BLE

July 26, 1978

MEDIATION AGREEMENT

DATED JULY 26, 1978

between railroads represented by the

NATIONAL CARRIERS' CONFERENCE COMMITTEE

and

employees of such railroads represented by the

BROTHERHOOD OF LOCOMOTIVE ENGINEERS

Case No. A - 10224

MEDIATION AGREEMENT

THIS AGREEMENT, made this 26th day of July, 1978, by and between

the participating carriers listed in Exhibit A, attached hereto and made a part

hereof, and represented by the National Carriers' Conference Committee, and

the employees of such carriers shown thereon and represented by the Brotherhood

of Locomotive Engineers, witnesseth:

IT IS HEREBY AGREED:

ARTICLE I - GENERAL WAGE INCREASES

Section 1 Ä First General Wage Increase

(a) Effective April 1, 1978, all standard basic daily and mileage

rates of pay of employees represented by the Brotherhood of Locomotive Engineers

in effect on March 31, 1978 shall be increased by an amount equal to 3 percent.

The amount of cost of living allowance which remained in effect after a portion

of the allowance was incorporated into basic rates pursuant to Article II, Section l(d) of the Agreement of March 6, 1975 will not be included with basic rates in computing the amount of this increase.

(b) In computing the percentage increases under paragraph (a)

above, 3 percent shall be applied to the standard basic daily rates of pay,

and 3 percent shall be applied to the standard mileage rates of pay, respectively, applicable in the following weight-on-drivers brackets, and the amounts so produced shall be added to each standard basic daily or mileage 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 - 250,000 and less than 300,000 pounds (*)

(separate computations covering five-

day rates and other than five-day rates)

by application of the increases provided for in this Section 1 are set forth

in Appendix 1, which is a part of this Agreement.

(*) In implementation of the provisions of the Agreement

entered into on this date, amending the Agreements of July 19,

1972 relating to Manning and Training, effective September 1,

1978 the rates of pay in the weight-on-drivers bracket 450,000

and less than 500,000 pounds, as increased under this Section 1,

will be the minimum standard rates of pay for firemen in yard

service.

Section 2 - Second General Wage Increase

Effective October 1, 1978, all standard basic daily and mileage

rates of pay of employees represented by the Brotherhood of Locomotive Engineers

in effect on September 30, 1978, shall be increased by an amount equal to 2 percent,

computed and applied in the manner prescribed in Section 1 above. The amount

of cost-of-living allowance which remains in effect after a portion of the allowance was incorporated into basic rates pursuant to Article II, Section 1(f) hereof will not be included with basic rates in computing the amount of this increase. The standard basic daily and mileage rates of pay produced by application of this increase are set forth in Appendix 2, which is a part of this Agreement.

Section 3 - Third General Wage Increase

Effective July 1, 1979, all standard basic daily and mileage rates

of pay of employees represented by the Brotherhood of Locomotive Engineers in effect on June 3O, 1979, shall be increased by an amount equal to 4 percent, computed and applied in the manner prescribed in Section 1 above. The amount of any cost-of-living allowance which may remain in effect after a portion of the allowance has been incorporated into basic rates pursuant to Article II, Section l(f)hereof, will not be included with basic rates in computing the amount of this increase. The standard basic daily and mileage rates of pay produced by application of this increase will be subsequently published.

Section 4 - Fourth General Wage Increase

Effective July 1, 1980, all standard basic daily and mileage rates

of pay of employees represented by the Brotherhood of Locomotive Engineers in effect on June 3O, 1980 shall be increased by an amount equal to 5 percent, computed and applied in the manner prescribed in Section 1 above. The amount of any cost-of-living allowance which may remain in effect after a portion of the allowance has been incorporated into basic rates pursuant to Article II, Section l(f)hereof, will not be included with basic rates in computing the amount of this increase. The standard basic daily and mileage rates of pay produced by application of this increase will be subsequently published.

Section 5 - Application of Wage Increases

(a) All arbitraries, miscellaneous rates or special allowances,

based upon mileage, hourly or daily rates of pay, as provided in the schedules

or wage agreements, shall be increased commensurately with the wage increases

provided for in this Article 1.

(b) In determining new hourly rates, fractions of a cent will be

disposed of by applying the next higher quarter of a cent.

respective daily increases.

(d) Existing money differentials above existing standard daily

rates shall be maintained.

(e) In local freight service, the same differential in excess of

through freight rates shall be maintained.

(f) The differential of $4.00 per basic day in freight and yard

service, and 4 cents per mile for miles in excess of 100 in freight service, will

be maintained for engineers working without firemen on locomotives on which

under the former National Diesel Agreement of 1950 firemen would have been required. Such differential will continue to be applied in the same manner as the local freight differential.

(g) In computing the increased rates of pay effective April 1,

1978 under Section 1 for firemen employed in local freight service, or on road

switchers, roustabout runs, mine runs, or in other miscellaneous service, on

runs of l00 miles or less which are therefore paid on a daily basis without

a mileage component, who rates had been increased by an additional $.40

effective July 1, 1968, 3 percent of the daily rates exclusive of the local

freight differential and any other money differential above existing standard

daily rates but including the $.40 increase, in effect for such firemen March 31,

1978 applicable in the weight-on-drivers bracket 950,000 and less than 1,000,000

pounds shall be added to each applicable weight-on-drivers daily rate of pay.

The same procedure shall be followed in computing the increases of 2 percent

effective October 1, 1978, 4 percent effective July 1, 1979, and 5 percent effective

July 1, 1980. The rates produced by application of the standard local freight

differential and the above-referred-to special increase of an additional $.40

to standard basic through freight rates of pay are set forth in Appendices 1

and 2, which are a part of this Agreement, and Appendices which will be subsequently

published.

