Document:

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                                                                   Exhibit 10.15

                             EMPLOYMENT AGREEMENT
                             --------------------
                    (Amended and Restated January 1, 1999)

     THIS AGREEMENT, made and entered into as of this 1st day of January, 1999,
by and between Kansas City Southern Lines, Inc., a Missouri corporation
("KCSL"), Kansas City Southern Industries, Inc., a Delaware corporation ("KCSI")
and Robert H. Berry, an individual ("Executive").

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

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

     1.   Employment.  KCSL hereby continues the employment of Executive as its
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Sr. Vice President & CFO - KCSR to serve at the pleasure of the Board of
Directors of KCSL (the "KCSL 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 KCSL Board and in the stockholder of KCSL.  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 KCSL and its affiliates.

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     2.   Compensation.
          ------------

          (a)   Base Compensation.  KCSL shall pay Executive as compensation for
                -----------------
his services hereunder an annual base salary at the rate approved by the KCSI
Compensation Committee on November 17, 1998.  Such rate shall not be increased
prior to January 1, 2000 and shall not be reduced except as agreed by the
parties or except as part of a general salary reduction program imposed by KCSL
for non-union employees and applicable to all officers of KCSL.

          (b)   Incentive Compensation.  For the year 1999, Executive shall not
                ----------------------
be entitled to participate in the KCSL Incentive Compensation Plan.

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

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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 KCSL, except that in the event of any material breach of this
Agreement by KCSL, Executive may terminate this Agreement and his employment
hereunder immediately upon notice to KCSL.

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

          (c)   Termination by KCSL For Cause.  KCSL may terminate this
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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 KCSL, KCSI, Railway or
     any subsidiary of KCSL, KCSI or Railway;

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

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

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

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                (vi)    Embezzlement or misappropriation by Executive.

          (d)   Termination by KCSL Other Than For Cause.
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                (i)     KCSL may terminate this Agreement and Executive's
     employment other than for cause immediately upon notice to Executive, and
     in such event, KCSL 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), KCSL shall continue, for a period of one (1) year following such
     termination, (a) to pay to Executive as severance pay a monthly amount
     equal to one-twelfth (1/12th) of the annual base salary referenced in
     Paragraph 2(a) above, at the rate in effect immediately prior to
     termination, and, (b) to reimburse Executive for the cost (including state
     and federal income taxes payable with respect to this reimbursement) of
     continuing the health insurance coverage provided pursuant to this
     Agreement or obtaining health insurance coverage comparable to the health
     insurance provided pursuant to this Agreement, and obtaining coverage
     comparable to the life insurance provided pursuant to this Agreement,
     unless Executive is provided comparable health or life insurance coverage
     in connection with other employment. The foregoing obligations of KCSL
     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 KCSL 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

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     pay received in such year shall be taken into account for the purpose of
     determining benefits, if any, under the KCSL 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 KCSL 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 KCSL.
     After termination of employment, Executive shall not be entitled to accrue
     or receive benefits under any other employee benefit plan or program,
     except that Executive shall be entitled to participate in the KCSI Profit
     Sharing Plan, the KCSI Employee Stock Ownership Plan and the KCSI Section
     401(k) Plan (if KCSL 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.   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 KCSL trade secret, except to the extent
necessary for Executive to perform his duties for KCSL while an employee.  For
purposes of this Agreement, the term "KCSL trade secret" shall mean any
information regarding the business or activities of KCSL 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 KCSL 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, KCSL
shall be entitled to terminate any and all remaining severance benefits under

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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 KCSL or Executive
                ------
for any reason, Executive shall immediately return to KCSL all KCSL 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 KCSL and all direct and indirect subsidiaries and affiliates of KCSL as may
be requested by KCSL and shall sign such other documents and papers relating to
Executive's employment, benefits and benefit plans as KCSL may reasonably
request.

