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exv10w8w1

 

	 	 	 	 	 

EXHIBIT 10.8.1

ADDENDUM TO EMPLOYMENT AGREEMENT

     This Addendum to Employment Agreement (“Addendum”) dated the day of August 18, 2004 is between
The Kansas City Southern Railway Company, a Missouri corporation (“Railway”), Kansas City Southern,
a Delaware corporation (“KCS”) (“formerly known as Kansas City Southern Industries, Inc.”) and
Michael R. Haverty, an individual (“Executive”).

     WHEREAS, Executive is currently employed by Railway, and Railway, KCSI and Executive
previously entered into an Employment Agreement dated January 1, 2001 (“Agreement”), which sets
forth terms and conditions of Executive’s employment; and

     WHEREAS, the parties desire to amend certain of those terms and conditions in the Agreement as
set forth below without amending the remaining terms of the Agreement.

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

1. Paragraphs 4(c) and 4(d) of the Agreement.

Paragraphs 4(c) and 4(d) of the Agreement are hereby deleted and replaced in their entirety with
the following:

     (c) Termination by Railway for Cause. Railway may terminate this Agreement and
Executive’s employment “for cause” immediately upon notice to Executive. For purposes of this
Agreement (except for Paragraph 7), termination “for cause” shall mean termination based upon any
one or more of the following:

     (i) Any material breach of this Agreement by Executive;

     (ii) Executive’s dishonesty involving Railway, KCSI, or any affiliate of Railway or
KCSI;

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

     (iv) Executive’s failure to substantially perform his duties and responsibilities
hereunder, including without limitation Executive’s willful failure to follow reasonable
instructions of the President or other officer to whom Executive reports;

     (v) Executive’s breach of an express employment policy of Railway or its affiliates;

     (vi) Executive’s fraud or criminal activity;

     (vii) Embezzlement or misappropriation by Executive; or

 

 

     (viii) Executive’s breach of his fiduciary duty to Railway, or KCSI or their
affiliates.

(d) Termination by Railway Other Than For Cause.

     (i) Railway may terminate this Agreement and Executive’s employment other than for
cause immediately upon notice to Executive, and in such event, Railway shall provide
severance benefits to Executive in accordance with Paragraph 4(d)(ii). Executive
acknowledges and agrees that such severance benefits constitute the exclusive remedy of
Executive upon termination of employment other than for cause. Notwithstanding any other
provision of this Agreement, as a condition to receiving such severance benefits, Executive
shall be required to execute a full release of claims in favor of Railway and KCSI and their
affiliates in the form attached hereto and incorporated herein by reference as Attachment
A.

     (ii) Unless the provisions of Paragraph 7 of this Agreement are applicable, if
Executive’s employment is terminated under Paragraph 4(d)(i), Railway shall: (1) continue
for a period of one (1) year following such termination, to pay to Executive as severance
pay a monthly amount equal to one-twelfth (1/12th) of the annual base salary referenced in
Paragraph 2(a), at the rate in effect immediately prior to termination, and, (2) for a
period of fifteen (15) months following such termination, reimburse Executive for the cost
(including state and federal income taxes payable with respect to this reimbursement) of
continuing the health insurance coverage provided pursuant to this Agreement or obtaining
health insurance coverage comparable to the health insurance provided pursuant to this
Agreement, and obtaining coverage comparable to the life insurance provided pursuant to this
Agreement, unless Executive is provided comparable health or life insurance coverage in
connection with other employment. The foregoing obligations of Railway shall continue until
the end of such respective one (1) year and fifteen (15)-month periods notwithstanding the
death or disability of Executive during said period (except, in the event of death, the
obligation to reimburse Executive for the cost of life insurance shall not continue). In
the year in which termination of employment occurs, Executive shall be eligible to receive
benefits under the Railway Incentive Compensation Plan and any Executive Plan in which
Executive participates (the “Executive Plan”) (if such Plans then are in existence and
Executive was entitled to participate immediately prior to termination) in accordance with
the provisions of such plans then applicable, and severance pay received in such year shall
be taken into account for the purpose of determining benefits, if any, under the Railway
Incentive Compensation Plan but not under the Executive Plan. After the year in which
termination occurs, Executive shall not be entitled to accrue or receive benefits under the
Railway Incentive Compensation Plan or the Executive Plan with respect to the severance pay
provided herein, notwithstanding that benefits under such plan there are still generally
available to executive employees of Railway. After termination of employment, Executive
shall not be entitled to accrue or receive benefits under any other employee benefit plan or
program, except that Executive shall be entitled to participate in the KCS Profit Sharing
Plan, the KCS Employee Stock Ownership Plan and the KCS Section 401(k) Plan (if Railway
employees then still participate in such plans) in the year

