MEMORANDUM AGREEMENT

Between

UNION PACIFIC RAILROAD

And its engineers represented by

BROTHERHOOD OF LOCOMOTIVE ENGINEERS

This agreement provides for the transfer of engineers from Tucumcari to Dalhart and El Paso. It is a separate agreement from the Southwest Hub merger agreement. This agreement covers only the transferring and relocation issues associated with the establishment of the Dalhart - Vaughn and El Paso Vaughn pool freight runs. Seniority provisions are covered in the merger agreement.

A. The transfer of engineers from Tucumari shall be handled as follows:

1. A preliminary bulletin shall be posted offering 21 positions to Dalhart and 12 to El Paso.

2. Engineers must bid to these locations. If sufficient engineers do not bid to a location CMS and the General Chairmen and/or his designate will review the number that bid to each location. If all parties agree that the number is sufficient no adjustments will be made. If they do not agree then junior engineers will be forced to meet the 21 and 12 numbers.

3. When the transition to the long pool begins, the number of positions to be transferred shall be bulletined again and shall be filled in seniority order. If insufficient bids then the junior engineers shall be forced for each cycle of transfers. This shall continue until all engineers are transferred from Tucumcari.

4. The Tucumari transition shall provide for the creation of a long pool at Dalhart. This pool shall initially have 12 pool turns (six from Dalhart and six from Tucumcari). If not already qualified they may run with two engineers, one from each roster, and familiarize each other over the route in addition to other methods of qualification. Every two months an additional 12 turns shall be bulletined until the entire pool is a long pool. With each bulletin of 12 turns another Tucumcari engineer shall be added to the extra board at Dalhart. At the same time as each group of engineers move to Dalhart four engineers shall be transferred to El Paso.

B. Engineers working at Tucumcari, required to relocate under this agreement, will be governed by the relocation provisions of Article IX of the May 19, 1986 Award of Arbitration Board no. 458. In lieu of Article IX provisions, engineers required to relocate may elect one of the following options:

1. Non-homeowners may elect to receive an "in lieu of' allowance in the amount of $12,500.

2. Homeowners may elect to receive an "in lieu of' allowance in the amount of $42,500. Mobile homes not on property owned by the homeowner and anchored to a foundation do not qualify in this section (2) but shall be in section (1).

3. Such "in lieu of' allowance will be the total relocation benefit for which engineers are eligible and is instead of any other relocation benefits, including loss on sale of home or consideration of whether "comparable housing' is applicable in this relocation.

4. Engineers assigned at Tucumcari receiving an "in lieu of" allowance set forth in this agreement may sell or retain their current residence, at their option, and the company is under no obligation to purchase their residence or reimburse the employee for any costs involved in the sale of their residence. Engineers will be governed by the calling provisions at the new terminal where they will be required to report.

5. Claims for these allowances may be filed immediately upon the signature date of this agreement, however no claim for an "in lieu of' relocation allowance will be accepted after six months from date of this agreement.

6. Engineers receiving an "in lieu of' relocation allowance pursuant to this implementing agreement will be required to remain at the new location, seniority permitting, for a period of two (2) years. The parties agree that the "in lieu of " monies are not meant to be separation allowances and those who apply for them agree to continue employment at the new location for the two year period. Failure to do so will obligate the engineer to return a pro-rata portion of the "in lieu of' allowance based on the portion of the two year period that he/she fails to work after receiving same.

7. Under no circumstances shall an engineer be permitted to receive

more than one (1) "in lieu of' relocation allowance under this implementing agreement and/or the Southwest Hub merger agreement or award.

8. Only one "in lieu of' shall be paid per residence. There will be no pyramiding of benefits.

C. Engineers, to be eligible for Article IX or "in lieu of', must meet general relocation requirements including having their residence being closer to their old on duty point than their new on duty point and at least thirty (30) miles from their new on duty point. Engineers must be homeowners prior to October 1, 1998 continuing to the time they apply for the relocation benefits. This does not apply to loaners or borrow outs to Tucumcari.

D. Engineers who do not want to transfer to either Dalhart or El Paso make elect to take a separation allowance in the amount of $20,000. This election must be made known at the time of the initial bid. Engineers so electing must continue working until the last group of assignments at Tucumcari is abolished as part of the phase in.

E. Those electing ID run protection shall have the same conditions and offsets as those found in the Southwest Hub merger-implementing document.

F. The Dalhart - Vaughn freight rate shall be the SPWest mountain rate.

G. This agreement is made in recognition of the unique circumstances which exist in connection with the change of terminals from Tucumcari to Dalhart and El Paso and is without prejudice or precedent to either party's position and will not be cited by any party in any other negotiations or arbitration.

This agreement is effective the _ day of 1999.

For the Organization: For the Carrier:

General Chairman BLE SPWL General Director Labor Relations

General Director Labor Relations

June 11, 1999

ICC-307-29

The following is a list of engineers that satisfy the conditions of Article III L of the Greater Southwest Hub and should be allowed to continue to reside at Pratt, Kansas should they not elect a relocation package.

