1996

AGREEMENT

IT IS HEREBY AGREED this 1st day of May, 1996:

ARTICLE I - THOROUGHBRED PERFORMANCE BONUS

Section 1

The Parties signatory hereto pledge their unceasing efforts to transform Norfolk Southern into the safest, most customer-focused, and successful transportation company in the world. The Parties further agree that the compensation system of a world-class transportation company must reflect both the risks and rewards of competing in today's market. This Agreement is the product of that consensus.

Section 2

(a) Effective January 1, 1996 and payable in 1997 locomotive engineers represented by the undersigned General Committees will be eligible for a bonus up to a maximum of five percent (5%) of their engineer earnings in the preceding calendar year.

(b) Effective January 1, 1997 and payable in 1998 locomotive engineers represented by the undersigned General Committees will be eligible for a bonus up to a maximum of five percent (5%) of their engineer earnings in the preceding calendar year.

(c) Effective January 1, 1998 and payable in 1999, and each year thereafter, locomotive engineers represented by the undersigned General Committees will be eligible for a bonus up to a maximum of ten percent (10%) of their engineer earnings in the preceding calendar year.

Section 3

(a) In any year that an annual bonus is paid under Norfolk Southern Corporation's Bonus Program, the amount payable to an engineer will be calculated by multiplying the employee's engineer earnings for the preceding calendar year by the appropriate percentage in Section 2 of this Article and then by the percentage of the maximum annual bonus (to the second decimal place) paid under the Bonus Program in that year. The "percentage of the maximum annual bonus paid under the Bonus Program" for any given year is hereinafter referred to as the "PBP."

Example: If the PBP is 100% of the maximum bonus in calendar year 1997 and the engineer's earnings in his craft in the preceding calendar year (1996) are $50,000, the following calculation applies:

.05 x $50,000 x 1 = $2,500 ( paid in 1997 )

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Example: If the PBP is 95.78% of the maximum bonus in calendar year 1999 and the engineer's earnings in his craft in the preceding calendar year (1998) are $50,000, the following calculation applies:

.1 x $50,000 x .9578 = $4,789 (paid in 1999)

(b) For the purposes of this section, engineer earnings consist of all payments made under an agreement between the undersigned carriers and the Brotherhood of Locomotive Engineers during the applicable calendar year. The following payments shall be excluded from engineer earnings:

(i) Thoroughbred Performance Bonus payments,

(ii) expense reimbursements and allowances, including, but not limited to those required by any protective

conditions,

(iii) any payment made by the carriers in the exercise of their managerial rights; however, this will not restrict the

carriers from including such payments in engineer earnings at its sole discretion,

(iv) any payment made pursuant to a verdict, award or other settlement of a legal dispute.

Section 4

The undersigned carriers will advise the undersigned General Committees of the PBP for each calendar year. The determination of the PBP, including but not limited to the methodology employed and the determination of any figures utilized in the calculation of the PBP, shall remain at management's sole discretion, and shall not be a subject for review, negotiation or dispute. Payment will be made as soon as reasonably possible after the bonus is paid under the Bonus Program.

Section 5

Payments made under this article will not be used in the calculation of vacation pay.

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ARTICLE II - SPECIAL PAY DIFFERENTIAL AND COST OF LIVING PAYMENTS

PART A - SPECIAL PAY DIFFERENTIAL

Section 1

Employees who meet the conditions specified in Article V of the 1991 National Implementing Document will continue to receive the frozen differential of $15 per basic day and 15 cents per mile for miles in excess of the miles encompassed in the basic day under Article V.

Section 2

Employees working as engineers who meet the conditions specified in Article V Section 1, but not Sections 2 (a) and 2 (b) of the 1991 National Implementing Document will, as of the earlier of July 1, 1996 or fourteen days after the ratification of this agreement, receive the frozen differential of $15 per basic day and 15 cents per mile for miles in excess of the miles encompassed in the basic day.

PART B - COST OF LIVING PAYMENTS - 1991 National Implementing Document

The nine-cent cost-of-living allowance in effect beginning July 1, 1995 pursuant to Article II, Part B of the 1991 National Implementing Document shall be rolled into basic rates of pay on November 30, 1995 and such Article II, Part B shall be eliminated at that time. Any amounts paid from January 1, 1996 under the aforementioned COLA provision (effective January 1, 1996) shall be deducted from regular pay after the effective date of this Agreement.

PART C - COST-OF-LIVING ALLOWANCE & ADJUSTMENTS THERETO AFTER JANUARY 1, 2000

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

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Such allowance, and further cost-of-living adjustments thereto which shall become effective as described below, shall be based on the change in the CPI during the respective measurement periods shown in the following table, subject to the exception provided in paragraph (d) (iii), according to the formula set forth in paragraph (e)

Measurement Periods

Effective Date

Base Month Measurement Month of Adjustment

September 1999 March 2000 July 1, 2000

March 2000 September 2000 January 1, 2001

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

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

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

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

Effective Date Maximum CPI Increase That

of Adjustment Shall Be Taken Into Account

July 1, 2000 3% of September 1999 CPI

January 1, 2001 6% of September 1999 CPI,

less the increase from

September 1999 to March 2000

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.

