The purpose of this agreement is to provide for expedited changes in services, facilities, operations, seniority districts, and collective bargaining agreements to effectuate the merger approved by the Surface Transportation Board in Finance Docket No. 32974. The purpose is also to allow the merged company proposed in that Finance Docket to be immediately operated in the most efficient manner.

ARTICLE I WORKING CONDITIONS

Section 1 Through Freight Service Headquartered at Seattle or Tacoma or Pasco

A. The schedule agreements and rates of pay between the Brotherhood of Locomotive Engineers and the Burlington Northern Railroad Company (former Northern Pacific Railway Company), as amended by subsequent agreements (including this one), will apply to this service.

B. Ellensburg, Washington shall be the away-from-home terminal for Engineers operating between Pasco -Ellensburg and Seattle / Tacoma - Ellensburg

C. Service between Pasco and Ellensburg shall be protected by the Pasco source of supply.

D. Service between Seattle or Tacoma and Ellensburg shall be protected by the Seattle or Tacoma source of supply.

1. Trains originating at Seattle, or between Seattle and Auburn, or at Auburn shall be protected by the Seattle source of supply

2. Trains originating at or between Auburn and Tacoma, or at Tacoma (or transferred to Auburn from Tacoma), will be protected by the Tacoma source of supply.

3. In the event one source of supply is exhausted, the other source of supply shall be utilized.

4. Engineers operating in unassigned service between Seattle or Tacoma and Ellensburg will operate first-in/first-out at Ellensburg for return service to Seattle or Tacoma, but will not be tied up at other than the on-duty location associated with the preceding trip between Seattle or Tacoma and Ellensburg.

E. Engineers reporting for service at Seattle, Tacoma, or Pasco will go on and off duty at the usual location where engineers normally report for or are relieved from duty.

F. The Carrier will designate the reporting and off-duty point at Ellensburg.

G. Lockers and washroom facilities will be provided by the Carrier at Ellensburg for away from home terminal Engineers operating in this service.

Where existing agreements require parking or other equipment facilities at the away from home terminal, they will also be provided by the Carrier.

H. Service may be protected by the extra board, an existing pool, or a separate pool, depending upon traffic volumes and patterns. Initially this service shall be protected by the extra board at the appropriate source of supply. Other alternatives may be agreed to locally.

I. In the event the train crew is afforded a meal period, the Engineer will be likewise afforded a meal period.

Section 2     Service Headquartered Between Pasco and Auburn

A. The schedule agreements and rates of pay between the Brotherhood of Locomotive Engineers and the Burlington Northern Railroad Company (former Northern Pacific Railway Company), as amended by subsequent agreements (including this one), will apply to this service.

B. Only insofar as it is applicable on the territory between Pasco, WA., and to and including Cle Elum, WA.,

Memorandum of Agreement dated April 14, 1988, OPS 1-88, is replaced as follows:

1. To establish assignments for engineers in this service, the Carrier will issue bulletins that will contain the following information: (1) territorial limits of the assignment, (2) home terminal of the assignment, (3) days of the week service is to be performed, (4) on-duty time, (5) rest days (if applicable), and (6) the date that the assignment will be established.

2. Engineers assigned to this road-switches service may be run back and forth over the territory within the limits of the assignment, and into, out of, and through terminals without pay in addition to that provided by this agreement. Rules covering terminal switching and terminal delay shall not apply to road-switches service.

3. Engineers working in assigned or unassigned service, other than road-switches assignments, may perform any service within road-switches limits without penalty occurring by reason of this agreement

Nothing herein shall be interpreted as establishing "road-switches" as a different class of service within the meaning of the more than one class of road service rule.

4. These assignments shall not operate within the general switching limits at Pasco, WA, except to deliver or receive the train.

