Document:

EX-10.1

May 3, 2006

Mr. William G. Filer II

20503 NE 21st Ct

Sammamish, WA 98074

Re: Transition Agreement

Dear Bill:

EvergreenBank offers you the transition benefits described in this Transition Agreement
(“Agreement”), which is entered into between William G. Filer II and EvergreenBank (the “Company”).
For reference purposes, this Agreement is dated May 3, 2006, which is the date the Company
presented it to you for consideration. This Agreement describes the terms and conditions of your
separation of employment with the Company.

In exchange for the Transition Benefits outlined in this Agreement, you and the Company agree as
follows:

	1.	 	Termination/Final Pay: Your last day of active work is June 16, 2006. You will remain on the
payroll through June 16, 2006, for pay and benefits purposes. Your formal termination date is
June 16, 2006. You acknowledge that you are owed no additional compensation of any kind from
the Company except as described in this Agreement. You will receive your final paycheck on
June 23, 2006. All required and agreed upon withholding will be deducted from this paycheck.

	2.	 	Earned Time: The Company will pay you all of your accrued and unused earned time on June 23,
2006. All required and agreed upon withholding will be deducted from this payment. Earned time
is subject to 401(k) contributions and company match, if you participate in that plan.

	3.	 	Transition Pay: In exchange for this signed Agreement, the Company will pay you 6 weeks of
regular base pay as transition pay in a lump sum less required deductions. You will receive
your transition pay on June 23, 2006, or the first regularly scheduled payday following the
7-day revocation period, whichever is later. Transition pay is not eligible for 401(k)
contributions.

	4.	 	Availability: From June 16 through August 1, 2006, you will make yourself reasonably
available, upon request, to consult with the Company without additional compensation or other
consideration regarding projects or work that you handled or were familiar with during your
employment.

	5.	 	Outplacement Counseling: The Company will provide career transition/outplacement counseling
through the firm of Lee Hecht Harrison in Bellevue, Washington. A packet outlining these
services is attached. The Company will pay the costs for these services. You must begin the
use of these services by September 30, 2006.

	6.	 	EvergreenBancorp Stock Options: The Board of Directors of EvergreenBancorp has approved the
accelerated vesting of all of your stock options, vested and unvested, as of June 16, 2006,
and has authorized an extended exercise period to December 31, 2006.

	7.	 	Medical, Dental and/or Vision Benefits: Beginning in July 2006, you and any enrolled
dependents covered under the medical, dental and/or vision benefits as of your last day of
active work can elect to continue group medical, dental and/or vision coverage through the
Company as specified in your COBRA Notice. The Company will pay you the equivalent of two
months of your and your enrolled dependents’ COBRA medical, dental and vision premiums, based
on the coverages you have as of your last day of active work, along with your transition pay
regardless of whether you elect COBRA coverage. This amount is taxable income to you. You must
elect, enroll in and pay for COBRA coverage per the terms of COBRA in order to receive COBRA
coverage.

	8.	 	Reference Checks: The Company will verify dates of employment, positions held, and pay rate.

	9.	 	401(k) Plan/Contributions: If you participate in the Company’s 401(k) Plan, you will make
your final employee contribution to this plan from your June 23, 2006, paycheck for regular
and overtime hours (if applicable), and from your cashout of accrued and unused earned time
(if applicable) paid on June 23, 2006. The Company will make its final matching contributions
to this plan according to the terms of the plan. After June 23, 2006, you may elect to receive
whatever accrued and vested benefits you are entitled to according to the terms of the plan.
No contributions may be made by you or the Company to this plan from the transition pay which
is paid to you under this Agreement.

	10.	 	Group Term Life Insurance: If you are eligible for coverage under the Company’s group term
life insurance plan, you may convert your group term life insurance coverage to an individual
policy and self-pay for the converted coverage under the timelines, terms and conditions of
the Company’s plan. Coverage under the Company’s plan ends on your last day of active work
with the Company.

	11.	 	Group Long Term Disability Insurance: If you are eligible for coverage under the Company’s
group long term disability plan, you may convert your group long term disability coverage to
an individual policy and self-pay for the converted coverage under the timelines, terms and
conditions of the Company’s plan. Coverage under the Company’s plan ends on your last day of
active work with the Company.