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(ii) Limitation. In calculations under paragraph (e), only fifty (50) percent of the increase in the CPI in any measurement period shall be considered.

(iii) If the increase in the CPI from the base month of September 1999 to the measurement month of March 2000 exceeds 3% of the September 1999 base index, the measurement period that shall be used for determining the cost-of-living adjustment to be effective the following January shall be the 12-month period from such base month of September; the increase in the index that shall be taken into account shall be limited to that portion of the increase that is in excess of 3% of such September base index; and the maximum increase in that portion of the index that may be taken into account shall be 6% of such September base index less the 3% mentioned in the preceding clause, to which shall be added any residual tenths of points which had been dropped under paragraph (e) below in calculation of the cost-of-living adjustment which shall have become effective July 1, 2000 during such measurement period.

(iv) Any increase in the CPI from the base month of September 1999 to the measurement month of September 2000 in excess of 6% of the September 1999 base index shall not be taken into account in the determination of subsequent cost of living adjustments.

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

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

The cost-of-living allowance in effect on December 31, 2000 shall be adjusted (increased or decreased) effective January 1, 2001 by the whole number of cents produced by dividing by 0.3 the number of points (including tenths of points) change, as limited by paragraph (d), in the CPI during the applicable measurement period. Any residual tenths of a point resulting from such division shall be dropped. The result of such division shall be added to the amount of the cost-of-living allowance in effect on December 31, 2000 if the CPI shall have been higher at the end than at the beginning of the measurement period, and subtracted therefrom only if the index shall have been lower at the end than at the beginning of the measurement period and then, only to the extent that the allowance remains at zero or above. The same procedure shall be followed in applying subsequent adjustments.

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

Section 2 - Payment of Cost-of-Living Allowances

(a) The cost-living allowance payable to each employee effective July 1, 2000 shall be equal to the difference between (I) the cost-of-living allowance effective on that date pursuant to Section 1 of this Part, and (ii) the lesser of (x) the cents per hour produced by dividing one-quarter of the increase, if any, in the carriers' 1999 payment rate for foreign-to-occupation health benefits under the Plan over such payment rate for l998, by the average composite straight-time equivalent hours that are subject to wage increases for the latest year for which statistics are available, and (y) one-half of the cost-of-living allowance effective July 1, 2000.

(b) The increase in the cost-of-living allowance effective January 1, 2001 pursuant to Section 1 of this Part shall be payable to each employee commencing on that date.

(c) The increase in the cost-of-living allowance effective July 1, 2001 pursuant to Section 1 of this Part shall be payable to each employee commencing on that date.

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

(e) The definition of the carriers' payment rate for foreign-to-occupation health benefits under the Plan set forth in Side Letter #1 of this agreement shall apply with respect to any year covered by this section.

(f) In making calculations under this section, fractions of a cent shall be rounded to the nearest whole cent; fractions less

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

Section 3 - Application of Cost-of-Living Allowances

The cost-of-living allowance provided for by Section 1 of this Part C 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 shall 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 Article I, Section 3 of Side Letter #1.

Section 4 - Continuation of Part C

The arrangements set forth in Part C 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 - DENTAL BENEFITS

Section 1 - Continuation of Plan

The benefits now provided under the Railroad employees National Dental Plan (Dental Plan), modified as provided in Section 2 below, will be continued subject to the provisions of the Railway Labor Act, as amended.

Section 2 - Eligibility

Existing eligibility requirements under the Dental Plan are amended, effective January 1, 1996, to provide that in order for an employee and his eligible dependents to be covered for Covered Dental Expenses (as defined in the Dental Plan) during any calendar month by virtue of rendering compensated service or receiving vacation pay in the immediately preceding calendar month (the "qualifying month"), such employee must have rendered compensated service on, or received vacation pay for, an aggregate of at least seven (7) calendar days during the applicable qualifying month. Any calendar day on which an employee assigned to an extra list is available for service but does not perform service shall be deemed a day of compensated service solely for purposes of this Section. Existing Dental Plan provisions pertaining to eligibility for and termination of coverage not specifically amended by this Section shall continue in effect.

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Section 3 - Benefit Changes

The following changes will be made effective as of January 1, 1999

(a) The maximum benefit (exclusive of any benefits for orthodonture) which may be paid with respect to a covered employee or dependent in any calendar year beginning with calendar year 1999 will be increased from $1000 to $1,500.

(b) The lifetime aggregate benefits payable for all orthodontic treatment rendered to a covered dependent, regardless of any interruption in service, will be increased from $750 to $1,000.

(c) The exclusion from coverage for implantology (including synthetic grafting) services will be deleted and dental implants and related services will be added to the list of Type C dental services for which the Plan pays benefits

(d) Repair of existing dental implants will be added to the list of Type B dental services for which the Plan pays benefits.

