Document:

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                                                                 Exhibit 10.16.1

                        AMENDMENT TO EMPLOYMENT AGREEMENT

        THIS AMENDMENT to Employment Agreement, made and entered into as of
January 1, 2001, by and among 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, Railway, KCSI and Executive have heretofore entered into an
Employment Agreement, as amended and restated as of January 1, 1999 (the
"Agreement"); and

        WHEREAS, the Agreement makes reference in several places to Kansas City
Southern Lines, Inc. or to KCSL (either of which being referred herein as
"KCSL") which prior to January 1, 2001, was the wholly-owned subsidiary of KCSI
and the sole shareholder of Railway; and

        WHEREAS, KCSL was administratively merged into KCSI as of December 31,
2000, and thereby ceased existence as a separate entity.

        NOW, THEREFORE, it is agreed by and among Railway, KCSI and Executive as
follows:

        1.      Effective as of January 1, 2001, each and every reference to
"Kansas City Southern Lines, Inc." or to "KCSL" or "KCSL's" which appear in the
Whereas clause and in paragraphs 3, 4(c)(ii), 7(b), 7(d)(ii) and (iii) and 7(e)
of the Agreement is deleted, and, where necessary, the conjunctive phrases
contained in each such clause or paragraph are appropriately modified consistent
with the deletion of each such reference.

        2.      Effective as of January 1, 2001, the final sentence of paragraph
7(d) of the Agreement is deleted.

        IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the 1st day of January, 2001.

                                    THE KANSAS CITY SOUTHERN RAILWAY COMPANY

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

                                    KANSAS CITY SOUTHERN INDUSTRIES, INC.

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

                                    EXECUTIVE

                                               /s/ Larry O. Stevenson
                                       -----------------------------------------
                                                 Larry O. Stevenson<PAGE>

                                                                 EXHIBIT 10.16.2

                        AMENDMENT TO EMPLOYMENT AGREEMENT

        THIS 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 Larry O. Stevenson, an
individual ("Executive").

        WHEREAS, Railway, KCSI and Executive are parties to that certain
Employment Agreement dated August 14, 2000 (the "Employment Agreement"),
pursuant to which Railway employed Executive as Vice President Forest Products
Business Unit;

        WHEREAS, as of January 3, 2003 (the "Effective Date"), Executive assumed
the role of Senior Vice President Sales and Marketing 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 Sales and Marketing, 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 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) 180% of his annual base salary specified in Paragraph 7(a)
        multiplied by (ii) Two;"

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

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

5.      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.

                                       -1-

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                                                                 EXHIBIT 10.16.2

6.      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/ Larry O. Stevenson
                                       -----------------------------------------
                                    Name:  Larry O. Stevenson

                                       -2-<PAGE>

                                                                   Exhibit 10.17

                              EMPLOYMENT AGREEMENT
                     (Amended and Restated January 1, 2001)

        THIS AGREEMENT, made and entered into as of this 1st day of January,
2001, by and between Kansas City Southern Industries, Inc., a Delaware
corporation ("KCSI") and Louis G. Van Horn, an individual ("Executive").

        WHEREAS, KCSI, Kansas City Southern Lines, Inc., a Missouri corporation
("KCSL") and Executive have heretofore entered into an Employment Agreement, as
amended and restated as of January 1, 1999 (the "Prior Agreement") pertaining to
the employment of Executive by KCSL; and

        WHEREAS, KCSL was administratively merged into KCSI as of December 31,
2000, and thereby ceased existence as a separate entity; and

        WHEREAS, KCSI and Executive desire for KCSI to employ Executive on the
terms and conditions set forth in this Agreement, which shall supercede the
Prior Agreement, and to provide an incentive to Executive to remain in the
employ of KCSI hereafter, particularly in the event of any change in control (as
herein defined) of KCSI or The Kansas City Southern Railway Company ("Railway"),
thereby establishing and preserving continuity of management of KCSI.

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

        1.      Employment. KCSI hereby employs Executive as its Vice President
and Comptroller - KCSR, Vice President and Comptroller - KCSI, to serve at the
pleasure of the Board of Directors of KCSI (the "KCSI Board") and to have such
duties, powers and responsibilities as may be prescribed or delegated from time
to time by the President or other

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officer to whom Executive reports, subject to the powers vested in the KCSI
Board and in the stockholders of KCSI. 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
KCSI and its affiliates.

