1991

November 7 , 1991

AGREED UPON IMPLEMENTATION OF

PUBLIC LAW 102-29

The attached document reflects the joint efforts of the Brotherhood of

Locomotive Engineers and the National Carriers' Conference Committee to reduce

to contract terms the report and recommendations of Presidential Emergency Board

No. 219 dated January 15, 1991, as clarified and modified by Special Board No.

102-29.

This understanding is based upon the provisions of Public Law 102-29, signed by

the President on April 18, 1991, which declares that the report and

recommendations of Presidential Emergency Board No. 219, as clarified and

modified by Special Board 102-29, shall be binding effective July 29, 1991, on

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

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

National Railway Labor Conference and certain of their employees represented by

the Brotherhood of Locomotive Engineers and shall have the same effect as though

arrived at by agreement of the parties in accordance with the Railway Labor Act.

R.P. McLaughlin Charles I. Hopkins, Jr.

President BLE Chairman NCCC

July 29, 1991

ARTICLE I - WAGES

Section 1 - Lump Sum Payment

Each employee subject to this Implementing Document who rendered compensated

service on a sufficient number of days during the calendar year 1990 to qualify

for an annual vacation in the calendar year 1991 will be paid $2,000 within 60

days of the date of this Implementing Document. Those employees who rendered

compensated service on an insufficient number of days during the calendar year

1990 to qualify for an annual vacation in the calendar year 1991 will be paid a

proportional share of that amount. This Section shall be applicable solely to

those employees subject to this Implementing Document who have an employment

relationship as of the date of this Implementing Document or who have retired or

died subsequent to January 1, 1990. There shall be no duplication of lump sum

payments by virtue of employment under an agreement with another organization.

Section 2 - First General Wage Increase

(a) Effective July 1, 1991, all standard basic daily rates of pay of employees

represented by the Brotherhood of Locomotive Engineers in effect June 30, 1991

shall be increased by three (3) percent.

(b) In computing the increase under paragraph (a) above, three (3) percent shall

be applied to the standard basic daily rates of pay applicable in the following

weight-on-drivers brackets, and the amounts so produced shall be added to each

standard basic daily rate of pay:

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

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

(through freight rates)

Yard Engineers - Less than 500,000 pounds

Yard Firemen - Less than 500,000 pounds

(separate computation covering five day rates and other than five

day rates)

Section 3 - Second General Wage Increase

Effective July 1, 1993, all standard basic daily rates of pay of employees

represented by the Brotherhood of Locomotive Engineers in effect on June 30,

1993 shall be increased by three (3) percent, computed and applied in the same

manner prescribed in Section 2 above.

Section 4 - Third General Wage Increase

Effective July 1, 1994, all standard basic daily rates of pay of employees

represented by the Brotherhood of Locomotive Engineers in effect on June 30,

1994 shall be increased by four (4) percent, computed and applied in the same

manner prescribed in Section 2 above.

Section 5 - Standard Rates

The standard basic daily rates of pay produced by application of the increases

provided for in this Article are set forth in Appendix 1, which is a part of this Implementing Document.

Section 6 - Application of Wage Increases

(a) Duplicate time payments, including arbitraries and special allowances that

are expressed in time, miles or fixed amounts of money, and mileage rates of pay

for miles run in excess of the number of miles comprising a basic day, will not

be subject to the adjustments provided for in this Article.

(b) Miscellaneous rates based upon hourly or daily rates of pay, as provided in

the schedules or wage agreements, shall be adjusted under this Implementing

Document in the same manner as heretofore increased under previous wage

agreements.

applying the next higher quarter of a cent.

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

adjustments.

(e) Existing money differentials above existing standard daily rates shall be

maintained.

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

rates shall be maintained.

(g) Where applicable, the differential of $4.00 and/or S6.00 per basic day in

freight, passenger and yard service, and 4 cents and/or 6 cents per mile for

miles in excess of the number of miles encompassed in the basic day in freight

and passenger 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.

(h) In computing the first increase in rates of pay effective July 1, 1 991,

under Section 2 for firemen employed in local freight service, or on road

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

runs of miles equal to or less than the number comprising a basic day, which are

therefore paid on a daily basis without a mileage component, whose rates had

been increased by "an additional $.40" effective July 1, 1968, the three (3)

percent increase shall be applied to daily rates in effect June 30, 1991,

exclusive of local freight differentials and any other money differential above

existing standard daily rates. For firemen, the rates applicable in the

weight-on drivers bracket 950,000 and less than 1,000,000 pounds shall be

utilized in computing the amount of increase. The same procedure shall be

followed in computing the increases effective July l, 1993 and July 1, 1994. The

rates produced by application of the standard local freight differentials and

the above referred-to special increase of "an additional $.40" to standard basic

through freight rates of pay are set forth in Appendix 1 which is a part of this

Implementing Document.

(i) Other than standard rates:

(i) Existing basic daily rates of pay other than standard shall be changed,

effective as of the dates specified in Sections 2, 3 and 4 hereof, by the same

respective percentages as set forth therein, computed and applied in the same

manner as the standard rates were determined.