R. D. Kramer

J. W. Detwiller

R. E. Graven

B. G. Hardin

D. B. Johnson

F. W. Thomasson

T. L. Orem

J. R. Whitman

R. Pena

W. L. Bosley

L. L. Keller

R. D. Haskell

H. D. Collier

J. M. Hart

R. L. (Bucky) Moore

R. L. Jones

D. L. Rassmussen

C. D. Pike

T. L. Mayhan

M. L. Mathys

T. G. Jones

T. L. Shurnway

J. P. Martin

M. E. Gilpin

L. C. Fail

D. E. Parsons

The three following engineers currently residing in Pratt do not meet the conditions of Article L of the Greater Southwest Hub and may be forced to relocate to Dalhart. They will be eligible for those relocation benefits of Article III L of the Greater Southwest Hub.

P. N. Payne

G. N. Wallace

M. D. Collier

MERGER IMPLEMENTING AGREEMENT

Southwest Hub

between the

UNION PACIFIC

SOUTHERN PACIFIC TRANSPORTATION COMPANY

and

BROTHERHOOD OF LOCOMOTIVE ENGINEERS

In Finance Docket No. 32760, the U.S. Department of Transportation, Surface Transportation Board (11STB") approved the merger of the Union Pacific Corporation ("UPC"), Union Pacific Railroad Company/Missouri Pacific Railroad Company (collectively referred to as "UP") and Southern Pacific Rail Corporation, Southern Pacific Transportation Company ("SP"), St. Louis Southwestern Railway Company ("SSW"), SPCSL Corp., and The Denver & Rio Grande Western Railroad Company ("DRGW") (collectively referred to as 11SP"). In approving this transaction, the ST13 imposed New York Dock labor protective conditions.

In order to achieve the benefits of operational changes made possible by the transaction, to consolidate the seniority of all engineers working in the territory covered by this Agreement into one common seniority district covered under a single, common collective bargaining agreement.

1. Southwest Hub

New seniority districts shall be created that encompasses the following area: the territory from milepost 292.33 East of Pratt Kansas westward to milepost 731.5 West of Yuma, Arizona: BNSF trackage rights to Childress (not including) and Lubbock (including) that connect to this line; and the lines from El Paso to Alpine (not including) and Toyah (not including) and shall include all main and branch lines, industrial leads and stations between the points identified.

NOTE 1: Engineers with home terminals within the hub may work to points outside the Hub without infringing on the rights of other engineers in other Hubs and engineers outside the Hub may work to points inside the Hub without infringing on the rights of engineers inside the Southwest Hub. The Hub identifies the on duty points for assignments and not the boundaries of assignments. ( This note is further explained in side letter No. 2)

II. Seniority and Work Consolidation.

The following seniority consolidations will be made:

A. The territory shall be divided into three zones as follows:

1 Zone 1 - The territory between Yuma (including) and Lordsburg (not

including).

2. Zone 2 - The territory between Lordsburg (including) and Alpine (not

including), Toyah (not including) and Vaughn (not including).

3. Zone 3 - The territory between Vaughn (including) and Pratt (including),

Childress (not including) and Lubbock (including).

B. A new seniority district will be formed and a master engineer Hub roster shall be

created. In addition, engineer roster(s) shall be created for each Zone for those engineers on the current SPWL, EP&SW, UP, SSW and SPEL seniority rosters. It does not include borrow outs or SPWL auxiliary board engineers working in the Hub, if any. The new rosters will be created as follows:

HUB ROSTERS

1. Engineers shall be dovetailed on the Hub roster based on their current

engineer's date in the Hub. If engineers from different rosters have the same engineer’s seniority date they shall be placed on the rosters as follows:

a. Engineers date and ranking as an engineer.

b. Fireman’s date and ranking as a fireman.

C. Hire date and ranking as an employee.

d. Age

e. Engineers date and ranking as an engineer.

f. Switchman’s date and ranking as a switchman.

9. Hire date and ranking as an employee.

h. Age.

NOTE : This will keep all engineers on the Hub roster in the same relative standing with respect to other engineers from the same pre merger roster that had the same seniority date.

2. Engineers placed on the Southwest Hub Rosters shall relinquish all seniority

outside the new hub upon implementation of this Agreement and all seniority inside the Southwest Hub held by engineers outside the Hub shall be eliminated.

NOTE: Because engineer seniority dates are based on the initial training date some employees now in training could be given a pre March 24, 1999 engineer seniority date after roster formulation. It is the intent of this agreement to include all those engineers based on the seniority date given them, and not when they finished training.

The new zone rosters will be created in three parts as follows:

3. The first part will include SPWL, EP&SW, UP, SSW and SPEL Engineers, if any, with an engineer's seniority date prior to March 24, 1999 that will initially work in each zone. They will be dovetailed based upon the current engineer seniority date within the Hub. This shall include any engineer working in trainman/fireman service with an engineer’s seniority date.

4. Following next on the roster (second part) will include all SPWL, EP&SW, UP, SSW and SPEL Engineers with engineer seniority dates prior to August 6, 1996 working in the other zones. They will be dovetailed based upon the current engineer seniority date within the Hub. This shall include any engineer working in trainman/fireman service with an engineer’s seniority date.