        2.      Compensation.

                (a)     Base Compensation. KCSI 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 KCSI
for non-union employees and applicable to all officers of KCSI.

                (b)     Incentive Compensation. For the year 2001, Executive
shall [not] be entitled to participate in the KCSI Incentive Compensation Plan.

        3.      Benefits. During the period of his employment hereunder, KCSI
shall provide Executive with coverage under such benefit plans and programs as
are made generally available to similarly situated employees of KCSI, provided
(a) KCSI 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 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 KCSI, it shall be assumed that the value of Executive's

                                       -2-

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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 neither KCSI nor 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 KCSI, except that in the event of any material breach of this
Agreement by KCSI, Executive may terminate this Agreement and his employment
hereunder immediately upon notice to KCSI.

                (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 KCSI's disability
plan. For purposes of this Agreement, Executive shall be deemed to be disabled
if he qualifies for disability benefits under KCSI's long-term disability plan.

                (c)     Termination by KCSI For Cause. KCSI 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;

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                        (ii)    Executive's dishonesty involving KCSI, Railway
        or any subsidiary of KCSI or Railway;

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

                        (vi)    Embezzlement or misappropriation by Executive.

                (d)     Termination by KCSI Other Than For Cause.

                        (i)     KCSI may terminate this Agreement and
        Executive's employment other than for cause immediately upon notice to
        Executive, and in such event, KCSI 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), KCSI 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

                                       -4-

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        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 KCSI 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 KCSI 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 KCSI 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
        KCSI Incentive Compensation Plan or the 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
        KCSI. 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 Employee Stock Ownership Plan and the KCSI 401(k) and Profit
        Sharing Plan (if KCSI 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.

                                       -5-

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        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 KCSI trade secret, except to the
extent necessary for Executive to perform his duties for KCSI while an employee.
For purposes of this Agreement, the term "KCSI trade secret" shall mean any
information regarding the business or activities of KCSI 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 KCSI 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, KCSI
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 KCSI or
Executive for any reason, Executive shall immediately return to KCSI all KCSI
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 KCSI and all direct and indirect subsidiaries and
affiliates of KCSI as may be requested by KCSI and shall sign such other
documents and papers relating to Executive's employment, benefits and benefit
plans as KCSI may reasonably request.

                                       -6-

<PAGE>

                (b)     Survival. The provisions of Paragraphs 5, 6(a) and 7 of
this Agreement shall survive any termination of this Agreement by KCSI or
Executive, and the provisions of Paragraph 4(d)(ii) shall survive any
termination of this Agreement by KCSI 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 KCSI for a period of three years (the
"Three-Year Period") from the date of such Change in Control (the "Control
Change Date"). KCSI 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, KCSI 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 KCSI 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 or Railway

                                       -7-

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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 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
        KCSI generally.

        In addition, KCSI shall use its 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 or Railway in
accordance with the terms thereof at the Control Change Date; provided that if
under KCSI 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

                                       -8-

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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 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 KCSI
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:

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                        (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 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 KCSI or Railway 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 KCSI's or
        Railway's then outstanding voting securities; or

                        (iii)   the stockholders of KCSI or Railway shall have
        approved a merger, consolidation or dissolution of KCSI or Railway or a
        sale, lease, exchange or disposition of all or substantially all of
        KCSI's or Railway's assets, if persons who were the beneficial owners of
        the combined voting power of KCSI's or Railway's voting securities
        immediately before any such merger, consolidation, dissolution, sale,
        lease,

                                      -10-

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        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.

                (e)     Termination After Control Change Date. Notwithstanding
any other provision of this Paragraph 7, at any time after the Control Change
Date, KCSI may terminate 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 KCSI 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) 180% 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 KCSI 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
or Railway) and a continuing participant in such plan to the end of the Benefits
Period. Following the end of the Benefits Period, KCSI 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),

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health, prescription and dental benefits equivalent to those then applicable to
active peer executives of KCSI) 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 KCSI) health
and prescription benefits equivalent to those then applicable to retired peer
executives of KCSI and their families, as the same may be modified from time to
time. The cost to the Executive of such Post-Period Benefits 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 KCSI, 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 KCSI and
effective at the end of such notice period, resign his employment with KCSI (the
"Resignation"). Within five (5) days of such a Resignation, KCSI shall pay to
Executive his full

                                      -12-

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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 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
        KCSI which results in a diminution or other material adverse change in
        such position, authority or duties;

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

                        (iii)   KCSI'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

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<PAGE>

                        (v)     any purported termination by KCSI 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 KCSI "for cause." Cause
means commission by the Executive of any felony or 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 KCSI
        (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 KCSI Board that the
        Executive met the applicable standard of conduct for indemnification or
        reimbursement under KCSI's by-laws, any applicable indemnification
        agreement, or applicable law, in each case in effect at the time of such
        act or omission; or

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                        (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 KCSI 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 KCSI 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 KCSI'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 KCSI or Railway 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, "Excise Taxes"), then KCSI 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.