(ii) Where applicable, the differential of $4.00 and/or $6.00 per basic day in

freight, passenger and yard service, and 4 cents and/or 6 cents per mile for

miles in excess of the number encompassed in the basic day in freight and

passenger 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 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 miles equal to or less than the number

encompassed in the basic day, which are therefore paid on a daily basis without

a mileage component, shall be increased as of the effective dates specified in

Sections 2, 3 and 4 hereof, by the same respective percentages as set forth

therein, computed and applied in the same manner as provided in paragraph

(i)(i) above.

ARTICLE II - COST- OF-LIVING PAYMENTS

PART A - Cost-of-Living Lump Sum Payments Through January 1, 1995

Section 1 - First Lump Sum Cost-of-Living Payment

Subject to Sections 6 and 7, employees with 2,000 or more straight time hours

paid for (not including any such hours reported to the Interstate Commerce

Commission as constructive allowances except vacations, holidays and guarantees

in protective agreements or arrangements) during the period April 1, 1991

through March 31, 1992, will receive a lump sum payment on July 1, 1992 of

$1,455.00

Section 2 - Second Lump Sum Cost-of Living Payment

Subject to Sections 6 and 7, employees with 1,000 or more straight time hours

paid for (not including any such hours reported to the ICC as constructive

allowances except vacations, holidays and guarantees in protective agreements or

arrangements) during the period April 1, 1992 through September 30, 1992, will

receive a lump sum payment on January 1, 1993 equal to the difference between

(i) $1,444.00, and (ii) the lesser of $720.00 and one quarter of the amount, if

any, by which the carriers' 1993 payment rate for foreign-to-occupation health

benefits under the Railroad Employees National Health and Welfare Plan (the

"Plan") exceeds the sum of (a) the amount of such payment rate for 1992 and (b)

the amount per covered employee that will be taken during 1993 from that certain

special account maintained at The Travelers Insurance Company known as the

"Special Account Held in Connection with the Amount for the Close-Out Period

(the ("Special Account") to pay or provide for Plan foreign-to-occupation health

benefits.

Section 3 - Third Lump Sum Cost-of Living Payment

Subject to Sections 6 and 7, employees with 2,000 or more straight time hours

paid for (not including any such hours reported to the ICC as constructive

allowances except vacations, holidays and guarantees in protective agreements or

arrangements) during the period October 1, 1992 through September 30, 1993, will

receive a lump sum payment on January 1, 1994 equal to the difference between

(i) $1,467.00, and (ii) the lesser of $733.50 and one quarter of the amount, if

any, by which the carriers' 1994 payment rate for foreign-to-occupation health

benefits under the Plan exceeds the sum of (a) the amount of such payment rate

for 1993 and (b) the amount per covered employee that will be taken during 1994

from the Special Account to pay or provide for Plan foreign-to-occupation health

benefits.

Section 4 - Fourth Lump Sum Cost-of Living Payment

Subject to Sections 6 and 7, employees with 2,000 or more straight time hours

paid for (not including any such hours reported to the ICC as constructive

allowances except vacations, holidays and guarantees in protective agreements or

arrangements) during the period October 1, 1993 through September 30, 1994, will

receive a lump sum payment on January 1, 1995 equal to the differences between

(i) $1,006.00, and (ii) the lesser of $503.00 and one quarter of the amount, if

any, by which the carriers' 1995 payment rate for foreign-to-occupation health

benefits under the Plan exceeds the amount of such payment rate for 1994.

Section 5 - Definition of Payment Rate for Foreign to Occupation Health Benefits

The carrier's payment rate for any year for foreign-to-occupation health

benefits under the Plan shall mean twelve times the payment made by the carriers

to the Plan per month (in such year) per employee who is fully covered for

employee health benefits under the Plan. Carrier payments to the Plan for these

purposes shall not include the amounts per such employee per month (in such

year) taken from the Special Account, or from any other special account, fund or

trust maintained in connection with the Plan, to pay or provide for current Plan

benefits, or any amounts paid by remaining carriers to make up the unpaid

contributions of terminating carriers pursuant to Article III, Part A, Section 1

hereof.

Section 6 - Employees Working Less Than Full Time

For employees who have fewer straight time hours (as defined) paid for in any of

the respective periods described in Sections 1 through 4 than the minimum number

set forth therein, the dollar amounts specified in clause (i) thereof shall be

adjusted by multiplying such amounts by the number of straight time hours

(including vacations, holidays and guarantees in protective agreements or

arrangements) for which the employee was paid during the applicable measurement

period divided by the defined minimum hours. For any such employee, the dollar

amounts described in clause (ii) of such Sections shall not exceed one-half of

the dollar amounts specified in clause (i) thereof, as adjusted pursuant to this

Section.

Section 7 - Lump Sum Proration

In the case of any employee subject to wage progression or entry rates, the

dollar amounts specified in clause (i) of Sections 1 through 4 shall be adjusted

by multiplying such amounts by the weighted average entry rate percentage

applicable to wages earned during the specified determination period. For any

such employee, the dollar amounts described in clause (ii)of such Sections shall

not exceed one-half of the dollar amounts specified in clause (i) thereof, as

adjusted pursuant to this Section.