5. Following them (third part) will include all SPWL, EP&SW, UP, SSW and SPEL Engineers with engineer seniority dates subsequent to March 23, 1999 working in the zone. It does not include SPWL, EP&SW, UP, SSW and SPEL Engineers with engineer seniority dates subsequent to August 6, 1996 working in other zones.

6. All engineers with engineer seniority dates subsequent to August 6, 1996 and those promoted after the implementation date will only have seniority in one zone except as provided in the consolidated seniority provisions of the surviving CBA. They require, among other provisions, the Carrier to post a notice of intent to promote additional engineers so that post August 6, 1996 engineers may request transfer to the zone with the need for additional engineers. Engineers may be held up to 9 months, in lieu of 7 months provided for in the consolidation seniority provisions, prior to being released to another zone. When an engineer moves under the consolidated seniority provisions, they shall come off the zone roster they left and shall be placed on the zone roster they move to. They shall use the same seniority date but placing in the non-prior rights portion of the roster and below those with prior rights. Surplus engineers may be used in another zone in accordance with auxiliary board provisions.

7. All engineers placed on the zone rosters may work all assignments protected by the zone roster in accordance with their seniority and the provisions set forth in this Agreement. For an engineer to hold a baseline pool or yard percentage position using prior rights identified in this Section B., they must be zone prior righted and have a seniority date prior to August 6, 1996 except as defined in NOTE to 7(a) of Section D.

C. Zone prior rights shall be governed by the following:

1 Those engineers who make up the first part of the roster (pre March 24, 1999 working or originally transferred to the zone) shall have prior rights to assignments with home terminals in the zone over those engineers that make up parts two and three of the roster.

2. Those engineers who make up the second part of the roster ( pre August 6, 1996 from other zones) may bid into the zone on assignments not filled by zone prior right engineers using their current seniority date without losing any of their original zone prior rights. This move shall not establish prior rights in the new zone.

3. Those engineers who are post August 6, 1996 will establish use of seniority when they move to another zone using the consolidated seniority provisions. This move shall not establish prior rights in the new zone nor relinquish existing prior rights, if any, in other zones.

D. Prior rights within a zone shall be governed as follows:

1. The Tucson - El Paso pool (home terminal at Tucson) shall be prior righted with the odd numbered slots being filled by those with zone prior rights and the even numbered slots to those engineers who relocate to Zone 1 as part of this implementing agreement. Each relocating engineer shall be placed on a specific turn by name and shall have prior rights only to that turn. These prior rights shall no longer be effective at the end of the sixth year after implementation, and at that time all positions in the pool shall be available to engineers based on the zone prior right provisions. If an engineer relocating to zone 1 voluntarily moves off their prior right spot during the six year period then he/she shall no longer be prior righted to that pool position. Once voluntarily vacated, the turn will be treated as an odd numbered slot.

2. With respect to all other assignments, the engineers who relocate to zone 1 as part of the single ending of the pool shall have the same zone prior rights as all other engineers currently working in the zone.

3. Assignments at Yuma, both regular and extra board, protected by the West Colton source of supply shall be governed as follows:

a. The assignments shall be prior righted to SP engineers holding seniority in the Los Angeles Hub on the day this agreement is implemented.

b. If an assignment goes no bid/application then it shall be filled by an engineer from the Zone 1 Southwest Hub roster.

c. LA Hub SP prior right engineers shall have bid/application rights to vacancies on these assignments and shall not have displacement rights to them if they are held by an engineer from the adjoining Hub for a period of time not to exceed 6 months from the date the engineer from the other Hub holding the assignment is assigned, unless the 6 month period of time is waived by the engineer holding the assignment.

d. Yuma positions protected by the West Colton source of supply shall be prior righted until attrited. All other Yuma positions shall be protected by zone 1 Southwest Hub engineers.

4. Except for El Paso yard assignments, Clifton locals and pool assignments all Zone 2 positions shall be filled from the common dovetail zone roster. Zone 2 pools shall be prior righted as follows:

a. El Paso - Lordsburg, 100% SPWL up to a base line of 26 and then to the dovetail roster.

b. El Paso - Vaughn, 100 % EP&SW up to a base line of 47 and then to the dovetail roster. When Alpine and Toyah are combined then the odd numbered slots, beginning with 35, shall be prior righted to SPNL engineers.

c. El Paso - Alpine, 100% SPEL up to a base line of 31 and then to the dovetail roster.

d. El Paso - Toyah, 100% UP up to a base line of 8 and then to the dovetail roster.

e. El Paso - Alpine/Toyah (when combined) 79% SPEL and 21 % UP up to a baseline of 39 and then to the dovetail roster. (see attached chart)

5. El Paso yard assignments shall be prior righted as follows: 60% UP/SPEL, 40% EP&SW. (see chart)

6. The Clifton locals shall be prior righted, one to J.E. Andress, a current occupant and the other to the initial successful bidder from the current El Paso /Tucson seniority district. Should either of the incumbents voluntarily vacate assignments at this location they shall lose their prior rights to these assignments and the assignments shall become common positions to the zone. This only applies when moving from this location not when moving from one assignment to another at the same on duty point.

