Document:

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                                                                 Exhibit 10.15.1

                     FIRST AMENDMENT TO EMPLOYMENT AGREEMENT

      THIS FIRST AMENDMENT TO EMPLOYMENT AGREEMENT (this "Amendment") dated this
14th day of March 2003 by and between The Kansas City Southern Railway Company,
a Missouri corporation ("Railway"), Kansas City Southern, a Delaware corporation
f/k/a Kansas City Southern Industries, Inc. ("KCSI"), and Jerry W. Heavin, an
individual ("Executive").

      WHEREAS, Railway, KCSI and Executive are parties to that certain
Employment Agreement dated September 1, 2001 (the "Employment Agreement"),
pursuant to which Railway employed Executive as Vice President of Engineering;

      WHEREAS, as of July 9, 2002 (the "Effective Date"), Executive assumed the
role of Senior Vice President Operations for Railway (the "Promotion"); and

      WHEREAS, Railway, KCSI and Executive desire to amend the Employment
Agreement to provide for certain changes to the Employment Agreement
necessitated by the Promotion.

      NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

1.    Section 1 of the Employment Agreement is hereby amended so that the first
sentence and only the first sentence of Section 1 is deleted in its entirety and
replaced with the following:

      "Railway hereby continues the employment of Executive as Senior Vice
      President Operations, to serve at the pleasure of the Board of Directors
      of Railway (the "Railway Board") and to have such duties, powers and
      responsibilities as may be prescribed or delegated from time to time by
      the President or other officer to whom Executive reports, subject to the
      powers vested in the Railway Board and in the stockholder of the Railway."

2.    Section 3 of the Employment Agreement is hereby amended so that the second
sentence and only the second sentence of Section 3 is deleted in its entirety
and replaced with the following:

      "In determining contributions, coverage and benefits under any disability
      insurance policy and under any cash compensation-based plan provided to
      Executive by Railway, it shall be assumed that the value of Executive's
      annual compensation, pursuant to this Agreement, is 175% of Executive's
      annual base salary."

3.    Section 7(e) of the Employment Agreement is hereby amended so that clauses
(i) and (ii) and only clauses (i) and (ii) are deleted in their entirety and
replaced with the following:

      "(i) 175% of his annual base salary specified in Paragraph 7(a) multiplied
      by (ii) Three;"

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                                                                 Exhibit 10.15.1

4.    The parties hereto acknowledge and agree that this Amendment shall be
deemed to have been effective as of the Effective Date.

5.    Capitalized terms used herein without definition shall have the respective
meanings attributed to such terms in the Employment Agreement.

6.    The parties hereto hereby ratify, confirm and approve the Employment
Agreement, as amended by this Amendment. Should any terms of this Amendment
conflict with any terms of the Employment Agreement, the terms of this Amendment
shall control.

7.    This Amendment may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.

[     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the day and year first written above.

                           RAILWAY:

                           THE KANSAS CITY SOUTHERN RAILWAY COMPANY

                           By:       /s/ Michael R. Haverty
                              ---------------------------------
                           Name:  Michael R. Haverty
                           Title: Chairman, President & CEO

                           KCSI:

                           KANSAS CITY SOUTHERN

                           By:       /s/ Michael R. Haverty
                              ---------------------------------
                           Name:  Michael R. Haverty
                           Title: Chairman, President & CEO

                           EXECUTIVE:

                           By:       /s/ Jerry W. Heavin
                              ---------------------------------
                           Name:  Jerry W. Heavin

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                                                                   Exhibit 10.16

                              EMPLOYMENT AGREEMENT

     THIS AGREEMENT, made and entered into as of this 14th day of August, 2000,
by and between The Kansas City Southern Railway Company, a Missouri corporation
("Railway"), Kansas City Southern Industries, Inc., a Delaware corporation
("KCSI") and Larry O. Stevenson, an individual ("Executive").

     WHEREAS, Executive is now employed by Railway, and Railway, KCSI and
Executive desire for Railway to continue to employ Executive on the terms and
conditions set forth in this Agreement and to provide an incentive to Executive
to remain in the employ of Railway hereafter, particularly in the event of any
change in control (as herein defined) of KCSI, Railway or Kansas City Southern
Lines, Inc., thereby establishing and preserving continuity of management of
Railway.

     NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, it is agreed by and between Railway, KCSI and Executive as
follows:

     1.   Employment. Railway hereby employs Executive as its Vice President
Forest Products Business Unit, to serve at the pleasure of the Board of
Directors of Railway (the "Railway Board") and to have such duties, powers and
responsibilities as may be prescribed or delegated from time to time by the
President or other officer to whom Executive reports, subject to the powers
vested in the Railway Board and in the stockholder of Railway. Executive shall
faithfully perform his duties under this Agreement to the best of his ability
and shall devote substantially all of his working time and efforts to the
business and affairs of Railway and its affiliates.