	12.	 	Voluntary Life and/or Voluntary Accidental Death and Dismemberment: If you have elected
coverage under the Company’s voluntary life and/or voluntary accidental death and
dismemberment plans, you may convert coverage to an individual policy and self-pay for the
converted coverage under the timelines, terms and conditions of the Company’s plans.

	13.	 	Company and PEMCO Financial Services (PFS) Property: You will return to the Company by June
16, 2006, all Company-owned and PFS-owned property in your possession, including all keys and
card key badges to the Company and PFS buildings or property, all Company- and PFS-owned
equipment, all Company and PFS documents and papers, including but not limited to trade
secrets and other confidential and proprietary information.

	14.	 	Employee Nondisclosure Agreement: You will continue to abide by the terms of the Employee
Nondisclosure Agreement you signed on June 13, 2001, a copy of which has been provided to you
along with a copy of this Agreement.

	15.	 	Confidentiality: You will keep the facts and the terms of this Agreement confidential,
although you may disclose them to your immediate family, or your attorney, accountant or
similar advisor, all of whom also are bound by this Confidentiality clause. You also may
disclose them, if needed, in response to government requests, subpoenas or other legal
processes.

	16.	 	General Release: In exchange for the transition pay and the other benefits contained in this
Agreement, most of which are benefits you were not otherwise entitled to receive, you and your
successors and assigns forever release and discharge the Company, any of the Company’s
parents, subsidiaries, affiliates, or related entities, any Company-sponsored employee benefit
plans in which you participate, and all of their respective officers, directors, shareholders,
trustees, agents, employees, employees’ spouses and all of their successors and assigns
(collectively “Released Parties”) from any and all claims, actions, causes of action, rights,
or damages, including costs and attorneys’ fees (collectively “Claims”) which you may have,
known, unknown, or later discovered which arose prior to the date you signed this Agreement.

This General Release includes, but is not limited to, any Claims under any local, state, or
federal laws prohibiting discrimination in employment, including without limitation, the Civil
Rights Acts, the Americans with Disabilities Act, the Age Discrimination in Employment Act, the
Older Workers Benefit Protection Act, or the Washington State Law Against Discrimination, or
Claims under the Employee Retirement Income Security Act, or Claims under any federal, state or
local leave laws, including without limitation the Family Medical Leave Act, or Claims for
unpaid salary, wages, commissions, bonuses or other compensation under any federal, state or
local wage and hour laws or wage claim statutes, or Claims alleging any legal restriction on the
Company’s right to terminate its employees, or any personal injury Claims, including, without
limitation, wrongful discharge, defamation, tortious interference with business expectancy or
emotional distress, or any Claims alleging breach of express or implied employment contract.
This release, however, will not prevent you from bringing a Claim for COBRA benefits,
unemployment benefits, vested 401(k) or other retirement benefits.

You represent that you have not filed any Claim that was released in this Agreement against the
Company or its Released Parties with any court or government agency, and that you will not, to
the extent allowed by applicable law, file such a Claim at any time in the future; provided,
however, that this will not limit you from filing a Claim to enforce the terms of this
Agreement. Additionally, if any government agency brings any Claim or conducts any investigation
against the Company, nothing in this Agreement forbids you from cooperating in such proceedings,
but by signing this Agreement, you waive and agree to relinquish any damages or other individual
relief that may be awarded as a result of any such proceedings.

	17.	 	Voluntary Agreement: You understand and acknowledge the significance and consequences of this
Agreement. You acknowledge that it is voluntary and that you have not signed it as a result of
any coercion.

	18.	 	Review by Attorney and Review and Revocation Periods: The Company hereby advises you in
writing to consult with an attorney prior to signing this Agreement. You have the right to
consider this Agreement for a period of up to 45 days prior to signing it, although you may
sign this Agreement in less than 45 days at your option. By signing this Agreement, you will
be affirming that you freely, voluntarily, and without coercion, entered into it and agreed to
be bound by its terms. You also have the right to revoke this agreement for a period of up to
7 days after signing it by giving written notice of revocation to Cindy Gok at PFS Human
Resources, 325 Eastlake Avenue East, Seattle, WA 98109. If you revoke this Agreement, it will
not be effective and enforceable, and you will not receive the transition pay described above.
This Agreement will not be effective or enforceable until the 7-day revocation period has
expired.

