IT IS AGREED: November 10,2003 MOA

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1 MEMORANDUM OF AGREEMENT between the UNION PACIFIC RAILROAD COMPANY PEORIA AND PEKIN UNION RAILWAY COMPANY and the UNITED TRANSPORTATION UNION (Former CNW Lines Territory) IMPLEMENTING AGREEMENT Pursuant to Article X of Award of Arbitration Board No. 559, the following shall govern the terms and conditions providing for the train service employees of the Peoria and Pekin Union Railway Company (P&PU RR), or it successor, to be placed on the United Transportation Union's Union Pacific Chicago and Northwestern (CNW) Lines Eastern Seniority District NO.1 train servce seniority roster. IT IS AGREED: ARTICLE I. Subject to the exceptions set forth in Article VI of this Agreement, the United Transportation Union shall furnish the Carrier a listing of employees with train service seniority, from the Peoria and Pekin Union Railway Company, or its successor, properly ranked among themselves, to be placed on the Union Pacific CNW Lines Eastern Seniority District No.1 roster. A. These employees with active train service seniority, shall be placed on the CNW Eastern Seniority District No. 1 roster, with a seniority date of January 1, NOTE: It is understood that both an active and an inactive roster will be maintained for the Peoria and Pekin Union Railway Company employees with train service seniority rights. Only the active P&PU train service employees will be placed on the Union Pacific CNW Lines Eastern Seniority District No. 1 roster. P&PU train service employees on the inactive P&PU roster will remain there until such time as they return to active service, wherein they will be placed in their proper seniority standing on the active P&PU roster and the CNW Lines Eastern Seniority District NO.1 roster. B. Trainmen that establish seniority on the Peoria and Pekin Union Railway Company, or its successor, after January 1, 2004, shall establish an identical seniority date on the Union Pacific CNW Lines Eastern Seniority District No.1 roster. November 10,2003 MOA

2 ARTICLE II. Trainmen who are placed on the Seniority Roster under Article I of this Agreement, shall only be allowed to exercise this newly-acquired Union Pacific seniority in the event that person cannot hold a position (including a position on an extra board) through the normal exercise of seniority on the Peoria and Pekin Union Railway Company, or its successor. This paragraph does not permit train service employees in a dismissed status on the Peoria and Pekin Union Railway Company to exercise their newly acquired seniority to the Union Pacific, unless returned to actise service. A. Pursuant to the conditions set forth in UPRR/CNW Lines Rule 94, trainmen who qualify to exercise this newly-acquired seniority shall advise the appropriate Officer of the Union Pacific Railroad Company and the UTUlCNW General Chairman of this desire within a fifteen (15) day period following the date the trainman was unable to hold a position through the normal exercise of seniority on the Peoria and Pekin Union Railway Company. A trainman exercising seniority to the Union Pacific pursuant to the terms of this Agreement, must demonstrate furlough status by providing the Union Pacific Railroad and the UP/CNW General Committee a copy of the "furlough letter" from the P&PU RR. Note: The addresses and telephone numbers of the appropriate UP office and the UTUlCNW General Committee of Adjustment are as follows: Union Pacific Railroad Manager of Manpower Planning WT Dodge Street Omaha, NE (402) UTUlCNW General Committee of Adjustment 307 W. Layton Avenue Milwaukee, WI (414) B. P&PU Trainmen exercising this newly-acquired seniority shall be held to the same physical standards as existing Union Pacific CNW Lines Eastern Seniority District No. 1 trainmen, and shall not be subjected to a "special" physical examination prior to exercising this newly-acquired seniority. 1) This Section B does not eliminate the Carrier's right to require a trainman to submit to physical examination for cause. The intent of the Section is to prohibit the Carrier from 2 November 10, 2003 MOA