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                                                                   Exhibit 10.16

     2.   Compensation.

          (a)  Base Compensation. Railway shall pay Executive as compensation
for his services hereunder an annual base salary at the rate approved by the
KCSI Compensation Committee. Such rate shall not be increased prior to January
1, 2002 and shall not be reduced except as agreed by the parties or except as
part of a general salary reduction program imposed by Railway for non-union
employees and applicable to all officers of Railway.

          (b)  Incentive Compensation. For the years 2000 and 2001, Executive
shall not be entitled to participate in the Railway Incentive Compensation Plan.

     3.   Benefits. During the period of his employment hereunder, Railway shall
provide Executive with coverage under such benefit plans and programs as are
made generally available to similarly situated employees of Railway, provided
(a) Railway shall have no obligation with respect to any plan or program if
Executive is not eligible for coverage thereunder, and (b) Executive
acknowledges that stock options and other stock and equity participation awards
are granted in the discretion of the Board of Directors of KCSI (the "KCSI
Board") or the Compensation Committee of the KCSI Board and that Executive has
no right to receive stock options or other equity participation awards or any
particular number or level of stock options or other awards. In determining
contributions, coverage and benefits under any disability insurance policy and
under any cash compensation-based plan provided to Executive by Railway, it
shall be assumed that the value of Executive's annual compensation, pursuant
to this Agreement, is 145% of Executive's annual base salary. Executive
acknowledges that all rights and benefits under benefit plans and programs shall
be governed by the official text of each plan or program and not by any summary
or description thereof or any provision of this Agreement (except to the extent
that this Agreement expressly modifies such benefit plans or programs) and that
none of KCSI, KCSL nor

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                                                                   Exhibit 10.16

Railway is under any obligation to continue in effect or to fund any such plan
or program, except as provided in Paragraph 7 hereof.

     4.   Termination.

          (a)  Termination by Executive. Executive may terminate this Agreement
and his employment hereunder by at least thirty (30) days advance written notice
to Railway, except that in the event of any material breach of this Agreement by
Railway, Executive may terminate this Agreement and his employment hereunder
immediately upon notice to Railway.

          (b)  Death or Disability. This Agreement and Executive's
employment hereunder shall terminate automatically on the death or disability of
Executive, except to the extent employment is continued under Railway's
disability plan. For purposes of this Agreement, Executive shall be deemed to be
disabled if he qualifies for disability benefits under Railway's long-term
disability plan.

          (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, KCSL or any
     subsidiary of Railway, KCSI or KCSL;

               (iii) Gross negligence or willful misconduct in the performance
     of Executive's duties as determined in good faith by the Railway Board;

               (iv)  Willful failure by Executive to follow reasonable
     instructions of the President or other officer to whom Executive reports;

               (v)   Executive's fraud or criminal activity; or

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                                                                   Exhibit 10.16

               (vi)  Embezzlement or misappropriation by Executive.

          (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) below.

               (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 continue, for a period of one (1) year following
     such termination, (a) 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) above, at the rate in effect immediately prior to
     termination, and, (b) to 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 one (1) year period 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 the KCSL 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

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                                                                   Exhibit 10.16

     account for the purpose of determining benefits, if any, under the Railway
     Incentive Compensation Plan but not under the KCSL 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 KCSL Executive Plan with respect to the severance pay provided herein,
     notwithstanding that benefits under such plan then 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 KCSI Profit Sharing Plan, the KCSI
     Employee Stock Ownership Plan and the KCSI Section 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.

          (e)  Termination Upon Expiration of Right to Work Documentation.
Notwithstanding the foregoing provisions of this Paragraph 4, this Agreement and
Executive's employment shall terminate automatically upon the expiration,
cancellation, revocation or other cessation of Executive's Right to Work
Documentation without contemporaneous extension, renewal or replacement thereof.
For purposes of this Paragraph 4(e), the term "Right to Work Documentation"
shall mean a TN or H-1b visa or other documentation evidencing Executive's legal
right to work in the United States pursuant to this Agreement. A termination of
employment pursuant to this Paragraph 4(e) shall be treated, for all purposes of
this Paragraph 4, as a voluntary termination of employment by the Executive,
shall not be treated as a termination by Railway under Paragraph 4(d)(is), and
shall not entitle the Executive to severance benefits under Paragraph 4(d)(ii).

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                                                                   Exhibit 10.16

     5.   Non-Disclosure. During the term of this Agreement and at all times
after any termination of this Agreement, Executive shall not, either directly or
indirectly, use or disclose any Railway trade secret, except to the extent
necessary for Executive to perform his duties for Railway while an employee. For
purposes of this Agreement, the term "Railway trade secret" shall mean any
information regarding the business or activities of Railway or any subsidiary or
affiliate, including any formula, pattern, compilation, program, device, method,
technique, process, customer list, technical information or other confidential
or proprietary information, that (a) derives independent economic value, actual
or potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from its disclosure or use, and (b) is the subject of efforts of Railway or its
subsidiary or affiliate that are reasonable under the circumstance to maintain
its secrecy. In the event of any breach of this 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.