(e) One application of sealants in any calendar year for dependent children under 14 years of age will be added to the list of Type A dental services for which the Plan pays benefits.

(f) The Plan will pay 80%, rather than 75%, of covered expenses for Type B dental services.

(g) The Plan will establish and maintain an 800 telephone number that employees and dependents may use to make inquiries regarding the Plan.

ARTICLE IV - VISION CARE

Section 1 - Establishment and Effective Date

The railroads will establish a Vision Care Plan to provide specified vision care benefits to employees and their dependents, to become effective January 1, 1999 and to continue thereafter subject to provisions of the Railway Labor Act, as amended, according to the following provisions:

(a) Eligibility and Coverage. Employees and their dependents will be eligible for coverage under the Plan beginning on the first day of the calendar month after the employee has completed a year of service for a participating railroad, but no earlier than the first day of January 1999. An eligible employee who renders compensated service on, or receives vacation pay for, an aggregate

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of at least seven (7) calendar days in a calendar month will be covered under the Plan, along with his eligible dependents, during the immediately succeeding calendar month. Any calendar day on which an employee assigned to an extra list is available for service but does not perform service shall be deemed a day of compensated service solely for the purposes of this Section.

(b) Managed Care Managed vision care networks that meet standards developed by the National Carriers' Conference Committee concerning quality of care, access to providers and cost effectiveness shall be established wherever feasible. Employees who live in a geographical area where a managed vision care network has been established will be enrolled in the network along with their covered dependents. Employees enrolled in managed vision care network will have a point-of-service option allowing them to choose an out-of-network provider to perform any vision care service covered by the Plan that they need. The benefits provided by the Plan when services are performed by in-network providers will be greater than the benefits provided by the Plan when the services are performed by providers who are not in-network providers, including providers in geographic areas where a managed vision care network has not been established. These two sets of benefits will be as described in the table below.

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Plan Benefit	In-Network	Other Than In-Network
One vision examination per 12-month period.	100% of reasonable and customary charges	100% of reasonable and customary charges up to a $35 maximum
One set of frames of any kind per 24-month period.	100% of reasonable and customary charges 1	100% of reasonable and customary charges up to a $35 maximum
One set of two lenses of any kind, including contact lenses, per 24- month period.	100% of reasonable and customary charges 2	100% of reasonable and customary charges up to the following maximums: up to $25 for single vision lenses up to $40 for bifocals up to $55 for trifocals up to $80 for lenticulars up to $210 for medically necessary contact lenses up to $105 for contact lenses that are not medically necessary
Where the employee or dependent requires only one lens.	100% of reasonable and customary charges 2	100% of reasonable and customary charges up to a maximum of one-half of the maximum benefit payable for a set of two lenses of the same kind

1 Patients who select frames that exceed a wholesale allowance established under the program may be required to pay part of the cost of the frames selected.

2 Patients may be required to pay part of the cost of spectacle lenses or lens characteristics that are not necessary for the patients visual welfare. Moreover, patients who choose contact lenses in lieu of spectacle may be required to pay part of a contact lens evaluation fee and part of the cost of fitting and materials.

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Section 2 - Administration

The Vision Care Plan will be administered by the National Carriers' Conference Committee, which will bear the same responsibilities and perform the same functions as it does with respect to the Railroad Employees National Dental Plan, including the development of detailed plan language describing the Plan's eligibility, coverage, benefit and other provisions.

ARTICLE V - BENEFITS ELIGIBILITY

Section 1 - Health and Welfare Plan

The Railroad Employees National Health and Welfare Plan ("the Plan") is amended, effective January 1, 1996, as provided in this Section. In order for an Eligible Employee (as defined by the Plan) to continue to be covered by the Plan during any calendar month by virtue of rendering compensated service or receiving vacation pay in the immediately preceding calendar month (the "qualifying month") such employee must have rendered compensated service on, or received vacation pay for, an aggregate of at least seven (7) calendar days during the applicable qualifying month. Any calendar day on which an employee assigned to an extra list is available for service but does not perform service shall be deemed a day of compensated service solely for purposes of this Section. Existing Plan provisions pertaining to eligibility for and termination of coverage not specifically amended by this Section shall continue in effect.

Section 2 - Vacation Benefits

Existing rules governing vacations are amended as follows effective January 1, 1997:

(a) The minimum number of basic days in miles or hours paid for, as provided in individual schedules, on which an employee must render service under schedule agreements held by the organization signatory hereto to qualify for an annual vacation for the succeeding calendar year shall be increased by fifty (50) percent from the minimum number applicable under vacation rules in effect on the date of this Agreement. The multiplying factors set forth in vacation rules in effect on the date of this Agreement shall be amended to provide that 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 qualification for vacation based on service rendered in the preceding calendar year.

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NOTE: It is the parties' intent that, in accordance with application of the multiplying factors set forth in existing vacation rules as amended above, commencing with calendar year 1997 this subsection would require the equivalent of 150 qualifying days in a calendar year in yard service and 180 qualifying days in a calendar year in road service to qualify for an annual vacation for the succeeding year.

