(c)  There shall be no duplication of the Longevity Bonus by

virtue of employment under another agreement, nor will such payment be used to offset, construct or increase guarantees in protective agreements or arrangements.

 

Section 2 - First General Wage Increase   (for other than Dining Car Stewards)

 

(a)     Effective on July 1, 2001, all standard basic daily rates of pay for employees represented by the United Transportation Union in effect on June 30, 2001 shall be increased by two-and one-half (2-1/2) percent.

 

(b)     In computing the increase for enginemen under paragraph (a) above, two-and-one-half (2-1/2) percent shall be applied to the standard basic daily rates of pay applicable in the following weight-on-drivers brackets, and the amounts so produced shall be added to each standard basic daily rate of pay:

 

Passenger       - 600,000 and less than 650,000 pounds

Freight         - 950,000 and less than 1,000,000 pounds

(through freight rates)

Yard Engineers     - Less than 500,000 pounds

Yard Firemen     - Less than 500,000 pounds

(separate computation covering five- day rates and other than five-day rates)

 

Section 3 - Second General Wage Increase  (for other than Dining Car Stewards)

 

Effective July 1, 2002, all standard basic daily rates of pay in effect on June 30, 2002 for employees represented by the United Transportation Union shall be increased by three (3) percent, computed and applied in the same manner prescribed in Section 2(b) above.

 

Section 4 - Third General Wage Increase    (for other than Dining Car Stewards)

 

Effective July 1, 2003, all standard basic daily rates of pay in effect on June 30, 2003 for employees represented by the United Transportation Union shall be increased by two-and-one-half (2-1/2) percent, computed and applied in the same manner prescribed in Section 2(b) above.

 

 

Section 5 - Fourth General Wage Increase  (for other than Dining Car Stewards)

 

Effective July 1, 2004, all standard basic daily rates of pay in effect on June 30, 2004 for employees represented by the United Transportation Union shall be increased by three (3) percent, computed and applied in the same manner prescribed in Section 2(b) above.

 

Section 6 - Standard Rates

 

The standard basic daily rates of pay produced by application of the increases provided for in this Article are set forth in Appendix 1, which is a part of this Agreement.

 

Section 7 - Application of Wage Increases

 

(a)     The adjustments provided for in this Article will not apply to duplicate time payments, including arbitraries and special allowances that are expressed in time, miles or fixed amounts of money, but will apply to mileage rates of pay for miles run in excess of the number of miles comprising a basic day.

 

(b)     In engine service and in train and yard ground service, miscellaneous rates based upon hourly or daily rates of pay, as provided in the schedules or wage agreements, shall be adjusted in the same manner as heretofore increased under previous wage agreements.

 

(c)     In determining new hourly rates, fractions of a cent will be disposed of by applying the next higher quarter of a cent.

 

(d)     Daily earnings minima shall be changed by the amount of the respective daily adjustments.

 

(e)     Standard monthly rates and money monthly guarantees applicable in passenger train service shall be thirty times the new standard daily rates.  Other than standard monthly rates and money monthly guarantees shall be so adjusted that money differentials existing as of June 30, 2001 shall be preserved.

 

(f)     Existing monthly rates and money monthly guarantees applicable in train service other than passenger will be changed in the same proportion as the daily rate for the class of service involved is adjusted.

 

(g)     Existing money differentials above existing standard daily rates shall be maintained.

 

(h)     In local freight service, the same differential in excess of through freight rates shall be maintained.

 

(i)     The existing differential of $6.00 per basic day in passenger, freight, and yard service, and 6¢ per mile for miles in excess of the number of miles encompassed in the basic day, currently payable to engineers working without firemen, shall be maintained and applied in the same manner as the local freight differential.

 

(j)     In computing the first increase in rates of pay effective under Section 2 for engineers, firemen, conductors, brakemen and flagmen employed in local freight service, or on road switchers, roustabout runs, mine runs, or in other miscellaneous service, on runs of miles equal to or less than the number comprising a basic day, which are therefore paid on a daily basis without a mileage component, whose rates had been increased by "an additional $.40" effective July 1, 1968, the two-and-one-half (2-1/2) percent increase shall be applied to daily rates in effect on the day preceding the effective date of the general wage increase provided for in Section 2, exclusive of car scale additives, local freight differentials, and any other money differential above existing standard daily rates.  For firemen, the rates applicable in the weight-on-drivers bracket 950,000 and less than 1,000,000 pounds shall be utilized in computing the amount of increase.  The same procedure shall be followed in computing the increases effective July 1, 2002, July 1, 2003, and July 1, 2004.  The rates produced by application of the standard local freight differentials and the above-referred-to special increase of "an additional $.40" to standard basic through freight rates of pay are set forth in Appendix 1 which is a part of this Agreement.