     6.   Duties Upon Termination; Survival.

          (a)  Duties. Upon termination of this Agreement by Railway or
Executive for any reason, Executive shall immediately return to Railway all
Railway trade secrets which exist in tangible form and shall 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.

          (b)  Survival. The provisions of Paragraphs 5, 6(a) and 7 of this
Agreement shall survive any termination of this Agreement by Railway or
Executive, and the provisions of

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                                                                   Exhibit 10.16

Paragraph 4(d)(ii) shall survive any termination of this Agreement by Railway
under Paragraph 4(d)(i).

     7.   Continuation of Employment Upon Change in Control

          (a)  Continuation of Employment. Subject to the terms and conditions
of this Paragraph 7, in the event of a Change in Control (as defined in
Paragraph 7(d)) at any time during the term of this Agreement, Executive agrees
to remain in the employ of Railway for a period of three years (the "Three-Year
Period") from the date of such Change in Control (the "Control Change Date").
Railway agrees to continue to employ Executive for the Three-Year Period. During
the Three-Year Period, (i) the Executive's position (including offices, titles,
reporting requirements and responsibilities), authority and duties shall be at
least commensurate in all material respects with the most significant of those
held, exercised and assigned at any time during the 12 month period immediately
before the Control Change Date and (ii) the Executive's services shall be
performed at the location where Executive was employed immediately before the
Control Change Date or at any other location less than 40 miles from such former
location. During the Three-Year Period, Railway shall continue to pay to
Executive an annual base salary on the same basis and at the same intervals as
in effect prior to the Control Change Date at a rate not less than 12 times the
highest monthly base salary paid or payable to the Executive by Railway in
respect of the 12-month period immediately before the Control Change Date.

          (b)  Benefits. During the Three-Year Period, Executive shall be
entitled to participate, on the basis of his executive position, in each of the
following KCSI, KCSL or Railway plans (together, the "Specified Benefits") in
existence, and in accordance with the terms thereof, at the Control Change Date:

               (i)  any benefit plan, and trust fund associated therewith,
     related to (A) life, health, dental, disability, accidental death and
     dismemberment insurance or accrued

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                                                                   Exhibit 10.16

     but unpaid vacation time, (B) profit sharing, thrift or deferred savings
     (including deferred compensation, such as under Sec. 401(k) plans), (C)
     retirement or pension benefits, (D) ERISA excess benefits and similar plans
     and (E) tax favored employee stock ownership (such as under ESOP, and
     Employee Stock Purchase programs); and

               (ii)  any other benefit plans hereafter made generally available
     to executives of Executive's level or to the employees of Railway
     generally.

     In addition, Railway and KCSI shall use their best efforts to cause all
outstanding options held by Executive under any stock option plan of KCSI or its
affiliates to become immediately exercisable on the Control Change Date and to
the extent that such options are not vested and are subsequently forfeited, the
Executive shall receive a lump-sum cash payment within 5 days after the options
are forfeited equal to the difference between the fair market value of the
shares of stock subject to the non-vested, forfeited options determined as of
the date such options are forfeited and the exercise price for such options.
During the Three-Year Period Executive shall be entitled to participate, on the
basis of his executive position, in any incentive compensation plan of KCSI,
KCSL or Railway in accordance with the terms thereof at the Control Change Date;
provided that if under KCSI, KCSL or Railway programs or Executive's
Employment Agreement in existence immediately prior to the Control Change Date,
there are written limitations on participation for a designated time period in
any incentive compensation plan, such limitations shall continue after the
Control Change Date to the extent so provided for prior to the Control Change
Date.

     If the amount of contributions or benefits with respect to the Specified
Benefits or any incentive compensation is determined on a discretionary basis
under the terms of the Specified Benefits or any incentive compensation plan
immediately prior to the Control Change Date, the amount of such contributions
or benefits during the Three-Year Period for each of the Specified

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                                                                   Exhibit 10.16

Benefits shall not be less than the average annual contributions or benefits for
each Specified Benefit for the three plan years ending prior to the Control
Change Date and, in the case of any incentive compensation plan, the amount of
the incentive compensation during the Three-Year Period shall not be less than
75% of the maximum that could have been paid to the Executive under the terms of
the incentive compensation plan.

          (c)  Payment. With respect to any plan or agreement under which
Executive would be entitled at the Control Change Date to receive Specified
Benefits or incentive compensation as a general obligation of Railway which has
not been separately funded (including specifically, but not limited to, those
referred to under Paragraph 7(b)(i)(d) above), Executive shall receive within
five (5) days after such date full payment in cash (discounted to the then
present value on the basis of a rate of seven percent (7%) per annum) of all
amounts to which he is then entitled thereunder.