(b) Calendar days on which an employee assigned to an extra list is available for service and on which days he performs no service, not exceeding ninety (90) such days, will be included in the determination of qualification for vacation; also, calendar days, not in excess of forty-five (45) , on which an employee is absent from and unable to perform service because of injury received on duty will be included. Such calendar days shall not be subject to the multiplying factors set forth in existing vacation rules as amended.

(c) Calendar days on which an employee is compensated while attending training and rules classes at the direction of the carrier will be included in the determination of qualification for vacation. Such calendar days shall not be subject to the multiplying factors set forth in existing vacation rules as amended.

(d) During a calendar year in which an employee’s vacation entitlement will increase on the anniversary date, such employee shall be permitted to schedule the additional vacation time to which entitled on the anniversary date at any time during that calendar year.

(e) An employee may make up to two splits in his annual vacation in any calendar year.

(f) An employee may take up to one week of his annual vacation in single day increments, provided, however, that such employee shall be automatically marked up for service upon the expiration of any single day vacation.

(g) Existing rules and practices regarding vacation not specifically amended by this Section, including (but not limited to) scheduling of vacations, shall continue in effect without change.

Section 3

This Article is not intended to restrict any of the existing rights of a carrier except as specifically provided herein.

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ARTICLE VI - PERSONAL LEAVE

See Side Letter #5

ARTICLE VII - ENHANCED EMPLOYMENT OPPORTUNITIES

Section 1

In the event that a carrier sells or leases its interest in one or more rail lines to a non-carrier pursuant to a transaction authorized under 49 U.S.C. $l090l (or any successor provision) as to which labor protective conditions have not been imposed by any governmental authority, any employee represented by the organization signatory hereto who (I) as a result of that transaction is deprived of employment with the carrier because of the abolition of his position, and (ii) does not accept employment with the purchaser shall be entitled to the benefits set forth in Section 2.

Section 2

(a) An employee covered by Section 1 shall have the right, in seniority order, to bid on vacant positions or claim locomotive engineer positions at any location on the carrier at any time within ninety (90) days after being deprived of employment. Seniority issues associated with the exercise of that right shall be resolved by the carrier and the organization representative or, absent agreement and at the request of either party by written notice served on the appropriate representative of the other party, by final and binding arbitration as provided in subsection (b). Solely for the purpose of this Section, a single locomotive engineer seniority roster for the carrier shall be developed, in accordance with applicable rules and procedures, no later than June 30, 1996

(b) The arbitrator shall be selected by the parties. If they fail to agree within five days from the date notice of the submission to arbitration is received from the moving party, either party may request a list of five potential arbitrators from the National Mediation Board, from which the parties shall choose the arbitrator through alternate striking. The order of such striking shall be determined by coin flip unless otherwise agreed by the parties. The fees and expenses of the arbitrator shall be paid under Section 153 of the Railway Labor Act.

(c) An employee exercising rights under this Section who relocates his residence shall receive a relocation allowance of $5,000, provided, however, that an employee shall be required to elect between such allowance and any carrier relocation benefits that may be provided to such employee under other existing

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agreements or arrangements. Such allowance shall be paid in two equal installments: the first payable on the relocation date, and the second ninety (90) days thereafter. Such allowance (or any portion thereof) shall be payable as provided as long as the individual has an employment relationship with the carrier and is still at the new location at the time the payment is due.

NOTE: Employees who presently have extended seniority and who are deprived of

employment on their prior right territory(s) as a result of a transaction covered in Section

1, will be covered by the conditions of Section 2 (c), provided that any exercise of seniority

must be beyond their prior right territory(s), with a minimum of fifty (50) miles distance.

Section 3

In the case of any transaction authorized under 49 U.S.C. $l090l (or any successor provision), the arrangements provided for under this Article shall be deemed to fulfill all of the parties’ bargaining obligations that may exist under any applicable statute, agreement or other authority with respect to such transaction, and shall also be deemed to satisfy the standards for the protection of the interests of employees who may be affected by such transaction described in 49 U.S.C. $10901(e)

Section 4

This Article shall become effective ten (10) days after the date of this Agreement and is not intended to restrict any of the existing rights of a carrier except as specifically provided herein.

ARTICLE VIII - RATE PROGRESSION ADJUSTMENT FOR PROMOTION

Section 1

(a) An employee who is subject to national rules concerning rate progression on the effective date of this Article shall have his position on the rate progression scale adjusted to the next higher level upon promotion to engineer. An employee covered by this Agreement who is subject to Article IV, Section 5 of the 1991 National Implementing Document (Rate Progression - New Hires) on the effective date of this Article shall have his position on the rate progression scale adjusted to the next higher level on such effective date.

(b) The next adjustment to an employee’s position on the rate progression scale after the adjustment specified in subsection (a) of this Section shall be made when such employee completes one year

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of "active service" (as defined by the aforementioned Article IV, Section 5) measured from the date on which that employee would have attained the position of employee on the rate progression scale provided pursuant to subsection (a) of this Section.