(h) Other than standard rates:

(i) Existing basic daily and mileage rates of pay other than

standard shall be increased, effective as of the effective dates specified in

Sections 1 through 4 hereof, by the same respective percentages and amounts

as set forth therein, computed and applied in the same manner as the standard

rates were determined.

(ii) The differential of $4.00 per basic day in freight and

yard service, and 4 cents per mile for miles in excess of 100 in freight service, will be maintained for engineers working without firemen on locomotives on which under the former National Diesel Agreement of 1950 firemen would have been required. Such differential will continue to be applied in the same manner as the local freight differential.

(iii) Daily rates of pay, other than standard, of firemen employed in local freight service, or on road switchers, roustabout runs, mine runs, or in other miscellaneous service, on runs of 100 miles or less which are therefore paid on a daily basis without a mileage component, shall be increased as of the effective dates specified in Sections 1 through 4 hereof, by the same respective percentages as set forth therein, computed and applied in the same manner as provided in paragraph (g) above.

(iv) Wage rates resulting from the increases provided for in Sections 1, 2, 3 and 4 of this Article I, and in Section l(f) of Article II, will not be reduced under Article II.

ARTICLE II – COST-OF-LIVING ADJUSTMENT

Section 1 Ä Amount and Effective Dates of Cost-of-Living Adjustments

(a) A cost-of-living adjustment increase of 19 cents per hour, based

upon the increase in the Consumer Price Index (old series) between March 1977 and September 1977, will be made effective as of January 1, 1978. The amount of such adjustment will be added to the cost-of-living allowance of 15 cents per hour which became effective December 31, 1977 resulting from incorporation into basic rates of 16 cents per hour effective that date, as provided in Article II, Section 1(d)(iii) of the 1975 General Wage Increase Agreement and the Letter of Understanding of September 6, 1977 as to the amount to be so incorporated. As result of such adjustment, the cost-of-living allowance effective January 1, 1978 will be 34

cents per hour.

(b) A further cost-of-living adjustment increase of 19 cents per hour, based upon the increase in the Consumer Price Index between September 1977 (old series) and March 1978 (using the old series CPI for September-December 1977 and the new CPIW identified in paragraph (c) below for January-March 1978), will be made effective as of July 1, 1978. The amount of such adjustment will be added to the cost-of-living allowance of 17 cents per hour which will become effective as of June 30, 1978 resulting from incorporation into basic rates of 17 cents per hour of the cost-of-living allowance effective that date, as provided in paragraph (f)(i) below. As result of such adjustment, the cost-of-living allowance effective July 1, 1978 will be 36 cents per hour.

(c) The cost-of-living allowance resulting from the adjustments provided for in paragraphs (a) and (b) above will subsequently be adjusted, in the manner set forth in and subject to all the provisions of paragraphs (g) and (h) below, on the basis of the "Consumer Price Index for Urban Wage Earners and Clerical Workers (Revised series) (CPIÄW)" (1967 = 100), U.S. Index, all items Ä unadjusted, as published by the Bureau of Labor Statistics, U. S. Department of Labor, and here in after referred to as the BLS Consumer Price Index. The first such cost-f-living adjustment shall be made effective January 1, 1979, based (subject to paragraph (g)(i) below) on the BLS Consumer Price Index for September 1978 as compared with the index of 189.7 for March 1978. Such adjustment and further cost-of-living adjustments will be made effective the first day of each sixth month thereafter based on the change in the BLS Consumer Price Index during the respective measurement periods shown in the following table subject to the exception in paragraph (g)(ii) below, according to the formula set forth in paragraph (h) below:

Measurement Periods Effective Date

Base Month Measurement Month of Adjustment

(1) (2) (3)

March 1978 September 1978 January 1, 1979

September 1978 March 1979 July 1, 1979

March 1979 September 1979 January 1, 1980

September 1979 March 1980 July 1, 1980

March 1980 September 1980 January 1, 1981

(d) While a costÄofÄliving allowance is in effect, such costÄof-liv ing

allowance will apply to straightÄtime, overtime, vacations, holidays and to special

allowances and arbitraries in the same manner as basic wage adjustments have been

applied in the past.

(e) The amount of the costÄofÄliving allowance, if any, which will be

effective from one adjustment date to the next may be equal to, or greater or less

than, the costÄofÄliving allowance in effect in the preceding adjustment period.

(f)(i) Effective as of June 30 and December 31 of each year, 50% of the

costÄofÄliving allowance then in effect will be incorporated into basic rates of

pay for all purposes, and the costÄofÄliving allowance will be reduced by 50%.

(ii) If as of June 30 or December 31 of any year prior to the incorÄ

poration referred to in subparagraph (i) the amount of the costÄofÄliving allowance

in effect should be an odd number of cents, the amount which will be rolled into

basic rates of pay will be the number of whole cents next above 50% of the amount

of the costÄofÄliving allowance then in effect, and the costÄofÄliving allowance

will be reduced by that amount.

(iii) The provisions of this paragraph (f) will have no effect on

the amount of costÄofÄliving allowance in effect as of March 31, 1981. DisposiÄ

tion of that allowance or any portion thereof will remain for handling in connecÄ

tion with notices which may be served on or after January 1, 1981.

(g) Cap. (i) In calculations under paragraph (h) below, the maximum

increase in the BLS Consumer Price Index (C.P.I.) which will be taken into account

will be as follows:

Effective Date Maximum C.P.I. Increase

of Adjustment Which May Be Taken into Account

(1) (2)

January 1, 1979 4% of March 1978 CPI

July 1, 1979 8% of March 1978 CPI, less increase from March to September 1978

January 1, 1980 4% of March 1979 CPI

July 1, 1980 8% of March 1979 CPI, less increase from March to September 1979

January 1, 1981 4% of March 1980 CPI

(ii) If the increase in the BLS Consumer Price Index from the base

month of March 1978 to the measurement month of September 1978, or from the base

month of March 1979 to the measurement month of September 1979, exceeds 4% of the

March base index, the measurement period which will be used for determining the

costÄofÄliving adjustment to be effective the following July 1 will be the twelveÄ

month period from such base month of March; the increase in the index which will

be taken into account will be limited to that portion of increase which is in

excess of 4% of such March base index, and the maximum increase in that portion of

the index which may be taken into account will be 8% of such March base index less

the 4% mentioned in the preceding clause, to which will be added any residual

tenths of points which had been dropped under paragraph (h) below in calculation

of the costÄofÄliving adjustment which will have become effective the January 1

during such measurement period.