5. Compensation shall be computed on a continuous time basis at the local freight rate applicable to the weight on drivers. Overtime will commence at the expiration of eight (8) hours from the time on duty and will be computed on a minute basis at the rate of three-sixteenths (3/16) of the daily rate applicable to the tour of duty

6. An assigned road-switches engineer who is required to work less than the bulletined number of days of the assignment will be compensated under BLE/NP Schedule Rule 65.

7. Assignments must be made on a turnaround basis with the on-duty and off-duty point being the same. Assignments will be established for either five, six, or seven days per week. On five-day assignments the rest days shall be consecutive.

8. The National Holiday Agreement provisions shall apply to these assignments.

9. The starting time for any assignment may be changed up to four (4) hours without the requirement of re-bulletining provided that the engineers are informed of the change before being released from duty on the workday before the change takes effect.

NOTE: When an Engineer's starting time is changed as provided above, that Engineer will constructively go under pay at the new starting time on the day of the change. This provision does not preclude the Carrier from annulling the job and providing compensation as otherwise provided by this Agreement

10. Any assignment may be abolished upon notice to the engineer prior to being released from duty on the workday before the effective date of the abolishment.

11. Employees on assignments established under this Section shall be entitled to payment for held-away-from-home terminal time in the event they otherwise qualify for such payment.

C. The Carrier has the right to establish a Guaranteed Extra Board at Yakima under the terms of Memorandum of Agreement effective May 1, 1994. So long as an Extra Board is maintained at Yakima, it will protect all extra service that goes on duty between Pasco and Cle Elum, except through freight service or assignments protected by the Seattle, Tacoma, or Pasco source of supply.

A. This Article applies to Former Washington Central Railroad "TSR" Employees Who Are Qualified Locomotive Engineers.

B. Employees will be ranked amongst themselves based upon their earliest hiring date with the Washington Central Railroad. Employees with the same hiring date will be ranked amongst themselves based upon their earliest hiring date with a Class 1 railroad. If the forgoing process does not result in a specific ranking order, ties will be decided amongst those employees involved by a random drawing of names, with the first drawn name ranked ahead of the second drawn name, and so on.

C. After ranking is complete, the employees addressed by Paragraph B of this Article will be placed on the bottom of the Pacific Seniority District Roster for engineers in their relative standing with seniority dates coinciding with the effective date of the transaction.

D. These employees shall have "prior rights" subject to the conditions set forth in Article III of this Agreement.

E. Except as provided by Paragraph F below, in the event one of these employees elects to exercise the acquired Pacific Seniority District Seniority outside of the prior rights district, that individual's prior rights entitlement will be forfeited.

F. Former WCRC employees having prior rights as defined above shall be afforded a one-time opportunity to exercise seniority to a non-prior rights position for a period of up to thirty (30) days without forfeiture of their prior rights. Such employees choosing to avail themselves of this opportunity must submit a bid sheet listing the desired non-prior rights position(s). Upon being notified that s/he is the successful applicant, the employee must advise the General Chairman (with a copy to the involved Local Chairmen), in writing, that this is to be considered the one-time exercise of seniority. In the event such employee remains on a non-prior right position in excess of thirty (30) days dating from the date first assigned outside of the prior rights zone, such employee shall be considered to have elected the position and will forfeit prior rights as provided by Paragraph E above.

G. Attachment B, Section 3 ,"Zones; Pacific District-Seattle-Auburn Zone and Tacoma Zone" on the BN-BLE Implementing Agreement No. 1 (Gold Book) will be amended as necessary to provide:

Seattle-Auburn Zone: add Seattle-Ellensburg

Tacoma Zone add Tacoma-Ellensburg

H. Employees subject to this Agreement who do not remain with the new Company will be removed from the Pacific Seniority District Roster.

I. When calculating entitlement to personal leave days or the number of vacation weeks due an employee, former WCRC employees will utilize the earliest continuous service date established on the WCRC.

ARTICLE III PRIOR RIGHTS

A. Currently the Washington Central Railroad has the following engine service positions:

Yakima

2 Switch Engineers
4 Local Engineers

Gibbon

2 Local Engineers
8 engine service positions shall be identified by the Brotherhood of Locomotive Engineers Representative as "prior rights" positions.

