MEMORANDUM OF AGREEMENT

BETWEEN

CSX TRANSPORTATION, INC.

and its railroad affiliates

AND THE EMPLOYEES REPRESENTED BY THE

BROTHERHOOD OF MAINTENANCE OF WAY EMPLOYES

WHEREAS, all issues relating to selection of forces, applicable collective bargaining agreements, seniority district organization, shop consolidations, subcontracting, Shared Asset Areas and disposition of the Conrail Supplemental Unemployment Benefit Plan have been resolved in the January 14, 1999 Arbitrated Implementing Agreement pursuant to New York Dock made with CSXT, NSR and CR through arbitration pursuant to Section 4 of the New York Dock labor protective conditions, and;

WHEREAS, the parties to this Memorandum of Agreement have, after reviewing the terms of said Arbitrated Implementing Agreement, wish to make voluntary adjustment to certain specific terms of said Arbitrated Implementing Agreement as it relates to CSXT;

IT IS THEREFORE AGREED:

Section 1. a. - As to CSXT the following provisions of the Arbitrated Implementing Agreement are replaced by the terms of this Agreement:

Section 1. b. - All other terms of the Arbitrated Implementing Agreement will remain applicable to CSXT.

Section 2 - The parties have agreed to a new single collective bargaining agreement with BMWE which will establish a consolidated workforce on the expanded CSXT System (Copy attached as Attachment "A"). By its terms, the new CSXT System BMWE Agreement will be effective on "split date" which is expected to be June 1, 1999.

Section 3 - The employees on allocated CRC lines to be operated by CSXT will participate in the CSXT System Production Gang Agreement, commencing with the 2000 production season. Except by mutual agreement of the parties, no SPG will perform work on the former CRC territory until the former CRC employees have had the opportunity to bid on positions on such SPG. For the remainder of the 1999 production season only, existing zone and region gangs, working on lines allocated to CSXT on "split date" will continue to work on the allocated Conrail lines operated by CSXT with vacancies resulting from employees allocated to NSR or the SM filled by available former Conrail employees allocated to CSXT and then offered to other available employees from other CSXT district if there are not sufficient available bidders. These vacancies will be bulletined to all former CRC employees as a group without regard to former Conrail seniority districts. Employees holding seniority in the vacant classification will be awarded positions in order of earliest seniority in the applicable classification. This interim arrangement will not set a precedent.

Section 4. a. - Twelve (12) new "Service Lane Work Territories" ("SLWTs") are hereby established for "floating; i.e.other than point headquartered" Track and Bridge and Facility positions falling into the category between System Production Gang work and basic point headquartered maintenance work; e.g., an AFE gang that would perform work over multiple seniority districts. Such gangs consisting of any number of employees may perform any work covered by the scope of the new Maintenance of Way Agreement and may be established effective on "split date". It is recognized that as these gangs are established a corresponding number of positions in floating district or other similar type gangs may be abolished. It is also understood that the establishment of SLWT gangs will not diminish the carrier’s right to retain or establish seniority district floating gangs where warranted. On the other hand the establishment of SLWT gangs will not be used as a device to eliminate basic maintenance forces (See Side Letter). A copy of a map and a listing of seniority districts contemplated in each SLWT are attached (Attachments "E" and "F"). Employees holding seniority on a seniority district that is split between more than one SLWT will only be obligated for protective benefit eligibility, including but not limited to SUB, to protect SLWT work op one SLWT, whichever is nearest In proximity to the employee’s place of residence.

Section 4. b. - The seniority rosters of the involved seniority districts within each SLWT specified in Attachment "F" will be dovetailed for the purpose of establishing a "list" to be used solely to administer bids and displacements to SLWT gang positions.

Section 4. c. - These work territories may be modified on thirty (30) days written notice as organizational structures of service lanes and operating divisions are changed. If requested, the Carrier will meet with the Organization to discuss any changes and concerns associated therewith.

Section 4. d. - Weekend travel allowance for employees assigned In SLWT gangs will be a flat weekly allowance of $50 ($75 for cases of 300 or more miles actual round trip travel), in lieu of the benefits of Section 5 of CSXT Labor Agreement 12-81-97.

Section 4. e. - In the event the number of SLWTs are reduced to 10 or less, the production gang lump sum bonus (up to 5 percent of his compensation earned on such gang during the applicable calendar year - up to a maximum of $1,000 - subject to qualifying) will be allowed to all employees on such SLWT gangs.

Section 4. f. - In the event the number of SLWTS are reduced below 10, the weekend travel allowance then applicable to System Production Gangs under CSXT Labor Agreement No. 12-81-97 will be allowed to all employees on such SLWT gangs.

Section 4. g. - If the Carrier wishes to reduce the number of SLWTs below 8, agreement with the Organization will be required.