Section 8 - Eligibility for Receipt of Lump Sum Payments

The lump sum cost-of-living payments provided for in this Article will be

payable to each employee subject to this Implementing Document who has an

employment relationship as of the dates such payments are made or has retired or

died subsequent to the beginning of the applicable base period used to determine

the amount of such payments. There shall be no duplication of lump sum payments

by virtue of employment under an agreement with another organization.

PART B - Cost of-Living Allowance and Adjustments Thereto After January 1, 1995

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

(a) A cost of living allowance will be payable in the manner set forth in and

subject to the provisions of this Part, on the basis of the "Consumer Price

Index for Urban Wage Earners and Clerical Workers (Revised Series) (CPI-W)"

(1967=100), U.S. Index, all items - unadjusted, as published by the Bureau of

Labor Statistics, U.S. Department of Labor, and hereinafter referred to as the

BLS CPI. The first such cost-of-living allowance shall be payable effective July

1, 1995 based, subject to paragraph (d), on the BLS CPI for September 1994 as

compared with the BLS CPI for March 1995. Such allowance, and further

cost-of-living adjustments thereto which will become effective as described

below, will be based on the change in the BLS CPI during the respective

measurement periods shown in the following table, subject to the exception

provided in paragraph (d)(iii), according to the formula set forth in paragraph

(e).

Measurement Periods Effective Date

Of Adjustment

Base Month Measurement Month

September 1994 March 1995 July 1, 1995

March 1995 September 1995 January 1, 1996

Measurement Periods and Effective Dates conforming to the above schedule shall

be applicable to periods subsequent to those specified above during which this

Article is in effect.

(b) While a cost-of-living allowance is in effect, such -cost-of-living

allowance will apply to straight time, overtime, vacations, holidays and to

special allowances in the same manner as basic wage adjustments have been

applied in the past, except that such allowance shall not apply to duplicate

time payments, including arbitraries and special allowances that are expressed

in time, miles or fixed amounts of money or to mileage rates of pay for miles

run in excess of the number of miles comprising a basic day.

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

the cost-of-living allowance in effect in the preceding adjustment period.

(d) (i) Cap. In calculations under paragraph (e), the maximum increase in the

BLS CPI that will be taken into account will be as follows:

Effective Date Maximum CPI Increase That

of Adjustment May Be Taken Into Account

July 1, 1995 3% of September 1994 CPI

January 1, 1996 6% of September 1994 CPI,

less the increase from

September 1994 to March

1995

Effective Dates of Adjustment and Maximum CPI Increases conforming to the above

schedule shall be applicable to periods subsequent to those specified above

during which this Article is in effect.

(ii) Limitation. In calculations under paragraph (e), only fifty (50) percent of

the increase in the BLS CPI in any measurement period shall be considered.

(iii)If the increase in the BLS CPI from the base month of September 1994 to

the measurement month of March 1995 exceeds 3% of the September base index, the

measurement period that will be used for determining the cost-of-living

adjustment to be effective the following January will be the 12-month period

from such base month of September; the increase in the index that will be taken

into account will be limited to that portion of the increase that is in excess of

3% of such September base index; and the maximum increase in that portion of the

index that may be taken into account will be 6% of such September base index less

the 3% mentioned in the preceding clause, to which will be added any residual

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

the cost-of living adjustment which will have become effective July 1, 1995 during

such measurement period.

(iv) Any increase in the BLS CPI from the base month of September 1994 to the

measurement month of September 1995 in excess of 6% of the September 1994 base

index will not be taken into account in the determination of subsequent

cost-of-living adjustments.

(v) The procedure specified in subparagraphs (iii) and (iv) will be applicable

to all subsequent periods during which this Article is in effect.

(e) Formula. The number of points change in the BLS CPI during a measurement

period, as limited by paragraph (d), 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 cost-of-living allowance in effect on December 31, 1995 will be

adjusted (increased or decreased) effective January 1, 1996 by the whole number

of cents produced by dividing by 0.3 the number of points (including tenths of

points) change, as limited by paragraph (d), in the BLS CPI during the

applicable measurement period. 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 cost-of-living allowance in effect on December 31, 1995 if the BLS

CPI 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 and then, only, to the

extent that the allowance remains at zero or above. The same procedure will be

followed in applying subsequent adjustments.

(f) Continuance of the cost-of-living allowance and the adjustments thereto

provided herein is dependent upon the availability of the official monthly BLS

Consumer Price Index (CPI-W) calculated on the same basis as such Index, except

that, if the Bureau of Labor Statistics, U.S. Department of Labor should, during

the effective period of this Article, revise or change the methods or basic data

used in calculating such Index in such a way as to affect the direct

comparability of such revised or changed index with the CPI-W 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 CPI-W

Index during such measurement period.