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of termination of employment
only if Executive meets all requirements of such plans for participation in such year.

2. Paragraph 5 of the Agreement.

Paragraph 5 of the Agreement is hereby deleted and replaced in its entirety with the
following:

Confidentiality and Non-Disclosure.

     (a)
Executive understands and agrees that he has been and will continue to be
given Confidential Information (as defined below) during his employment with Railway relating to
the business of Railway, KCSI and/or their affiliates, in exchange for his agreement herein.
Executive hereby expressly agrees to maintain in strictest confidence and not to use in any way
(including without limitation in any future business relationship of Executive), publish, disclose
or authorize anyone else to use, publish or disclose in any way, any Confidential Information
relating in any manner to the business or affairs of Railway, KCSI and/or their affiliates.
Executive agrees further not to remove or retain any figures, calculations, letters, documents,
lists, papers, or copies thereof, which embody Confidential Information of Railway, KCSI and/or
their affiliates, and to return, prior to Executive’s termination of employment for any reason, any
such information in Executive’s possession. If Executive discovers, or comes into possession of,
any such information after his termination he shall promptly return it to Railway. Executive
acknowledges that the provisions of this paragraph are consistent with Railway’s policies and
procedures to which Executive, as an employee of Railway, is bound.

     (b)
For purposes of this Agreement, “Confidential Information” includes, but is
not limited to, information in the possession of, prepared by, obtained by, compiled by, or that is
used by Railway, KCSI or their affiliates or customers, and (1) is proprietary to, about, or
created by Railway, KCSI or their affiliates or customers; (2) gives Railway, KCSI or their
affiliates or customers some competitive business advantage, the opportunity of obtaining such
advantage, or disclosure of which might be detrimental to the interest of Railway, KCSI or their
affiliates or customers; and (3) is not typically disclosed by Railway, KCSI or their affiliates or
customers, or known by persons who are not employed by Railway, KCSI or their affiliates or
customers. Without in any way limiting the foregoing and by way of example, Confidential
Information shall include: information pertaining to Railway’s, KCSI’s or their affiliates’
business operations such as financial and operational information and data, operational plans and
strategies, business and marketing strategies, pricing information, plans for various products and
services, and acquisition and divestiture planning.

     (c) In the event of any breach of Paragraph 5 by Executive, Railway shall be entitled to
terminate any and all remaining severance benefits under Paragraph 4(d)(ii) and shall be entitled
to pursue such other legal and equitable remedies as may be available. Executive acknowledges,
understands and agrees that Railway, KCSI and/or their affiliates will suffer immediate and
irreparable harm if Executive fails to comply with any of his obligations under Paragraph 5 of the
Agreement, and that monetary damages alone will be inadequate to compensate Railway, KCSI or their
affiliates for such breach. Accordingly, Executive agrees that Railway, KCSI and/or their
affiliates shall, in addition to any other remedies available to it at law or in equity, be
entitled to temporary, preliminary, and permanent injunctive relief and

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specific performance to
enforce the terms of Paragraph 5 without the necessity of proving inadequacy of legal remedies or
irreparable harm or posting bond.