7. Except for pools all Zone 3 positions shall be filled from the common dovetail zone roster. Zone 3 pools shall be prior righted as follows:

a. Pratt - Dalhart/Dalhart - Pratt, 100% SSW up to a baseline of 38 then to the dovetail roster.

NOTE: SSW engineers working in Pratt from March 24, 1999 until implementation date will continue to hold prior rights pursuant to Article 111, L, of this agreement until attrited.

b. Dalhart - Vaughn, 50%SSW(even) and 50%EP&SW(odd) up to a baseline of 38 then to the dovetail roster.

c. Dalhart - Childress/Lubbock, 100% SSW up to a baseline of 5 then to the dovetail roster.

E. Yard and pool prior rights shall be eliminated as follows:

1. El Paso yard prior rights shall be 100% for the first three years. Starting with the fourth year (from start of implementation) all third shift assignments shall lose their yard prior rights, and starting with the fifth year all second shift assignments shall lose their yard prior rights and starting with the sixth year all first shift assignments shall lose their yard prior rights.

2. Pool baseline prior rights shall phase out 25% per year beginning with the start of year four (from start of implementation) and ending with the start of year seven when the pools shall lose their pool prior rights. This does not apply to Pratt-Dalhart pool engineers who remain at Pratt nor to the TucsonEl Paso pool which has its own phase out schedule.

F. Engineers who are on an authorized leave of absence or who are dismissed and later reinstated will have the right to displace to the appropriate roster(s), provided his/her seniority at time of displacement would have permitted him/her to hold that selection. The parties will create an inactive roster for all such engineers until they return to service in a Hub or other location at which time they will be placed on the appropriate seniority roster(s) and removed from the inactive roster.

G. The movement of engineers from Zone 2 to zone 1 shall be as follows:

1. Engineers currently holding seniority on the Tucson Seniority District and

working in zone 2 shall be given the first opportunity to elect to transfer to Tucson up to a baseline number of 35.

2. Should an insufficient number of engineers from this seniority district elect to transfer and prior to forcing engineers an opportunity for exchanges of seniority between former Tucson seniority district engineers and other engineers in Zone 2 and 3 shall be offered. The process shall be as follows:

a. All requests must go through the local chairmen and be on file by August 15, 1999. The local chairmen will match up engineers with the closest seniority dates. The provisions of the surviving CBA requiring that engineers be within five years of age and five years of service are waived for this process.

b. Each engineer shall take the younger of the two dates and shall be treated as holding seniority on the roster of the engineer they exchanged with.

c. Other engineers in Zone 2 who go to Tucson will be treated the same as if they were initial voluntary transfer Tucson seniority district engineers. (relocation, zone prior rights and pool even numbered prior rights.)

d. Rights to seniority exchanges will go first to former EP&SW engineers(at El Paso and Tucumcari) and then to other engineers in Zone 2 and finally to engineers in Zone 3.

3. Should an insufficient number of engineers elect to transfer or exchange seniority, then the remaining number (up to the demand number of 27) shall be forced from former Tucson seniority district engineers in junior order.

H. The structure of the zone seniority rosters is to provide a supply of engineers in each zone. Movement to other zones has some restrictions (depending on seniority) so as to provide a more stable Hub and Spoke system for engineers. This also provides a supply of available engineers in each zone for Carrier operations without the need to force engineers from one zone to another after the initial movement involving Tucumcari engineers and engineers involved in the El Paso Tucson pool. Engineers forced to a new zone due to implementation will be permitted to make application back to their original prior rights zone. The application must be on file within sixty days of being forced and will be honored when vacancies of a minimum of thirty days exist in the original zone and there are no engineers their senior on reserve boards or demoted in that zone. If an engineer is recalled and declines the recall, then his/her application will be pulled and not

reentered. (see relocation section on restrictions if relocation allowances are requested Engineers who receive a relocation allowance shall not be recalled for the two (2) year period.)

NOTE: The minimum of thirty days shall be met when all engineers senior to

the forced engineer have been assigned to a working position for a minimum of

thirty days or on a leave of absence for a minimum of thirty days and an additional

regular assignment becomes vacant. If the engineer returning to the original zone

works for ninety days without being demoted then the forced zone rights will be

relinquished and the original zone rights reinstated.

III. POOL OPERATION/ASSIGNED SERVICE

The following operations may be instituted:

A. Dalhart - Childress/Lubbock via Dalhart or Strafford as one pool with Dalhart as the home terminal.

B. Dalhart - Vaughn with Dalhart as the home terminal. However, Tucumcari Vaughn and Dalhart - Tucumcari shall continue to operate as separate pools during the transition to the long pool.

C. Dalhart - Springfield with Dalhart as the home terminal.

D El Paso - Vaughn with El Paso as the home terminal.