(iii) Any increase in the BLS Consumer Price Index from the base

month of March 1978 to the measurement month of March 1979 in excess of 8% of the

March 1978 base index, or from the base month of March 1979 to the measurement

month of March 1980 in excess of 8% of the March 1979 base index, will not be

taken into account in the determination of subsequent costÄofÄliving adjustments.

(h) Formula. The number of points change in the BLS Consumer Price

Index during a measurement period, as limited by paragraph (g) above, will 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 will not be counted.)

The costÄofÄliving allowance of 18 cents per hour which will become

effective December 31, 1978 as result of application of paragraph (f)(i) will be

adjusted (increased or decreased) effective January 1, 1979 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 (g) above, in the BLS Consumer Price Index

during the measurement period from the base month of March 1978 to the measurement

month of September 1978. Any residual tenths of a point resulting from such

division will be dropped. The result of such division will be added to the amount

of the allowance which will have become effective December 31, 1978 if the ConÄ

sumer Price Index will have been higher at the end than at the beginning of the

measurement period, and subtracted therefrom only if the index will have been

lower at the end than at the beginning of the measurement period.

The same procedure will be followed in applying subsequent adjustments.

(i) Continuance of the costÄofÄliving adjustments is dependent upon the

availability of the official monthly BLS Consumer Price Index (CPIÄW) 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 Agreement

revise or change the methods or basic data used in calculating the BLS Consumer

Price Index in such a way as to affect the direct comparability of such revised or

changed index with the CPIÄW Index 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 CPIÄW Index during such measurement period.

Section 2 Ä Application of CostÄofÄLiving Adiustments

In application of the costÄofÄliving adjustments provided for by Section

1 of this ArticleÄII, the costÄofÄliving allowance will not become part of basic

rates of pay except as provided in Section l(f). In application of such allowÄ

ance, each one cent per hour of costÄofÄliving allowance will be treated as an

increase of 8 cents in the basic daily rates of pay produced by application of

Sections 2, 3 and 4 of Article I and by Section l(f) of this Article II. The

costÄofÄliving allowance will otherwise be applied in keeping with the provisions

of Section 5 of Article I.

ARTICLE III Ä VACATIONS

Insofar as applicable to employees represented by the Brotherhood

of Locomotive Engineers, the Vacation Agreement dated April 29, 1949g, as amended,

is further amended effective January 1, 1979, by substituting the following

Section l(c) and l(d) for the corresponding provisions contained in Section

1 of Article IX of the Agreement of May 13, 1971:

of schedule agreements held by the organizations signatory to the April

29, 1949 Vacation Agreement, having nine or more years of continuous

service with employing carrier will be qualified for an annual vacation

of three weeks with pay, or pay in lieu thereof, if during the preceding

calendar year the employee renders service under schedule agreements

held by the organizations signatory to the April 29, 1949 Vacation Agreement

amounting to one hundred sixty (160) basic days in miles or hours paid

for as provided in individual schedules and during the said nine or more

years of continuous service renders service of not less than fourteen

hundred forty (1440) basic days in miles or hours paid for as provided

in individual schedules.

Beginning with the effective date of the provisions of Article 3

of Agreement "A" dated May 23, 1952, on an individual carrier, but not

earlier than the year 1960, in the application of this Section l(c) each

basic day in yard service performed by a yard service employee or by

an employee having interchangeable road and yard rights shall be computed

as 1.6 days, and each basic day in all other services shall be computed

a 1.3 days, for purpose of determining qualifications for vacations.

(This is the equivalent of 100 qualifying days in a calendar year in

yard service and 120 qualifying days in a calendar year in road service.)

(See NOTE below.)

Beginning with the year 1960 on all other carriers, in the application

of this Section l(c) each basic day in all classes of service shall be

computed as 1.3 days for purposes of determining qualifications for vacation.

(This is the equivalent of 120 qualifying days.) (See NOTE below.)

(d) Effective January 1, 1979, each employee, subject to the scope

of schedule agreements held by the organizations signatory to the April

29, 1949 Vacation Agreement, having eighteen or more years of continuous

service with employing carrier will be qualified for an annual vacation

of four weeks with pay, or pay in lieu thereof, if during the preceding

calendar year the employee renders service under schedule agreements

held by the organizations signatory to the April 29, 1949 Vacation Agreement

amounting to one hundred sixty (160) basic days in miles or hours paid

for as provided in individual schedules and during the said eighteen

or more years of continuous service renders service of not less than

twentyÄeight hundred eighty (2880) basic days in miles or hours paid

for as provided in individual schedules.

Beginning with the effective date of the provisions of Article

3 of Agreement "A" dated May 23, 1952, on an individual carrier, but

not earlier than the year 1960, in the application of this Section l(d)

each basic day in yard service performed by a yard service employee

or by an employee having interchangeable road and yard rights shall

be computed as 1.6 days, and each basic day in all other services shall

be computed as 1.3 days, for purposes of determining qualifications

for vacations. (This is the equivalent of 100 qualifying days in a

calendar year in yard service and 120 qualifying days in a calendar

year in road service.) (See NOTE below.)

Beginning with the year 1960 on all other carriers, in the application

of this Section l(d) each basic day in all classes of service shall

be computed as 1.3 days for purposes of determining qualifications for

vacation. (This is the equivalent of 120 qualifying days.) (See NOTE

below.)