3. Paragraph 6 (a) of the Agreement.

Paragraph 6(a) of the Agreement is hereby deleted and replaced in its entirety with the following:

     (a) Duties. Upon termination of this Agreement by Railway or Executive for any
reason, Executive shall immediately sign such written resignations from all positions as an
officer, director or member of any committee or board of Railway and all direct and indirect
subsidiaries and affiliates of Railway as may be requested by Railway and shall sign such other
documents and papers relating to Executive’s employment, benefits and benefit plans as Railway may
reasonably request.

4. Paragraph 7(c) of the Agreement.

The parenthetical “(discounted to the then present value of the basis of a rate of seven percent
(7%) per annum)” is deleted from the first paragraph of paragraph 7(e).

5. Remainder of Agreement Unchanged.

     Except as otherwise expressly set forth in this Addendum, the Agreement shall remain unchanged
and in full force and effect in accordance with its terms.

     IN WITNESS WHEREOF, the parties hereto have executed this Addendum to Employment Agreement as
of the 19th day of August 2004.

	 	 	 	 	 	 	 
	EXECUTIVE	 	CHAIRMAN, COMPENSATION COMMITTEE	 	 
	 	 	BOARD OF DIRECTORS	 	 
	 	 	KANSAS CITY SOUTHERN	 	 
	 
	 	 	 	 	 	 
	          /s/ Michael R. Haverty

	 	By:
	 	           /s/ A. Edward Allinson	 	 
	 

          Michael R. Haverty

	 	 	 	 

A. Edward Allinson
	 	 

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ATTACHMENT A

WAIVER AND RELEASE

In consideration of the benefits described in the Employment Agreement, I do hereby fully waive all
claims and release The Kansas City Southern Railway Company (KCSR), and its affiliates, parents,
subsidiaries, successors, assigns, directors and officers, fiduciaries, employees and agents, as
well as any employee benefit plans from liability and damages related in any way to any claim I may
have against KCS or KCSR. This Waiver and Release includes, but is not limited to all claims,
causes of action and rights under: Title VII of the Civil Rights Act of 1964, as amended; the Civil
Rights Act of 1991; the Age Discrimination in Employment Act of 1967, as amended; the Civil Rights
Act of 1866; the American with Disabilities Act of 1990; the Rehabilitation Act of 1973; the Older
Workers Benefit Protection Act of 1990; the Employee Retirement Income Security Act of 1974, as
amended; the Worker Adjustment and Retraining Notification Act; the Family and Medical Leave Act;
the Federal Employers Liability Act; the Railway Labor Act, including bumping rights, rights to
file a grievance, rights to a hearing (whether before any company official, any system, group,
regional or special adjustment board, the National Railroad Adjustment Board, or any other entity),
and any rights to arbitration thereunder; the Missouri Human Rights Act, the Kansas Act Against
Discrimination, the Kansas and Missouri Workers’ Compensation acts, and all local state and federal
statutes and regulations; all claims arising from labor protective conditions imposed by the
Interstate Commerce Commission or the Surface Transportation Board; all any KCSR incentive or
benefit plan or program, and any rights under any collective bargaining agreement, including
seniority rights, bumping rights and reinstatement rights, rights to file or assert a grievance or
other complaint, rights to a hearing, or rights to arbitration under such agreement; and all rights
under common law such as breach of contract, tort or personal injury of any sort.

I understand that this Waiver and Release also precludes me from recovering any relief as a result
of any lawsuit, grievance or claims brought on my behalf and arising out of my employment or
resignation of, or separation from employment, provided that nothing in this Waiver and this
Release may affect my entitlement, if any, to workers’ compensation or unemployment compensation.
Additionally, nothing in this Waiver and Release prohibits me from communications with, filing a
complaint with, or full cooperation in the investigations of, any governmental agency on matters
within their jurisdictions. However, as stated above, this Waiver and Release does prohibit me
from recovering any relief, including monetary relief, as a result of such activities.