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

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During the Three-Year Period, KCSL 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 KCSL 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 KCSL, KCSI or Railway plans (together, the "Specified Benefits") in
existence, and in accordance with the terms thereof, at the Control Change Date:

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

     In addition, KCSL and KCSI shall use their best efforts to cause all
outstanding options held by Executive under any stock option plan of KCSI or its
affiliates to become immediately exercisable on the Control Change Date and to
the extent that such options are not vested and are subsequently forfeited, the
Executive shall receive a lump-sum cash payment within 5 days after the options
are forfeited equal to the difference between the fair market value of the
shares of stock subject to the non-vested, forfeited options determined as of
the date such options are forfeited and the exercise price for such options.
During the Three-Year Period Executive shall be entitled to participate, on the
basis of his executive position, in any incentive compensation

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plan of KCSL, KCSI or Railway in accordance with the terms thereof at the
Control Change Date; provided that if under KCSL, 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 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
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Executive would be entitled at the Control Change Date to receive Specified
Benefits or incentive compensation as a general obligation of KCSL 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.

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

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

                (ii)    any "person" (as such term is used in Sections 13(d) and
     14(d)(2) of the Securities Exchange Act of 1934 (the "Exchange Act")) other
     than KCSI shall have become after September 18, 1997, according to a public
     announcement or filing, the "beneficial owner" (as defined in Rule 13d-3
     under the Exchange Act), directly or indirectly, of securities of KCSL,
     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 KCSL's, KCSI's or Railway's then
     outstanding voting securities; or

                (iii)   the stockholders of KCSL, KCSI or Railway shall have
     approved a merger, consolidation or dissolution of KCSL, KCSI or Railway or
     a sale, lease, exchange or disposition of all or substantially all of
     KCSL's, KCSI's or Railway's assets,

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

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

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

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effect for the three plan years ending prior to the Control Change Date
(regardless of any limitations based on the earnings or performance of KCSL,
KCSI or Railway) and a continuing participant in such plan to the end of the
Benefits Period. Following the end of the Benefits Period, KCSL shall continue
to provide to the Executive and the Executive's family the following benefits
("Post-Period Benefits"): (1) prior to the Executive's attainment of age sixty
(60), health, prescription and dental benefits equivalent to those then
applicable to active peer executives of KCSL) 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
KCSL) health and prescription benefits equivalent to those then applicable to
retired peer executives of KCSL 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 KCSL, 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

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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 KCSL and effective at the end of
such notice period, resign his employment with KCSL (the "Resignation"). Within
five (5) days of such a Resignation, KCSL shall pay to Executive his full base
salary through the effective date of such Resignation, to the extent not
theretofore paid, plus a lump sum amount equal to the Special Severance Payment
(computed as provided in the first sentence of Paragraph 7(e), except that for
purposes of such computation all references to "Termination" shall be deemed to
be references to "Resignation"). Upon Resignation of Executive, Specified
Benefits to which Executive was entitled immediately prior to Resignation shall
continue on the same terms and conditions as provided in Paragraph 7(e) in the
case of Termination (including equivalent payments provided for therein), and
Post-Period Benefits shall 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 KCSL
     which results in a diminution or other material adverse change in such
     position, authority or duties;

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

                (iii)   KCSL'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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                (v)     any purported termination by KCSL 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 KCSL "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 KCSL (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 KCSL Board that the
     Executive met the applicable standard of conduct for indemnification or
     reimbursement under KCSL'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

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     of the KCSL 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 KCSL 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 KCSL'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 KCSL, 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 KCSL 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.

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

                (ii)    If the Executive does not make a request for, and KCSL
     does not deliver to the Executive, a Certificate, KCSL 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 KCSL and/or the Executive that certain Payments are neither subject to Excise
Taxes nor to be counted

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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
KCSL'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 KCSL or the Executive
pursuant to Paragraph 7(h) or Paragraph 7(i), as applicable, then KCSL 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.