B. Prior rights positions shall be designated on assignments or extra board positions that are headquartered between Pasco and Cle Elum, or at Cle Elum.

C. In the event work owing to former WCRC prior rights is changed such that it is headquartered at Pasco (the YPT job, for example) it will be manned as follows:

1. If the job is an assignment, the assignment will be considered to be a WCRC prior rights assignment and subject to bidding accordingly:

2. If the work is handled by crews in the Pasco-Ellensburg pool, an allocation will be made in the Pasco-Ellensburg pool and apportioned to prior righted former WCRC employees on a mileage ratio basis.

3. Should former WCRC prior righted engineers decline to bid positions provided in (1) and (2) above, the position will be filled from the Consolidated Pacific Seniority District Roster.

D. Employees granted prior rights under Article II (D) shall have preference to the identified positions over other employees holding seniority on the Pacific Seniority District.

E. In the event a former WCRC employee declines to exercise seniority to an allocated position, that employee shall thereafter forfeit the preferential rights provided by this Agreement.

F. As the number of employees with prior rights declines below the number 8 (either through attrition or by forfeiture as provided under Article II (E) or (F)), the number of so-called "prior-righted" positions will likewise decrease. When "prior-righted" positions are to be reduced, the Brotherhood of Locomotive Engineers Representative will determine the positions) that will lose the prior rights designation.

ARTICLE IV PROTECTION

A. This Agreement is made pursuant to the New York Dock Conditions (Finance Docket 32974) which, by this reference, are incorporated here.

B. Employees who, as a result of this transaction, cannot obtain a position on the Seniority District except through a change in residence, will receive the relocation benefits contained in Attachment "A" to this Agreement if both of the following conditions are satisfied:

1. The Carrier instructs the employee to report to a specific location on the Seniority District due to a need for additional employees.

2. The employee reports to the location specified by the Carrier, assumes service and actually relocates to the new location.

NOTE: This provision does not apply to the exercise of seniority to positions protected by the original source of supply.

ARTICLE V INTERIM AGREEMENT

Upon the effective date of this Implementing Agreement, the Interim Agreement signed October 2, 1996, will expire.

This Agreement is effective March 16, 1997 and will continue in effect until changed in accordance with the provisions of the Railway Labor Act, as amended

Signed this 3 rd day of March, 1997.

Mr. D.L. McPherson
General Chairman BLE
Army Corps of Engineers Building
190 East 5th Street
Suite #105
Saint Paul, MN. 55101

Dear Mr. McPherson,

In connection with Implementing Agreement signed this date concerning Finance Docket 32974, the parties agreed to embrace a significant portion of the collective bargaining agreements applicable to the former Northern Pacific Railway Company for application on this territory. We made this decision for a variety of reason that include, but are not limited to, the fact that this territory would be incorporated into the Pacific Seniority District and former WCRC employees would be granted seniority on that Seniority District. With that in mind, we were faced with the option of either rewriting rules that provide for the exercise of seniority on the Seniority District or incorporate a system that has been in place for many years that both crew management and the employees understand. We elected the latter.

During the negotiations leading to this Agreement, it was clearly understood that adopting and modifying the former Northern Pacific collective bargaining agreements on this territory was done without prejudice to the Carrier's position that there is no support for a position contending that the Carrier is obligated to reinstate collective bargaining agreements when a portion of a railroad is sold by a Carrier, and later acquired by that same Carrier.

If the foregoing accurately reflects our understanding, please affix your signature in the space provided below.

SIDE LETTER NO. 2

Mr. D.L. McPherson
General Chairman BLE
Army Corps of Engineers Building
190 East 5th Street
Suite #105
Saint Paul, MN. 55101

Dear Mr. McPherson,

In connection with Section 1.2 of Implementing Agreement signed this date concerning Finance Docket 32974.