Section 2

Local rate progression rules applicable on a carrier that is not covered by the aforementioned Article IV, Section 5 are hereby amended in the same manner as provided in Section 1.

Section 3

This Article shall become effective ten (10) days after the date of this Agreement and is not intended to restrict any of the existing rights of a carrier except as specifically provided herein.

ARTICLE IX - ENHANCED CUSTOMER SERVICE

Article VIII - Special Relief, Customer Service - Yard Crews of the 1991 National Implementing Document is amended to read as follows and furthermore shall be applicable to all carriers party to this Agreement:

Section 1

(a) When an individual carrier has a customer request for particularized handling that would provide more efficient service, or can show a need for relaxation of certain specific work rules to attract or retain a customer, such service may be instituted on an experimental basis for a six-month period.

(b) Prior to implementing such service, the carrier will extend seven (7) days advance notice where practicable but in no event less than forty-eight (48) hours' advance notice to the General Chairman of the employees involved. Such notice will include an explanation of the need to provide the service, a description of the service, and a description of the work rules that may require relaxation for implementation. Relaxation of work rules that may be required under this Article shall be limited to: starting times, yard limits, calling rules, on/off duty points, seniority boundaries, and class of service restrictions.

(c) A Joint Committee, comprised of an equal number of carrier representatives and organization representatives, shall determine whether a need exists, as provided in paragraph (a), to provide the service. If the Joint Committee has not made its determination by the end of the advance notice period referenced in paragraph (b).

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it shall be deemed to be deadlocked, and the service will be allowed on an experimental basis for a six-month period. If, after the six-months has expired, the organization members of the Joint Committee continue to object, the matter shall be referred to arbitration.

(d) If the parties are unable to agree upon an arbitrator within seven days of the date of the request for arbitration, either party may request the National Mediation Board to provide a list of five potential arbitrators, from which The parties shall choose the arbitrator through alternate striking. The order of such striking shall be determined by coin flip unless otherwise agreed by the parties. The fees and expenses of the arbitrator shall be born equally by the parties.

(e) The determination of the arbitrator shall be limited to whether the carrier has shown a bona fide need to provide the service requested or can provide the service without a special exception to existing work rules being made at a comparable cost to the carrier. If the arbitrator determines that this standard has not been met, the arbitrator shall have the discretion to award compensation for all wages and benefits lost by an employee as a result of the carrier's implementation of its proposal.

Section 2

This Article shall become effective ten (10) days after the date of this Agreement and is not intended to restrict any of the existing rights of a carrier.

ARTICLE X - DISPLACEMENT

Section 1

(a) Where agreements that provide for the exercise of displacement rights within a shorter time period are not in effect, existing rules are amended to provide that an employee who has a displacement right on any position (including extra boards) within a terminal or within 30 miles of such employee's current reporting point, whichever is greater, must, from the time of proper notification under the applicable agreement or practice, exercise that displacement right within forty-eight (48) hours.

(b) Failure of an employee to exercise displacement rights, as provided in (a) above, will result in said employee being assigned to the applicable extra board, seniority permitting. (The applicable extra board is the extra board protecting the assignment from which displaced.)

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(c) In the event force assignment is not compatible with local agreements, prior to implementation, the parties will meet on property to determine an avenue of assignment.

Section 2

This Article shall become effective ten (10) days after the date of this Agreement and is not intended to restrict any of the existing rights of a carrier.

ARTICLE XI - GENERAL PROVISIONS

Section 1 - Effect of this Agreement

(a) The purpose of this Agreement is to fix the general level of compensation and other terms and conditions of employment during the period of the Agreement and is in settlement of the dispute growing out of the notices dated November 1, 1994 served by and on behalf of the carriers listed in Exhibit A upon the organization signatory hereto, and the notices dated on or about November 1, 1994 served by the organization upon such carriers.

(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 December 31, 1999 and thereafter until changed or modified in accordance with the provisions of the Railway Labor Act, as amended.

(c) The parties to this Agreement shall not serve nor progress prior to November 1, 1999 (not to become effective before January 1, 2000) any notice or proposal for changing any matter contained in:

(1) this Agreement,

(2) the proposals of the parties identified in Section 1(a) of this Article, and

(3) Section 2(c) (3) of Article VIII of the National Agreement of March 6, 1975.

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

(d) The parties to this Agreement shall not serve nor progress prior to November 1, 1999 (not to become effective before January 1, 2000) any notice or proposal which might properly have been served on November 1, 1994, and any pending notices which propose such matters are hereby withdrawn.

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(e) This Article will not bar management and committees on individual railroads from agreeing upon any subject of mutual interest.

SIGNED AT NORFOLK, VIRGINIA THIS DAY 1ST DAY OF JUNE , 1996.