          (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

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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 KCSL'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 KCSL
                -----------------------------
in writing of any claim by the IRS or other taxing authority that, if
successful, would require the payment by KCSL 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 KCSL's obligations under this Paragraph 7 only if and
to the extent that such failure results in actual prejudice to KCSL. The
Executive shall not pay such claim less than 30 days after the Executive gives
such notice to KCSL (or, if sooner, the date on which payment of such claim is
due). If KCSL notifies the Executive in writing before the expiration of such
period that it desires to contest such claim, the Executive shall:

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

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

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

                                      -17-
<PAGE>

                (iv)    permit KCSL to participate in any proceedings relating
     to such claim; provided, however, that KCSL 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, KCSL 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 determination before any administrative
     tribunal, in a court of initial jurisdiction and in one or more appellate
     courts, as KCSL shall determine; provided, however, that if KCSL directs
     the Executive to pay such claim and sue for a refund, KCSL 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 KCSL'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.

                                      -18-
<PAGE>

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

          (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, KCSL 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 KCSL 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
KCSL's obligations set forth in the preceding sentence, KCSL 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 KCSL Board shall have determined is reasonably
sufficient for such purpose.

                                      -19-
<PAGE>

          (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 provided in Paragraph 4(d)(ii) with respect
to health and life insurance and in Paragraph 7(e) with respect to health,
prescription and dental benefits, no such other employment, if obtained, or
compensation or benefits payable in connection therewith shall reduce any
amounts or benefits to which Executive is entitled hereunder.  Such amounts or
benefits payable to Executive under this Agreement shall not be treated as
damages but as severance compensation to which Executive is entitled because
Executive's employment has been terminated.

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

     10.  Notice.  Notices and all other communications to either party pursuant
          ------
to this Agreement shall be in writing and shall be deemed to have been given
when personally delivered, delivered by facsimile or deposited in the United
States mail by certified or registered mail, postage prepaid, addressed, in the
case of KCSL or KCSI, to KCSL or KCSI at 114 West 11th Street, Kansas City,
Missouri 64105, Attention: Secretary, or, in the case of the Executive, to him
at 11037 S. Whitetail Lane, Olathe, KS 66061, or to such other address as a
party shall designate by notice to the other party.

                                      -20-
<PAGE>

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

     12.  Successors in Interest.  The rights and obligations of KCSL and 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 KCSL and
KCSI, regardless of the manner in which such successors or assigns shall succeed
to the interest of KCSL or KCSI hereunder, and this Agreement shall not be
terminated by the voluntary or involuntary dissolution of KCSL or KCSI or by any
merger or consolidation or acquisition involving KCSL or KCSI, or upon any
transfer of all or substantially all of KCSL's or 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 KCSL.

     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.

                                      -21-
<PAGE>

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

     IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Agreement as of the 1st day of January, 1999.

                                KANSAS CITY SOUTHERN LINES, INC.

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

                                KANSAS CITY SOUTHERN INDUSTRIES, INC.

                                By  /s/ Landon Rowland
                                    -----------------------------------
                                        Landon H. Rowland, President

                                EXECUTIVE

                                 /s/ Robert H. Berry
                                ---------------------------------------
                                        Robert H. Berry

                                      -22-<PAGE>

                                                                   Exhibit 10.16

                             EMPLOYMENT AGREEMENT
                             --------------------
                    (Amended and Restated January 1, 1999)

     THIS AGREEMENT, made and entered into as of this 1st day of January, 1999,
by and between Kansas City Southern Lines, Inc., a Missouri corporation
("KCSL"), Kansas City Southern Industries, Inc., a Delaware corporation ("KCSI")
and Richard P. Bruening, an individual ("Executive").

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

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

     1.   Employment.  KCSL hereby continues the employment of Executive as its
          ----------
Sr. Vice President & General Counsel to serve at the pleasure of the Board of
Directors of KCSL (the "KCSL 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 KCSL Board and in the stockholder of KCSL.  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 KCSL and its affiliates.