During negotiations you asked how the Carrier planned to initially advertise the assignments between Pasco and Cle Elum and at Cle Elum. It is my understanding that the assignments will initially be structured as follows:

Yakima

8:00 a.m. General yard switching and provide service to local customers. 6-day road-switcher assignment. Territorial limits Gibbon-Cle Elum, including all branches and industrial track.

10:30 a.m. General yard switching, primarily on the U.P. side, service to Toppenish and Wapato. 5-day road-switcher assignment. Territorial limits Gibbon-Cle Elum, including all branches and industrial track.

1:00 p.m. General yard switching and service to Cle Elum (M-W-F) and the Moxee City / Naches territories (T-Th). 5-day road-switcher assignment. Territorial limits Gibbon-Cle Elum, including all branches and industrial track.

8:00 p.m Service between Yakima and Pasco (the former YPT job). 7-day assigned through freight. Territorial limits Yakima-Pasco, including all branches and industrial track.

2-person engine service extra board.

Prosser:

7:00 a.m. Service between Pasco, Yakima, Gibbon, and Zillah (Granger). 6-day road-switcher assignment. Territorial limits Pasco-Yakima, including all branches and industrial track.

Kennewick

10:00 P.M. Service between Pasco and Yakima, including all branches and industrial tracks. 6-day road-switcher assignment. Territorial limits Pasco-Yakima, including all branches and industrial track.

The forgoing is for information only and does not constitute an agreement as to the number of jobs that will either be created or maintained, nor does this letter suggest that the description of the anticipated duties associated with each assignment in any fashion restricts what the assignments may do. There are no restrictions as to how these road-switcher or through freight assignments are operated, except as contained in Article I, Section 2 of this Agreement.

If the foregoing accurately reflects our understanding, please affix your signature in the space provided below.

SIDE LETTER NO. 3

Mr. D.L. McPherson
General Chairman BLE
Army Corps of Engineers Building
190 East 5th Street
Suite #105
Saint Paul, MN. 55101

Dear Mr. McPherson,

Article II, paragraph B of Agreement signed this date provides the procedure whereby former WCRC "TSR" employees, who are qualified as locomotive engineers, will be ranked amongst themselves prior to being placed on the Pacific Seniority District Roster for Engineers. This letter will serve to confirm our understanding that these employees may be ranked by any method acceptable to the affected employees, so long as a proper list is provided to the General Chairman and the Assistant Vice President of Labor Relations on or before the effective date of this Agreement.

If the foregoing accurately reflects our understanding, please affix your signature in the space provided below.

SIDE LETTER NO. 4

Mr. D.L. McPherson
General Chairman BLE
Army Corps of Engineers Building
190 East 5th Street
Suite #105
Saint Paul, MN. 55101

Dear Mr. McPherson,

Former WCRC employees who are qualified as locomotive engineers may elect to relinquish their certification as a locomotive engineer by advising the General Chairman and the Assistant Vice President of Labor Relations, in writing, within thirty (30) days of the effective date of this Agreement. Employees electing the option provided by this Side Letter will not be placed on the Pacific Seniority District Roster for Engineers.

This election does not relieve the employee's obligation to accept promotion under the 1985 National Agreement with the United Transportation Union or the 1986 Award of Arbitration Board No. 458 involving the Brotherhood of Locomotive Engineers.

If the foregoing accurately reflects our understanding, please affix your signature in the space provided below.

SIDE LETTER NO. 5

Mr. D.L. McPherson
General Chairman BLE
Army Corps of Engineers Building
190 East 5th Street
Suite #105
Saint Paul, MN. 55101

Dear Mr. McPherson, In connection with Article I, Section 2, Paragraph G, of Implementing Agreement signed this date, this letter will serve to confirm our discussion concerning the Carrier's obligation to provide the facilities addressed by this portion of the Agreement. We discussed the logistical, as well as political difficulties of providing these permanent facilities because, among other things,

Ellensburg is located on the Tacoma watershed. During negotiations I committed to you that permanent facilities would be provided as soon as reasonably possible. In the meantime, I also indicated to you that some type of temporary facilities would be provided in order to meet the spirit and intent of the Agreement to the fullest possible extent.