FOR THE EMPLOYEES REPRESENTED BY

FOR THE NCCC THE BROTHERHOOD OF LOCOMOTIVE ENGINEERS

W.E. Knight

S.D. Speagle

R.C. Wallace

P.T. Sorrow

Participating carriers:

Norfolk Southern Railway

The Alabama Great Southern Railroad Company

Atlantic & East Carolina Railway Company

Central of Georgia Railroad Company

The Cincinnati, New Orleans & Texas Pacific Railway Company

Georgia Southern and Florida Railway Company

Interstate Railroad Company

Norfolk & Western Railway Company

Tennessee, Alabama and Georgia Railway Company

Tennessee Railway Company

May 1, 1996

Mr. W. E. Knight, General Chairman

Brotherhood of Locomotive Engineers

433 South Street

Wheelersburg, OH 45694

Mr. S. D. Speagle, General Chairman

Brotherhood of Locomotive Engineers

P.O. Box 4509

Decatur, IL 62521

Mr. R. C. Wallace, General Chairman

Brotherhood of Locomotive Engineers

P.O. Box 16039

Asheville, NC 28816

Gentlemen:

This confirms our understanding regarding Articles I and II of the Agreement of this date.

It is understood that The Brotherhood of Locomotive Engineers may between November 1, 1999 and November 30, 1999 provide the Carrier with written notice of its intent to cancel, effective from and after January 1, 2000, Articles I and II collectively of this Agreement.

In the event Articles I and II are canceled, they will, effective from and after January 1, 2000, be replaced by the following:

ARTICLE I - WAGES

Section 1 - General Wage Increase

(a) Effective from and after January 1, 2000 all standard basic daily rates of pay for employees represented by the Brotherhood of Locomotive Engineers in effect on December 31, 1999 shall be increased by ten-and-one-half (10 1/2) percent.

(b) In computing the increase under paragraph (a) above, (10 1/2) percent shall be applied to the standard basic daily rates of pay applicable in the following weight-on-drivers brackets,

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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

Section 2 - Standard Rates

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

Section 3 - Application of Wage Increase

(a) The adjustment provided for in this Article (I) will apply to mileage rates of pay for overmiles, and (ii) will not apply to duplicate time payments, including arbitraries and special allowances that are expressed in time, miles or fixed amounts of money.

(b) Miscellaneous rates based upon hourly or daily rates of pay, as provided in the schedules or wage agreements, shall be adjusted under this agreement in the same manner as heretofore increased under previous wage agreements.

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

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

(e) 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) Other than standard rates:

Existing basic daily rates of pay other than standard shall be changed, effective as of the date specified in Section 1 hereof, by the same respective percentage as set forth therein, computed and applied in the same manner as the standard rates were determined.

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Section 4 - Definition of Carriers' Payment Rate

The carriers' payment rate for any year for foreign-to-occupation health benefits under the Plan shall mean twelve (12) 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 of the Agreed-Upon Implementation of Public Law 102-29 (1991 National Implementing Document).

ARTICLE II - COST-OF-LIVING PAYMENTS

Part A - Cost-of-Living Allowance Through January 1, 2000 and Effective Date of Adjustment

(a) A cost-of-living allowance, calculated and applied in accordance with the provisions of Part B of this Article except as otherwise provided in this Part, shall be payable and rolled in to basic rates of pay on January 1, 2000.

(b) The measurement periods shall be as follows:

Measurement Periods

Effective Date

Base Month Measurement Month of Adjustment

March 1995 March 1996

plus

March 1997 March 1998 January 1, 2000

The number of points change in the CPI during each of these measurement periods shall be added together before making the calculation described in Part B, Section 1(e) of this Article.

Effective Date Minimum CPI Increase That

of Adjustment Shall Be Taken Into Account

January 1, 2000 4% of March 1995 CPI plus

4% of March 1997 CPI

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(ii) Cap. The maximum increase in the CPI that shall be taken into account shall be as follows:

Effective Date Maximum CPI Increase That

of Adjustment Shall Be Taken Into Account

January 1, 2000 6% of March 1995 CPI plus

6% of March 1997 CPI

(d) The cost-of-living allowance payable to each employee and rolled in to basic rates of pay on January 1, 2000 shall be equal to the difference between (I) the cost-of-living allowance effective on that date pursuant to this Part, and (ii) the lesser of (x) the cents per hour produced by dividing one-quarter of the increase, if any, in the carriers' 1998 payment rate for foreign-to-occupation health benefits under the Plan over 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, and (y) one half of the cost-of-living allowance effective on January 1, 2000 pursuant to this Part.

(e) The definition of the carriers' payment rate for foreign-to-occupation health benefits under the Plan set forth in Article I, Section 4 of this side letter shall apply to this section.

