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                                                                  EXHIBIT 10.9.2

                               SECOND AMENDMENT
                                    TO THE
                             EMPLOYMENT AGREEMENT
                                      OF
                                JAMES F. VERHEY

     This SECOND AMENDMENT TO THE EMPLOYMENT AGREEMENT OF JAMES F. VERHEY
("Second Amendment") is made and entered as of October 1, 1999, by and between
James F. Verhey ("Employee") and Kaiser Ventures Inc. ("Kaiser").

                                   Recitals

     A.   Employee is currently employed by Kaiser as Executive Vice President
and Chief Financial Officer and has an existing Employment Agreement with Kaiser
dated effective June 17, 1996, as amended by that certain First Amendment dated
effective January 15, 1998, between Kaiser and Employee (collectively the
"Employment Agreement").

     B.   Employee and Kaiser have mutually agreed to reduce Employee's time
commitment to Kaiser to approximately one-half time; and

     C.   Employee and Kaiser desire to amend the Employment Agreement solely as
provided herein to reflect their agreement with regard to the reduction in
Employee's time commitment to Kaiser.

     NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

     1.   Amendment of Section 1 of Employment Agreement.  Section 1 of the
Employment Agreement is hereby amended in its entirety to read as follows:

          Employment, Positions and Duties.  Kaiser hereby continues the
          ---------------------------------
          employment of Employee upon the terms and conditions set forth in the
          Employment Agreement as amended herein.  Employee's positions with
          Kaiser shall continue to be Executive Vice President and Chief
          Financial Officer.  Employee shall have the responsibilities and
          duties normally incident to such positions, including, but not limited
          to, those duties and responsibilities set forth in Exhibit "A"
          attached hereto and incorporated herein by this reference and such
          other duties and responsibilities as may be reasonably assigned to him
          from time-to-time by Kaiser's President or Chief Executive Officer.
          Employee agrees to devote fifty percent (50%) of his full business
          time and attention to the discharge of his duties and responsibilities
          under this Agreement with Employee generally being present at Kaiser's
          corporate offices Monday through Thursday, every other week.  Kaiser
          and Employee acknowledge the need for flexibility in Employee's work
          schedule so that Employee agrees to adjust his general schedule to
          give priority to, assist in the preparation for, and attend important
          meetings for Kaiser that may occasionally be scheduled at times other
          than Employee's general work schedule.

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     2.   Amendment of Section 3 of Employment Agreement.  Section 3 of the
Employment Agreement is hereby amended in its entirety to read as follows:

          Base Salary.  Except in connection with the payment of any severance
          -----------
          as provided herein, Employee's initial annual base salary shall be one
          hundred five thousand ($105,000) per year.

          Prior to the first meeting of the Board of Directors in any calendar
          year, the Human Relations Committee of the Board will review
          Employee's annual performance and salary on the same basis as other
          executive officers and report its recommendations for any revision to
          the full Board at such meeting.

          Nothwithstanding anything contained in this Agreement to the contrary,
          for the purposes of determining the amount of severance benefits to be
          paid to Employee for any reason, Employee's base salary shall be
          deemed to be his base salary as of September 30, 1999, and not the new
          initial annual salary provided in this Section 3.

     3.   Confirmation of Participation in Bonus Program.  Employee shall
continue to participate in Kaiser's executive bonus program as provided in
Section 4 of the Employment Agreement or in any other bonus or incentive program
for executive officers adopted by Kaiser.  However, Kaiser and Employee
acknowledge that any amounts paid to Employee, under any such bonus or incentive
programs, may be based on Employee's current annual base salary.

     4.   Confirmation of Benefits.  Employee's benefits such as health, life,
dental and other similar benefits shall remain the same as those available to
full time executive officers of Kaiser as provided in Section 6 of the
Employment Agreement as they may change from time to time (although the total
amount of the benefit may be correspondingly reduced if it is based upon annual
base salary) except that Employee shall not: (i) accrue vacation time after
September 30, 1999; and (ii) be paid a car allowance.  However, this provision
shall not be construed to cause any reduce in the severance benefits payable to
Employee as provided in the Employment Agreement as amended by this Amendment.

     5.   Payment of Certain Expenses.  In addition to the payment of normal and
reasonable business expenses typically reimbursed in the course of work for
Kaiser, Kaiser shall pay Employee's reasonable travel expenses to and from
Kaiser's corporate offices and reasonable hotel expenses while working at
Kaiser's corporate offices.  Employee shall pay for all of his personal meals.

     6.   Ratification of Employment Agreement as Amended.  The Employment
Agreement is not amended in any respect except as expressly provided herein, and
the Employment Agreement as amended by this Second Amendment is hereby ratified
and approved in all respects

     7.   Governing Law.  This Second Amendment shall be governed by and
construed in accordance with the laws of the State of California.