                                      -1-
<PAGE>

     2.   Compensation.
          ------------

          (a)   Base Compensation.  KCSL shall pay Executive as compensation for
                -----------------
his services hereunder an annual base salary at the rate approved by the KCSI
Compensation Committee on November 17, 1998.  Such rate shall not be increased
prior to January 1, 2000 and shall not be reduced except as agreed by the
parties or except as part of a general salary reduction program imposed by KCSL
for non-union employees and applicable to all officers of KCSL.

          (b)   Incentive Compensation.  For the year 1999, Executive shall not
                ----------------------
be entitled to participate in the KCSL Incentive Compensation Plan.

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

                                      -2-
<PAGE>

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 KCSL, except that in the event of any material breach of this
Agreement by KCSL, Executive may terminate this Agreement and his employment
hereunder immediately upon notice to KCSL.

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

          (c)   Termination by KCSL For Cause.  KCSL 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 KCSL, KCSI, Railway or
     any subsidiary of KCSL, KCSI or Railway;

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

                                      -3-
<PAGE>

                (vi)    Embezzlement or misappropriation by Executive.

          (d)   Termination by KCSL Other Than For Cause.
                ----------------------------------------

                (i)     KCSL may terminate this Agreement and Executive's
     employment other than for cause immediately upon notice to Executive, and
     in such event, KCSL 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), KCSL shall continue, for a period of one (1) year following such
     termination, (a) to pay to Executive as severance pay a monthly amount
     equal to one-twelfth (1/12th) of the annual base salary referenced in
     Paragraph 2(a) above, at the rate in effect immediately prior to
     termination, and, (b) to reimburse Executive for the cost (including state
     and federal income taxes payable with respect to this reimbursement) of
     continuing the health insurance coverage provided pursuant to this
     Agreement or obtaining health insurance coverage comparable to the health
     insurance provided pursuant to this Agreement, and obtaining coverage
     comparable to the life insurance provided pursuant to this Agreement,
     unless Executive is provided comparable health or life insurance coverage
     in connection with other employment. The foregoing obligations of KCSL
     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 KCSL 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

                                      -4-
<PAGE>

     pay received in such year shall be taken into account for the purpose of
     determining benefits, if any, under the KCSL 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 KCSL 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 KCSL.
     After termination of employment, Executive shall not be entitled to accrue
     or receive benefits under any other employee benefit plan or program,
     except that Executive shall be entitled to participate in the KCSI Profit
     Sharing Plan, the KCSI Employee Stock Ownership Plan and the KCSI Section
     401(k) Plan (if KCSL 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.   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 KCSL trade secret, except to the extent
necessary for Executive to perform his duties for KCSL while an employee.  For
purposes of this Agreement, the term "KCSL trade secret" shall mean any
information regarding the business or activities of KCSL 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 KCSL 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, KCSL
shall be entitled to terminate any and all remaining severance benefits under

                                      -5-
<PAGE>

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 KCSL or Executive
                ------
for any reason, Executive shall immediately return to KCSL all KCSL 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 KCSL and all direct and indirect subsidiaries and affiliates of KCSL as may
be requested by KCSL and shall sign such other documents and papers relating to
Executive's employment, benefits and benefit plans as KCSL 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 KCSL or Executive,
and the provisions of Paragraph 4(d)(ii) shall survive any termination of this
Agreement by KCSL 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 KCSL for a period of three years (the "Three-Year
Period") from the date of such Change in Control (the "Control Change Date").
KCSL 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.