          (d)  Change in Control. Except as provided in the last sentence of
this Paragraph 7(d), for purposes of this Agreement, a "Change in Control" shall
be deemed to have occurred if:

               (i)   for any reason at any time less than seventy-five percent
     (75%) of the members of the KCSI Board shall be individuals who fall into
     any of the following categories: (A) individuals who were members of the
     KCSI Board on the date of the Agreement; or (B) individuals whose election,
     or nomination for election by KCSI's stockholders, was approved by a
     vote of at least seventy-five percent (75%) of the members of the KCSI
     Board then still in office who were members of the KCSI Board on the date
     of the Agreement; or (C) individuals whose election, or nomination for
     election, by KCSI's stockholders, was approved by a vote of at least
     seventy-five percent (75%) of

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                                                                   Exhibit 10.16

     the members of the KCSI Board then still in office who were elected in
     the manner described in (A) or (B) above, or

               (ii)  any "person" (as such term is used in Sections 13(d) and
     14(d)(2) of the Securities Exchange Act of 1934 (the "Exchange Act")) other
     than KCSI shall have become after September 18, 1997, according to a public
     announcement or filing, the "beneficial owner" (as defined in Rule 13d-3
     under the Exchange Act), directly or indirectly, of securities of KCSL,
     Railway or KCSI representing thirty percent (30%) (or, with respect to
     Paragraph 7(c) hereof, 40%) or more (calculated in accordance with Rule
     13d-3) of the combined voting power of KCSL's, Railway's or
     KCSI's then outstanding voting securities; or

               (iii) the stockholders of KCSL, Railway or KCSI shall have
     approved a merger, consolidation or dissolution of KCSL, Railway or KCSI or
     a sale, lease, exchange or disposition of all or substantially all of
     KCSL's, Railway's or KCSI's assets, if persons who were the
     beneficial owners of the combined voting power of KCSL's, Railway's
     or KCSI's voting securities immediately before any such merger,
     consolidation, dissolution, sale, lease, exchange or disposition do not
     immediately thereafter, beneficially own, directly or indirectly, in
     substantially the same proportions, more than 60% of the combined voting
     power of any corporation or other entity resulting from any such
     transaction.

Notwithstanding the foregoing provisions of this Paragraph 7(d) to the contrary,
the sale of shares of stock of KCSL pursuant to an initial public offering of
shares of stock of KCSL shall not constitute a Change in Control.

          (e)  Termination After Control Change Date. Notwithstanding any other
provision of this Paragraph 7, at any time after the Control Change Date,
Railway may terminate

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                                                                   Exhibit 10.16

the employment of Executive (the "Termination"), but unless such Termination is
for Cause as defined in subparagraph (g) or for disability, within five (5) days
of the Termination Railway shall pay to Executive his full base salary through
the Termination, to the extent not theretofore paid, plus a lump sum amount (the
"Special Severance Payment") equal to the product (discounted to the then
present value on the basis of a rate of seven percent (7%) per annum) of (i)
160% of his annual base salary specified in Paragraph 7(a) multiplied by (ii)
Two; and Specified Benefits (excluding any incentive compensation) to which
Executive was entitled immediately prior to Termination shall continue until the
end of the 3-year period ("Benefits Period") beginning on the date of
Termination. If any plan pursuant to which Specified Benefits are provided
immediately prior to Termination would not permit continued participation by
Executive after Termination, then Railway shall pay to Executive within five (5)
days after Termination a lump sum payment equal to the amount of Specified
Benefits Executive would have received under such plan if Executive had been
fully vested in the average annual contributions or benefits in effect for the
three plan years ending prior to the Control Change Date (regardless of any
limitations based on the earnings or performance of KCSI, KCSL or Railway) and a
continuing participant in such plan to the end of the Benefits Period. Following
the end of the Benefits Period, Railway shall continue to provide to the
Executive and the Executive's family the following benefits ("Post-Period
Benefits"): (1) prior to the Executive's attainment of age sixty (60), health,
prescription and dental benefits equivalent to those then applicable to active
peer executives of Railway) and their families, as the same may be modified from
time to time, and (2) following the Executive's attainment of age sixty (60)
(and without regard to the Executive's period of service with Railway) health
and prescription benefits equivalent to those then applicable to retired peer
executives of Railway and their families, as the same may be modified from time
to time. The cost to the Executive of such Post-Period Benefits

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                                                                   Exhibit 10.16

shall not exceed the cost of such benefits to active or retired (as applicable)
peer executives, as the same may be modified from time to time. Notwithstanding
the preceding two sentences of this Paragraph 7(e), if the Executive is covered
under any health, prescription or dental plan provided by a subsequent employer,
then the corresponding type of plan coverage (i.e., health, prescription or
dental), required to be provided as Post-Period Benefits under this Paragraph
7(e) shall cease. The Executive's rights under this Paragraph 7(e) shall be in
addition to, and not in lieu of, any post-termination continuation coverage or
conversion rights the Executive may have pursuant to applicable law, including
without limitation continuation coverage required by Section 4980 of the Code.
Nothing in this Paragraph 7(e) shall be deemed to limit in any manner the
reserved right of Railway, in its sole and absolute discretion, to at any time
amend, modify or terminate health, prescription or dental benefits for active or
retired employees generally.