 

(k)     Other than standard rates:

 

(i)   Existing basic daily rates of pay other than standard shall be changed, effective as of the dates specified in Sections 2, 3, 4, and 5 hereof, by the same respective percentages as set forth therein, computed and applied in the same manner as the standard rates were determined.

 

(ii)  The existing differential of $6.00 per basic day in passenger, freight, and yard service, and 6¢ per mile for miles in excess of the number of miles encompassed in the basic day, currently payable to engineers working without firemen, shall be maintained and applied in the same manner as the local freight differential.

 

(iii)  Daily rates of pay, other than standard, of engineers, firemen, conductors, brakemen and flagmen employed in local freight service, or on road switchers, roustabout runs, mine runs, or in other miscellaneous service, on runs of miles equal to or less than the number encompassed in the basic day, which are therefore paid on a daily basis without a mileage component, shall be increased as of the effective dates specified in Sections 2, 3, 4, and 5 hereof, by the same respective percentages as set forth therein, computed and applied in the same manner as provided in paragraph (k)(i) above. This provision does not apply to the Trip Rates established pursuant to Article V of this Agreement.

 

 

Section 8 - General Wage Increases for Dining Car Stewards

 

(a)     Effective on July 1, 2001, all basic monthly rates of pay in effect on June 30, 2001 for dining car stewards represented by the United Transportation Union shall be increased by two-and-one-half (2-1/2) percent.

 

(b)     Effective July 1, 2002, all basic monthly rates of pay in effect on June 30, 2002 for dining car stewards represented by the United Transportation Union shall be increased by three (3) percent.

 

(c)     Effective July 1, 2003, all basic monthly rates of pay in effect on June 30, 2003 for dining car stewards represented by the United Transportation Union shall be increased by two-and-one-half (2-1/2) percent. 

 

(d)     Effective July 1, 2004, all basic monthly rates of pay in effect on June 30, 2004 for dining car stewards represented by the United Transportation Union shall be increased by three (3) percent.

 

 

ARTICLE II - OPTIONAL ALTERNATIVE COMPENSATION PROGRAM

 

Section 1

 

A carrier, at its discretion, may offer employees alternative compensation arrangements in lieu of the general wage increases provided in Article I (in whole or part).  Such arrangements may include, for example, stock options, stock grants (including restricted stock), bonus programs based on carrier performance, and 401(k) plans.

 

 

Section 2

 

(a)     The following conditions shall govern implementation of alternative compensation arrangements pursuant to this Article:

 

(1)     Carrier shall notify the appropriate organization representative(s) regarding its proposed alternative compensation arrangement(s).  The parties shall meet promptly on such proposal and use their best efforts to reach agreement on implementation;

 

(2)     The proposed arrangement(s) may be implemented only by mutual agreement of the carrier and the appropriate organization representative(s);

 

(3)     The proposed arrangement(s) must be made available to the smallest employee grouping that can be reasonably administered.

 

(b) Nothing herein shall be construed to bar the parties from reaching mutual agreement on different terms or conditions pertaining to implementation of this Article.

 

 

ARTICLE III - COST-OF-LIVING PAYMENTS

 

Part A - Cost-of-Living Payments Under Appendix D, Document “A” of Award of Arbitration Board No. 559 dated May 8, 1996

Section 1

 

Article II, Part C, Document “A” of Appendix D of the Award of Arbitration Board No. 559 dated May 8, 1996, shall be eliminated effective on the date of this Agreement.  Cost-of- living payments pursuant to such provision that are in effect on that date shall be rolled in to rates of pay at that time.

 

Section 2

 

Any local counterpart to the above-referenced Article II, Part C that is in effect on a carrier party to this Agreement shall be amended in the same manner as provided in Section 1.