If the foregoing accurately reflects our understanding, please affix your signature in the space provided below.

ATTACHMENT A

Section 1

The following benefits will apply to employees permanently transferred under Article N (B) of the Agreement.

Section 2

A. Transfer Allowance

1. The transferred employees will be afforded a transfer allowance of $20,000 payable as follows:(i) $10,000 payable within 30 days after the date of transfer.

(ii) $5,000 payable one year after the date of transfer.

(iii) $5,000 payable two years after the date of transfer.

2. The amounts listed in (ii) and (iii) will be payable provided the employee is still in the employ of the Carrier.

B. An employee transferring under this package who makes a bona ode change in residence to another terminal will be reimbursed for expenses of moving household and other personal effects, including living expenses for the employee and family while traveling and loss of wages during the time necessary for such transfer (not to exceed five (5) working days).

C. The employee and spouse will be allowed up to a five (5) day house hunting trip; without loss of wages, prior to date of transfer with expenses for mileage or round trip coach class airfare, lodging and meals paid by Carrier (type of transportation and lodging facility to be determined by Carrier). Additionally, reimbursement of up to $200 for child care will be allowed during the house hunting trip.

Note 1: An employee will receive the authorized mileage allowance (currently 31 cents per mile) for transporting not to exceed two personal motorized vehicles by the most direct route between his former home and his new location. Automobiles and boats will not be authorized for shipment in moving van.

Note 2:  An employee may elect to receive a cash payment equal to the moving company's estimate to move household and other personal effects, with a maximum of $5,000, which shall be paid within 30 days of actual relocation of residence.

D. The employee will be allowed up to thirty (30) calendar days temporary living expenses (facility to be determined by Carrier) while waiting for permanent residence at the location being transferred to.

Note: In lieu of approved temporary living expenses, an employee may elect to receive a cash payment of $1.500.

Section 3 Real Estate Benefits

Real estate benefits under this section will only be applicable for employees who own their homes and are required to move and only if the employee has not received real estate or lump sum benefits for that same home in the past. In order to qualify for the benefits provided herein, an employee must own his/her home as of the date of this Agreement.

NOTE: As clarification, "owns" also means purchasing.

A. If the employee owns his/her own home and is required to move, he shall at his option be reimbursed by the Carrier for any loss suffered in the sale of this home for less than its fair market value, including all of the usual and customary closing costs to the seller, such as real estate commission paid to a licensed Realtor, title insurance fee, reconveyance fee, revenue stamps and prepayment penalty on existing mortgages, but shall not include the payment of any "points" by the seller.

B. If employee is unable to sell his home within three months of agreed upon appraisal, the Carrier will purchase the home for fair market value, with employee providing marketable title.

C. An employee who desires to avail himself/herself of option A or B must include is listing agreement with any Realtor the following provision:

"It is understood and agreed and that regardless of whether an offer is presented by a ready, willing and able buyer.

1. No commission or compensation shall be earned by, or be due and payable to, broker until the sale of the property has been consummated between seller and buyer, the deed delivered to the buyer and the purchase price delivered to the seller; and

2. The Sellers reserve the right to sell the property to [Name of Relocation Company] or [Name of any other party to be covered by this exclusion clause] (individually and collectively a "Named Prospective Purchaser") at any time. Upon the execution by a Named Prospective Purchaser and me (us) of an Agreement of Sale with respect to the property, this Listing Agreement shall immediately terminate without obligation on my (our) part or on the part of any Named Prospective  Purchaser to either pay a commission or to continue this listing.

Note: Type exclusion clause into body of listing agreement -do not just attach."