3 establishing a special physical examination, or standard, as a blanket policy to be applied only to Peoria and Pekin Union Railway Company employees exercising seniority pursuant to the terms of this Agreement to position(s) on the Union Pacific CNW Lines Eastern Seniority District No.1. 2) For purposes of determining the number of Personal Leave (PL) days that an trainman is entitled to under Presidential Emergency Board 213 (CNW), as amended by the CNW/UTU December 13, 1991 Crew Consist Agreement, the earliest continually maintained UTU train service seniority date that the trainman established on the Peoria and Pekin Union Railway Company, shall be used. In cases where a train service employee exercises seniority to the Union Pacific CNW Lines Eastern Seniority District No.1, that trainman's entitlement to Personal Leave Days for the remainder of that year shall be prorated for the number of month(s) and portion thereof, rounded to the next whole number, remaining in the calendar year, divided by the number of the individual's maximum annual PL days. This will result in the allowable number of prorated PL days and fraction thereof, rounded to the next whole number, due for remainder of the }ear. Example: A P&PU trainman exercises his/her seniority pursuant to the terms of this Agreement on June 16, to the Union Pacific, and consist with his/her seniority date, is entitled to a maximum of eleven (11) PL days. The trainman would be entitled to 7/12th's of the eleven (11) PL days. This equals is 6.41 PL days, when rounded to the next whole number this individual, will be entitled to seven (7) PL days for the remainder of the year. C. Trainmen exercising seniority to the Union Pacific CNW Eastern Seniority District No. 1 roster under the terms of this Agreement shall not be considered as "new" employees for the purposes of applying the provisions of health and welfare provisions, e.g. these trainmen shall not be subject to any waiting period that may be applicable to "new-hires" before coverage becomes effective. ARTICLE III. Trainmen who qualify to exercise seniority on the Union Pacific CNW Eastern Seniority District No.1 roster pursuant to the terms of the Agreement are subject to a thirty (30) day recall to the Peoria and Pekin Union Railway Company, or its successor, by certified letter to the last kno'ml address provided to the Carrier. 3 November 10, 2003 MOA

4 Trainmen who do not respond to recall to the Peoria and Pekin Union Railway Company within thirty (30) days shall forfeit all seniority on the Peoria and Pekin Union Railway Company, as well as all seniority on the Union Pacific Railroad CNW Eastern Seniority District NO.1 rosters. ARTICLE IV. Trainmen exercrsmq seniority under the terms of this Agreement to the Union Pacific Railroad will not be considered as being qualified as conductors, nor will they be considered as "new hires" subject to the terms of the New Hire Training Agreement dated October 31, In order to qualify as a conductor, the trainman may be required to attend the classroom portion of the training program subject to Section VI of the aforementioned New Hire Training Agreement. Trainmen who attend such classroom training will be paid for each week of classroom training on the same basis as if they were on vacation, they will be covered by the same provisions relating to travel, meal and lodging expenses that cover trainees under the New Hire Training Agreement, and they shall be required to pass the examination(s) normally administered by the Union Pacific Railroad for promotion to conductor. The trainmen will be required to participate in a sufficient number on-the-job training trips and will be paid as though they were a working conductor on the assignments. ARTICLE V. Trainmen establishing seniority on the Union Pacific CNW Eastern Seniority District No. 1 roster pursuant to this Agreement and working as such, shall not make application for, nor will they be selected for, or forced into the Locomotive Engineer Training Program, unless the trainman has worked on the Union Pacific CNW Eastern Seniority District No.1, for a continuous period of more than one (1) y:!ar. ARTICLE VI. The following categories of train service employees shall not be placed on the Union Pacific CNW Eastern Seniority District No. 1 roster, nor shall any trainman meeting any of the following categories be placed on the Union Pacific CNW Eastern Seniority District No. 1 roster upon establishing an employment relationship with the Peoria and Pekin Union Railway Company, or its successors after the effective date of this Agreement. A. Individuals who had an employment relationship with any owning Carrier or any former railroad component thereof and haw been dismissed for cause, and not subsequently reinstated with seniority unimpaired. B. Trainmen who had an employment relationship with Union Pacific Railroad Company, or any former railroad component thereof, and separated with the understanding that the railroad had no obligation to consider the individual for future employment. This Section B shall not apply to trainmen who have separated pursuant to the terms of a collective bargaining agreement, or under the terms of a 4 November 10, 2003 MOA