 

Part B - Cost-of-Living Allowance and Adjustments Thereto After January 1, 2005

 

Section 1 - Cost-of-Living Allowance and Effective Dates of Adjustments

 

(a)     A cost-of-living allowance shall be payable in the manner set forth in and subject to the provisions of this Part, on the basis of the "Consumer Price Index for Urban Wage Earners and Clerical Workers (Revised Series) (CPI-W)" (1967=100), U.S. Index, all items - unadjusted, as published by the Bureau of Labor Statistics, U.S. Department of Labor, and hereinafter referred to as the CPI.  The first such cost-of-living allowance shall be payable effective July 1, 2005 based, subject to paragraph (d), on the CPI for March 2005 as compared with the CPI for September 2004.  Such allowance, and further cost-of-living adjustments thereto which shall become effective as described below, shall be based on the change in the CPI during the respective measurement periods shown in the following table, subject to the exception provided in paragraph (d)(iii), according to the formula set forth in paragraph (e).

 

   Measurement Periods                 

                                                  Effective Date

Base Month          Measurement Month        of Adjustment

 

September 2004      March 2005                 July 1, 2005

 

March 2005             September 2005                January 1, 2006

 

Measurement Periods and Effective Dates conforming to the above schedule shall be applicable to periods subsequent to those specified above during which this Article is in effect.

 

(b)     While a cost-of-living allowance is in effect, such cost-of-living allowance shall apply to straight time, overtime, vacations, holidays and to special allowances in the same manner as basic wage adjustments have been applied in the past, except that such allowance shall not apply to duplicate time payments, including arbitraries and special allowances that are expressed in time, miles or fixed amounts of money.

 

(c)  The amount of the cost-of-living allowance, if any, that shall be effective from one adjustment date to the next may be equal to, or greater or less than, the cost-of-living allowance in effect in the preceding adjustment period.

 

(d) (i) Cap.  In calculations under paragraph (e), the maximum increase in the CPI that shall be taken into account shall be as follows:

 

Effective Date                Maximum CPI Increase That           of Adjustment                   May Be Taken Into Account

 

July 1, 2005                3% of September 2004 CPI     

         

January 1, 2006               6% of September 2004 CPI, less the increase from September 2004 to March 2005

 

Effective Dates of Adjustment and Maximum CPI Increases conforming to the above schedule shall be applicable to periods subsequent to those specified above during which this Article is in effect.

 

(ii) Limitation.  In calculations under paragraph (e),

only fifty (50) percent of the increase in the CPI in any

measurement period shall be considered.

 

(iii)  If the increase in the CPI from the base month of September 2004 to the measurement month of March 2005 exceeds 3% of the September 2004 base index, the measurement period that shall be used for determining the cost-of-living adjustment to be effective the following January shall be the 12-month period from such base month of September; the increase in the index that shall be taken into account shall be limited to that portion of the increase that is in excess of 3% of such September base index; and the maximum increase in that portion of the index that may be taken into account shall be 6% of such September base index less the 3% mentioned in the preceding clause, to which shall be added any residual tenths of points which had been dropped under paragraph (e) below in calculation of the cost-of-living adjustment which shall have become effective July 1, 2005 during such measurement period.

 

(iv)  Any increase in the CPI from the base month of September 2004 to the measurement month of September 2005 in excess of 6% of the September 2004 base index shall not be taken into account in the determination of subsequent cost-of-living adjustments.

 

(v) The procedure specified in subparagraphs (iii) and (iv) shall be applicable to all subsequent periods during which this Article is in effect.

 

(e) Formula.  The number of points change in the CPI during a measurement period, as limited by paragraph (d), shall be converted into cents on the basis of one cent equals 0.3 full points.  (By "0.3 full points" it is intended that any remainder of 0.1 point or 0.2 point of change after the conversion shall not be counted.)

 

The cost-of-living allowance in effect on December 31, 2005 shall be adjusted (increased or decreased) effective January 1, 2006 by the whole number of cents produced by dividing by 0.3 the number of points (including tenths of points) change, as limited by paragraph (d), in the CPI during the applicable measurement period.  Any residual tenths of a point resulting from such division shall be dropped.  The result of such division shall be added to the amount of the cost-of-living allowance in effect on December 31, 2005 if the  CPI shall have been higher at the end than at the beginning of the measurement period, and subtracted therefrom only if the index shall have been lower at the end than at the beginning of the measurement period and then, only, to the extent that the allowance remains at zero or above.  The same procedure shall be followed in applying subsequent adjustments.