	19.	 	Transition Benefits Offer Expiration Date: You acknowledge that you were advised of your
right to sign this Agreement and return it to Human Resources on or before 5:00 p.m. on June
16, 2006.

	20.	 	Entire Agreement: This Agreement, along with the Employee Nondisclosure Agreement referenced
above, constitutes the entire understanding and agreement between the Company and you
regarding the termination of your employment and future obligations toward each other. This
Agreement supersedes all prior agreements, correspondence, representations, or understandings
between the parties relating to its subject matter. This Agreement is made and shall be
construed and performed under Washington State law without regard to its choice of law
principles. This Agreement may not be modified except through another written agreement signed
by you and by the Company. If any provisions of this Agreement are held to be invalid or
unenforceable, the remaining provisions will nevertheless continue to be valid and
enforceable. This Agreement shall not be considered as evidence of any violation of any
statute or law, or any wrongdoing or liability on the part of the Company, or its agents or
employees.

If you want to receive the transition benefits offered, please sign the original copy of this
letter and return it to me. I also recommend that you sign the extra copy provided and keep the
extra copy with your personal records.

Sincerely,

/s/ Susan E. McNab

Susan E. McNab

Chief People Services Officer

Accepted and agreed this 8th day of June, 2006:

/s/ William G. Filer II

William G. Filer II

Accepted on behalf of EvergreenBank:

By: /s/ Susan E. McNab

Susan E. McNab

Its: Chief People Services Officer

Date: June 8, 2006EX-10.1

EMPLOYMENT AGREEMENT

THIS AGREEMENT, (“Agreement”) made and entered into as of this 15th day of May, 2006, by and
between The Kansas City Southern Railway Company, a Missouri corporation (“Railway”), and Patrick
J. Ottensmeyer, an individual (“Executive”).

WHEREAS, Executive has been offered employment by Railway, and Railway and Executive desire
for Railway 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 Kansas City Southern, a Delaware corporation
(“KCS”), or Railway, 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 and Executive as follows:

1. Employment. Railway hereby employs Executive as its Executive Vice President and Chief
Financial Officer, 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 stockholders of Railway. Executive shall faithfully perform
Executive’s duties under this Agreement to the best of Executive’s ability and Executive shall
devote substantially all of Executive’s working time and efforts to the business and affairs of
Railway and its affiliates. For purposes of this Agreement, an “affiliate” of Railway is KCS and
any United States or foreign corporation or partnership or other similar entity with respect to
which Railway or KCS owns, directly or indirectly, at least 15% of the voting power of such entity.

2. Compensation. Railway shall pay Executive as compensation for Executive’s services
hereunder an annual base salary at the rate approved by the Compensation and Organization Committee
of the Board of Directors of KCS (the “KCS Board”). Such rate shall not be reduced except as
agreed by the parties hereto or except as part of a general salary reduction program imposed by
Railway for non-union employees and applicable to all officers of Railway, not related to a Change
of Control.

3. Benefits. During the period of Executive’s 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 any stock or equity participation awards (including by way of example, but not
limited to, stock options or restricted stock) are granted in the discretion of the KCS Board or
the Compensation and Organization Committee of the KCS Board and that Executive has no right to
receive any such stock or equity participation awards or any particular number or level of such
stock or equity participation awards, if any. In determining contributions, coverage and benefits
under any disability insurance policy and under any cash compensation-based plan provided to
Executive pursuant to this Agreement, it shall be assumed that the value of Executive’s annual
compensation is 175% 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
Railway nor KCS is under any obligation to continue in effect or to fund any such plan or program,
except as provided in Paragraph 7 hereof.

4. Term and Termination. The “Term” of this Agreement shall begin on the date first
written above and continue until terminated as provided in (a) through (d) of this Section 4.