(The NOTE referred to in Sections l(c) and l(d) above reads

as follows:

"NOTE: In the application of Section l(a),

(b), (c), (d) and (e), qualifying years

accumulated, also qualifying requirements

for years accumulated, prior to the effective

date of the respective provisions hereof, for

extended vacations shall not be changed.")

ARTICLE IV Ä HEALTH AND WELFARE BENEFITS; EARLY RETIREMENT MAJOR MEDICAL EXPENSE BENEFITS; AND DENTAL BENEFITS.

PART A. HEALTH AND WELFARE BENEFITS

Section 1. Continuation of Plan. The benefits now provided under The

Railroad Employees National Health and Welfare Plan, modified as provided in

Sections 2 and 3 below, will be continued subject to the provisions of the Railway

Labor Act, as amended. Contributions to the Plan will be offset by the expeditious

use of such amounts as may at any time be in Special Account A or in one or more

special accounts or funds maintained by the insurer in connection with Group

Policy Contract GAÄ23000, and by the use of funds held in trust that are not

otherwise needed to pay claims, premiums or administrative expenses which are

payable from trust. Detailed contract language specifying the new benefits and

the changes in existing benefit and eligibility provisions is to be worked out by

the Joint Policyholder Committee with the insurer.

Section 2. Benefit Changes. The following benefit changes will be made

effective as of January 1, 1979:

a. Alcoholism Treatment. For treatment of alcoholism of an emÄ

ployee which has been diagnosed as such by the employee's attending physician,

as a result of which the employee is confined at an approved treatment center

which provides medical and therapeutic treatment for alcoholism under a

program approved by both the attending physician and the insurer, on an inÄ

patient basis requiring fullÄtime participation by the patient, and certain

evaluation, diagnostic and counseling services: a benefit will be provided

to cover charges by the treatment center for room and board, care and treatment,

exclusive of custodial care, up to $50 per day for not more than 31 days per

calendar year with a lifetime maximum of $3,000.

b. Ambulatory Surgical Centers. Charges incurred by an employee

or dependent for services rendered and supplies furnished by an approved amÄ

bulatory surgical center within the time limits and for the purposes specified

in the outÄpatient expense provisions of the plan shall be treated as if they

were hospital outÄpatient expenses.

c. Second Surgical Opinion. A benefit will be provided to pay

reasonable charges incurred by an employee or dependent for consultations

(including the reasonable charges for laboratory and XÄray examinations and

other diagnostic procedures in connection therewith) with one or more qualiÄ

fied specialist surgeons for additional opinions as to the medical necessity

for the performance of a recommended surgical procedure for which benefits

are payable under the surgical expense benefits provisions of the Plan,

provided the consultant surgeon examines the patient and furnishes the insurer

either copy of his written report to the patient or a written report setting

forth his opinion.

d. PreÄAdmission Testing. Charges incurred by an employee or

dependent in connection with preÄadmission testing ordered by a physician

will be covered as hospital inÄpatient expenses provided such tests are

related to the performance of scheduled surgery in connection with a confirmed

hospital admission, and (i) the person involved is subsequently admitted to

the hospital as a resident inÄpatient unless the scheduled confinement is

cancelled or postponed because of the unavailability of a bed or a change in

his condition which precludes surgery or (ii) the surgery is performed in an

outÄpatient facility (which may be an ambulatory surgical center) unless

there is a change in the patient's condition which precludes surgery.

e. Surgical Expense Benefit. The maximum basic benefit for a

surgical procedure will be increased from $650 to $1,000; the maximum alÄ

lowance for administration of anesthetics will be increased from $162.50 to

$250; and the $650 E Surgical Schedule will be replaced by a $1,000 E Surgical

Schedule.

f. Hospital Miscellaneous Benefit. The provision for reimburseÄ

ment for hospital charges for medical care and treatment (other than charges

for room and board, nurses', and physicians' and surgeons' fees), and the

excess of charges for intensive care in an intensive care unit over the

amount payable otherwise, shall be increased from "not more than $1,000 plus

80% of the excess over $1,000," to "not more than $2,000 plus 80% of the

excess over $2,000."

g. OutÄPatient Expense Benefit, and Supplemental OutÄPatient

Medical Expense Benefit. The provision for reimbursement for hospital outÄ

patient expenses, and the supplemental outÄpatient medical expense benefit

Ä 10 Ä

provision, covering certain emergency medical care and treatment on account

of accidental bodily injuries and additional subsequent medical care and

treatment in connection with such emergency care, and medical care and treatÄ

ment in connection with surgical operations, will be increased to provide for

reimbursement for such expenses in full on a reasonable and customary basis

(an increase from the maximum of $100 plus 80% of the excess over $100).

h. Ambulance Benefit. Necessary ambulance charges for transporÄ

tation to and from hospital for an employee or dependent who is confined as a

hospital inÄpatient, or who receives outÄpatient care of a nature referred to

in g. above in a hospital, will be provided in full on a reasonable and

customary basis (an increase from the maximum of $25 for such benefit).

i. Physician's Fee Benefit.

(i) The maximum amount payable on behalf of an employee or

dependent for physician charges for visits while the employee or deÄ

pendent is confined as a hospital inÄpatient will be increased from

$6.00 to $10.00 per day of such confinement, and the maximum so payable

during any one period of hospital confinement will be increased from

$2,190 to $3,650.