Note 1: In the event the appraised fair market value of an employee's home, excluding mobile homes, is less than the original purchase price of such home, the employee will be reimbursed for any loss suffered in the home's sale (not to exceed $10,000) providing such home has been adequately maintained by the employee. The original purchase price will be determined by presenting proof from the lending institution holding the mortgage of such home.

Note 2: In each case, the fair market value of the home in question shall be determined as of the date sufficiently prior to the change in operations to be unaffected thereby. The Carrier shall in each instance be afforded an opportunity to purchase the home at such fair market value before it is sold by the employee to any other party.

Note 3: Should an employee transferring under this Agreement have a contract (offer made and accepted) to purchase a home and needs funds for closing, the Carrier will purchase the employee's home is less than the three months provided in Paragraph B above at the agreed upon fair market value.

Note 4: In order to be eligible for the real estate benefits of this section, a home must be certified as in salable condition and structurally sound, subject to inspections at Carrier's expense. Necessary repairs to make home in salable condition are employee's expense and not reimbursable..

D. In lieu of the real estate benefits provided above, an employee required to change his/her place of residence under this package may elect to receive a lump sum of 15% of the appraised fair market value of their home, not to exceed $15.000. The employee will be permitted to retain title to the home and will retain responsibility for any and all indebtedness, if any, outstanding against the home. The Carrier will assume no liability whatever in connection therewith. The amount shall be recovered from any employee who leaves Carrier's service voluntarily within one (1) year. An employee electing to receive the 15% of the appraised fair market value of his home will be entitled to make said option for a period of thirty (30) calendar days from the date of transfer.

E. If the employee is under a contract (contract for deed) to purchase his home, the Carrier shall protect him against loss to the extent of the fair market value of any equity he may have in the home and, in addition, shall relieve him from any further obligations under his contract.

F. If the employee holds an unexpired lease of a dwelling occupied by him as his home, the Carrier shall protect him from all loss and cost in securing the cancellation of his said lease.

G. No claim for loss shall be paid under the provisions of this section which is not presented within three years after the date of transfer.

H. The term "home" as used herein, means the single primary place of abode of an employee which is a structure consisting of not more than two (2) dwelling units (duplex), located on a building site of not more than one acre (or the number of acres consistent with state, city or county codes), which is utilized for residential purposes only.

I. Mobile homes are not covered by this agreement, except as set forth is this paragraph. Employees being relocated under this Agreement who own mobile homes and occupy them as their residence at their current locations, will be allowed the 15% set forth in Paragraph D, where value is determined using NADA Mobile Home Manufacturer Appraisal Guide. Employees will not be entitled to any other payments of benefits under this Section. An employee may, however, request that the mobile home be relocated to his new terminal, in lieu of the 15 %. If the law permits and the mobile home is moveable, it may be moved to his new terminal if the employee so elects. If moved, the Carrier will assume the cost of moving the mobile home.

Section 4 - Lump Sum

A. In lieu of the $20,000 transfer allowance, and all moving and real estate benefits in this package, an employee may elect a lump sum relocation allowance of $35.000 if the employee owns his place of residence, or $17, 500 if the employee does not own his place of residence, which will be paid within 30 calendar days of date of transfer. The lump sum allowance shall constitute the entire relocation benefits. If the employee voluntarily leaves the Carrier's service prior to expiration of 12 months from date of transfer, he must reimburse the Carrier the entire lump sum allowance, less taxes withheld. These must be repaid within one week of such action or by the other arrangements made with Carrier.

Section 5 - Fair Market Value

A. It is understood the fair market value of an employee's home will be determined prior to the employee being required to relocate.

Section 6 - Handling Disputes

A. Any dispute as to the fair market value of a home will be handled in accordance with THE APPROPRIATE SECTION OF WJPA

Section 7 - Transfer Forms

A. None of the moving and real estate benefits contained herein will be provided until Form 12602, Scheduled Employee Transfer

Notice, has been properly completed and forwarded to the Human Resources staff.

Section 8

A. This package, if offered and accepted, will be in lieu of any other moving benefit package, or elements of such packages.