Case No. A ­ 10222

MEDIATION AGREEMENT

THIS AGREEMENT, made this 25^th day of August 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 United Transportation Union, witnesseth:

IT IS HEREBY AGREED:

ARTICLE I ­ GENERAL WAGE INCREASES

Section 1 ­ First General Wage Increase (for others than Dining Car Stewards and Yardmasters)

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 (*)

Section 2 ­ Second General Wage Increase (for others than Dining Car Stewards and Yardmasters)

Effective October 1, 1978, all standard basic daily and mileage rates of pay of employees represented by the United Transportation Union in effect on September 30, 1978, shall be increased by an amount equal to 2 percent, computed and applied for enginemen in the manner prescribed in Section 1 above.

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The amount of cost­of­living 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 (for others than Dining Car Stewards and Yardmasters)

Effective July 1, 1979, all standard basic daily and mileage rates of pay of employees represented by the United Transportation Union in effect on June 30, 1979, shall be increased by an amount equal to 4 percent, computed and applied for enginemen in the manner prescribed in Section 1 above. The amount of any cost­of­living allowance which may remain in effect after a portion of the allowance has been 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 will be subsequently published.

Section 4 ­ Fourth General Wage Increase (for others than Dining Car Stewards and Yardmasters)

Effective July 1, 1980, all standard basic daily and mileage rates of pay of employees represented by the United Transportation Union in effect on June 30, 1980 shall be increased by an mount equal to 5 percent, computed and applied for enginmen in the manner prescribed in Section 1 above. The amount of any cost­of­living allowance which way remain in effect after a portion of the allowance has been 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 will be subsequently published.

Section 5 ­ Application of Wage Increases

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Section 6 ­ General Wage Increases for Dining Car Stewards and Yardmasters

Effective April 1, 1978 all basic monthly rates of pay of dining car stewards and yardmasters represented by the United Transportation Union in effect on March 31, 1978 shall be increased by 3 percent. The amount of cost­of­living allowance which remained in effect after a portion of the allowance was incorporated into basic rates pursuant to Article II, Section 1(d) of the Agreement of January 29, 1975 will not be included with basic rates in computing the amount of this increase.

The rates produced by such increase shall be further increased as follows:

Rates of pay resulting from the increases provided for in this Section 6, and Section 1(f) of Article II, will not be reduced under Article II.

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ARTICLE II - COST­OF­LIVING ADJUSTMENTS

Section 1 ­ Amount and Effective Dates of Cost­of­Living Adjustments

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

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Effective Date Maximum C.P.I. Increase

of Adjustment Which May Be Taken into Account

January 1, 1979 4% of March 1978 CPI

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

January 1, 1980 4% of March 1979 CPI

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

January 1, 1981 4% of March 1980 CPI

The same procedure will be followed in applying subsequent adjustments.

Section 2 ­ Application of Cost­of­Living Adjustments

In application of the cost­of­living adjustments provided for by Section 1 of this Article II, the cost­of­living allowance will not become part of basic rates of pay except as provided in Section 1(f). Such allowance will be applied as follows:

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ARTICLE III ­ VACATIONS

Insofar as applicable to employees represented by the United Transportation Union, the Vacation Agreement dated April 29, 1949, as amended, is further amended effective January 1, 1979, by substituting the following Section 1© and 1(d) for the corresponding provisions contained in Section 1 of Article III of the Agreement of January 27, 1972:

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 twenty­eight 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 September 25, 1950, May 25, 1951 or May 23, 1952, on an individual carrier, but not earlier than the year 1960, in the application of this Section 1(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 1(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.)

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(The NOTE referred to in Sections 1© and 1(d) above reads as follows:

"NOTE: ­ In the application of Section 1(a), (b), ©, (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 - 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 mantained by the insurer in connection with Group Policy Contract GA­23000, and by the use of funds held in trust that are not otherwise needed to pay claim , 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.