(ii) The maximum amount payable for physicians' office visits by

an employee shall be increased from $6.00 to $10.00, and for home visits

from $7.50 to $12.00, per visit limited as at present to one home or

office visit per day and a maximum of 180 such visits in a 12Ämonth

period; no benefit payable for the first visit on account of injury or

the first three visits on account of sickness.

j. Major Medical Expense Limit Benefit. A provision will be added

to the major medical expense benefit section of the Plan to the effect that

if in a calendar year a covered employee or dependent has incurred expenses

not otherwise reimbursed under the Plan which aggregate $2,000 including (i)

the individual's cash deductible and (ii) the individual's 20% share of coÄ

insurance under the hospital miscellaneous benefits and major medical expense

benefit provisions, all further "covered expenses" of that individual in that

calendar year which would otherwise come under the 80%/20% coinsurance proviÄ

sions will instead be reimbursed under the major medical expense benefit

provisions on a 100% basis. The four exclusions in the major medical expense

benefit section will apply to this benefit.

k. Living Tissue Donor Benefit. Benefit will be provided for the

living donor of an organ or tissue to an employee or dependent covered by The

Railroad Employees National Health and Welfare Plan, with respect to the

donation involved, on the same basis as if the donor were himself an employee

covered by the Policy Contract to the extent such donor is not covered under

any other health insurance program.

Section 3. Eligibility. The provision under which a new employee

becomes a Qualifying Employee, and may become insured and eligible for benefits,

on the first day of the first calendar month starting after such employee has

completed 30 continuous days during which he has maintained an employment relaÄ

tionship, will be changed to provide that a new employee (employed on or after

August 1, 1978) will become a qualifying employee on the first day of the first

calendar month starting after such employee has completed 60 continuous days

during which he has maintained an employment relationship.

Section 4. Restructuring. The parties to this Agreement will seek to

work out with the insurer reasonable and practicable arrangements designed to

decrease federal income taxes payable by the insurer in connection with the Plan,

to decrease the insurer's reserves for its liabilities under the Plan, or otherÄ

wise to lessen the cost of maintaining the Plan without decreasing the benefits or

services that the Plan provides.

PART B. EARLY RETIREMENT MAJOR MEDICAL EXPENSE BENEFIT

Section 1. Establishment and Effective Date. The railroads will estabÄ

lish an Early Retirement Major Medical Benefit Plan to provide specified major

medical expense benefits for certain retired or disabled railroad employees and

their dependents, to become effective August 1, 1978 and to continue subject to

the provisions of the Railway Labor Act, as amended, according to the following

provisions:

a. Employees Eligible:

(i) Age. An employee who, on or after July 1, 1978, retires

at or after 61 years of age under the 60/30 provisions of the Railroad

Retirement Act of 1974, if immediately prior to the date he retired he

was covered for employee or dependent health benefits under the Railroad

Employees National Health and Welfare Plan and had a current connection

with the railroad industry.

(ii) Disability.

(a) An employee of a nonÄhospital association railroad

who on or after July 1, 1978 and at or after age 61 was receiving

employee health benefits (or still eligible for such benefits under

the disability waiver provisions) under The Railroad Employees

National Health and Welfare Plan, and who meets the requirements of

subparagraph (c) below.

(b) An employee of a hospital association railroad who

would have met the requirements of subparagraph (a) above in full

if he had been an employee of a nonÄhospital association railroad,

and who meets the requirements of subparagraph (c) below.

must, in addition to fulfilling the requirements of subparagraph

(a) or subparagraph (b) above, Ä

(1) solely because of his disability be prevented

from working in his regular occupation;

(2) be entitled to an annuity by reason of disability

under the Railroad Retirement Act of 1974; however, he need

not have filed application for disability annuity under the

Railroad Retirement Act if he is receiving sickness benefits

under the Railroad Unemployment Insurance Act, but when he is

no longer receiving such sickness benefits if he does not

apply for such disability annuity his eligiblity under the

Plan will terminate;

(3) have had a current connection with the railroad

industry on the date immediately prior to the date on which he

became entitled to such disability annuity; and

(4) have had by his eligibility date a total period,

consisting of his railroad service prior to the onset of such

disability plus the period of such disability itself, totaling

not less than 30 years.

b. Dependents Eligible: Spouse and dependent children of eligible

employees who are within definition of "dependent" in The Railroad Employees

National Health and Welfare Plan.

c. Scope of Coverage:

(i) Eligible employees of nonÄhospital association railroads,

and, to the extent provided in Section 3, of hospital association railÄ

roads.

(ii) Dependents of eligible employees of either hospital assoÄ

ciation or nonÄhospital association railroads.

d. Duration of Coverage:

(i) Coverage for all covered employees and dependents will

begin when the employee becomes eligible under paragraph a., but not

earlier than the effective date, and except that an employee's or depenÄ

dent's coverage will not begin earlier than such employee's or dependent's

eligibility for benefits under the Railroad Employees National Health

and Welfare Plan ceases.

(ii) Coverage for covered employees will terminate on the

earlier of Ä

(a) The date the employee becomes eligible for Medicare

(even though his coverage may not yet have begun, e.g., if a disabled

employee becomes eligible for Medicare before he becomes eligible

under paragraph a.), or

(b) The date the employee's Railroad Retirement annuity

terminates.

(iii) Coverage for all dependents of an employee will terminate

on the earlier of Ä

(a) The date the employee's coverage terminates for any

cause other than (1) death or (2) eligibility for Medicare by .

reason of disability, or

(b) If the employee predeceases dependent(s), or becomes

eligible for Medicare by reason or disability, the date the employee

would have become eligible for Medicare by reason of age if he had

not died.

(iv) Coverage for any dependent will terminate if such individual

dependent, while covered, Ä

(a) becomes eligible for Medicare, or

(b) is no longer within the aboveÄreferredÄto definition

of dependent, or

remarries.

Note: As used in this paragraph d. Duration of Coverage,

"Medicare" means the full measure of benefits under

the Health Insurance for The Aged and Disabled

Program under Title XVIII of the Social Security

Act, as amended and as it may be further amended,

which are normally available to an individual at age

65 or on general disability. Benefits under the

Plan will be so adjusted to avoid duplication between

Plan benefits and any other Medicare benefits.

e. Plan:

(i) Elements:

(a) Deductible: $100 per calendar year for each individual.