          (f)  Resignation After Control Change Date. In the event of a Change
in Control as defined in Paragraph 7(d), thereafter, upon good reason (as
defined below), Executive may, at any time during the 3-year period following
the Change in Control, in his sole discretion, on not less than thirty (30)
days' written notice (the "Notice of Resignation") to the Secretary of
Railway and effective at the end of such notice period, resign his employment
with Railway (the "Resignation"). Within five (5) days of such a Resignation,
Railway shall pay to Executive his full base salary through the effective date
of such Resignation, to the extent not theretofore paid, plus a lump sum amount
equal to the Special Severance Payment (computed as provided in the first
sentence of Paragraph 7(e), except that for purposes of such computation all
references to "Termination" shall be deemed to be references to "Resignation").
Upon Resignation of Executive, Specified Benefits to which Executive was
entitled immediately prior to Resignation shall continue on the same terms and
conditions as provided in Paragraph 7(e) in the case of Termination (including
equivalent payments provided for therein), and Post-Period Benefits shall

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                                                                   Exhibit 10.16

be provided on the same terms and conditions as provided in Paragraph 7(e) in
the case of Termination. For purposes of this Agreement, "good reason" means any
of the following:

               (i)   the assignment to the Executive of any duties inconsistent
     in any respect with the Executive's position (including offices, titles,
     reporting requirements or responsibilities), authority or duties as
     contemplated by Section 7(a)(i), or any other action by Railway which
     results in a diminution or other material adverse change in such position,
     authority or duties;

               (ii)  any failure by Railway to comply with any of the provisions
     of Paragraph 7;

               (iii) Railway's requiring the Executive to be based at any office
     or location other than the location described in Section 7(a)(ii);

               (iv)  any other material adverse change to the terms and
     conditions of the Executive's employment; or

               (v)   any purported termination by Railway of the Executive's
     employment other than as expressly permitted by this Agreement (any such
     purported termination shall not be effective for any other purpose under
     this Agreement).

A passage of time prior to delivery of the Notice of Resignation or a failure by
the Executive to include in the Notice of Resignation any fact or circumstance
which contributes to a showing of Good Reason shall not waive any right of the
Executive under this Agreement or preclude the Executive from asserting such
fact or circumstance in enforcing rights under this Agreement.

          (g)  Termination for Cause After Control Change Date. Notwithstanding
any other provision of this Paragraph 7, at any time after the Control Change
Date, Executive may be terminated by Railway "for cause." Cause means commission
by the Executive of any felony or

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                                                                   Exhibit 10.16

willful breach of duty by the Executive in the course of the Executive's
employment; except that Cause shall not mean:

               (i)   bad judgment or negligence;

               (ii)  any act or omission believed by the Executive in good faith
     to have been in or not opposed to the interest of Railway (without intent
     of the Executive to gain, directly or indirectly, a profit to which the
     Executive was not legally entitled);

               (iii) any act or omission with respect to which a determination
     could properly have been made by the Railway Board that the Executive met
     the applicable standard of conduct for indemnification or reimbursement
     under Railway's by-laws, any applicable indemnification agreement, or
     applicable law, in each case in effect at the time of such act or omission;
     or

               (iv)  any act or omission with respect to which Notice of
     Termination of the Executive is given more than 12 months after the
     earliest date on which any member of the Railway Board, not a party to the
     act or omission, knew or should have known of such act or omission.

Any Termination of the Executive's employment by Railway for Cause shall be
communicated to the Executive by Notice of Termination.

          (h)  Gross-up for Certain Taxes. If it is determined (by the
reasonable computation of Railway's independent auditors, which determinations
shall be certified to by such auditors and set forth in a written certificate
("Certificate") delivered to the Executive) that any benefit received or deemed
received by the Executive from Railway, KCSL or KCSI pursuant to this Agreement
or otherwise (collectively, the "Payments") is or will become subject to any
excise tax under Section 4999 of the Code or any similar tax payable under any
United States federal, state, local or other law (such excise tax and all such
similar taxes collectively,

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                                                                   Exhibit 10.16

"Excise Taxes"), then Railway shall, immediately after such determination, pay
the Executive an amount (the "Gross-up Payment") equal to the product of:

               (i)   the amount of such Excise Taxes; multiplied by

               (ii)  the Gross-up Multiple (as defined in Paragraph 7(k)). The
     Gross-up Payment is intended to compensate the Executive for the Excise
     Taxes and any federal, state, local or other income or excise taxes or
     other taxes payable by the Executive with respect to the Gross-up Payment.

