ADDENDUM TO EMPLOYMENT AGREEMENT
Exhibit
10.51.1
ADDENDUM TO EMPLOYMENT AGREEMENT
This Addendum to Employment Agreement (“Addendum”) dated the day of August 18, 2004 is between
Kansas City Southern, a Delaware corporation (“KCS”), formerly known as Kansas City Southern
Industries, Inc. or KCSI, and Xxxxx X. Xxxxxxxx, an individual (“Executive”).
WHEREAS, Executive is currently employed by KCS, and KCS and Executive previously entered into
an Employment Agreement dated April 1, 2003 (“Agreement”), which sets forth terms and conditions of
Executive’s employment; and
WHEREAS, the parties desire to amend certain of those terms and conditions in the
Agreement as set forth below without amending the remaining terms of the Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, it
is agreed by and between KCS and Executive that the Agreement is amended as follows:
1.
Paragraphs 4(c) and 4(d) of the Agreement.
Paragraphs
4(c) and 4(d) of the Agreement are hereby deleted and replaced in their
entirety with the following:
(c) Termination
by KCS For Cause. KCS 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 KCS, or any affiliate of KCS;
(iii) Gross negligence or willful misconduct in the performance of Executive’s
duties as determined in good faith by the KCS Board;
(iv) Executive’s failure to substantially perform his duties and responsibilities
hereunder, including without limitation Executive’s willful failure to follow reasonable
instructions of the President or other officer to whom Executive reports;
(v) Executive’s breach of an express employment policy of KCS or its
affiliates;
(vi) Executive’s fraud or criminal activity;
(vii) Embezzlement or misappropriation by Executive; or
(viii)
Executive’s breach of his fiduciary duty to KCS or its affiliates.
(d) Termination by KCS Other Than For Cause
(i) KCS may terminate this Agreement and Executive’s employment other than for cause
immediately upon notice to Executive, and in such event, KCS shall provide severance benefits to
Executive in accordance with Paragraph 4(d)(ii). Executive acknowledges and agrees that such
severance benefits constitute the exclusive remedy of Executive upon termination of employment
other than for cause. Notwithstanding any other provision of this Agreement, as a condition to
receiving such severance benefits, Executive shall be required to execute a full release of claims
in favor of KCS and its affiliates in the form attached hereto and incorporated herein by reference
as Attachment A.
(ii) Unless the provisions of Paragraph 7 of this Agreement are applicable, if Executive’s
employment is terminated under Paragraph 4(d)(i), KCS shall: (1) continue for a period of one (1)
year following such termination, to pay to Executive as severance pay a monthly amount equal to
one-twelfth (1/12th) of the annual base salary referenced in Paragraph 2(a), at the rate in effect
immediately prior to termination, and, (2) for a period of fifteen (15) months following such
termination, reimburse Executive for the cost (including state and federal income taxes payable
with respect to this reimbursement) of continuing the health insurance coverage provided pursuant
to this Agreement or obtaining health insurance coverage comparable to the health insurance
provided pursuant to this Agreement, and obtaining coverage comparable to the life insurance
provided pursuant to this Agreement, unless Executive is provided comparable health or life
insurance coverage in connection with other employment. The foregoing obligations of KCS shall
continue until the end of such respective one (1) year and fifteen (15)-month periods
notwithstanding the death or disability of Executive during said period (except, in the event of
death, the obligation to reimburse Executive for the cost of life insurance shall not continue).
In the year in which termination of employment occurs, Executive shall be eligible to receive
benefits under the KCS Incentive Compensation Plan and any Executive Plan in which Executive
participates (the “Executive Plan”) (if such Plans then are in existence and Executive was
entitled to participate immediately prior to termination) in accordance with the provisions of
such plans then applicable, and severance pay received in such year shall be taken into account
for the purpose of determining benefits, if any, under the KCS 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 KCS Incentive Compensation Plan or the Executive
Plan with respect to the severance pay provided herein, notwithstanding that benefits under such
plan there are still generally available to executive employees of KCS. After termination of
employment, Executive shall not be entitled to accrue or receive benefits under any other employee
benefit plan or program, except that Executive shall be entitled to participate in the KCS Profit
Sharing Plan, the KCS Employee Stock Ownership Plan and the KCS Section 401(k) Plan (if KCS
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.