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     IN WITNESS WHEREOF, the parties hereto have executed this First Amendment
to the Employment Agreement to be effective as of the day and year first written
above not withstanding the actual date of signature.

                                            "Employee"
                                            James F. Verhey

                                            /s/ James F. Verhey
                                            ------------------------------------
                                            James F. Verhey

                                            "Kaiser"
                                            Kaiser Ventures Inc.

                                            By: /s/ Richard E. Stoddard
                                                --------------------------------
                                                Richard E. Stoddard, Chairman of
                                                the Board, Chief Executive
                                                Officer and President

                                            By:  /s/ Todd G. Cole
                                                 -------------------------------
                                                 Todd G. Cole, Chairman of the
                                                 Human Relations Committee

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                                    REVISED
                                 SCHEDULE "A"

                                JAMES F. VERHEY
                        Executive Vice President & CFO

     This position will report to the President and Chief Executive Officer.

Responsibilities:

     This position has the responsibility to manage all accounting, finance,
tax, and treasury functions for the Company and its subsidiaries; to represent
the Company with all outside entities coming under the purview of corporate
finance; to ensure all reporting requirements are met in a satisfactory and
timely manner; to assist senior management in analyzing, evaluating and pursuing
new business and growth opportunities; to manage the Company's annual budget and
capital plan processes; to manage the Company's financial analysis and modeling
function; to manage the Company's insurance program; and to monitor all project
development activities from the financial perspective.  These duties include the
following:

     .    Assist CEO in analyzing, evaluating and pursuing business and growth
          opportunities.
     .    Seek out, secure and manage all financing for future growth
          opportunities and acquisitions.
     .    Oversee investor relations program implementation,
          shareholder/investor communications.
     .    Oversee implementation of real estate financing strategy.
     .    Manage and oversee financial aspects of SEC compliance.
     .    Oversee the treasury and controller functions. Oversee all audit
          procedures, outside auditors, and report to the Chairman of the Audit
          Committee.
     .    Manage all aspects of the accounting function of the Company,
          employing Generally Accepted Accounting Procedures.
     .    Manage the Company's annual budget and capital plan processes.
     .    Manage the Company's financial analysis and modeling function.
     .    Manage all tax planning and reporting.
     .    Manage all debt and equity structuring.
     .    Manage all insurance programs.
     .    Manage and oversee the Kaiser Eagle Mountain, operations, insuring
          both smooth functioning of all administrative departments and
          operations. Monitor all project development activities from the
          financial perspective.
     .    Participate in major negotiations with third parties.
     .    Direct and manage, in coordination with the Sr. Vice President and
          General Counsel, the operations of the Company in the absence of the
          Chief Executive Officer.

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                                                                  Exhibit 10.9.3

                                THIRD AMENDMENT
                                    TO THE
                             EMPLOYMENT AGREEMENT
                                      OF
                                JAMES F. VERHEY

     This THIRD AMENDMENT TO THE EMPLOYMENT AGREEMENT OF JAMES F. VERHEY ("Third
Amendment") is made and entered into as of January 6, 2000, by and between JAMES
F. VERHEY ("Employee") and KAISER VENTURES INC. ("Kaiser").

                                   Recitals
                                   --------

     A.   Employee is currently employed by Kaiser as Executive Vice President-
Finance and Chief Financial Officer and has an existing Employment Agreement
with Kaiser dated effective June 17, 1996, as amended by that certain First
Amendment dated effective January 15, 1998, as further amended by that certain
Second Amendment dated effective October 1, 1999, between Kaiser and Employee
(collectively the "Employment Agreement"); and

     B.   Employee and Kaiser have mutually agreed to the modification of
certain provisions of the Employment Agreement and therefore Employee and Kaiser
desire to amend the Employment Agreement solely as provided herein.

     NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

     1.   Amendment of Paragraph 11 of Employment Agreement. Paragraph 11 of the
Employment Agreement is hereby amended as follows:

          (a)  Subparagraph 11.b. Subparagraph 11.b. of the Employment Agreement
               -----------------
     is hereby deleted in its entirety and the following new subparagraph 11.b.
     is substituted therefore:

               "b.  any acquisition of common stock by a person or "group" (as
          defined in section 13(d) of the Securities Exchange Act of 1934),
          resulting in the "beneficial ownership" (as defined in Rule 13d-3
          under the Securities Exchange Act of 1934) by that person or group of
          more than 35% of the capital stock of Kaiser."