(a) Termination by Executive. Executive may terminate this Agreement and Executive’s
employment hereunder by providing 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 Executive’s 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 Executive 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 or any affiliate of Railway;

(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 Exectuve’s 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 any affiliate of
Railway;

(vi) Executive’s fraud or criminal activity;

(vii) Embezzlement or misappropriation by Executive; or

(viii) Executive’s breach of Executive’s fiduciary duty to Railway or any affiliate of
Railway.

(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. 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 execute a full release of claims in favor of Railway and its affiliates in the form
attached hereto as Appendix 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 twelve (12) months 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 above, 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 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 fifteen (15) month period notwithstanding the death or disability of
Executive (except, in the event of death, the obligation to reimburse Executive for the cost
of life insurance shall not continue). In the calendar year in which termination of
employment occurs, Executive shall be eligible to receive benefits under the Railway
Incentive Compensation Plan and any executive incentive compensation plan in which Executive
participates (the “Executive Plan”) (provided, however, that 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
calendar 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 either or
both such plans 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 401(k) and Profit Sharing Plan, as amended from time to time, and the
KCS Employee Stock Ownership Plan, as amended from time to time, (provided Railway active
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. Confidentiality and Non-Disclosure.

(a) Executive understands and agrees that Executive will be given Confidential Information (as
defined below) during Executive’s employment with Railway relating to the business of Railway and
its affiliates subject to Executive’s 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 in
any way, publish or disclose, any Confidential Information relating in any manner to the business
or affairs of Railway or any of its affiliates or customers. Executive further agrees not to
remove or retain any figures, calculations, letters, documents, lists, papers, or copies thereof,
which embody Confidential Information of Railway or any of its 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
Executive’s termination, Executive 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 or any of its affiliates or customers and (i) is proprietary to, about, or created by
Railway or any of its affiliates or customers; (ii) gives Railway or any of its 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 or any of its affiliates or
customers; and (iii) is not typically disclosed by Railway or any of its affiliates or customers,
or known by persons who are not employed by Railway or any of its affiliates or customers. Without
in any way limiting the foregoing and by way of example, Confidential Information shall include:
information pertaining to business operations of Railway or any of its affiliates or customers 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 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. Executive acknowledges,
understands and agrees that Railway and its affiliates will suffer immediate and irreparable harm
if Executive fails to comply with any of Executive’s obligations under this Paragraph 5, and that
monetary damages alone will be inadequate to compensate Railway or any of its affiliates for such
breach. Accordingly, Executive agrees that Railway and its affiliates shall, in addition to any
other remedies available to it at law or in equity, be entitled to temporary, preliminary, and
permanent injunctive relief and specific performance to enforce the terms of this Paragraph 5
without the necessity of proving inadequacy of legal remedies or irreparable harm or posting bond.

6. Duties Upon Termination; Survival.

(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 or of any of its affiliates as may
be requested by Railway or such affiliate 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 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”), and
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 the executive position of Executive, in each of the following Railway
plans or KCS plans in which active employees of Railway may then participate (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 Section 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, if not otherwise occurring under applicable award agreements, Railway and KCS
shall use their best efforts to cause all outstanding options or other equity awards held by
Executive under any stock option or other plan of KCS or Railway or its affiliates to become
immediately vested and exercisable on the Control Change Date, and to the extent that such awards
are not vested and are subsequently forfeited, the Executive shall receive a lump-sum cash payment
within five (5) days after the awards are forfeited equal to, in the case of stock options, 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, and, in the case of other equity awards, equal to the amount that would have been
includible in the Executive’s gross income on the date of forfeiture if such awards had instead on
such date become vested and, if applicable, were then exercised (ignoring, for this purpose, the
effect of any election made by the Executive under Section 83(b) of the Internal Revenue Code of
1986, as amended (the “Code”)). During the Three Year Period Executive shall be entitled to
participate, on the basis of the executive position of Executive, in any incentive compensation
plan of Railway in accordance with the terms thereof at the Control Change Date; provided that if
under 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
Benefits, to the extent permissible by law and the applicable plan document, if any, 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 of all amounts to which he is then entitled
thereunder.