If any term, provision, covenant, or restriction of this Waiver and Release is held by a court of
competent jurisdiction to be invalid, void or unenforceable, the remainder of this Waiver and
Release and the other terms, provisions, covenants and restrictions hereof shall remain in full
force and effect and shall in no way be affected, impaired or invalidated. I understand and agree
that, in the event of breach by me of any of the terms and conditions of this Waiver and Release,
the Railway will be entitled to recover all costs and expenses as a result of my breach, including
but not limited to, reasonable attorneys’ fees and costs.

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Waiver and Release Page 2

I have read this Agreement and Release and I understand all of its terms. I enter into and
sign this Waiver and Release knowingly and voluntarily, with full knowledge of what it means.

	 	 	 	 	 
	 

	 	 	 	 
	Employee Signature

	 	Date	 	 
	 
	 	 	 	 
	 

Employee Name(Please Print)

	 	 

Social Security Number
	 	 

6exv10w8w2

 

EXHIBIT 10.8.2

AMENDMENT TO

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

     THIS AMENDMENT to Amended and Restated Employment Agreement, made and entered into effective
as of January 1, 2005, by and among The Kansas City Southern Railway Company, a Missouri
corporation (“Railway”), Kansas City Southern, a Delaware corporation (“KCS”) and Michael R.
Haverty, an individual (“Executive”).

     WHEREAS, Railway, KCS and Executive have heretofore entered into an Amended and Restated
Employment Agreement dated as of January 1, 2001, and an Addendum to Employment Agreement dated
August 18, 2004 (collectively the “Agreement”); and

     WHEREAS, under the terms of the Agreement, Executive is to serve as President and Chief
Executive Officer of Railway and as President and Chief Executive Officer of KCS; and

     WHEREAS, with the consent and agreement of the Executive, the Board of Directors of Railway,
of which the Executive is the Chairman, on January 1, 2005 elected Arthur L. Shoener as the
President and Chief Executive Officer of the Railway, and, in accordance with the bylaws of
Railway, Executive thereupon ceased to serve as President and Chief Executive Officer of Railway,
but remained an employee of Railway; and

     WHEREAS, the parties hereto desire to enter into an amendment to the Agreement to conform the
Agreement, effective January 1, 2005, to the resolutions previously adopted by the Board of
Directors of Railway.

     NOW, THEREFORE, it is agreed by and among Railway, KCS and Executive that effective January 1,
2005, Executive will no longer have the title of, and will no longer serve as President and Chief
Executive Officer of Railway, but Executive will continue as an employee of Railway and will
continue to have such duties, powers and responsibilities as an employee of Railway as may be
prescribed for Executive by the Board of Directors of Railway, and except as provided above in this
paragraph all provisions of the Agreement remain in full force and effect.

     IN WITNESS WHEREOF, the parties hereto have executed this Amendment this 21st day of March,
2006, effective as of the date specified above.

	 	 	 	 	 	 	 
	 	 	THE KANSAS CITY SOUTHERN RAILWAY COMPANY
	 
	 	 	 	 	 	 
	 

	 	By:
	 	     /s/ Arthur L. Shoener	 	 
	 

	 	 	 	 

     Arthur L. Shoener, President & CEO
	 	 
	 
	 	 	 	 	 	 
	 	 	KANSAS CITY SOUTHERN	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	      /s/ Robert B. Terry	 	 
	 

	 	 	 	 

     Robert B. Terry, Senior Vice President and
	 	 
	 

	 	 	 	     General Counsel	 	 
	 
	 	 	 	 	 	 
	 	 	EXECUTIVE	 	 
	 
	 	 	 	 	 	 
	 	 	           /s/ Michael R. Haverty	 	 
	 	 	 	 	 
	 	 	           Michael R. Haverty

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