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2.
Paragraph 5 of the Agreement.
Paragraph 5 of the Agreement is hereby deleted and replaced in its entirety with the following:
Confidentiality
and Non-Disclosure.
(a) Executive understands and agrees that he has been and will continue to be given
Confidential Information (as defined below) during his employment with KCS relating to the
business of KCS and/or its affiliates, in exchange for his agreement herein. Executive hereby
expressly agrees to maintain in strictest confidence and not to use in any way (including
without limitation in any future business relationship of Executive), publish, disclose or authorize
anyone else to use, publish or disclose in any way, any Confidential Information relating in any
manner to the business or affairs of KCS and/or its affiliates. Executive agrees further not to
remove or retain any figures, calculations, letters, documents, lists, papers, or copies thereof, which
embody Confidential Information of KCS and/or its affiliates, and to return, prior to Executive’s
termination of employment for any reason, any such information in Executive’s possession. If
Executive discovers, or comes into possession of, any such information after his termination he
shall promptly return it to KCS. Executive acknowledges that the provisions of this paragraph
are consistent with KCS’ policies and procedures to which Executive, as an employee of KCS, is
bound.
bound.
(b) For purposes of this Agreement, “Confidential Information” includes, but is not
limited to, information in the possession of, prepared by, obtained by. compiled by. or that
is used by KCS or its affiliates or customers and (1) is
proprietary to, about, or created by KCS
or its affiliates or customers; (2) gives KCS or its affiliates or customers some competitive
business advantage, the opportunity of obtaining such advantage, or disclosure of which might be
detrimental to the interest of KCS or its affiliates or customers; and (3) is not typically
disclosed by KCS or its affiliates or customers, or known by persons who are not employed by KCS or its
affiliates or customers. Without in any way limiting the foregoing and by way of example,
Confidential Information shall include: information pertaining to KCS or its affiliates’
business operations such as financial and operational information and data, operational plans and
strategies, business and marketing strategies, pricing information, plans for various products
and services, and acquisition and divestiture planning.
(c) In the event of any breach of Paragraph 5 by Executive, Railway shall be entitled
to terminate any and all remaining severance benefits under Paragraph 4(d)(ii) and shall be
entitled to pursue such other legal and equitable remedies as may be available. Executive
acknowledges, understands and agrees that KCS and/or its affiliates will suffer immediate and
irreparable harm if Executive fails to comply with any of his obligations under Paragraph 5 of
the Agreement, and that monetary damages alone will be inadequate to compensate KCS or its
affiliates for such breach. Accordingly, Executive agrees that KCS and/or its affiliates
shall, in addition to any other remedies available to it at law or in equity, be entitled to temporary,
preliminary, and permanent injunctive relief and specific performance to enforce the terms of
Paragraph 5 without the necessity of proving inadequacy of legal remedies or irreparable harm
or posting bond.
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3.
Paragraph 6(a) of the Agreement.
Paragraph 6(a) of the Agreement is hereby deleted and replaced in its entirety with the following:
| (a) | Duties. Upon termination of this Agreement by KCS or Executive for any reason, Executive shall immediately sign such written resignations from all positions as an officer, director or member of any committee or board of KCS and all direct and indirect subsidiaries and affiliates of KCS as may be requested by KCS and shall sign such other documents and papers relating to Executive’s employment, benefits and benefit plans as KCS may reasonably request. |
4.
Paragraph 7(e) of the Agreement.
The parenthetical “(discounted to the then present value on the basis of a rate of seven percent
(7%) per annum)” is deleted from the first paragraph of paragraph 7(e).
