	 	9-15-2004
 

Date
	 	 
	 
	Scott Arvidson
 

Employee Name (Please Print)

	 	On file with company.
 

Social Security Number
	 	 







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