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Section 2. Benefit Changes. The following benefit changes will be made effective as of January 1, 1979:

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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 relationship, 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 otherwise 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 establish 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:

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Section 2. Administration.

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provided by the same insurer as is handling those functions under The Railroad Employees National Health and Welfare Plan.

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 associations 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 non­hospital 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 transferred 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.

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Section 2. Benefit Changes. The following changes in the benefit area will be made effective as of November 1, 1978:

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

ARTICLE V ­ JURY DUTY

Effective fifteen (15) days after the date of this Agreement, Article V of the January 27, 1972 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 straight time rate of his position for each calendar day lost less the amount allowed his 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:

ARTICLE VI ­ 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 Article XI, Section 2, of the January 27, 1972 National Agreement, is increased from $2.00 to $2.75.

ARTICLE VII ­ APPLICATION FOR EMPLOYMENT

Section 1 ­ Probationary Period

Applications for employment will be rejected within sixty (60) calendar days after seniority date is established, or applicant shall be considered accepted. Applications rejected by the carrier must be declined in writing to the applicant.

Section 2 ­ 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 application 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 ­ EMPLOYMENT OF FIREMEN

Section 1.

Subject to the provisions of Section 2 and the carriers' legal obligations, in the employment of firemen (helpers) employees represented by the United Transportation Union who have established seniority as conductor (foreman), brakeman (yardman­switchman), hostler or hostler helper (but without seniority as a locomotive fireman) will be considered for transfer to positions of locomotive firemen (helpers) in preference to hiring individuals who have riot established seniority with the carrier in any class or craft.

Section 2.

Each carrier will establish a procedure which will (1) ensure that such employees have knowledge of fireman (helper) job openings and (2) provide an opportunity for them to apply for transfer to the fireman craft. In selecting an employee from among those making application for a fireman (helper) position, the carrier will take into consideration the relative seniority standing of the applicants and the carriers' physical and other employment standards.

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Section 3.

In employee accepting transfer to a fireman (helper) position in accordance with this Article VIII shall retain his seniority standing and all other rights in train and/or yard or hostling service. However, such employee shall be permitted to exercise such rights only in the event he is unable to hold any position or assignment In engine service.

NOTE: It is understood that employees accepting transfer to fireman between July 7, 1978 and the effective date of this Article will have their seniority preserved as of the effective date of such transfer.

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This Article VIII shall become effective thirty (30) days from the date of this Agreement unless within such time a General Committee of the organization elects to preserve an existing rule accomplishing the same essential purpose as this Article VIII by notifying a carrier in writing.

ARTICLE IX ­ ENTRY RATES

Section 1 ­ Service First 12­Months

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 conductor (foreman), footboard yardmaster, yardmaster, car retarder operator or engineer:

Section 2 ­ 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.

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This Article shall become effective fifteen (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 ­ ROAD­YARD MOVEMENTS

Article IX, Section 1 of the Agreement of January 27, 1972 is amended to read as follows:

Section 1 ­ Road freight crews may be required at any point where yard crews are employed to do any of the following as part of the road trip, paid for as such without any additional compensation and without penalty payments to yard crews, hostlers, etc: one straight pick up at another location in the initial terminal (in addition to picking up train) and one straight set out at another location in the final terminal (in addition to yarding the train); one straight pick up and/or set out at each intermediate point between terminals; switch out defective cars from their own trains regardless of when discovered; handle engines to and from train to ready track and engine house including all units coupled to the operating unit (units); pick up and set out cars of their trains from or to the minimum number of tracks which could hold the cars provided, however, that where it is necessary to use two or more tracks to hold the train it is not required that any track be filled to capacity; and exchange engine of its own train.

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.

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This Article shall become effective fifteen (15) days after the date of this Agreement.

ARTICLE XI ­ COMBINATION ROAD­YARD SERVICE ZONES

Section 1 - At points where yard crews are employed, combination road­yard service zones may be established within which yard crews may be used to perform specified service outside of switching limits under the following conditions:

NOTE: The use of yard crews in Road­Yard 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.