Section 2 - Payment of Cost-of-Living Allowances

(a) The cost-of-living allowance payable to each employee effective July 1, 1995

shall be equal to the difference between (i) the cost-of-liv ing allowance in

effect on that date pursuant to Section 1 of this Part, and (ii) the cents per

hour produced by dividing one-quarter of the increase, if any, in the carriers'

1995 payment rate for foreign-to-occupation health benefits under the Plan over

such payment rate for 1994, by the average composite straight-time equivalent

hours that are subject to wage increases for the latest year for which

statistics are available, but not more than one-half of the amount specified in

clause (i) above. For the purpose of the foregoing calculation, the amount of

any increase described in clause (ii) that has been taken into account in

determining the amount received by the employee as a lump sum payment on January

1, 1995 shall not be taken into account.

(b) The cost-of-living allowance payable to each employee effective January 1,

1996, shall be equal to the difference between (i) the cost-of-living allowance

in effect on that date pursuant to Section 1 of this Part, and (ii) the cents

per hour produced by dividing one-quarter of the increase, if any, in the

carriers' 1996 payment rate for foreign-to-occupaticn health benefits under the

Plan over the amount of such payment rate for 1995, by the average composite

straight-time equivalent hours that are subject to wage increases for the latest

year for which statistics are available, but not more than one-half of the

amount specified in clause (i) above.

computation of the cost-of-living allowances payable in subsequent years during

which this Article is in effect.

(d) The definition of the carriers' payment rate for foreign-to-occupation

health benefits under the Plan set forth in Section 5 of Part A shall apply with

respect to any year covered by this Section.

(e) In making calculations under this Section, fractions of a cent shall be

rounded to the nearest whole cent; fractions less than one-half cent shall be

dropped and fractions of one-half cent or more shall be increased to the nearest

full cent.

Section 3 - Application of Cost-of- Living Allowances

The cost-of-living allowance provided for in this Part will not become part of

basic rates of pay. In application of such allowance, each one cent per hour of

cost-of-living allowance that is payable will be treated as an increase of 8

cents in the basic daily rates of pay produced by application of Article I. The

cost-of-living allowance will otherwise be applied in keeping with the

provisions of Section 6 of Article I.

Section 4 - Continuation of Part B

The arrangements set forth in Part B of this Article shall remain in effect

according to the terms thereof until revised by the parties pursuant to the

Railway Labor Act.

ARTICLE III - HEALTH AND WELFARE PLAN AND EARLY RETIREMENT MAJOR MEDICAL BENEFIT

PLAN

Part A - Health and Welfare Plan

Section 1 - Continuation of Plan

The Railroad Employees National Health and Welfare Plan (the "Plan"), modified

as provided in this Part, 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 any insurer, third party

administrator or other entity in connection with the Plan and by the use of

funds held in trust that are not otherwise needed to pay claims, premiums, or

administrative expenses that are payable from funds held in trust; provided,

however, that such amounts as may at any time be in that certain special account

maintained at The Travelers Insurance Company, known as the 'Special Account

Held in Connection with the Amount for the Close-Out Period,' relating to the

obligations of the Plan to pay, among other things, benefits incurred but not

paid at the time of termination of the Plan in the event such termination should

occur, shall be used to pay or provide for Plan benefits as follows: one-third

of the balance in such special account as of January 1, 1992, shall be used to

pay or provide for benefits that become due and payable during 1992. One-half of

the balance in such special account as of January 1, 1993, shall be used to pay

or provide for benefits that become due and payable during 1993. All of the

balance in such special account in excess of $25 million as of January 1, 1994,

shall be used to pay or provide for benefits that become due and payable during

1994. The $25 million referred to in the preceding sentence shall be maintained

by the Plan as a cash reserve to protect against adverse claims experience from

year to year.

In the event that a carrier participating in the Plan defaults for any reason,

including but not limited to bankruptcy, on its obligation to contribute to the

Plan, and the carrier's participation in the Plan terminates, the carriers

remaining in the Plan shall be liable for any Plan contribution that was

required of the terminating carrier prior to the effective date of its

termination, but not paid by it. The remaining carriers shall be obligated to

make up in a timely fashion such unpaid contribution of the terminating carrier

in pro rated amounts based upon their shares of Plan contributions for the month

immediately prior to such default.

Section 2 - Change to Self-Insurance

Except for life insurance, accidental death and dismemberment insurance, and all

benefits for residents of Canada, the Plan will be wholly self-insured

and administered, under an administrative services only arrangement, by an

insurance company or third party administrator.

Section 3 - Joint Plan Committee

The Joint Policyholder Committee shall be renamed the Joint Plan Committee. This

change in name shall not in any way change the functions and responsibilities of

the Committee.

A neutral shall be retained by and at the expense of the Plan for the duration

of this Implementing Document to consider and vote on any matter brought before

the Joint Plan Committee (formerly the Joint Policyholder Committee), arising

out of the interpretation, application or administration (including investment

policy) of the Plan, but only if the Committee is deadlocked with respect to the

matter. A deadlock shall occur whenever the carrier members of the Committee,

who shall have a total of one vote regardless of their number, and the

organization members of the Committee, who shall also have a total of one vote

regardless of their number, do not resolve a matter by a vote of two to nil and

either side declares a deadlock.

If the members of the Joint Plan Committee cannot agree upon a neutral within 30

days of the date this Implementing Document becomes effective, either side may

request the National Mediation Board to provide a list of seven persons from

which the neutral shall be selected by the procedure of alternate striking.