 

(f)     Continuance of the cost-of-living allowance and the adjustments thereto provided herein is dependent upon the availability of the official monthly BLS Consumer Price Index (CPI-W) calculated on the same basis as such Index, except that, if the Bureau of Labor Statistics, U.S. Department of Labor should, during the effective period of this Article, revise or change the methods or basic data used in calculating such Index in such a way as to affect the direct comparability of such revised or changed index with the CPI-W during a measurement period, then that Bureau shall be requested to furnish a conversion factor designed to adjust the newly revised index to the basis of the CPI-W during such measurement period.

 

Section 2 - Payment of Cost-of-Living Allowances

 

(a)     The cost-of-living allowance that becomes effective July 1, 2005 shall be payable to each employee commencing on that date.

 

(b)     The increase in the cost-of-living allowance effective January 1, 2006 pursuant to Section 1 of this Part shall be payable to each employee commencing on that date.

 

(c)     The increase in the cost-of-living allowance effective July 1, 2006 pursuant to Section 1 of this Part shall be payable to each employee commencing on that date.

 

(d)     The procedure specified in paragraphs (b) and (c) shall be followed with respect to computation of the cost-of-living allowances payable in subsequent years during which this Article is in effect. 

 

(e)  In making calculations under this Section, fractions of a cent shall be rounded to the nearest whole cent; fractions less than one-half cent shall be dropped and fractions of one-half cent or more shall be increased to the nearest full cent.

 

Section 3 - Application of Cost-of-Living Allowances   

 

The cost-of-living allowance provided for by Section 1 of this Part B will not become part of basic rates of pay.  Such allowance will be applied as follows:

 

(a)     For other than dining car stewards, each one cent per hour of cost-of-living allowance will be treated as an increase of 8 cents in the basic daily rates of pay produced by application of Article I of this Agreement.  The cost-of-living allowance will otherwise be applied in keeping with the provisions of Section 7 of Article I.

 

(b)     For dining car stewards, each one cent per hour of cost-of-living allowance will be treated as an increase of $1.80 in the monthly rates of pay produced by application of Sections 7 and 8 of Article I.

 

 

Section 4 - Continuation of Part B

 

The arrangements set forth in this Part B shall remain in effect according to the terms thereof until revised by the parties pursuant to the Railway Labor Act.

 

ARTICLE IV - HEALTH AND WELFARE

 

Section 1

 

The parties’ proposals concerning health and welfare matters contained in their respective bargaining notices served on and

after November 1, 1999 are, as of the date of this Agreement, being handled on a national basis by the NCCC (on behalf of the participating carriers listed in Attachment A) and a coalition of national railroad unions that includes the UTU.  It is mutually agreed that the settlement of those proposals with those

organizations will be incorporated into and become part of this Agreement upon the effective date of such settlement, and will be

deemed full and final disposition of the parties’ notices on these matters.

 

Section 2

 

In the event that the national discussions referenced in Section 1 conclude without the matters in dispute either being fully resolved or referred to other means of dispute resolution under the Railway Labor Act, the parties shall meet promptly to resolve such matters under the Railway Labor Act.  The parties mutually agree that their health and welfare dispute shall be resolved on the same terms and conditions applicable to the other labor organizations participating in the aforementioned national discussions.

 

 

Section 3

 

Nothing herein shall be construed to bar the parties from reaching mutual agreement on any matter relating to health and welfare.

 

ARTICLE V - PAY SYSTEM SIMPLIFICATION

 

PART A - GENERAL

 

Section 1 - General

 

The parties have agreed that the current pay system should be simplified.  In agreeing upon a new pay system the following

 

principles shall apply:

 

(a)  The new pay system will neither create nor result in additional pay-related costs for a carrier, nor gains for its employees, nor losses for pre October 31, 1985 employees, except insofar as those employees acquiring seniority in train or engine service subsequent to October 31, 1985 who, coincident with the establishment of Trip Rates pursuant to this Article, will have their Trip Rates calculated based upon elements of pay for which they were not eligible prior to the date of this Agreement.  Except as otherwise provided herein, pay elements not specifically identified in Section 5 will continue to be covered by existing rules and will not be impacted by this Article.