E. El Paso - Toyah/Alpine as one pool with El Paso as the home terminal. The Carrier will not give notice to combine the pools until either the new lodging facility is built at Toyah or the pools away from home lodging is at Pecos.

F. El Paso - Lordsburg with El Paso as the home terminal.

G. Tucson - El Paso with Tucson as the home terminal.

H Tucson - Lordsburg with Tucson as the home terminal.

I. Tucson - Nogales/Phoenix as one pool with Tucson as the home terminal. Through freight pool service to Nogales shall be run in turnaround service with no away from home lodging. Tucson pool engineers working to Nogales and return shall be paid in combination service if they perform deadhead and service in the same tour of duty. Through freight service to Phoenix may be run as either turnaround or straight away service on a trip by trip basis.

J. Tucson - Yuma with Tucson as the home terminal.

K. Phoenix - Yuma with Phoenix as the home terminal.

L. Pratt- Dalhart - This pool shall continue to operate (regulation and balancing) as it currently operates (double-ended) pending agreement on final provisions. In the next six months the parties will meet and agree on the operation of the pool and the transition process that will take place as the pool attrites to Dalhart. The basic principles are as follows:

1 . The Pratt engineers who qualify for this treatment shall be identified by name. The list will only include those engineers with a home terminal at or between Pratt and Liberal, Kansas and continually working at these locations from the date of notice March 24, 1999 to the date of implementation.

2. The listed engineers shall have prior rights to all SSW pool turns with a home terminal at Pratt subject to their obligations to cover other assignments set forth below. No non listed engineer may hold a pool turn at Pratt. They may hold non-pool assignments if there are no listed engineers available.

3. Listed Pratt engineers will be required to protect all other assignments (including extra board at Pratt) between Pratt and Liberal, Kansas prior to protecting pool assignments between Pratt and Dalhart. Absent bids or requests from senior engineers at Pratt, the junior engineer(s) in pool freight service may be removed from pool freight service and placed on the vacancies. When removed these engineers will be considered as holding the highest paying assignment for New York Dock purposes.

4. Lodging will be furnished at Dalhart for those Pratt engineers working into Dalhart and at Pratt for Dalhart based engineers.

5. Pool will operate so as to minimize time engineers are held at the away from home terminal.

6. There is no reverse held away from home terminal time or reverse lodging for either end of the pool.

7. Pratt engineers shall lay off at Pratt and Dalhart engineers shall lay off at Dalhart.

8. The carrier may offer relocation allowances to Pratt engineers to transfer to Dalhart.

M. Any pool freight, local, work train, or road switcher service may be established in accordance with the controlling CBA.

N. Crews may use and/or operate over any route or combination of UP and SP trackage between their initial and final terminal. Side trips shall continue to be paid under side trip provisions of the CBA.

0. New pool operations not covered in this implementing Agreement between Hubs or within a Hub will be handled per Article IX of the 1986 National Implementation Award.

P. The different pools identified in this agreement may be established individually or in groups. Other than Dalhart-Vaughn and Tucson - El Paso changes, pools not established at time of implementation shall be established upon ten days written notice to the General Chairman. Existing pools will remain in place until replaced by new pools. The Dalhart-Vaughn and Tucson-EI Paso pools have their own implementation provisions. Tucson-Phoenix-Nogales and Phoenix-Yuma shall be implemented concurrently. When requested these pools may be pre advertised.

Q. The Tucumcari transition shall provide for the creation of a long pool at Dalhart. This pool shall initially have 12 pool turns (six from Dalhart and six from Tucumcari). If not already qualified they may run with two engineers, one from each roster, and familiarize each other over the route in addition to other methods of qualification. Every two months an additional 12 turns shall be bulletined until the entire pool is a long pool. With each bulletin of 12 turns another Tucumcari engineer shall be added to the extra board at Dalhart. At the same time as each group of engineers move to Dalhart four engineers shall be transferred to El Paso.

R. There are some current locals and road switchers operating under other than SPWL agreements. The transition to the SPWL Agreement shall not eliminate these assignments if the SPWL agreements do not have similar provisions that permit these operations. It is the desire of all parties to continue to provide service to customers after the Hub implementation so these assignments may continue to operate and be paid pending review of their operations and agreements by the General Chairmen and the Director Labor Relations with regard to the SPWL Agreement. If the SPWL agreement does not provide for continued coverage then the current agreements will be adopted on a limited basis, (current operations only).

S. Current blue print provisions for EP&SW, SSW, UP and SPEL pools shall be retained at implementation pending a review by the parties to see if changes need to be made. In addition, If the pools to Alpine and Toyah are combined, engineers shall be placed at the home terminal in the order in which called from the away from home terminals.

A. The Carrier may establish extra boards at any location in accordance with the governing CBA. The Carrier will give a thirty day notice of the consolidation of premerger extra boards and the notice provisions of the governing CBA shall be used in the establishment of new extra boards. Existing extra boards not covered by a notice shall continue to operate until a notice is served abolishing or combining them. Beginning with implementation, day these existing extra boards shall be governed by the provisions of the selected CBA.