                                      -6-
<PAGE>

During the Three-Year Period, KCSL 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 KCSL 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 KCSL, KCSI or Railway plans (together, the "Specified Benefits") in
existence, and in accordance with the terms thereof, at the Control Change Date:

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

     In addition, KCSL and KCSI shall use their best efforts to cause all
outstanding options held by Executive under any stock option plan of KCSI or its
affiliates to become immediately exercisable on the Control Change Date and to
the extent that such options are not vested and are subsequently forfeited, the
Executive shall receive a lump-sum cash payment within 5 days after the options
are forfeited equal to the difference between the fair market value of the
shares of stock subject to the non-vested, forfeited options determined as of
the date such options are forfeited and the exercise price for such options.
During the Three-Year Period Executive shall be entitled to participate, on the
basis of his executive position, in any incentive compensation

                                      -7-
<PAGE>

plan of KCSL, KCSI or Railway in accordance with the terms thereof at the
Control Change Date; provided that if under KCSL, 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 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 KCSL 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.

                                      -8-
<PAGE>

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

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

                (ii)    any "person" (as such term is used in Sections 13(d) and
     14(d)(2) of the Securities Exchange Act of 1934 (the "Exchange Act")) other
     than KCSI shall have become after September 18, 1997, according to a public
     announcement or filing, the "beneficial owner" (as defined in Rule 13d-3
     under the Exchange Act), directly or indirectly, of securities of KCSL,
     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 KCSL's, KCSI's or Railway's then
     outstanding voting securities; or

                (iii)   the stockholders of KCSL, KCSI or Railway shall have
     approved a merger, consolidation or dissolution of KCSL, KCSI or Railway or
     a sale, lease, exchange or disposition of all or substantially all of
     KCSL's, KCSI's or Railway's assets,

                                      -9-
<PAGE>

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

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

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

                                      -10-
<PAGE>

effect for the three plan years ending prior to the Control Change Date
(regardless of any limitations based on the earnings or performance of KCSL,
KCSI or Railway) and a continuing participant in such plan to the end of the
Benefits Period. Following the end of the Benefits Period, KCSL shall continue
to provide to the Executive and the Executive's family the following benefits
("Post-Period Benefits"): (1) prior to the Executive's attainment of age sixty
(60), health, prescription and dental benefits equivalent to those then
applicable to active peer executives of KCSL) 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
KCSL) health and prescription benefits equivalent to those then applicable to
retired peer executives of KCSL 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 KCSL, 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

                                      -11-
<PAGE>

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 KCSL and effective at the end of
such notice period, resign his employment with KCSL (the "Resignation"). Within
five (5) days of such a Resignation, KCSL shall pay to Executive his full base
salary through the effective date of such Resignation, to the extent not
theretofore paid, plus a lump sum amount equal to the Special Severance Payment
(computed as provided in the first sentence of Paragraph 7(e), except that for
purposes of such computation all references to "Termination" shall be deemed to
be references to "Resignation"). Upon Resignation of Executive, Specified
Benefits to which Executive was entitled immediately prior to Resignation shall
continue on the same terms and conditions as provided in Paragraph 7(e) in the
case of Termination (including equivalent payments provided for therein), and
Post-Period Benefits shall 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 KCSL
     which results in a diminution or other material adverse change in such
     position, authority or duties;

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

                (iii)   KCSL'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

                                      -12-
<PAGE>

                (v)     any purported termination by KCSL 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 KCSL "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 KCSL (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 KCSL Board that the
     Executive met the applicable standard of conduct for indemnification or
     reimbursement under KCSL'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

                                      -13-
<PAGE>

     of the KCSL 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 KCSL 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 KCSL'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 KCSL, 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 KCSL 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.

                KCSL shall cause the preparation and delivery to the Executive
     of a Certificate upon request at any time. KCSL 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.
                -------------------------------

                                      -14-
<PAGE>

                (i)     If KCSL 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 KCSL
     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 KCSL, KCSL 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 KCSL) or (b)
     deliver to the Executive a Certificate specifying the Gross-up Payment
     determined by KCSL's independent auditors, together with an opinion of
     KCSL's counsel ("KCSL Counsel Opinion"), and pay the Executive the Gross-up
     Payment specified in such Certificate. If for any reason KCSL fails to
     comply with clause (b) of the preceding sentence, the Gross-up Payment
     specified in the Executive's Determination shall be controlling for all
     purposes.