                                      -15-

<PAGE>

                        KCSI shall cause the preparation and delivery to the
        Executive of a Certificate upon request at any time. KCSI 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 KCSI 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 KCSI 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 Determination to KCSI, KCSI 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 KCSI) or (b) deliver to the
        Executive a Certificate specifying the Gross-up Payment determined by
        KCSI's independent auditors, together with an opinion of KCSI's counsel
        ("KCSI Counsel Opinion"), and pay the Executive the Gross-up Payment
        specified in such Certificate. If for any reason KCSI fails to comply

                                      -16-

<PAGE>

        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 KCSI does not deliver to the Executive, a Certificate, KCSI 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 KCSI 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 KCSI'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 KCSI or the Executive pursuant to Paragraph 7(h) or
Paragraph 7(i), as applicable, then KCSI 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 taken a position in accordance with
        a determination made pursuant to Paragraph 7(h); multiplied by

                        (ii)    the Gross-up Multiple.

                                      -17-

<PAGE>

                (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 KCSI'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 KCSI in writing of any claim by the IRS or other taxing authority that,
if successful, would require the payment by KCSI 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
knowledge of such claim; provided, however, that any failure to give or delay in
giving such notice shall affect KCSI's obligations under this Paragraph 7 only
if and to the extent that such failure results

                                      -18-

<PAGE>

in actual prejudice to KCSI. The Executive shall not pay such claim less than 30
days after the Executive gives such notice to KCSI (or, if sooner, the date on
which payment of such claim is due). If KCSI notifies the Executive in writing
before the expiration of such period that it desires to contest such claim, the
Executive shall:

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

                        (ii)    take such action in connection with contesting
        such claim as KCSI 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 KCSI;

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

                        (iv)    permit KCSI to participate in any proceedings
        relating to such claim; provided, however, that KCSI 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, KCSI 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

                                      -19-

<PAGE>

        determination before any administrative tribunal, in a court of initial
        jurisdiction and in one or more appellate courts, as KCSI shall
        determine; provided, however, that if KCSI directs the Executive to pay
        such claim and sue for a refund, KCSI 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 KCSI'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 KCSI pursuant to Paragraph 7(m), the Executive receives any
refund with respect to such claim, the Executive shall (subject to KCSI's
complying with the requirements of Paragraph 7(m)) promptly pay KCSI 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 KCSI 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
KCSI 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

                                      -20-

<PAGE>

amount of Gross-up Payment required to be paid. Any contest of a denial of
refund shall be controlled by Paragraph 7(m).

                (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,
KCSI 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 KCSI 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 KCSI's obligations set forth in the preceding sentence, KCSI 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 KCSI 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.

        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

                                      -21-

<PAGE>

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.      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 KCSI, to KCSI at 114 West 11th Street, Kansas City, Missouri
64105, Attention: Secretary, or, in the case of the Executive, to him at 9322
West 146th Street, Overland Park, Kansas 66221, or to such other address as a
party shall designate by notice to the other party.

        10.     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 signed by Executive 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.

        11.     Successors in Interest. The rights and obligations of KCSI 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, regardless
of the manner in which such successors or assigns

                                      -22-

<PAGE>

shall succeed to the interest of KCSI hereunder, and this Agreement shall not be
terminated by the voluntary or involuntary dissolution of KCSI or by any merger
or consolidation or acquisition involving KCSI, or upon any transfer of all or
substantially all of KCSI'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 KCSI.

        12.     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.

        13.     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.

        14.     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

                                      -23-

<PAGE>

agreements and understandings (including, without limitation, the Prior
Agreement), 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 the 1st day of January, 2001.

                                       KANSAS CITY SOUTHERN INDUSTRIES, INC.

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

                                       EXECUTIVE

                                               /s/ Louis G. Van Horn
                                          --------------------------------------
                                                 Louis G. Van Horn
                                      -24-

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