Section 2 ­ At points where yard crews are employed, combination road­yard service zones may be established within which yard crews may be used to perform specified service outside of switching limits under the following conditions:

Section 3 ­ Time consumed by yard crews in Road­Yard Service Zones established under this Article will not be subject to equalization as between road and yard service crews and/or employees

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This Article shall become effective fifteen (15) days after the date of this Agreement.

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ARTICLE XII ­ 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.

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This Article shall become effective fifteen (15) days after the date of this Agreement.

ARTICLE XIII ­ OFF­TRACK VEHICLE ACCIDENT BENEFITS

Article XI(b) of the July 17, 1968 Brotherhood of Railroad Trainmen Agreement, Article IX(b) of the July 29, 1968 Switchmen's Union of North America Agreement, Article IX(b) of the September 14, 1968 Brotherhood of Locomotive Firemen and Enginemen Agreement, Article V(b) of the March 19, 1969 United Transportation Union © Agreement and Article V(b) of the April 15, 1969 United Transportation Union (E) Agreement are 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 subparagraph (1), (2) and (3) below, the carrier will provide, subject to the terms and conditions herein contained, and less any amounts payable under Group Policy Contract GA­23000 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 after 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.

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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 GA­23000 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 full­time 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 benefits under provisions of the Railroad Unemployment Insurance Act.

(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 limit 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 XIV ­ JOINT LABOR­MANAGEMENT COMMITTEE ON

PHYSICAL DISQUALIFICATION PROCEDURES

Within sixty (60) days of the date of this agreement, a committee, consisting of two partisan members representing the carriers and two partisan members representing the United Transportation Union, will be established to continue study and formulation of procedures covering physical disqualifications.

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ARTICLE XV ­ JOINT LABOR­MANAGEMENT COMMITTEE ON DISCIPLINE

RULES AND PROCEDURES

Within sixty (60) days of the date of this agreement, a committee, consisting of two partisan members representing the carriers and two partisan members representing the United Transportation Union, will be established for the purpose of continuing study and formulation of standard discipline rules and procedures. The signatories to this agreement will urge that the Committee's recommendations be adopted by the railroads parties hereto.

ARTICLE XVI ­ GENERAL PROVISIONS

Section 1 ­ 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 ­ Effect of this Agreement

(1) this Agreement,

(3) proposals of the parties identified in Section 2(a) of this Article except proposal B

of the carriers' June 13, 1977 notice.

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

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subject matters not specifically dealt with in Section 2© of this Article XVI and which do not request compensation may be served and progressed under the provisions of the Railway Labor Act, as amended.

SIGNED AT WASHINGTON, D. C. THIS 25^th DAY OF AUGUST, 1978

FOR THE PARTICIPATING CARRIERS FOR THE EMPLOYEES REPRESENTED BY

LISTED IN EXHIBIT A: THE UNITED TRANSPORTATION UNION:

Charles I. Hopkins, Jr. A. L. Chesser

Chairman

C. F. Burch F. A. Hardin

A. E. Egbers J. W. Jennings

F. L. Elterman J. E. Burke

M. Farr (?signature illegible) F. J. Zamarioni

(?signature illegible)

C. E.Mervine, Jr.

George S. Paul

L. W. Sloan

Robert E. Upton

Witness: George S. Coes,

Member, National Mediation Board

NATIONAL RAILWAY LABOR CONFERENCE LETTERHEAD

August 25, 1978

Mr. Al H. Chesser, President

United Transportation Union

14600 Detroit Avenue

Cleveland, Ohio 44107

Dear Mr. Chesser:

This concerns your notices identified as Held­Away­From­Home Terminal and Assigned Freight Service served during 1977 and withdrawn as part of this Agreement. In recognition of your organization's continuing intent to correct those situations where in your view employees represented by UTU are held at their away from home terminal for inadequate reasons, the National Carriers' Conference Committee is prepared to confer with you on any such matter that is not resolved on a local basis and to use its best efforts to find a mutually satisfactory resolution.