                (ii)    If the Executive does not make a request for, and KCSL
     does not deliver to the Executive, a Certificate, KCSL 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 KCSL and/or the Executive that certain Payments are neither subject to Excise
Taxes nor to be counted

                                      -15-
<PAGE>

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
KCSL'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 KCSL or the Executive
pursuant to Paragraph 7(h) or Paragraph 7(i), as applicable, then KCSL 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.

          (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

                                      -16-
<PAGE>

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 KCSL'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 KCSL
                -----------------------------
in writing of any claim by the IRS or other taxing authority that, if
successful, would require the payment by KCSL 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 KCSL's obligations under this Paragraph 7 only if and
to the extent that such failure results in actual prejudice to KCSL. The
Executive shall not pay such claim less than 30 days after the Executive gives
such notice to KCSL (or, if sooner, the date on which payment of such claim is
due). If KCSL notifies the Executive in writing before the expiration of such
period that it desires to contest such claim, the Executive shall:

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

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

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

                                      -17-
<PAGE>

                (iv)    permit KCSL to participate in any proceedings relating
     to such claim; provided, however, that KCSL 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, KCSL 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 determination before any administrative
     tribunal, in a court of initial jurisdiction and in one or more appellate
     courts, as KCSL shall determine; provided, however, that if KCSL directs
     the Executive to pay such claim and sue for a refund, KCSL 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 KCSL'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.

                                      -18-
<PAGE>

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

          (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, KCSL 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 KCSL 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
KCSL's obligations set forth in the preceding sentence, KCSL 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 KCSL Board shall have determined is reasonably
sufficient for such purpose.

                                      -19-
<PAGE>

          (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 provided in Paragraph 4(d)(ii) with respect
to health and life insurance and in Paragraph 7(e) with respect to health,
prescription and dental benefits, no such other employment, if obtained, or
compensation or benefits payable in connection therewith shall reduce any
amounts or benefits to which Executive is entitled hereunder.  Such amounts or
benefits payable to Executive under this Agreement shall not be treated as
damages but as severance compensation to which Executive is entitled because
Executive's employment has been terminated.

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

     10.  Notice.  Notices and all other communications to either party pursuant
          ------
to this Agreement shall be in writing and shall be deemed to have been given
when personally delivered, delivered by facsimile or deposited in the United
States mail by certified or registered mail, postage prepaid, addressed, in the
case of KCSL or KCSI, to KCSL or KCSI at 114 West 11th Street, Kansas City,
Missouri 64105, Attention: Secretary, or, in the case of the Executive, to him
at 606 W. Meyer Blvd., Kansas City, MO 64113, or to such other address as a
party shall designate by notice to the other party.

                                      -20-
<PAGE>

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

     12.  Successors in Interest.  The rights and obligations of KCSL and 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 KCSL and
KCSI, regardless of the manner in which such successors or assigns shall succeed
to the interest of KCSL or KCSI hereunder, and this Agreement shall not be
terminated by the voluntary or involuntary dissolution of KCSL or KCSI or by any
merger or consolidation or acquisition involving KCSL or KCSI, or upon any
transfer of all or substantially all of KCSL's or 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 KCSL.

     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.

                                      -21-
<PAGE>

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

     IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Agreement as of the 1st day of January, 1999.

                                KANSAS CITY SOUTHERN LINES, INC.

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

                                KANSAS CITY SOUTHERN INDUSTRIES, INC.

                                By  /s/ Landon Rowland
                                  -------------------------------------
                                        Landon H. Rowland, President

                                EXECUTIVE

                                /s/ Richard P. Bruening
                                ---------------------------------------
                                       Richard P. Bruening

                                      -22-

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