5 voluntary separation agreement that was not associated with the settlement of a specific claim or dispute. C. Trainmen who had an employment relationship with Union Pacific Railroad Company, or any former railroad component thereof, and separated with the understanding that the individual would not seek re-employment with the railroad. This Section C shall not apply to trainmen who have separated pursuant to the terms of a collective bargaining agreement, or under the terms of a voluntary separation agreement that was not associated with the settlement of a specific claim or dispute. D. Trainmen who had an employment relationship with any owning Carrier who are otherwise estopped from seeking rs-ernploynent with the railroad. ARTICLE VII. This Agreement is made without prejudice to either parties' position on the matters contained herein and will not be cited for any reason outside the realm of this Agreement. ARTICLE VIII. Where the Rules, practices or interpretations conflict with this Agreement, the provisions of this ~reement will apply. Signedth~tt effective I day of ~JJ, 2003, in Omaha, NE, to be,2004, unless specified different herem. FOR THE UNITED THE UNITED TRANSPORTATION UNION: FOR THE UNION PACIFIC RAILROAD: Asst. Director Labor Relations ~ Terry M. Stone Director Labor Relations Approved: ecdjcdj {)~ Patrick D. Drennan Vice President - UTU General Manager (P&PU) 5 November 10,2003 MOA

6 UNION PACIFIC RAILROAD COMPANY 1416 DODGE STREET OMAHA, NEBRASKA Side Letter No.1 November 10, 2003 Mr. J. W. Babler, GC UTU/UP Mr. E. J. Kavanaugh, GC P&PU RR Mr. P. D. Drennan, VP UTU Mr. T.M. Stone, Dir LRIUP Mr. J.C. Freedman, GM P&PU RR Gentlemen: On November 10, 2003 the parties signatory hereto met pursuant to the notice served by the United Transportation Union representative on the Peoria and Pekin Union Railway (PPU), requesting that the PPU trainmen be placed on the bottom of the Union Pacific Eastern 1 Seniority Roster, under the provisions of Article X of Arbitration Board 559 ( 1996 National Agreement). That meeting has resulted in an Implementing Agreement, dated Nov. 10, 2003, that places existing and future PPU trainmen on the UP seniority roster, which will be effective January 1, During these negotiations it was discussed that the PPU was accepting bids that may result in a change of ownership. Based upon this possible change in ownership, the parties have agreed to adopt this side letter, which would amend the provisions of the Agreement dated Nov. 10, Article X of the 1996 National Agreement was adopted by the Class 1 Railroads and numerous Terminal Companies, which were identified by the signature page attached to the 1996 Agreement. The Peoria and Pekin Union Railway was one of the Terminal Companies identified as being signatory to this National Agreement, and the Union Pacific Railroad is a partial owner of the PPU. Thus the parties have agreed to the terms and conditions in which the PPU trainmen will be placed onto the UP seniority roster, and when the newly acquired seniority may be utilized. In the event the PPU Railway is sold to another Company that is not a party to, or signatory to the 1996 National Agreement; or if the Union Pacific ceases to be a partial owner, the November 10, 2003 Implementing Agreement will be canceled, and the following provisions will apply. All PPU trainmen listed on the Union Pacific CNW Lines Eastern Seniority District No.1 roster on the date in which the PPU Railway changed ownership to a non-1996 National Agreement participant, or if the Union Pacific ceases to be a partial owner of same, will have thirty (30) days to exercise seniority to the Union Pacific, or they may remain with the Terminal company. If such employees exercise their seniority onto the