Part B - Cost-of-Living Allowance and Adjustments Thereto After January 1, 2000

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

(a) A cost-of-living allowance shall be payable in the manner set forth in and subject to the provisions of this Part, on the basis of the "Consumer Price Index for Urban Wage Earners and Clerical Workers (Revised Series) (CPI-W)" (1967-100), U.S. Index, all items - unadjusted, as published by the Bureau of Labor Statistics, U.S. Department of Labor, and hereinafter referred to as the CPI. The first such cost-of-living allowance shall be payable effective July 1, 2000 based, subject to paragraph (d), on the CPI for March 2000 as compared with the CPI for September 1999. Such allowance, and further cost-of-living adjustments thereto which shall become effective as described below, shall be based on the change in the CPI during the respective measurement periods shown in the following table, subject to the exception provided in paragraph (d) (iii), according to the formula set forth in paragraph (e)

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Measurement Periods Effective Date

Base Month Measurement Month of Adjustment

September 1999 March 2000 July 1, 2000

March 2000 September 2000 January 1, 2001

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

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

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

Effective Date Maximum CPI Increase That

of Adjustment Shall Be Taken Into Account

July 1, 2000 3% of September 1999 CPI

January 1, 2001 6% of September 1999 CPI,

less the increase from

September 1999 to March 2000

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

(ii) Limitation. In calculations under paragraph (e), only fifty (50) percent of the increase in the CPI in any measurement period shall be considered.

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(iii) If the increase in the CPI from the base month of September 1999 to the measurement month of March 2000 exceeds 3% of the September 1999 base index, the measurement period that shall be used for determining the cost-of-living adjustment to be effective the following January shall be the 12-month period from such base month of September; the increase in the index that shall be taken into account shall be limited to that portion of the increase that is in excess of 3% of such September base index; and the maximum increase in that portion of the index that may be taken into account shall be 6% of such September base index less the 3% mentioned in the preceding clause, to which shall be added any residual tenths of profits which had been dropped under paragraph (e) below in calculation of the cost-of-living adjustment which shall have become effective July 1, 2000 during such measurement period.

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

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

Page 7

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

Section 2 - Payment of Cost-of-Living Allowances

(a) The cost-living allowance payable to each employee effective July 1, 2000 shall be equal to the difference between (I) the cost-of-living allowance effective on that date pursuant to Section 1 of this Part, and (ii) the lesser of (x) the cents per hour produced by dividing one-quarter of the increase, if any, in the carriers’ 1999 payment rate for foreign-to-occupation health benefits under the Plan over such payment rate for 1998, by the average composite straight-time equivalent hours that are subject to wage increases for the latest year for which statistics are available, and (y) one-half of the cost-of-living allowance effective July 1, 2000.

(b) The increase in the cost-of-living allowance effective January 1, 2001 pursuant to Section 1 of this Part shall be payable to each employee commencing on that date.

(c) The increase in the cost-of-living allowance effective July 1, 2001 pursuant to Section 1 of this Part shall be payable to each employee commencing on that date.

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

(e) The definition of the carriers’ payment rate for foreign-to-occupation health benefits under the Plan set forth in Article I, Section 4 of this side letter shall apply with respect to any year covered by this section

(f) 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.

Page 8

Section 3 - Application of Cost-of-Living Allowances

The cost-of-living allowance provided for by Section 1 of this Part B will not become part of basic rates of pay. In application of such allowance, each one cent per hour of cost-of-living allowance that is payable shall 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 Article I, Section 3 of this side letter.

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.

Please acknowledge your agreement by signing your name in the space provided below.

Very truly yours,

R.F. Allen

Robert F. Allen

I agree:

W.E. Knight

Stephen D. Speagle

R.C. Wallace

P.T. Sorrow

ARTICLE I - WAGES

Q-1: Does the General Wage Increase provided for in Article I of Side Letter #1

apply to guaranteed extra board payments?

A-1: Yes.

Q-2: Does the December 31, 1999, 4% / 6% COLA apply to overmiles?

A-2: Yes.

Q-3: What is the definition of "foreign-to-occupation": as used In Section 10?

A-3: "Foreign-to-occupation" is defined in Article I, Section 4 of Side Letter #1 to

mean "other than on duty".

May 1, 1996

# 2

Mr. W. E. Knight, General Chairman

Brotherhood of Locomotive Engineers

433 South Street

Wheelersburg, OH 45694

Mr. S. D. Speagle, General Chairman

Brotherhood of Locomotive Engineers

P.O. Box 4509

Decatur, IL 62521

Mr. R. C. Wallace, General Chairman

Brotherhood of Locomotive Engineers

P.O. Box 16039

Asheville, NC 28816

Gentlemen:

This confirms our understanding that In the event Articles I and II of Agreement of this date are canceled in accordance with Side Letter 1 and replaced with Articles I and II of Side Letter 1 the following reflects our understanding in regard to Article I -Wages of the Agreement of this date.

Solely for the purpose of concluding this Agreement, the carriers have agreed to apply the general wage increases provided for therein to mileage rates of pay for miles run in excess of the number of miles comprising a basic day (overmiles).

Our agreement to include language providing for such applications shall not be considered as precedent for how such issues should be addressed in the future and is without prejudice to our position that this component of the pay system is inappropriate.

Page 2

Please acknowledge your agreement by signing your name in the space provided below.