5.
Remainder of Agreement Unchanged.
Except as otherwise expressly set forth in this Addendum, the Agreement shall remain unchanged
and in full force and effect in accordance with its terms.
IN
WITNESS WHEREOF, the parties hereto have executed this Addendum to Employment Agreement as
of the 3rd day of September 2004.
| EXECUTIVE | KANSAS CITY SOUTHERN F/K/A | |||||||
| KANSAS CITY SOUTHERN INDUSTIRES, INC. | ||||||||
| /s/ Xxxxx X. Xxxxxxxx | By: | /s/ Xxxxxxx X. Xxxxxxx | ||||||
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ATTACHMENT A
WAIVER AND RELEASE
In consideration of the benefits described in the Employment Agreement, I do hereby fully waive all
claims and release Kansas City Southern (KCS), and its affiliates, parents, subsidiaries,
successors, assigns, directors and officers, fiduciaries, employees and agents, as well as any
employee benefit plans from liability and damages related in any way to any claim I may have
against KCS. This Waiver and Release includes, but is not limited to all claims, causes of action
and rights under: Title VII of the Civil Rights Act of 1964, as amended; the Civil Rights Act of
1991; the Age Discrimination in Employment Act of 1967, as amended; the Civil Rights Act of 1866;
the American with Disabilities Act of 1990; the Rehabilitation Act of 1973; the Older Workers
Benefit Protection Act of 1990; the Employee Retirement Income Security Act of 1974, as amended;
the Worker Adjustment and Retraining Notification Act; the Family and Medical Leave Act; the
Federal Employers’ Liability Act; the Railway Labor Act, including bumping rights, rights to file a
grievance, rights to a hearing (whether before any company official, any system, group, regional or
special adjustment board, the National Railroad Adjustment Board, or any other entity), and any
rights to arbitration thereunder; the Missouri Human Rights Act, the Kansas Act Against
Discrimination, the Kansas and Missouri Workers’ Compensation acts, and all local state and federal
statutes and regulations; all claims arising from labor protective conditions imposed by the
Interstate Commerce Commission or the Surface Transportation Board; any KCS incentive or benefit
plan or program, and any rights under any collective bargaining agreement, including seniority
rights, bumping rights and reinstatement rights, rights to file or assert a grievance or other
complaint, rights to a hearing, or rights to arbitration under such agreement; and all rights under
common law such as breach of contract, tort or personal injury of any sort.
I understand that this Waiver and Release also precludes me from recovering any relief as a result
of any lawsuit, grievance or claims brought on my behalf and arising out of my employment or
resignation of, or separation from employment, provided that nothing in this Waiver and this
Release may affect my entitlement, if any, to workers’ compensation or unemployment compensation.
Additionally, nothing in this Waiver and Release prohibits me from communications with, filing a
complaint with, or full cooperation in the investigations of, any governmental agency on matters
within their jurisdictions. However, as stated above, this Waiver and Release does prohibit me from
recovering any relief, including monetary relief, as a result of such activities.
If any term, provision, covenant, or restriction of this Waiver and Release is held by a court of
competent jurisdiction to be invalid, void or unenforceable, the remainder of this Waiver and
Release and the other terms, provisions, covenants and restrictions hereof shall remain in full
force and effect and shall in no way be affected, impaired or invalidated. I understand and agree
that, in the event of breach by me of any of the terms and conditions of this Waiver and Release,
KCS will be entitled to recover all costs and expenses as a result of my breach, including but not
limited to, reasonable attorneys’ fees and costs.
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Waiver and Release Page 2
I have read this Waiver and Release and I understand all of its terms. I enter into and sign this
Waiver and Release knowingly and voluntarily, with full knowledge of what it means.
/s/ Xxxxx X. Xxxxxxxx
|
8/2/04 | |||
Xxxxx X. Xxxxxxxx
|
On file with company. | |||
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