Joint Plan Committee members and the neutral shall, to the extent required by

ERISA, be bonded at the expense of the Plan. The Joint Plan Committee shall have

the power to create such subcommittees as it deems appropriate and to choose a

neutral chairman for such subcommittees, if desired.

Section 4 - Managed Care

Managed care networks that meet standards developed by the Joint Plan Committee,

or a subcommittee thereof, concerning quality of care, access to health care

providers, and cost-effectiveness, shall be established wherever feasible as

soon as practicable. Until a managed care network is established in a given

geographical area, individuals in that area who are covered by the Plan will

have the comprehensive health care benefit coverage described in Section 5 of

this Part A. Each employee in a given geographical area who is a Plan

participant at the time a managed care network is established in that area will

be enrolled in the network (along with his or her covered dependents) unless the

employee provides timely written notice to his or her employer of an election to

have (along with his or her covered dependents) the comprehensive health care

benefit coverage rather than to be enrolled in the network. Any such employee

who provides such timely written notice shall have an annual opportunity to

revoke his or her election by providing a written notice of revocation to his or

her employer at least sixty days prior to January 1 of the calendar year for

which such revocation shall first become effective. Similarly, each employee in

a given geographical area who is a Plan participant at the time a managed care

network is established in that area and is thereafter enrolled in the network

(along with his or her covered dependents) shall have an annual opportunity to

elect to have (along with his or her covered dependents) the comprehensive

health care benefit coverage rather than continue to be enrolled in the network.

This election may be made by such an employee by providing written notice thereof to

his or her employer at least sixty days prior to January 1 of the calendar year

for which the election shall first become effective. Each employee hired after a

managed care network is established in his or her geographic area (and his or

her covered dependents) will be enrolled in the network and may not thereafter

elect to be covered by the comprehensive benefits until the January 1 which

falls on or after the first anniversary of his or her initial date of

eligibility for Plan coverage. Employees who return to eligibility for Plan

coverage within 24 months of loss of eligibility for Plan coverage and whose

employment relationship has not terminated at any time prior to such return will

be enrolled in the program of Plan benefits in which they were enrolled when

their eligibility for Plan coverage was lost, and shall thereafter have the same

rights of election as other employees whose eligibility for Plan coverage was

not lost.

Covered individuals enrolled in a managed care network will have a point of

service option allowing them to choose an out-of-network provider to perform any

covered health care service that they need. The benefits provided by the Plan

when a service is performed by an in-network provider and the benefits provided

by the Plan when the service is performed by an out-of-network provider will be

as described in the table below:

PLAN FEATURE IN-NETWORK OUT-OF-NETWORK+

Primary Care Physician yes No

Required

Annual Deductible

Individual None $100

Family None $300

Deductible applies

to all covered

expenses

Plan/Employee Coinsurance 100%/0% 75%/25%

Annual Out-of-Pocket

Maximum (exclusive of

deductible)

Individual None $1.500

Family None $3,000

Maximum Lifetime Benefit None $1,000,000 ($5,000)

annual restoration)

Special Maximum Lifetime None $100,000 lifetime

Benefit for Mental Health ($500 annual restoration)

Hospital Charges (inpatient 100% 75%*

and outpatient)

Ambulatory Surgery 100% 75%*

Emergency Room 100% after $15 75%

employee copayment

Inpatient Mental Health &

Substance Abuse

Benefit

Hospital 100% 75%#

Alternative Care - 100% 75%#

Residential Treatment

Center Inpatient or

Partial Hospitalization/

Day Treatment

Outpatient Mental Health & 100% after $15 75%#

Substance Abuse employee copayment

per visit

Physician Services

Surgery/Anesthesia 100% 75%*

Hospital Visits 100% 75%*

Office Visits 100% after $15 75%**

employee copayment

Diagnostic Tests 100% 75%*

Routine Physical 100% after $15 Not Covered

employee copayment

Well Baby Care 100% after $15 Not Covered

employee copayment

Skilled Nursing Facility 100% 75%*

Care

Hospices Care 100% 75%*

Home Health Care 100% 75%*

Temporomandibular Joint 100% 75%*

Syndrome

Birth Center 100% 75%*

Prescription Drugs 100% after $5 75%**

(other than by employee copayment

mail order) for brand name

($3 for generic)

Mail Order Prescription 100% after $5 100% (not subject to

Drugs (60-90 day supply employee copayment regular deductible)

of maintenance drugs after $5 employee co-

only) payment (not counted

toward regular de-

ductible)**

Claim System Paperless Forms Required

Approved by Utilization Physician-initiated Required. If approval

Review/Large Case included in network not given, benefits

Management management reduced by 20% (except

for mental health and

substance abuse care

where benefits reduced by

50%) both before and

after annual out-of-

pocket maximum is

reached, and amount of

reduction is not counted

toward that maximum.

+ The medically necessary health care services for which out-of-network benefits

will be paid are those listed in subparagraphs 1 through 7 of Part A, Section 5,

of this Implementing Document.

* Benefits reduced by 20% if care is not approved by utilization review program.