The following information is given in order to assist engineers in any merger implementation decisions they must make. It is the Carriers intention to initially establish or retain extra boards at the following locations:

1. Dalhart

2. El Paso (2)

a. One to cover the yard assignments and the territory between El Paso and Lordsburg.

b. One to cover the territory between El Paso and Vaughn, Toyah and Alpine.

3. Tucson

4. Phoenix

5. Yuma

6. Pratt

C. The extra boards at Yuma will be consolidated on a 50/50 basis with the LA Hub entitled to prior rights to the even numbered assignments 2, 4 and 6. The Southwest Hub zone 1 shall have prior rights to all other extra board assignments. There will then be one extra board at Yuma and the extra board at Yuma will be used to fill short term vacancies on all assignments that have Yuma as a home terminal (whether LA Hub or Southwest Hub vacancies) and EL Centro as a home terminal. This extra board shall protect hours of service relief/turnaround service as far West as Niland (MP 667) in the LA Hub and as far East as is provided elsewhere in this agreement.

D. At Alpine, there may be a joint extra board that may cover hours of service relief for trains heading to Alpine that are within 65 miles of Alpine, all other non pool assignments in this area and other usual extra board work. If only one assignment then the senior bidder from the two Hubs (San Antonio and zone 2 of the Southwest Hub) shall be assigned and if two assignments then the other Hub shall be assigned. If forced then it shall be forced even years from Southwest Hub seniority and odd years from San Antonio Hub seniority. Southwest Hub forcing shall be limited to previous SPEL engineers and engineers hired/promoted after March 24, 1999.

E. Exhausted extra boards.

1. At El Paso, if one of the above extra boards is exhausted, then another (secondary)extra board may be used prior to using other sources of supply within the zone. Secondary extra boards shall be identified by bulletin.

2. An engineer called from his/her extra board for an assignment in another area not primarily covered by their extra board shall be handled as follows:

a. Pay received for this assignment shall not be used as an offset for extra board guarantee but shall be in addition to, however, it shall be used in computing whether the engineer is entitled to protection pay at the end of the month.

b. An engineer unavailable at time of call for secondary assignments shall have a deduction made in their extra board guarantee in accordance with the extra board agreement and shall have an offset to their protection in accordance with the protection offset provisions. If miss called for secondary calls, the engineer shall not be placed on the bottom of the board but will hold his/her place.

C. An engineer unavailable at time of call for secondary assignments shall not be disciplined.

A. The several yards at El Paso shall be combined into a single terminal. Yard engineers shall not be restricted as to where in the terminal they can operate. The new terminal limits shall be as follows:

B. The provisions of A above will not be used to enlarge or contract the current limits except to the extent necessary to combine into a unified operation.

C. With the implementation of this Agreement all areas, trackage, stations and facilities in the Hub shall be common to all engineers as a single unified system. Engineers shall not be restricted in the Hub where they can operate except on the basis of CBA provisions that set forth limits of an assignment such as the radius of a road switcher.

D. Road crews may receive/leave their trains at any location within the consolidated terminals and may perform work within the terminals pursuant to the controlling collective bargaining agreement, including National Agreement provisions.

E. Within terminals, the carder will designate the on/off duty points for all road and yard crews. Such on/off duty points will have appropriate facilities as currently required by the controlling collective bargaining agreement and/or by governmental statute or regulation.

F The following payment applies to Alfalfa yard:

1. The 20 minute payment currently paid to pre October 31, 1985 employees shall continue to be paid to regularly assigned engineers who report to this location.

2. A 20 minute payment shall be paid to those extra board engineers (both pre and post October 31, 1985) who fill vacancies at this location and report directly to this location at the call time.

A. General Conditions for Terminal Operations.

1. Initial delay and final delay will be governed by the controlling collective bargaining agreement, including the Duplicate Pay and Final Terminal Delay provisions of the 1986 and 1991 National and Implementing Agreements and awards.

2. Engineers will be transported to/from their trains to/from their designated on/off duty point in accordance with Article VIII, Section 1 of the May 1986 National Agreement. The Carrier shall designate the on/off duty points for engineers within a terminal. Suitable transportation includes Carrier owned or provided passenger carrier motor vehicles or taxi, but excludes other forms of public transportation.

3. The current application of National Agreement provisions regarding road work and Hours of Service relief under the combined road/yard service Zone, shall continue to apply. Yard engineers at any location within the Hub may perform such service in all directions out of their terminal.

4. SPEL and SSW engineers who have earned their vacation for the year 2000 in 1999 shall be allowed to take the number of weeks provided in their current vacation agreement for the year 2000.

1 The terms and conditions of the pool operations set forth in Article Ill (A-L), shall be the same except where specifically provided otherwise in those Sections. The terms and conditions are those of the surviving collective bargaining agreement as modified by subsequent national agreements, awards and implementing documents and those set forth in this Agreement.

2. Twenty-Five Mile Zone - Pool engineers may receive their train up to twenty-five miles on the far side of the terminal and run on through to the scheduled terminal. Engineers shall be paid an additional one-half (1/2) basic day for this service in addition to the miles run between the two terminals. If the time spent in this zone is greater than four (4) hours, then they shall be paid on a minute basis. This payment shall be at the pro rata through freight rate.