               Railway shall cause the preparation and delivery to the Executive
     of a Certificate upon request at any time. Railway shall, in addition to
     complying with this Paragraph 7(h), cause all determinations and
     certifications under Paragraphs 7(h)-(o) to be made as soon as reasonably
     possible and in adequate time to permit the Executive to prepare and file
     the Executive's individual tax returns on a timely basis.

          (i)  Determination by the Executive.

               (i)   If Railway shall fail (A) to deliver a Certificate to the
     Executive or (B) to pay to the Executive the amount of the Gross-up
     Payment, if any, within 14 days after receipt from the Executive of a
     written request for a Certificate, or if at any time following receipt of a
     Certificate the Executive disputes the amount of the Gross-up Payment set
     forth therein, the Executive may elect to demand the payment of the amount
     which the Executive, in accordance with an opinion of counsel to the
     Executive ("Executive Counsel Opinion"), determines to be the Gross-up
     Payment. Any such demand by the Executive shall be made by delivery to
     Railway of a written notice which specifies the Gross-up Payment determined
     by the Executive and an Executive Counsel Opinion regarding such Gross-up
     Payment (such written notice and opinion collectively, the "Executive's
     Determination"). Within 14 days after delivery of the Executive's

                                      -15-

<PAGE>

                                                                   Exhibit 10.16

     Determination to Railway, Railway shall either (A) pay the Executive the
     Gross-up Payment set forth in the Executive's Determination (less the
     portion of such amount, if any, previously paid to the Executive by
     Railway) or (B) deliver to the Executive a Certificate specifying the
     Gross-up Payment determined by Railway's independent auditors, together
     with an opinion of Railway's counsel ("Railway Counsel Opinion"), and pay
     the Executive the Gross-up Payment specified in such Certificate. If for
     any reason Railway fails to comply with clause (B) of the preceding
     sentence, the Gross-up Payment specified in the Executive's Determination
     shall be controlling for all purposes.

               (ii)  If the Executive does not make a request for, and Railway
     does not deliver to the Executive, a Certificate, Railway shall, for
     purposes of Paragraph 7(j), be deemed to have determined that no Gross-up
     Payment is due.

          (j)  Additional Gross-up Amounts. If, despite the initial conclusion
of Railway and/or the Executive that certain Payments are neither subject to
Excise Taxes nor to be counted in determining whether other Payments are subject
to Excise Taxes (any such item, a "Non-Parachute Item"), it is later determined
(pursuant to subsequently-enacted provisions of the Code, final regulations or
published rulings of the IRS, final IRS determination or judgment of a court of
competent jurisdiction or Railway's independent auditors) that any of the
Non-Parachute Items are subject to Excise Taxes, or are to be counted in
determining whether any Payments are subject to Excise Taxes, with the result
that the amount of Excise Taxes payable by the Executive is greater than the
amount determined by Railway or the Executive pursuant to Paragraph 7(h) or
Paragraph 7(i), as applicable, then Railway shall pay the Executive an amount
(which shall also be deemed a Gross-up Payment) equal to the product of:

               (i)   the sum of (A) such additional Excise Taxes and (B) any
     interest, fines, penalties, expenses or other costs incurred by the
     Executive as a result of having

                                      -16-

<PAGE>

                                                                   Exhibit 10.16

     taken a position in accordance with a determination made pursuant to
     Paragraph 7(h); multiplied by

               (ii)  the Gross-up Multiple. (k) Gross-up Multiple. The Gross-up
     Multiple shall equal a fraction, the numerator of which is one (1.0), and
     the denominator of which is one (1.0) minus the sum, expressed as a decimal
     fraction, of the rates of all federal, state, local and other income and
     other taxes and any Excise Taxes applicable to the Gross-up Payment;
     provided that, if such sum exceeds 0.8, it shall be deemed equal to 0.8 for
     purposes of this computation. (If different rates of tax are applicable to
     various portions of a Gross-up Payment, the weighted average of such rates
     shall be used.)

          (l)  Opinion of Counsel. "Executive Counsel Opinion" means a legal
opinion of nationally recognized executive compensation counsel that there is a
reasonable basis to support a conclusion that the Gross-up Payment determined by
the Executive has been calculated in accord with this Paragraph 7 and applicable
law. "Company Counsel Opinion" means a legal opinion of nationally recognized
executive compensation counsel that (i) there is a reasonable basis to support a
conclusion that the Gross-up Payment set forth in the Certificate of
Railway's independent auditors has been calculated in accord with this
Paragraph 7 and applicable law, and (ii) there is no reasonable basis for the
calculation of the Gross-up Payment determined by the Executive.