(b) Coinsurance proportions: 80/20, except 65/35 for

outÄofÄhospital mentalÄnervous treatments.

(ii) Benefits: Covered benefits will be benefits of the same

categories as are covered major medical expense benefits under The RailÄ

road Employees National Health and Welfare Plan.

(iii) The same Coordination of Benefits provisions as in Group

Policy Contract GAÄ23000 will be included.

Section 2. Administration.

a. The railroads, which will be sole policyholder, will work out

arrangements for the Plan to be administered and insurance thereunder to be

provided by the same insurer as is handling those functions under The Railroad

Employees National Health and Welfare Plan.

b. The railroads will work out with the insurer detailed contract

language setting forth the eligibility ant benefit provisions.

c. The insurer will furnish financial data, statistical and acÄ

tuarial reports, and claim experience information to the organizations in the

same detail and at the same time that it furnishes such data to the railroads.

d. Any dividends or retroactive rate refunds or credits will be

paid into a special fund or account held by the insurer or into a trust

established in connection with the Plan. Withdrawals may be made from such

fund, account or trust only to provide or finance benefits.

Section 3. Employees of Hospital Association Railroads.

Hospital association railroads will pay the respective hospital associations such

portion of the cost of the plan as is attributable to coverage for retired employees

(but not for their dependents) contingent on commitments* from the hospital associÄ

ations to provide benefits similar to those provided by the plan to such retired

employees of the respective railroads as meet the above eligibility requirements

and were members of the hospital association. In absence of such a commitment, no

payment such as provided for in this paragraph shall be made to the hospital

association involved, and the employees involved will be regarded as employees of

a hospital association railroad for purposes of eligibility for early retirement

medical benefits but shall be provided such benefits under the national plan the

same as employees of nonÄhospital association railroads. On a railroad on which

the hospital association has furnished such a commitment, individual retired or

disabled employees who had not been members of the hospital association or who had

been such members but elected to leave the association on discontinuing active

railroad service, or who forego association benefits, will not have an option of

electing coverage under the national plan; nor on a railroad on which there has

been no such commitment from the hospital association will individual employees

have an option of electing hospital association coverage in place of coverage

under the national plan.

*Including acceptance of the following obligation: If a hospital association

having furnished the commitment referred to in Section 3 should subsequently

withdraw such commitment, the employees involved will thereafter be provided

their benefits under the national plan as provided in the second sentence of

Section 3. If any special contribution to the national plan is required to

cover any liability which the hospital association may have incurred during

the period it covered the employees involved (and while it was receiving the

contribution identified in the first sentence of Section 3), which liability

the national plan assumes by reason of the employees' coverage being transÄ

ferred from the hospital association to the national plan, such special

contribution will be made by the hospital association.

PART C. DENTAL BENEFITS

Section 1. Continuation of Plan. The benefits now provided under The

Railroad Employees National Dental Plan, modified as provided in Sections 2 and 3

below, will be continued subject to the provisions of the Railway Labor Act, as

amended. Detailed contract language specifying the changes in existing benefit

and eligiblity provisions is to be worked out by the Policyholder with the insurer.

Section 2. Benefit Changes. The following changes in the benefit area

will be made effective as of November 1, 1978.

a. The maximum benefit (exclusive of any benefits for orthodontia)

which may be paid with respect to a covered employee or dependent in any

calendar year, including the calendar year 1978, will be increased from $500

to $750 for all expenses incurred on or after November 1, 1978.

b. A limit of $100 will be placed on the amount of the deductible

per calendar year, including the calendar year 1978, to be paid by all memÄ

bers of an employee's family, to apply as follows:

(i) Any covered individual who has incurred and paid $50 of

covered dental expenses in a calendar year has met the deductible with

respect to himself.

(ii) When a covered employee and/or any one or more of his

defined dependents have collectively incurred and paid $100 of covered

dental expenses, counting not more than $50 with respect to any individÄ

ual, in a calendar year, the deductible has been met with respect to

such employee and all his defined dependents.

c. Extended coverage will be provided for disabled, pregnant,

furloughed and discharged or dismissed employees on exactly the same basis as

under The Railroad Employees National Health and Welfare Plan.

Section 3. Orthodontia. No change will be made with respect to benefits

for orthodontia, except for the extended coverage provision described in paragraph

c. of Section 2 above.

PART D. GENERAL

National Health Legislation. In the event that national health legislaÄ

tion should be enacted, benefits provided under The Railroad Employees National

Health and Welfare Plan, The Early Retirement Major Medical Benefit Plan, and The

Railroad Employees National Dental Plan with respect to a type of expense which is

a covered expense under such legislation will be integrated so as to avoid dupliÄ

cation, and the parties will agree upon the disposition of any resulting savings.

ARTICLE V Ä JURY DUTY

Effective fifteen (15) days after the date of this Agreement, Article

X of the May 13, 1971 Agreement is amended to read as follows:

When an employee is summoned for jury duty and is required to lose

time from his assignment as a result thereof, he shall be paid for actual time

lost with a maximum of a basic day's pay at the strraight time rate of hsi position

for each calendar day lost less the amount allowed him for jury service for

each such day, excepting allowances paid by the court for meals, lodging or

transportation, subject to the following qualification requirements and

limitations:

(1) An employee must furnish the carrier with a statement

from the court of jury allowances paid and the days on which

jury duty was performed.

(2) The number of days for which jury duty pay shall be paid is limited

to a maximum of 60 days in any calendar year.

(3) No jury duty pay will be allowed for any day as to which the

employee is entitled to vacation or holiday pay.

ARTICLE VI Ä EXPENSES AWAY FROM HOME

Effective October 1, 1978, the meal allowance provided for in Article

II, Section 2, of the June 25, 1964 National Agreement, as amended by the letterÄ

agreement of February 9, 1972, is increased from $2.00 to $2.75.