# Benefits reduced by 50% if care is not approved by utilization review program.

**Benefits not generally subject to utilization review program but may be

reviewable in specific circumstances with advance notice to the employee; in

such cases, benefits reduced by 20% if care not approved by utilization review

program.

At any time after the expiration of two years from the effective date of

implementation of the first managed care network, either the carriers or the

organizations may bring before the Joint Plan Committee for consideration a

proposal to change the Plan's in-network or out-of-network benefits for the

purpose of promoting an increase in the use of in-network providers by Plan

participants.

Section 5 - Comprehensive Health Care Benefits

The comprehensive health care benefits provided under the Plan in geographical

areas where managed care networks are not available to Plan participants and

their dependents, and in cases where a Plan participant has elected to be

covered, along with his or her dependents, by such comprehensive benefits rather

than to be enrolled in a managed care network, shall be as described below.

Terms used in such description shall have the same meaning as they have in the

Plan.

After satisfaction of an annual deductible of $100 per covered individual or

$300 per family unit of three or more, the Plan will pay 85%, and the covered

individual 15%, of certain health care expenses, up to an annual out-of- Pocket

maximum which shall not include the deductible) of $1,500 per covered individual

or $3,000 per family. The expenses counted toward the $3,000 annual family

out-of-pocket maximum will include those, which are otherwise eligible, incurred

on behalf of a covered employee and each of his or her covered dependents

regardless of whether the employee or dependent has reached the $1,500

individual annual out-of-pocket maximum. Once the applicable annual

out-of-pocket maximum has been reached, the Plan will pay 100% of such

reasonable charges up to an overall lifetime maximum of $1 million per covered

individual, restorable at a rate of $5,000 per year; provided, however, that

there shall be a separate lifetime maximum of $100,000 per covered individual,

restorable at a rate of $500 per year, for Plan benefits for the treatment of

mental and/or nervous conditions and substance abuse. (Benefits counted for

purposes of determining whether or not a lifetime maximum has been reached are

all benefits paid under the Plan as amended by this Implementing Document and

all Major Medical Expense Benefits paid under the Plan prior to such

amendments.) The Plan will pay 85% of the reasonable charges for medically

necessary health care services as follows:

1. All expenses that are "Covered Expenses" (as defined in the Plan) at any time

under the current major medical expense benefits provisions of the Plan, and not

within any exclusions from and limitation upon them, except that the exclusion for

the treatment of polio will be removed.

2. Expenses for mammograms described in American Cancer Society guidelines,

childhood disease immunization, pap smears and colorectal cancer screening.

3. Donor expense benefits as now defined.

4. Jaw joint disorder benefits as now defined, and subject to the current

exclusions from and limitation on them, except that the $50 separate lifetime

cash deductible will be removed.

5. Home health care expense benefits as now defined, subject to the current

exclusions from and limitation on them, except that the exclusion that governs

if polio benefits are payable will be removed.

6. Treatment center expense benefits, subject to the current exclusions from and

limitation on them, except that

a. the separate $100 cash deductible per confinement will be removed in

connection with benefits for transportation to a treatment center, and

b. the separate $100 cash deductible per benefit period and the S40 maximum

limitation on benefits per episode of treatment - all with regard to outpatient

benefits - will be removed.

7. Expenses for the services of psychologists if benefits would be paid for such

services had they been rendered by a physician.

The Plan will provide the same benefits to all employees eligible for Plan coverage, including those in their first year of such eligibility and those eligible for extended Plan coverage because of disability.

The Plan's comprehensive health care benefits will include, where permissible under applicable law, a mail order prescription drug benefit that will reimburse a covered individual, after he or she pays $5.00 per prescription, 100% of the cost of prescriptions covering a 60-to-90 day supply of maintenance drugs for such individual. This benefit will not be subject to, and the covered individual's $5.00 copayment will not be counted against, the Plan's regular $100/$300 deductible and will be included only upon execution of appropriate contracts with vendors.

Section 6 - Strengthened Utilization Review and Case Management

The Plan's current utilization review/case management contractor, and any

successor, shall henceforth require that its prior approval be secured for the

following services to the extent that benefits with respect to them are payable

under the Plan: (a) all non-emergency confinements, and all lengths of stay, in

any facility, (b) all hc Jme health care, and (c) all inpatient and outpatient

procedures and treatment, except for any care where, pursuant to standards

developed by the Joint Plan Committee, prior approval is not feasible or would

not be cost-efficient. Approval may be withheld if the utilization review/case

management contractor determines that a less intensive or more appropriate

diagnostic or treatment alternative could be used.

If an individual covered by the Plan incurs expenses without the requisite

approval of the Plan's utilization review/case management contractor, such

benefits as the Plan would otherwise pay will be reduced by one-fifth; provided,

however, that if such unapproved expenses are incurred for the treatment of

mental or nervous conditions or substance abuse, such benefits as the Plan would

otherwise pay will be reduced by one-half. These reductions will continue to

apply after the out-of-pocket maximum is reached, i.e., the l00% benefit will

become 80 % (or 50%, as the case may be) if approval by the utilization

review/case management contractor is not obtained.