          (m)  Amount Increased or Contested. The Executive shall notify Railway
in writing of any claim by the IRS or other taxing authority that, if
successful, would require the payment by Railway of a Gross-up Payment. Such
notice shall include the nature of such claim and the date on which such claim
is due to be paid. The Executive shall give such notice as soon as practicable,
but no later than 10 business days, after the Executive first obtains actual

                                      -17-

<PAGE>

                                                                   Exhibit 10.16

knowledge of such claim; provided, however, that any failure to give or delay in
giving such notice shall affect Railway's obligations under this Paragraph 7
only if and to the extent that such failure results in actual prejudice to
Railway. The Executive shall not pay such claim less than 30 days after the
Executive gives such notice to Railway (or, if sooner, the date on which payment
of such claim is due). If Railway notifies the Executive in writing before the
expiration of such period that it desires to contest such claim, the Executive
shall:

               (i)   give Railway any information that it reasonably requests
     relating to such claim;

               (ii)  take such action in connection with contesting such claim
     as Railway reasonably requests in writing from time to time, including,
     without limitation, accepting legal representation with respect to such
     claim by an attorney reasonably selected by Railway;

               (iii) cooperate with Railway in good faith to contest such claim;
     and

               (iv)  permit Railway to participate in any proceedings relating
     to such claim; provided, however, that Railway shall bear and pay directly
     all costs and expenses (including additional interest and penalties)
     incurred in connection with such contest and shall indemnify and hold the
     Executive harmless, on an after-tax basis, for any Excise Tax or income
     tax, including related interest and penalties, imposed as a result of such
     representation and payment of costs and expenses. Without limiting the
     foregoing, Railway shall control all proceedings in connection with such
     contest and, at its sole option, may pursue or forego any and all
     administrative appeals, proceedings, hearings and conferences with the
     taxing authority in respect of such claim and may, at its sole option,
     either direct the Executive to pay the tax claimed and sue for a refund or
     contest the claim in any permissible manner. The Executive agrees to
     prosecute such contest to a

                                      -18-

<PAGE>

                                                                   Exhibit 10.16

     determination before any administrative tribunal, in a court of initial
     jurisdiction and in one or more appellate courts, as Railway shall
     determine; provided, however, that if Railway directs the Executive to pay
     such claim and sue for a refund, Railway shall advance the amount of such
     payment to the Executive, on an interest-free basis and shall indemnify the
     Executive, on an after-tax basis, for any Excise Tax or income tax,
     including related interest or penalties, imposed with respect to such
     advance; and further provided that any extension of the statute of
     limitations relating to payment of taxes for the taxable year of the
     Executive with respect to which such contested amount is claimed to be due
     is limited solely to such contested amount. The Railway's control of the
     contest shall be limited to issues with respect to which a Gross-up Payment
     would be payable. The Executive shall be entitled to settle or contest, as
     the case may be, any other issue raised by the IRS or other taxing
     authority.

          (n)  Refunds. If, after the receipt by the Executive of an amount
advanced by Railway pursuant to Paragraph 7(m), the Executive receives any
refund with respect to such claim, the Executive shall (subject to Railway's
complying with the requirements of Paragraph 7(m)) promptly pay Railway the
amount of such refund (together with any interest paid or credited thereon after
taxes applicable thereto). If, after the receipt by the Executive of an amount
advanced by Railway pursuant to Paragraph 7(m), a determination is made that the
Executive shall not be entitled to a full refund with respect to such claim and
Railway does not notify the Executive in writing of its intent to contest such
determination before the expiration of 30 days after such determination, then
the applicable part of such advance shall be forgiven and shall not be required
to be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of Gross-up Payment required to be paid. Any contest of a denial of
refund shall be controlled by Paragraph 7(m).

                                      -19-

<PAGE>

                                                                   Exhibit 10.16

          (o)  Expenses. If any dispute should arise under this Agreement after
the Control Change Date involving an effort by Executive to protect, enforce or
secure rights or benefits claimed by Executive hereunder, Railway shall pay
(promptly upon demand by Executive accompanied by reasonable evidence of
incurrence) all reasonable expenses (including attorneys'fees) incurred by
Executive in connection with such dispute, without regard to whether Executive
prevails in such dispute except that Executive shall repay Railway any amounts
so received if a court having jurisdiction shall make a final, nonappealable
determination that Executive acted frivolously or in bad faith by such dispute.
To assure Executive that adequate funds will be made available to discharge
Railway's obligations set forth in the preceding sentence, Railway has
established a trust and upon the occurrence of a Change in Control shall
promptly deliver to the trustee of such trust to hold in accordance with the
terms and conditions thereof that sum which the Railway Board shall have
determined is reasonably sufficient for such purpose.

     (p)  Prevailing Provisions. On and after the Control Change Date, the
provisions of this Paragraph 7 shall control and take precedence over any other
provisions of this Agreement which are in conflict with or address the same or a
similar subject matter as the provisions of this Paragraph 7.