ARTICLE VII Ä APPLICATION FOR EMPLOYMENT

Section 1 Ä Probationary Period

Applications for employment will be rejected within sixty (60) calendar

days after seniorlty date is established, or applicant shall be considered

accepted. Applications rejected by the carrier must be declined in writing

to the appllcant.

Section 2 Ä Omission or Falsification of Information

An employee who has been accepted for employment in accordance with

Section 1 will not be terminated or disciplined by the carrier for furnishing

incorrect information in connection with an appllcation for employment or for

withholding information therefrom unless the information involved was of such

a nature that the employee would not have been hired if the carrier had had

timely knowledge of it.

ARTICLE VIII Ä COMBINATION ROADÄYARD SERVICE ZONES

Sectlon 1 Ä At points where yard crews are employed, comblnation roadÄyard

servlce zones may be established within which yard engine crews may be used

to perform specified seryice outside of switching limits under the following

conditions:

(a) RoadÄYard Servlce Zones for industrial switching purposes are

limited to a distance not to exceed ten (10) miles, or the entrance switch

to the last industry, whichever is the lesser. The distances referred to

herein are to be computed from the switching limits existing on the date of

this agreement, except where the parties on individual properties may agree

otherwise.

(b) Within RoadÄYard Service Zones, yard engine crews may be used

only to meet customer service requirements for the delivery, switching, or

pick up of cars which were not available or ready for handling by the road

crew or crews normally performing the service or which are required to be

expedited for movement into the yard before arrival of said road crew or crews.

Yard engine crews may be used to perform such service without any additional

compensation and without penalty payments to road crews.

NOTE: The use of yard engine crews in RoadÄYard Service Zones is

restricted to the specific service required or requested by

the customer and they may not be used indiscriminately to perform any

other additional work.

under this Article may not be used to reduce or eliminate road crew assignments

working within such zones.

(d) Nothing in this Section 1 is intended to impose restrictions

with respect to any operation where restrictions did not exist prior to the

date of this agreement.

Section 2 Ä At points where yard crews are employed, combination roadÄyard

service zones may be established within which yard engine crews may be used

to perform specified service outside of switching limits under the following

conditions:

(a) RoadÄYard Service Zones for purposes of this Section 2 are

limited to a distance not to exceed fifteen (15) miles for the purpose of

handling disabled trains or trains tied up under the Hours of Service Act.

The distances referred to herein are to be computed from the switching limits

existing on the date of this agreement, escept where the parties on individual

properties may agree otherwise.

(b) Within RoadÄYard Service Zones, yard engine crews may be used

to handle disabled road trains or those tied up under the Hours of Service

Act outside their final terminal without penalty to road crews. For such

service yard engine crews shall be paid miles or hours, whichever is the greater,

with a minimum of one (1) hour for the class of service performed (except

where existing agreements require payment at yard rates) for all time consumed

outside of switching limits. This allowance shall be in addition to the regular

yard pay and without any deduction therefrom for the time consumed outside

of switching limits.

with respect to handling disabled road trains or those tied up under the Hours

of Service Act beyond the 15 mile roadÄyard service zones, established under

this section where restrictions did not exist prior to the date of this agreement.

(d) This Section 2 shall become effective unless a carrier elects

to preserve existing rules or practices by notifying the authorized employee

representatives within fifteen (15) days after the date of this agreement.

Section 3 Ä Time consumed by yard engine crews in RoadÄYard Service Zones

established under this Article will not be subject to equalization as between

road and yard service crews and/or employees.

This Article shall become effective fifteen (15) days after the

date of this Agreement.

Ä 18 _

ARTICLE IX Ä ENTRY RATES

Section 1 Ä Service First 12ÄMonths

Employees entering service on and after the effective date of this

Article shall be paid as follows for all service performed within the first

twelve (12) calendar months of service when working in a capacity other than

engineer:

(a) For the first twelve (12) calendar months of employment, new

employees shall be paid 90% of the applicable rates of pay (including COLA)

for the class and craft in which service is rendered, exclusive of arbitraries

and/or special allowances which shall be paid at the full amount.

(b) Employees who have had an employment relationship with the

carrier and are rehired will be paid at established rate after completion

of a total of twelve (12) months' combined service.

be paid at established rates after completion of a total of twelve (12) months'

combined service in both crafts.

(d) Any calendar month in which an employee does not render compensated

service due to voluntary absence, suspension, or dismissal shall not count

toward compietion of the twelve (12) month period.

Section 2 Ä Preservation of Lower Rates

Agreements which provide for training or entry rates that are lower

than those provided for in Section 1 are preserved. If such agreements provide

for payment at the lower rate for less than the first twelve (12) months of

actual service, Section 1 of this Article will be applicable during any portion

of that period in which such lower rate is not applicable.

This Article shall become effective 15 days after the date of this

Agreement except on such carriers as may elect to preserve existing rules

or practices and so notify the authorized employee representative on or before

such effective date.

ARTICLE X Ä OFFÄTRACK VEHICLE ACCIDENT BENEFITS

Article IV(b) of the March 10, 1969 Brotherhood of Locomotive Engineers

Agreement is hereby amended to read as follows:

(b) Payments to be Made:

In the event that any one of the losses enumerated in subparagraphs

(1), (2) and (3) below results from an injury sustained directly from an accident

covered in paragraph (a) and independently of all other causes and such loss

occurs or commences within the time limits set forth in subparagraphs (1),

(2) and (3) below, the carrier will provide, subject to the terms and conditions

Ä 19 Ä

herein contained, and less any amounts payable under Group Policy Contract

GAÄ23000 of The Travelers Insurance Company or any other medical or insurance

policy or plan paid for in its entirety by the carrier, the following benefits:

(1) Accidental Death or Dismemberment

The carrier will provide for loss of life or dismemberment

occurring within 120 days arter date of an accident covered

in paragraph (a):

Loss of Life $150,000

Loss of Both Hands $150,000

Loss of Both Feet $150,000

Loss of Sight of Both Eyes $150,000

Loss of One Hand and One Foot $150,000

Loss of One Hand and Sight of One Eye $150,000

Loss of One Foot and Sight of One Eye $150,000

Loss of One Hand or One Foot or Sight

of One Eye $ 75,000

"Loss" shall mean, with regard to hands and feet, dismemberment

by severance through or above wrist or ankle joints; with

regard to eyes, entire and irrecoverable loss of sight.