When there is disagreement between an attending physician and the utilization

review/case management contractor, the patient and/or attending physician, after

all opportunities for appeal have been exhausted within the utilization

review/case management contractor's organization, shall be afforded an

opportunity to obtain a review (including if necessary, an examination) by an

independent specialist physician. This independent physician, who shall be

conveniently located and board certified in the appropriate specialty, shall be

designated by a physician appointed for this purpose by the Joint Plan

Committee. Neither physician may be an employee of or under contract to the

utilization review/case management contractor. In the event of an appeal to a specialist described above, the utilization review/case management contractor shall bear the burden of convincing the specialist that the utilization review/case

management contractor's determination was correct.

Section 7 - Coordination of Benefits

The Plan's coordination of benefit rules shall be changed so that the Plan will

pay no benefit to any covered individual that would cause the sum of the

benefits paid by the Plan and by any other plan with which the Plan coordinates

benefits to exceed (a) the maximum benefit available under the more generous of

the Plan and such other plan, or (b) with respect only to spouses who are both

covered as employees under the Plan (and the Dependents of such spouses), and to

spouses one of whom is covered as an employee under the Plan and the other as a

retired railroad employee under the Railroad Employees National Early Retirement

Major Medical Benefit Plan (and the Dependents of such spouses), 100% of the

reasonable charges for services the expense of which is covered by the Plan.

Section 8 - Medicare Part B Premiums

Active employees currently covered by Medicare Part B and those who elect to

enroll in Medicare Part B when they become eligible shall not be reimbursed for

premiums they pay for such Part B Medicare participation unless Medicare is

their primary payor of medical benefits.

Section 9 - Solicitation of Bids

As promptly as practicable, the Joint Plan Committee will solicit bids from

qualified entities for the performance of (a) all managed care functions under

the Plan, including without limitation the establishing and/or arranging for the

use by individuals covered by the Plan of managed networks of health care

providers in those geographical areas where it is feasible to do so, and (b) all

utilization review/case management functions under the Plan, including

specialized utilization review/case management functions for mental health and

substance abuse to assure expert determination of medical necessity and

appropriateness of treatment and provider. The Committee will select one or more

contractors, from among those that the Committee determines are likely to

provide high-quality, cost-effective services, to perform such functions on

behalf of the Plan. In the meantime, the Plan's current utilization review/case

management contractor will continue to perform those functions. Hospital

associations shall be incorporated into the managed care networks wherever

appropriate.

Upon the expiration of three years from the effective date of this Implementing

Document, the Joint Plan Committee will solicit bids for all of the services

involved in the administration of the Plan, including the utilization

review/case management and/or managed care functions, unless the Committee

unanimously determines not to seek bids for any one or more of the services

involved in the administration of the Plan.

Part B - Early Retirement Major Medical Benefit Plan

Section 1 - Continuation of Plan

The Railroad Employees Early Retirement Major Medical Benefit Plan ("ERMA"),

modified as provided in this Part, will be continued subject to the provisions

of the Railway Labor Act, as amended. Contributions to ERMA will be offset by

the expeditious use of such amounts as may at any time be in one or more special

accounts or funds maintained by any insurer, third party administrator or other

entity in connection with ERMA and by the use of funds held in trust that are

not otherwise needed to pay claims, premiums, or administrative expenses that

are payable from funds held in trust; provided, however, that such amounts as

may at any time be in the special account maintained at The Travelers Insurance

Company in connection with the obligations of ERMA to pay benefits incurred but

not paid at the time of termination of ERMA, in the event such termination

should occur, shall be used to pay or provide for Plan benefits as follows:

one-third of the balance in such special account as of January 1, 1992, shall be

used to pay or provide for benefits that become due and payable during 1992.

One-half of the balance in such special account as of January 1, 1993, shall be

used to pay or provide for benefits that become due and payable during 1993. All

of the balance in such special account in excess of $1 million as of January 1,

1994, shall be used to pay or provide for benefits that become due and payable

during 1994. The $1 million referred to in the preceding sentence shall be

maintained by the Plan as a cash reserve to protect against adverse claims

experience from year to year.

Section 2 - Change to Self-Insurance

EMRA will be wholly self-insured. It will be administered, under an

administrative services only arrangement, by an insurance company or third party

administrator.

Section 3 - Coordination of Benefits

ERMA's coordination of benefit rules shall be changed so that ERMA will pay no

benefit to any covered individual that would cause the sum of the benefits paid

by ERMA and by any other plan with which ERMA coordinates benefits to exceed (a)

the maximum benefit available under the more generous of ERMA and such other

plan, or (b) with respect only to spouses who are both covered as retired

railroad employees under ERMA (and the Dependents of such spouses), and to

spouses one of whom is covered as a retired railroad employee under ERMA and the

other as an employee under the Railroad Employees National Health and Welfare

Plan (and the Dependents of such spouses), 100% of the reasonable charges for

services the expense of which is covered by ERMA.