7 Side letter No. 1 Page 2 Union Pacific, they will not be permitted to hold seniority on the Terminal Company. Any employee remaining on the Terminal Company after the expiration of the thirty (30) day period will be removed from the Union Pacific seniority rosters. Trainmen electing to exercise seniority to the Union Pacific following a change in ownership, or Union Pacific ceases to be an owner, will be entitled to all provisions of Article X of Arbitration Board 559, as well as the November 10, 2003 Implementing Agreement, as it pertains to wages and benefits. If this accurately reflects our understanding, please indicate your acceptance and concurrence by signing in the spaces provided below. Agreed: ~~ D.B. Foley Asst. Dir. Labor Relations ~~ M t7jqhi;w. Babler General Chairman - UTU Terry M. Stone Director Labor Relations - UP 4~~ Edward avanaug General Chairman - P&PU RR -9(-1~ John C. Freedman General Manager - P&PP RR Approved: rm-qj:yv~ Patrick D. Drennan Vice President - UTU. November 10, 2003

8 r at.e 1 (a).year o IV, have Tided lt is oreby 3 not «rept -21- level grievance, claim and disciplinary proceedings on carrier1. on the date such other organization terminates exclusive representation rights; and such its (ii) if no organization is exercising the exclusive right to represent all locomotive engineers in company-level grievance, claim and disciplinary proceedings on such carrier, on the effective date of this Article. ~ction 3 This Article shall become effective June 1, 1996 and is not intendedto restrict any of the existing rights of a carrier except as specifically provided herein. AATICLE X - TERMINAL COMPANIES ~ S.ection 1 (a) The authorized representative of the organization may ma:~e a written request to any terminal company party to this "-'~ment that the seniority roster on such company be placed on.ttom of a contiguous seniority roster of a designated owning party to this Agreement, with all prior rights and sibilities maintained. Representatives of the organization, erminal company, and its designated owning line shall meet. thirty (30) days thereafter to discuss implementation of equest. If a terminal company has more than one owning line d by this Article, the terminal company employees (as a shall designate the owning line on whose roster all such Des will be placed. An employee covered by this Article who exercises on the designated owning line shall be treated as a new, provided, however, that such employee shall be credited of his train and engine service with the terminal company for purposes of rules pertaining to vacation qualification!, progression.. An employee covered by this Article who exercises y on the designated owning line shall be governed by the ~ bargaining agreement bf such owning line. If the parties have not reached agreement within ninety after receipt of the organization's proposal, either refer the matter to final and binding arbitration as set,his Section.

9 -22- (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 borne equally by the parties. (c) The arbitrator's jurisdiction shall be limited to unresolved issues concerning how the seniority rights of employees covered by this Article will be established on the designated owning line's seniority roster. The arbitrator's decision shall be rendered within thirty (30) calendar days from the date the appointment is accepted. Section 3 This Article shall become effective June 1, 1996 and is not intended to restrict any of the existing rights of a carrier except as specifically provided herein. ARTICLE XI - ENHANCED CUSTOMER SERVICE Article VIII - Special Relief, Customer Service - Yard Crews of the UTU Implementing Document of November 1, 1991, Document A, 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. dete pro" det pare wi1] 1f, the reft wit eit lis eho sue ag:t sho whe se) e){.( th( no' co' re in d e: p p m 9 a 'If, (c) A Joint Committee, comprised of an equal number of carrier representatives and organization.representatives, shall

10 I ' ATTACHMENT A TERMINAL COMPANIES SUBJECT TO ARTICLE X f s r o Alameda Belt Line Railway - 1 Alton & Southern Railway Camas Prairie Railroad Company Houston Belt and Terminal Railway Los Angeles Junction Railroad Company - 1 Norfolk and Portsmouth Belt Line Railroad Company Peoria and Pekin Union Railway Company Port Terminal Railroad Association Portland Terminal Railroad Company Sacramento Northern Railway - 1 Terminal Railroad Association of St. Louis Wichita Terminal Association - 1 Winston Salem Southbound Railway Company - 1.e NOTE: 1 - Article X not applicable with' respect to Yardmasters Department - United Transportation Union.

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