No more than $150,000 will be paid under this paragraph

to any one employee or his personal representative as a

result of any one accident.

(2) Medical and Hospital Care

The carrier will provide payment for the actual expense of

medical and hospital care commencing within 120 days after an accident

covered under paragraph (a) of injuries incurred as a result of

such accident, subject to limitation of $3,000 for any employee

for any one accident, less any amounts payable under Group Policy

Contract GAÄ23000 of The Travelers Insurance Company or under any

other medical or insurance policy or plan paid for in its entirety

by the carrier.

(3) Time Loss

The carrier will provide an employee who is injured as a result

of an accident covered under paragraph (a) hereof and who is unable

to work as a result thereof commencing within 30 days after such

accident 80% of the employee's basic fullÄtime weekly compensation

from the carrier for time actually lost, subject to a maximum payment

of $150.00 per week for time lost during a period of 156 continuous

weeks following such accident provided, however, that such weekly

payment shall be reduced by such amounts as the employee is entitled

to receive as sickness benefrits under provisions of the Railroad

Unemployment Insurance Act.

_ 20 Ä

(4) Aggregate Limit

The aggregate amount of payments to be made hereunder is limited

to $1,000,000 for any one accident and the carrier shall not be

liable for any amount in excess of $1,000,000 for any one accident

irrespective of the number of injuries or deaths which occur in

or as a result of such accident. If the aggregate amount of payments~

otherwise payable hereunder exceeds the aggregate limit herein provided,

the carrier shall not be required to pay as respects each separate

employee a greater proportion of such payments than the aggregate

llmit set forth herein bears to the aggregate amount of all such

payments.

This Article will become effective 90 days after the date of this

Agreement.

ARTICLE XI Ä BEREAVEMENT LEAVE

Bereavement leave, not in excess of three calendar days, following

the date of death will be allowed in case of death of an employee's brother,

sister, parent, child, spouse or spouse's parent. In such cases a minimum

basic day's pay at the rate of the last service rendered will be allowed for

the number of working days lost during bereavement leave. Employees involved

will make provision for taking leave with their supervising officials in the

usual manner.

This Article shall become effective fifteen (15) days after the

date of this Agreement.

ARTICLE XII Ä JOINT LABORÄMANAGEMENT COMMITTEE

Section 1 Ä There is hereby established a joint laborÄmanagement committee

to consider certain proposals not resolved by this Agreement. The Committee

shall consist of four (4) members to be appointed within thirty (30) days

of the date of this Agreement Ä two (2) by the Brotherhood of Locomotive Engineers

and two (2) by the National Carriers' Conference Committee.

Section 2 Ä The Committee established by Section 1 is authorized and directed

to investigate the issues raised by the organization's proposals for a uniform

Discipline Rule and Procedures and a uniform Physical Examination Rule and

Procedures. The method and procedures for handling the issues are left to

the discretion of the Committee; however, it shall make its report and recommendations

to the parties no later than eighteen (18) months after the date of this Agreement.

Section 3 Ä The parties to this Agreement shall promptly resume negotiations

following receipt of the Committees report and recommendations for the purpose

of reaching agreement on discipline rules and procedures and physical examination

rules and procedures which can be recommended for adoption to the individual

railroads and the individual Brotherhood of Locomotive Engineers' General

Committees of Adjustment on such railroads.

ARTICLEÄ XIII Ä GENERAL PROVISIONS

Section 1 Ä Court Approval

This Agreement is subject to approval of the courts with respect

to participating carriers in the hands of receivers or trustees.

Section 2 Ä Effect of this Agreement

(a) The purpose of this Agreement is to fix the general level of

compensation during the period of the Agreement, and is in settlement of the

dispute growing out of the notices served upon the carriers listed in Exhibit

A by the Organization signatory hereto dated on or about January 20, 1977,

February 1, 1977, March 1, 1977 and June 21, 1977 (wage and rules); February 15,

1977 and August 15, 1977 (health and welfare and dental), and proposals served

on June 13, 1977 by the carriers for concurrent handling therewith.

(b) This Agreement shall be construed as a separate agreement by

and on behalf of each of said carriers and their employees represented by

the Organization signatory hereto, and shall remain in effect through March 31,

1981 and thereafter until changed or modified in accordance with the provisions of

the Railway Labor Act, as amended.

1978, concerning compensation relationships, and paragraph (d) of this Section

2, the parties to this Agreement shall not serve nor progress prior to January 1,

1981 (not to become effective before April 1, 1981) any notice or proposal

for changing any matter:

(1) contained in this Agreement,

(2) listed in Section 2(c)(3) of Article VIII of the Agreement

of March 6, 1975, and

(3) contained in the proposals of the parties identified in

Section 2(a) of this Article.

and any pending notices which propose such matters are hereby withdrawn.

(d) Pending notices properly served under the Railway Labor Act

covering subject matters not specifically dealt with in Section 2(c) of this

Article XIII and which do not request compensation need not be withdrawn and

may be progressed under the provisions of the Railway Labor Act, as amended.

Similarly, new proposals properly served under the Railway Labor Act covering

subject matters not specifically dealt with in Section 2(c) of this Article

XIII and which do not request compensation may be served and progressed under

the provisions of the Railway Labor Act, as amended.

(e) This Article will not bar management and committees on individual

railroads from agreeing upon any subject of mutual interest.

SIGNED AT WASHINGTON, D. C. THIS 26TH DAY OF JULY, 1978.