(d) Change in Control. 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 KCS Board shall be individuals who fall into any of the following categories:
(A) individuals who were members of the KCS Board on the date of the Agreement; or
(B) individuals whose election, or nomination for election by KCS’s stockholders, was
approved by a vote of at least seventy-five percent (75%) of the members of the KCS Board
then still in office who were members of the KCS Board on the date of the Agreement; or
(C) individuals whose election, or nomination for election, by KCS’s stockholders, was
approved by a vote of at least seventy-five percent (75%) of the members of the KCS Board
then still in office who were elected in the manner described in (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 KCS shall have become after
the date of the Agreement, 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 Railway or KCS 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 Railway’s or KCS’s then outstanding voting securities; or

(iii) the stockholders of Railway or KCS shall have approved a merger, consolidation or
dissolution of Railway or KCS or a sale, lease, exchange or disposition of all or
substantially all of Railway’s or KCS’s assets, if persons who were the beneficial owners of
the combined voting power of Railway’s or KCS’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.

(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 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 of: (i) 175% of his annual
base salary specified in Paragraph 7(a) multiplied by (ii) Three; 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 Railway or any of its affiliates) and a continuing participant in such plan to the
end of the Benefits Period. 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 three-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). 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
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 or any of its affiliates (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) 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, non-appealable 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.

(i) 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 provided in Paragraph 4(d)(ii) with
respect to health and life insurance, 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. KCS Not an Obligor. KCS 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 any 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, to Railway at P.O. Box 219335, Kansas City, Missouri
64121-9335,, Attention: Secretary, or, in the case of the Executive, to him at P.O. Box 219335,
Kansas City, Missouri 64121-9335, 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 signed
by Executive and by the President of Railway. No waiver by a party hereto at any time of any
breach by the other 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 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 Railway, regardless of the manner in which such successors or assigns
shall succeed to the interests of Railway hereunder, and this Agreement shall not be terminated by
the voluntary or involuntary dissolution of Railway or by any merger or consolidation or
acquisition involving Railway, or upon any transfer of all or substantially all of 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.

15. Amendment to Agreement for Code Section 409A Compliance. This Agreement may constitute
a nonqualified deferred compensation plan within the meaning of Code Section 409A of the Internal
Revenue Code of 1986, as amended (“Code”), with respect to certain of its provisions. It is the
intention of Executive and KCSR that in such event this Agreement satisfy the requirements of Code
Section 409A so that benefits hereunder, if any, are not included in gross income under Code
Section 409A (whether or not included in gross income under another Code provision). At the time
of the execution of this Agreement final Treasury Regulations interpreting Code Section 409A are
pending. The parties hereto agree that subsequent to the finalization of such pending Treasury
Regulations, this Agreement will be amended or restated as necessary for the purpose of satisfying
the requirements of Code Section 409A and until the time of such amendment or restatement, this
Agreement will be interpreted and administered accordingly.

16. 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.

[SIGNATURES ON THE FOLLOWING PAGE]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the 7th day of June,
2006.

THE KANSAS CITY SOUTHERN RAILWAY COMPANY

By:   /s/ Arthur L. Shoener

Arthur L. Shoener, President and CEO

EXECUTIVE

/s/ Patrick J. Ottensmeyer

	 	 	Patrick J. Ottensmeyer

2

Appendix 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 (collectively “affiliates”) from liability and
damages related in any way to any claim I may have against KCSR or its affiliates. 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 KCSR
Labor Act, including bumping rights, rights to file a grievance, rights to a hearing (whether
before any company official, any system, group, regional or special adjustment board, the National
Railroad Adjustment Board, or any other entity), and any rights to arbitration thereunder; the
Missouri Human Rights Act, the Kansas Act Against Discrimination, the Kansas and Missouri Workers’
Compensation acts, and all local state and federal statutes and regulations; all claims arising
from labor protective conditions imposed by the Interstate Commerce Commission or the Surface
Transportation Board; any incentive or benefit plan or program of KCSR or any affiliate, 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 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,
KCSR 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.

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

	 	 	 
	Date

	 	Employee Signature

Employee Name (Please Print)
	 
	 	 

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