EXAMPLE: An El Paso-Vaughn crew receives their westbound train fifteen (15) miles east of Vaughn and runs to El Paso. They shall be paid the actual miles established for the El Paso - Vaughn run and a minimum of an additional one-half basic day for handling the train from the point fifteen (15) miles east of Vaughn back through that terminal. (See Q&A's for additional information.)

3. Turnaround Service/Hours of Service Relief, Except as provided in (2) above, turnaround hours of service relief at both home and away from home terminals shall be handled by extra boards, if available, prior to using pool engineers in turn around service. Engineers used for this service may be used for multiple trips in one tour of duty in accordance with the designated collective bargaining agreement rules. Extra boards may handle this in all directions out of a terminal. At El Paso each extra board will protect its primary area of coverage unless the other is exhausted.

4. Nothing in this Section B (2) and (3) prevents the use of other engineers to perform work currently permitted by prevailing agreements, including, but not limited to yard engineers performing Hours of Service relief within the road/yard zone, ID engineers performing service and deadheads between terminals, road switchers handling trains within their zones and using a engineer from a following train to work a preceding train and payments required by the controlling CBA shall continue to be paid when this work is performed.

5. Engineers, both pool and extra board, when called in turnaround hours of service relief shall be considered called as in combination dead head/service and shall be paid as such.

C. Agreement Coverage - Engineers working in the Southwest Hub shall be governed, in addition to the provisions of this Agreement, by the Collective Bargaining Agreement selected by the Carrier, including all addenda and side letter agreements pertaining to that agreement and previous National Agreement/Award/Implementing Document provisions still applicable. Except as specifically provided herein the system and national collective bargaining agreements, awards and interpretations shall prevail. None of the provisions of these agreements are retroactive. The Carrier has selected the SP WEST modified BLE Agreements.

A. Due to the parties voluntarily entering into this agreement the Carrier agrees to provide New York Dock wage protection (automatic certification) to all prior right engineers who are listed on the Southwest Hub Merged Rosters and working an assignment (including a Reserve Board) on March 24, 1999. (The term working shall also include those engineers disciplined and later returned to work and those full time Union Officers should they later return to service with the Carrier.) This protection will start with the effective (implementation) date of this agreement. The engineers must comply with the requirements associated with New York Dock conditions or their protection will be reduced for such items as layoffs, bidding/displacing to lower paying assignments when they could hold higher paying assignments, etc. Protection offsets due to unavailability are set forth in the Questions and Answers and side letter #1.

B. This protection is wage only and hours will not be taken into account.

C. Engineers required to relocate under this agreement will be governed by the relocation provisions of New York Dock. In lieu of New York Dock provisions, engineers required to relocate may elect one of the following options:

1. Non-homeowners may elect to receive an "in lieu of" allowance in the amount of $10,000 upon providing proof of actual relocation.

2. Homeowners may elect to receive an "in lieu of" allowance in the amount of $20,000 upon providing proof of actual relocation.

3. Homeowners in Item 2 above, who provide proof of a bona fide sale of their home at fair value at the location from which relocated, shall be eligible to receive an additional allowance of $10,000.

(a) This option shall expire five (5) years from date of application for the allowance under Item 2 above.

(b) Proof of sale must be in the form of sale documents, deeds, and filings of these documents with the appropriate agency.

4. With the exception of Item 3 above, no claim for an "in lieu of" relocation allowance will be accepted after two (2) years from date of implementation of this agreement.

5. Engineers receiving an "in lieu of" relocation allowance pursuant to this implementing agreement will be required to remain at the new location, seniority permitting, for a period of two (2) years.

6. Under no circumstances shall an engineer be permitted to receive more than one (1) "in lieu of" relocation allowance under this implementing agreement.

7. In addition to those engineers required to relocate, engineers at the location where assignments are relocated from shall be treated as required to relocate under this Agreement, seniority governing on a one for one basis equal to the number of assignments transferred. Once the number of in lieu of allowances are granted equal to the number of assignments transferred all other moves associated with the specific number of assignments transferred will not be eligible for any moving allowance.

D. There will be no pyramiding of benefits.

E. Engineers who do not have an interim protection shall select either the calendar year 1995 or 1996 to have their TPA calculated. Local Chairmen will provide the protection bureau a list of the names and SSN's and the year that the engineer selects to have his/her TPA developed. If an engineer is currently covered by an interim protection TPA due to the merger, then the engineer may elect to retain that TPA or select the period January 1, 1995 through December 31, 1995. When TPA's are mailed to the engineers the engineer must respond within thirty days from the date of the letter if they elect to retain the interim TPA. Engineers who were employed after the year 1995 shall use the twelve month period prior to implementation.

F. Those who elect to retain the interim (SPEL&SSW) TPA's shall have them adjusted the equivalent of the General Wage increase of July 1, 1997. All TPA's shall be eligible for the July 1, 1999 General Wage increase and SPEL and SSW engineers who worked a yard assignment a minimum of 150 yard shifts during their test period shall have a further adjustment of 2.3%. These are subject to this proposal being initialed by July 1, 1999.