     (q)  Termination Upon Expiration of Right to Work Documentation.
Notwithstanding the foregoing provisions of this Paragraph 7, this Agreement and
Executive's employment shall terminate automatically upon the expiration,
cancellation, revocation or other cessation of Executive's Right to Work
Documentation (as defined in Paragraph 4(e)) without contemporaneous extension,
renewal or replacement thereof. A termination of employment pursuant to this
Paragraph 7(q) shall be treated, for all purposes of this Paragraph 7, as a
voluntary termination of employment by the Executive without good reason, shall
not be treated as a

                                      -20-

<PAGE>

                                                                   Exhibit 10.16

termination by Railway under Paragraph 7(e) and shall not entitle Executive to
any Special Severance Payment, Specified Benefits or Post-Period Benefits under
Paragraph 7(e) or 7(f).

     8.   Mitigation and Other Employment. After a termination of
Executive's employment pursuant to Paragraph 4(d)(i) or a Change in Control
as defined in Paragraph 7(d), Executive shall not be required to mitigate the
amount of any payment provided for in this Agreement by seeking other employment
or otherwise, and except as otherwise specifically provided in Paragraph
4(d)(ii) with respect to health and life insurance and in Paragraph 7(e) with
respect to health, prescription and dental benefits, no such other employment,
if obtained, or compensation or benefits payable in connection therewith shall
reduce any amounts or benefits to which Executive is entitled hereunder. Such
amounts or benefits payable to Executive under this Agreement shall not be
treated as damages but as severance compensation to which Executive is entitled
because Executive's employment has been terminated.

     9.   KCSI Not An Obligor. Notwithstanding that KCSI has executed this
Agreement, it shall have no obligation for the payment of salary, benefits, or
other compensation hereunder, and all such obligations shall be the sole
responsibility of Railway.

     10.  Notice. Notices and all other communications to either party pursuant
to this Agreement shall be in writing and shall be deemed to have been given
when personally delivered, delivered by facsimile or deposited in the United
States mail by certified or registered mail, postage prepaid, addressed, in the
case of Railway or KCSI, to Railway or KCSI at 114 West 11th Street, Kansas
City, Missouri 64105, Attention: Secretary, or, in the case of the Executive, to
him at 114 West 11th Street, Kansas City, Missouri 64105, or to such other
address as a party shall designate by notice to the other party.

     11.  Amendment. No provision of this Agreement may be amended, modified,
waived or discharged unless such amendment, waiver, modification or discharge is
agreed to in writing

                                      -21-

<PAGE>

                                                                   Exhibit 10.16

signed by Executive, the President of Railway and the President of KCSI. No
waiver by any party hereto at any time of any breach by another party hereto of,
or compliance with, any condition or provision of this Agreement to be performed
by such other party shall be deemed a waiver of similar or dissimilar provisions
or conditions at the time or at any prior or subsequent time.

     12.  Successors in Interest. The rights and obligations of KCSI and Railway
under this Agreement shall inure to the benefit of and be binding in each and
every respect upon the direct and indirect successors and assigns of KCSI and
Railway, regardless of the manner in which such successors or assigns shall
succeed to the interest of KCSI or Railway hereunder, and this Agreement shall
not be terminated by the voluntary or involuntary dissolution of KCSI or Railway
or by any merger or consolidation or acquisition involving KCSI or Railway, or
upon any transfer of all or substantially all of KCSI's or Railway's assets,
or terminated otherwise than in accordance with its terms. In the event of any
such merger or consolidation or transfer of assets, the provisions of this
Agreement shall be binding upon and shall inure to the benefit of the surviving
corporation or the corporation or other person to which such assets shall be
transferred. Neither this Agreement nor any of the payments or benefits
hereunder may be pledged, assigned or transferred by Executive either in whole
or in part in any manner, without the prior written consent of Railway.

     13.  Severability. The invalidity or unenforceability of any particular
provision of this Agreement shall not affect the other provisions hereof, and
this Agreement shall be construed in all respects as if such invalid or
unenforceable provisions were omitted.

     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.

                                      -22-

<PAGE>

                                                                   Exhibit 10.16

     15.  Entire Agreement. This Agreement constitutes the entire agreement
among the parties with respect to the subject matter hereof and terminates and
supersedes all other prior agreements and understandings, both written and oral,
between the parties with respect to the terms of Executive's employment or
severance arrangements.

          IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Agreement as of (DATE).

                              KANSAS CITY SOUTHERN INDUSTRIES, INC.

                              By       /s/ Michael R. Haverty
                                ------------------------------------------
                                     Michael R. Haverty, President

                              EXECUTIVE

                                       /s/ Larry O. Stevenson
                                ------------------------------------------
                                     Larry O. Stevenson

                                      -23-

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