Will you please indicate your concurrence by affixing your signature in the space provided below.

Yours very truly,

I concur:

/s/ Al H. Chesser

NATIONAL RAILWAY LABOR CONFERENCE LETTERHEAD

August 25, 1978

Mr. Al H. Chesser, President

United Transportation Union

14600 Detroit Avenue

Cleveland, Ohio 44107

Dear Mr. Chesser:

This will confirm our understanding reached in current negotiations that the moratorium provisions of the Agreement do not preclude the serving of local notices to correct conditions with respect to suitable lodging accommodations as provided in individual agreements; provided, however, that no such local notices will be served for the purpose of changing the amount of allowance being paid in lieu of lodging, nor the qualifying conditions for eligibility for away from home expenses.

Will you please indicate your concurrence by affixing your signature in the space provided below.

Yours very truly,

I concur:

/s/ Al H. Chesser

NATIONAL RAILWAY LABOR CONFERENCE LETTERHEAD

August 25, 1978

Mr. Al H. Chesser, President

United Transportation Union

14600 Detroit Avenue

Cleveland, Ohio 44107

Dear Mr. Chesser:

This is to confirm our understanding that Item G of the notice served by railroads generally on or about June 13, 1977 for concurrent handling with the organization's proposals served at various times during 1977 (comprising NMB Case A­10222) is hereby withdrawn and that such Item G shall be considered as not having been served.

Will you please indicate your concurrence by affixing your signature in the space provided below.

Yours very truly,

I concur:

/s/ Al H. Chesser

NATIONAL RAILWAY LABOR CONFERENCE LETTERHEAD

August 25, 1978

Mr. Al H. Chesser, President

United Transportation Union

14600 Detroit Avenue

Cleveland, Ohio 44107

Dear Mr. Chesser:

This is to confirm our understanding that as used in Article XV, Section 2© of the Agreement of January 27, 1972 and incorporated by reference in Article XVI of the August 25, 1978 Agreement, the word "mergers" contained in the phrase "Employee protection except future mergers, consolidations or coordinations" shall be construed to include acquisitions.

Will you please indicate your concurrence by affixing your signature in the space provided below.

Yours very truly,

I concur:

/s/ Al H. Chesser

NATIONAL RAILWAY LABOR CONFERENCE LETTERHEAD

August 25, 1978

Mr. Al H. Chesser, President

United Transportation Union

14600 Detroit Avenue

Cleveland, Ohio 44107

Dear Mr. Chesser:

In accordance with our understanding, this is to confim that the carriers will make all reasonable efforts to make the retroactive increase payments provided for in the Agreement signed today as soon as possible.

If a carrier finds it impossible to make the retroactivity payments within sixty days, it is understood that such carrier will notify you in writing as to why such payments have not been made and indicate when it will be possible to make such retroactive payments.

Yours very truly,

NATIONAL RAILWAY LABOR CONFERENCE LETTERHEAD

August 25, 1978

Mr. Al H. Chesser, President

United Transportation Union

14600 Detroit Avenue

Cleveland, Ohio 44107

Dear Mr. Chesser:

This refers to my letter advising that the National Carriers' Conference Committee has remanded the crew consist notice, identified as item B of the notice served on your organization on June 13, 1977, to the railroads represented by the Committee for further handling on an individual railroad basis.

It is agreed that such notices shall be excluded from the moratorium provision of the August 25, 1978 Agreement and that the UTU shall not be prohibited from handling concurrently proposals concerning the sharing in any savings that may result from agreements to reduce crew consists and the subject of personal leave for employees represented by the UTU. It is further agreed that as part of these local negotiations, the carriers will also be free to pursue proposals eliminating requirements for filling vacancies arising in instances where employees are on authorized absences.

Will you please indicate your concurrence by affixing your signature in the space provided below.

Yours very truly,

I concur:

/s/ Al H. Chesser