G. The TPA for union officers will be based on the two engineers above and two engineers below the officer with regular work records on the pre-merger roster or their regular TPA, whichever is larger. Engineers with a current ID protection or a temporary SP West modification protection must either elect to retain that protection in accordance with those agreements or this New York Dock protection. Failure to so elect will result in retention of the ID or modification protection TPA.

H. Engineers will be treated for vacation, payment of arbitraries and personal leave days as though all their service on their original railroad had been performed on the merged railroad. Engineers assigned to the Southwest Hub seniority roster with a seniority date prior to March 24, 1999 shall have entry rate provisions waived and engineers hired after that date shall be subject to the rate progression provisions of the controlling CBA. Those engineers leaving the Southwest Hub will be governed by the CBA where they then work.

I. National Termination of Seniority provisions shall not be applicable to engineers hired prior to the effective date of this agreement.

A. Engineers involved in the consolidation of the Southwest Hub covered by this Agreement whose assignments require performance of duties of a new geographic territory not familiar to them will be given familiarization opportunities as quickly as possible. Engineers will not be required to lose time or ride the road on their own time in order to qualify for these new operations.

B. Engineers will be provided with a sufficient number of familiarization trips in order to become familiar with the new territory. Issues concerning individual-qualification shall be handled with local operating officers. The parties recognize that different terrain and train tonnage impact the number of trips necessary and an operating officer will be assigned to the merger that will work with the local managers of Operating Practices in implementing this Section. If disputes occur under this Agreement they may be addressed directly with the appropriate Director of Labor Relations and the General Chairman for expeditious resolution.

C. It is understood that familiarization required to implement the merger consolidation herein will be accomplished by calling a qualified engineer (or qualified Manager of Operating Practices) to work with an engineer called for service on a geographical territory not familiar to the engineer.

D. Engineers who work their assignment (road or yard) accompanied by an engineer taking a familiarization trip shall be paid one (1) hour at the pro rata rate, in addition to all other earnings for each tour of duty. This payment shall not be used to offset any extra board payments. The provision of 3 (a) and (b) Training Conditions of the

System Instructor Engineer Agreement shall apply to the regular engineer when the engineer taking the familiarization trip operates the locomotive.

E. Locomotive engineers will not be required to make the decision on whether or not an engineer being familiarized is sufficiently familiarized for the territory.

A. The Carrier shall give 30 days notice for implementation of this agreement, if ratified prior to August 15, 1999. If ratified after August 15, 1999 the Carrier shall give 10 days notice for implementation.

B. After notice of acceptance of this agreement, the appropriate Labor Relations Personnel, CIVIS Personnel, General Chairmen and Local Chairmen will convene a workshop to implement assembly of the merged seniority rosters. At this workshop, the representatives of the Organization will participate with the Carrier in constructing consolidated seniority rosters as set forth in Article 11 of this Implementing Agreement.

C. Engineers who are on assignments on the day of implementation shall remain on those assignments unless abolished or unless they make application to another vacancy or are displaced by engineers with displacement rights under the controlling CBA. This agreement does not create displacement rights due to its implementation. See the Article on implementation which covers the bulletining of extra board and other common positions. At a minimum the carrier shall bulletin UP/SPEL yard assignments at El Paso, the two extra boards at El Paso, all zone 2 non pool assignments and all non baseline pool assignments.

D. Dependent upon the Carriers manpower needs, the Carrier will develop (for zones 2 and 3) a pool of representatives of the Organization, with the concurrence of the General Chairmen, which, in addition to assisting in the preparation of the rosters, will assist in answering engineer's questions. In addition to questions, explanations of the seniority consolidation and implementing agreement issues, discussing merger integration issues with local Carrier officers and coordinating with respect to CIVIS issues relating to the transfer of engineers from one zone to another or the assignment of engineers to positions. Due to minor qualification issues and seniority changes in Zone 1 this pool may be developed if needed, however it is not mandatory to do so.

A. Engineers currently are under either the National Plan or the Union Pacific Hospital Association. Engineers coming under a new CBA will have six months from the implementation of this agreement to make an election as to keeping their old coverage or coming under the coverage of their new CBA. Engineers who do not make an election will have been deemed to elect to retain their current coverage. Engineers hired after the date of implementation will be covered under the plan provided for in the surviving CBA.

B. If an engineer is covered under a group life and/or disability insurance policy provided for in his/her collective bargaining agreement, and that collective bargaining agreement is not the surviving collective bargaining agreement, the Carrier shall continue the premium payments required at the time of implementation of this agreement for those engineers presently covered under those provisions for a period of six years, beginning January 1, 1998.

This Agreement is entered into this day of _______ 1999.

For the Organization: For the Carrier:

General Chairman BLE UP General Director Labor Relations

General Chairman BLE SPWest General Director Labor Relations

General Chairman BLE SSW Assistant Vice President Southern Region

General Chairman BLE SP East

Vice-President BLE

Vice-President BLE