          (b)  Subparagraph 11.c. Subparagraph 11.c of the Employment Agreement
               -----------------
     is hereby deleted in its entirety an the following new subparagraph 11.c.
     is substituted therefore:

               "c.  following the date of this Amendment there has been an
          aggregate of net assets with a cumulative value that exceeds the
          greater of (i) $30,000,000 or (ii) 30% of the net equity of Kaiser at
          the time of the distribution (whether by dividend or repurchase of
          stock) distributed to any one or more Kaiser shareholders."

          (c)  Addition of Subparagraphs 11.d. and 11.e. Paragraph 11 of the
               ----------------------------------------
     Employment Agreement is amended by the addition of the following new
     subparagraphs:

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               "d.  During any period of two consecutive years, the individuals
          who at the beginning of such period constitute the Board of Directors
          of the Company, cease for any reason, to constitute at least a
          majority thereof, unless the election, or the nomination for election
          by the Company's shareholders, of each new director has been approved
          at the time of such election or nomination by a vote of at least two-
          thirds of the directors then still in office who were directors at the
          beginning of the period; or

               e.  The Board of Directors or any designated committee
          determines, in its sole discretion, that any person (such as that
          term is used in Sections 13(d) and 14(d) of the Exchange Act)
          directly or indirectly exercises a controlling influence over the
          management or policies or the Company."

     2.   Amendment of Paragraph 12 of the Employment Agreement. Subparagraph
12.c. of the Employment Agreement is hereby deleted in its entirety, except for
that portion of the paragraph commencing with "then, at Employee's option---"
and ending with the words "Paragraph 13 below," and the following new portion of
Subparagraph 12.c. is substituted therefor:

               "c.  Any failure to provide Employee with compensation and
          benefits in the aggregate on terms that are materially less favorable
          than those enjoyed by Employee under this Agreement immediately prior
          to a Material Change, or the subsequent taking of any action that
          would materially reduce Employee's compensation and benefits in effect
          at the time of the Material Change."

     3.   Amendment of Paragraph 13 of the Employment Agreement. Paragraph 13 of
the Employment Agreement is hereby amended as follows:

          (a)  Subparagraph 13.a. The phrase "as measured by the preceding
               -----------------
     year's bonus" in subparagraph 13.a. is hereby deleted in its entirety and
     the following new phrase is substituted therefore in Subparagraph 13.a.:
     "as measured by Employee's average percentage bonus over the past five
     years (or such lesser period of time during which Employee was eligible to
     receive a bonus)."

          (b)  Subparagraph 13.b. The phrase in Subparagraph 13.b averaged over
               -----------------
     the two (2) immediately preceding years" is herein deleted and replaced
     with the phrase "as measured by Employee's average percentage bonus over
     the past five years" (or such lesser period of time during which Employee
     was eligible to receive a bonus)."

          (c)  Subparagraph 13.c. The word "will" in Subparagraph 13.c is hereby
               -----------------
     deleted and replaced with the word "with," such that the end of
     Subparagraph 13.c reads "in proportion to shares owned together with all
     other shareholders."

          (d)  Additional Paragraph. Paragraph 13 of the Employment Agreement is
               --------------------
     hereby amended by the addition of the following paragraph at the end of the
     current Paragraph 13.

               "For purposes of this Agreement, "average percentage bonus over
          the past five years" shall mean the average percentage bonus received
          by Employee for the five years preceding the year of termination (or
          for such lesser period in which bonus payments were

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          received) as applied to the Employee's current annual base salary," is
          substituted therefore:

     4.   Amendment of Paragraph 16. Paragraph 16 of the Employment Agreement is
hereby amended by deleting the reference to "ninety (90) days" and substituting
therefore "one hundred twenty (120) days."

     5.   Amendment of Paragraph 18. Paragraph 18 of the Employment Agreement is
hereby amended by the addition of the following phrase to the end of the first
sentence of Paragraph 18, "provided, however, Employee shall give a minimum of
ninety (90) days advance written notice."

     6    Ratification of Employment Agreement as Amended. The Employment
Agreement is not amended in any respect except as expressly provided herein, and
the Employment Agreement as amended by this Third Amendment is hereby ratified
and approved in all respects

     7    Governing Law. This Third Amendment shall be governed by and construed
in accordance with the laws of the State of California.

     IN WITNESS WHEREOF, the parties hereto have executed this Third Amendment
to the Employment Agreement to be effective as of the day and year first written
above not withstanding the actual date of signature.

"Employee"                              "Kaiser"
James F. Verhey                         Kaiser Ventures Inc.

/s/ James F. Verhey                     By: /s/ Richard E. Stoddard
---------------------------                 ------------------------------------
James F. Verhey                             Richard E. Stoddard
                                            President & Chief Executive Officer

                                            By:  /s/ Todd G. Cole
                                            ------------------------------------
                                            Todd G. Cole, Chairman of the
                                            Human Relations Committee

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