Section 4 - Strengthened Utilization Review and Case Management

ERMA's current utilization review/case management contractor, and any successor,

shall henceforth require that its prior approval be secured for the following

services to the extent that benefits with respect to them are payable under

ERMA: (a) all non-emergency confinements, and all lengths of stay, in any

facility, (b) all home health care, and (c) all inpatient and outpatient

procedures and treatment, except for any care where prior approval is not

feasible or would not be cost-efficient. Approval may be withheld if the

utilization review/case management contractor determines that a less intensive

or more appropriate diagnostic or treatment alternative could be used.

If an individual covered by ERMA incurs expenses without the requisite approval of

ERMA's utilization review/case management contractor, such benefits as ERMA

would otherwise pay will be reduced by one-fifth; provided, however, that if

such unapproved expenses are incurred for the treatment of mental or nervous

conditions or substance abuse, such benefits as ERMA would otherwise pay will be

reduced by one-half.

When there is disagreement between an attending physician and the utilization

review/case management contractor, the patient and/or attending physician, after

all opportunities for appeal have been exhausted within the utilization

review/case management contractor's organization, shall be afforded an

opportunity to obtain a review (including if necessary, an examination) by an

independent specialist physician. This independent physician, who shall be

conveniently located and board certified in the appropriate specialty, shall be

designated by a physician appointed for this purpose by mutual agreement between

the Chairman of the Health and Welfare Committee, Cooperating Railway Labor

Organization and of the National Carriers' Conference Committee. Neither

physician may be an employee of or under contract to the utilization review/case

management contractor. In the event of an appeal to a specialist described

above, the utilization review/case management contractor shall bear the burden

of convincing the specialist that the utilization review/case management

contractor's determination was correct.

The standards developed by the Joint Plan Committee for determining whether or

not prior approval is feasible and cost-efficient under the Health and Welfare

Plan shall be applied by the National Carriers' Conference Committee under ERMA,

and the utilization review/case management contractor(s) selected by the Joint

Plan Committee under the Health and Welfare Plan shall be selected by the

National Carriers' Conference Committee under ERMA.

Section 5 - Mail Order Prescription Drug Benefit

The Plan's benefits will include, where permissible under applicable law, a mail

order prescription drug benefit that will reimburse a covered individual, after

he or she pays $5 per prescription, 100% of the cost of each prescription

covering a 60-90 day supply of maintenance drugs for such individual. This

benefit will not be subject to, and the covered individual's $5.00 co payment

will not be counted against, the Plan's regular $100 deductible, and will be

included only upon execution of appropriate contracts with vendors.

Section 6 - Solicitation of Bids

As promptly as practicable, the National Carriers' Conference Committee will

solicit bids from qualified entities for the performance of all utilization

review/case management functions under the Plan, including specialized

utilization review/case management functions for mental health and substance

abuse to assure expert determination of medical necessity and appropriateness of

treatment and provider. The Committee will select one or more contractors, from

among those that the Committee determines are likely to provide high-quality,

cost-effective services, to perform such functions on behalf of the Plan. In the

meantime, the Plan's current utilization review/case management contractor will

continue to perform those functions.

Upon the expiration of three years from the date of this Implementing Document,

the National Carriers' Conference Committee will solicit bids for all of the

services involved in the administration of the Plan, including the utilization

review/case management function, unless the Committee determines not to seek

bids for any one or more of the services involved in the administration of the

Plan.

ARTICLE IV - PAY RULES

Section 1 - Mileage Rates

(a) Mileage rates of pay for miles run in excess of the number of miles

comprising a basic day will not be subject to general, cost-of-living, or other

forms of wage increases.

(b) Mileage rates of pay, as defined above, applicable to interdivisional,

interseniority district, intradivisional and/or intraseniority district service

runs now existing or to be established in the future shall not exceed the

applicable rates as of June 30, 1986. Such rates shall be exempted from wage

increases as provided in Section 1(a) of this Article. Weight-on-drivers

additives will apply to mileage rates calculated in accordance with this

provision.

Section 2 - Miles in Basic Day and Overtime Divisor

(a) The miles encompassed in the basic day in through freight and through

passenger service and the divisor used to determine when overtime begins will be

changed as provided below:

Effective Date Through Freight Service Through Passenger Service

of Change

Miles in Basic 0vertime Miles in Basic 0vertime

Day Divisor Day Divisor

July 29, 1991 114 14.25 114 22.8

January 1, 1992 118 14.75 118 23.6

January 1, 1993 122 15.25 122 24.4

January 1, 1994 126 15.75 126 25.2

January 1, 1995 130 16.25 130 25.0

(b) Mileage rates will be paid only for miles run in excess of the minimum

number specified in (a) above.

through freight or through passenger service is calculated by dividing the

miles of the trip or the number of miles encompassed in a basic day in that

class of service, whichever is greater, by the appropriate overtime divisor.

Thus, effective July 29, 1991, overtime on a trip in through freight service of

125 miles will begin after 8 hours and 46 minutes (125/14.25 = 8.77 hours). In

through freight service, overtime will not be paid prior to the completion of 8

hours of service.

Section 3 - Conversion to Local Rate

When employees in through freight service become entitled to the local rate of

pay under applicable conversion rules, the daily local freight differential (56

cents for engineers and 43 cents for firemen under national agreements) will be

added to their basic daily rate and the combined rate will be used as the basis

for calculating hour