 

(b)  The provisions of the new pay system will have no effect on work rules except where a pay element is incorporated in a Trip Rate.

 

(c) Any pay element incorporated in a Trip Rate established hereunder will not be used to support a  claim for that pay element relating to that trip, and carrier shall not be required to  respond to any such claim.

 

Section 2 - Mutual Cooperation  

 

The parties recognize that successful implementation of this Article is dependent upon the mutual cooperation of all involved.  Therefore, a Joint Committee shall be established on each carrier party to this Agreement consisting of an equal number of organization and management participants.  To the extent possible, the Committee shall consist of representatives from that property who participated in the negotiations leading to this Agreement.  The initial responsibility of the Committee shall be to explain the intent of this Article to the affected employees and managers so that there will be a clear and consistent understanding as to the Article’s purpose and intent.

 

 

PART B - THROUGH FREIGHT SERVICE

 

Section 1 - General

 

A new pay system shall be implemented as provided in this Subpart for all employees covered by this Agreement working in through freight (assigned and unassigned) service.

 

Section 2 - Trip Rates

 

(a)  Each carrier shall develop Trip Rates for Starts in through freight service runs/pools.  Separate Trip Rates shall be developed for conductors and brakemen.  The Trip Rates shall incorporate the pay elements specified in Section 5 except as otherwise agreed by the parties or determined by the Disputes Committee established in Section 6 hereof.  Once Trip Rates become effective for runs/pools, pay elements incorporated in such Trip Rates will not be used to support any claims for those pay elements relating to that rip.   Pay elements not included in Trip Rates will continue to be covered by existing rules.

 

(b) A Trip Rate shall be developed for each separate run/pool except as otherwise provided in Section 9.

 

Section 3 - Computation of Trip Rates

 

(a)  Trip Rates for through freight service runs/pools shall be derived as follows:

 

(1) add together all earnings attributable to the elements of pay to be incorporated in the Trip Rate actually paid to the employees (including extra employees)whose seniority in train service was established on or before October 31, 1985 (“Pre-85 Employees") for all through freight Starts involving service performed on such runs/pools during the Test Period;

 

(2) divide the earnings derived from the calculation in (1) above by the total through freight Starts made during the Test Period by the Pre-85 Employees (including extra employees) who performed service;

 

(3) the Trip Rate for each Start on such run/pool for all employees (including extra employees) shall be the dollar amount derived by the calculation set forth in (2);

 

(4) the earnings described in paragraph (1) above shall include all compensation attributable to the Starts described in paragraph (2) above and subsection (b) below.

 

 

(b)  For purposes solely of this Article, the term “Start” shall mean a fully compensated trip performed by the pool/run (including extra employees), including other trips such as deadhead, hours of service relief, and turnaround service directly related to and performed by the pool/run.

 

(c)  Test Period.  The parties agree that the differences in the prevailing operating conditions on each Carrier signatory to this Agreement warrant the establishment of Test Periods being developed on an individual railroad basis, pool/run by pool/run.  The objective in developing Test Periods will be to establish a measurement which reflects a 12-month period of “normalized operations.”  Normalized operations as defined and used herein will mean an operating pattern which is not adversely affected by the implementation of a major transaction such as an acquisition, control or merger involving two or more Carriers or any other unusual or extenuating circumstances.  The Carrier will bear by a preponderance of the evidence the burden of substantiating its reasons for selecting the Test Periods proposed for runs/pools.

 

Section 4 - Computation and Application Adjustments

 

(a)  In the computation and application of the Trip Rates  described in Section 3 above, the adjustments set forth in subsection (b) and (c) shall be made, where appropriate:

 

(b) Computation Adjustments:

 

(1) If and to the extent that General Wage Increases and Cost of Living Adjustments (except as to pay elements which are not currently subject to wage adjustments)become effective during a Test Period, appropriate computation adjustments shall be made, but there shall be no duplication or pyramiding; 

 

(2) Trip Rates shall be subject to adjustment for General Wage Increases and Cost of Living Adjustments (except as to pay elements which are not currently subject to wage adjustments) that become effective during the period from close of the Test Period to the effective date of the Trip Rate, but there shall be no duplication or pyramiding.

 

 

(c) Application Adjustments:

 

(1)