Very truly yours,

Robert F. Allen

I agree:

W.E. Knight

S.D. Speagle

R.C. Wallace

P.T. Sorrow

May 1, 1996

Mr. W. E. Knight, General Chairman

Brotherhood of Locomotive Engineers

433 South Street

Wheelersburg, OH 45694

Mr. S. D. Speagle, General Chairman

Brotherhood of Locomotive Engineers

P.O. Box 4509

Decatur, IL 62521

Mr. R. C. Wallace, General Chairman

Brotherhood of Locomotive Engineers

P.O. Box 16039

Asheville, NC 28816

Gentlemen:

This confirms our understanding riding with respect to the Agreement of this date.

The existing differential of $6 per basic day, currently payable to engineers working without firemen, shall be incorporated into the basic daily rates of pay of engineers working without firemen and will be subject to wage increases subsequent to this agreement. The differential of 6 cents per mile for miles in excess of the number of miles encompassed in the basic day, payable to engineers working without firemen, is incorporated into the overmile rate for engineers working without firemen and will be subject to wage increases subsequent to this agreement. The standard reduced crew allowance payable to engineers working with a reduced train crew and without a fireman under Side Letter 20 of the 1986 BLE National Agreement is only payable to engineers receiving the special allowance under Article V of the 1991 National Implementing Agreement.

Please acknowledge your agreement by signing your name in the space provided below.

Very truly yours,

Robert F. Allen

I agree:

W.E. Knight

S.D. Speagle

R.C. Wallace

P.T. Sorrow

May 1, 1996

Mr. W. E. Knight, General Chairman

Brotherhood of Locomotive Engineers

433 South Street

Wheelersburg, Ohio 45694

Mr. S. D. Speagle, General Chairman

Brotherhood of Locomotive Engineers

P.O. Box 4509

Decatur, IL 62521

Mr. R. C. Wallace, General Chairman

Brotherhood of Locomotive Engineers

P.O. Box 16039

Asheville, NC 28816

Gentlemen

This confirms our agreement that the health and welfare offsets will be taken against the 1998 and 1999 Thoroughbred Performance Bonuses in the following manner:

(A) There will be subtracted from each engineer’s 1997 bonus a sum equal to the lesser of (x) one-half of the bonus described in Article I of this agreement and (y) two times one-quarter of the amount, if any, by which the carriers’ payment rate for 1996 for foreign-to-occupation health benefits under The Railroad Employees National Health and Welfare Plan (Plan) exceeds such payment rate for 1995.

(B) There will be subtracted from each engineer’s 1999 bonus a sum equal to the lesser of (x) one-half of the bonus described in Article I of this agreement and (y) one-and-one-half times one-quarter of the amount, if any, by which the carriers' payment rate for 1998 for foreign-to-occupation health benefits under the Plan exceeds such payment rate for 1995.

The carriers' 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 each 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

Page 2

(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 of the Agreed Upon Implementation of Public Law 102-29 (1991 National Implementing Document)

Please acknowledge your agreement by signing your name in the space provided below.

Very truly yours,

Robert F. Allen

I agree:

W.E. Knight

S.D. Speagle

R.C. Wallace

P.T. Sorrow

May 1, 1996

Mr. W. E. Knight, General Chairman

Brotherhood of Locomotive Engineers

433 South Street

Wheelersburg, OH 45694

Mr. S. D. Speagle, General Chairman

Brotherhood of Locomotive Engineers

P.O. Box 4509

Decatur, IL 62521

Gentlemen:

This confirms our understanding with respect to the Agreement of this date.

Section 1

Employees in road freight service not covered by the National Paid Holiday Rules will be entitled to personal leave day(s) on the following basis subject to the limitation contained in Section 2, below:

Years of Service Personal Leave Days

Less than five years 3 days

Five years and less than 10 years 5 days

Ten years and less than 15 years 7 days

Fifteen years and less than 20 years 9 days

Twenty years or more 11 days

Section 2

The number of personal leave days each road freight service engineer is entitled to shall be reduced by the number of paid holidays (or pay in lieu thereof) received in covered road service or in the exercise of road and/or yard seniority rights. Once an engineer has reached the maximum of 11 days under this or any other agreement, he will not be entitled to any additional paid holidays or personal leave day(s) in that calendar year.

If an engineer takes any of his personal leave days before his service anniversary date, in a year in which his entitlement will

Page 2

increase, he may take up to the number of leave days he is entitled to prior to his anniversary date and then take the additional days that he is entitled to after his service anniversary date.

Section 3

Personal leave day(s) may be taken upon 24 hours' advance request to an appropriate Carrier Officer and shall be granted consistent with the requirements of the service. The Carrier has the option of granting personal leave days with less than 24 hours' notice. The engineer will be paid one basic day at the rate of the last service performed for each personal leave day(s). Should the Carrier refuse an engineer's request for Personal day(s), those leave days will be carried over, but must be requested and granted prior to May 1 of the following year. Any personal leave days not taken during the calendar year because of failure of the engineer to make timely request therefor shall not be carried over.