Section 5 - All CSXT BMWE represented employees will be permitted to participate in CSXT’s Capital Builder 401(k) employee savings plan effective on "split date".

Section 6 - Effective "split date", former Conrail BMWE represented employees residing in Canada allocated to CSXT will be provided the Canadian Exchange Adjustment provided other CSXT BMWE represented Canadian employee.

Section 7 - In lieu of Article I, Section 1 (h) of the Arbitrated Implementing Agreement, the parties have agreed that three specifically identified projects an Conrail lines to be operated by CSXT mat be completed with contractors, if necessary (See attached list of projects). Otherwise, the subcontracting provisions of the various collective bargaining agreements will govern any subcontracting that is proposed between the effective date of this agreement and "split date". Thereafter, the terms of the National Subcontracting Rule (May 17, 1968, as amended by subsequent national agreement will govern subcontracting matters under the new CSXT System BMWE Agreement.

Section 8 - Conrail employees allocated to CSXT under Article I of Appendix A, of Attachment No. 1 and employees subsequently entering service an the Conrail line to be operated by CSXT shall be credited with prior service for vacation, personal leave and other benefits now provided under the CSXT System BMWE Agreement arid which am granted on the basis of qualifying years of service in the same manner as though all such time spent had been in the service of CSXT.

Section 9. a. - The former Conrail Buffalo, Cleveland, Columbus, Mohawk, New England and Southwest seniority districts (or the remaining portion operated by CSXT) will be preserved as separate districts under the CSXT System BMWE Agreement.

Section 9. b. - The portions of the Conrail Philadelphia and New Jersey seniority districts operated by CSXT will be combined and will be known as the Philadelphia/New Jersey District under the CSXT System BMWE Agreement.

Section 9. c. - The portions of the Conrail Chicago and Youngstown District will be combined with the existing B&O Akron/Chicago West seniority district. The portion of the Conrail Toledo seniority district will be combined with the C&O Hocking seniority district.

Section 9. d. - Employees for the split former Conrail districts specified in Sections 9 b and c will be selected by the bidding procedure stipulated In the Memorandum of Agreement dated March 17, 1999.

Section 9. e - The portion of the 8&O Ohio North seniority district at Chillicothe, Ohio will be combined with the C&O (Chesapeake) Northern seniority district. The portion of the C&O (Chesapeake) Hocking District at Gallipolis to Hobson and the portion of the B&O Ohio South at Belpre to Relief will be combined with the B&O Monongah West seniority district. The portion of the B&O Toledo East seniority district at Rossford Yard will be combined with the C&O (Chesapeake) Hocking seniority district. The C&O (Chesapeake) Newport News seniority district will be combined with the C&O (Chesapeake) Richmond seniority district. The portion of the SCL Florence/Savannah seniority district at Fernadina to Seale will be combined with the SCL Jacksonville/Tampa seniority district. Employees assigned to positions headquartered on the lines specified in this Section 9 e will be allowed the option of remaining on their positions and having their seniority transferred to their new district or making a displacement over any employee junior to them on their district holding positions outside the transferred territory. This election must be made in writing within ten (10) days of being notified in writing.

Section 9. f. - Positions in the Cincinnati, Ohio Coordinated Terminal will be awarded on the basis of seniority. Only employees who hold seniority on a seniority district that enters the Coordinated Terminal Area (i.e, B&O Toledo East, C&O Cincinnati/Chicago, and the L&N Cincinnati seniority districts) will be considered.

For bidding and displacement purposes only fat positions within the Coordinated Terminal Area, these three (3) rosters will be combined on a dovetailed "bid and displacement list" comprised of the enumerated rosters.

Section 9. g. -The Toledo Terminal district seniority rosters will be dovetailed into the C&C) Hocking seniority district rosters. With this action the coordination arrangement previously in place is canceled.

Section 9. h. - Employees on such combined rosters contemplated in Sections 9b, c, d, e and g above, (both Conrail and CSXT) 4iii have their seniority dovetailed and will be given preference for positions established with fixed headquarters located on their prior rights territory. Employees with seniority on multiple rosters (except where those rosters are being combined will be allowed to retain such seniority until recalled. Employees with seniority in multiple districts that are being combined will be granted a one time election of which seniority date and prior rights district they will retain.

Section 9. i. - In application of Appendix A, Section 1.B.2(c), of Attachment No. 1 to the Arbitrated Implementing Agreement, employees allocated to CSXT having only Regional seniority will be given a designated home seniority roster standing based on the location of their residence. They will not, however, obtain prior rights to point headquartered positions.

Section 10 - Seniority rights conferred by Conrail to former Conrail employees currently employed on any passenger agency will be recognized and said employee(s) will be permitted to exercise seniority in the same manner they could have, had the operation of portions of CSXT not occurred.

Section 11 - For convenience, references to gender, if any, in this Agreement are made in the masculine gender. It is understood and agreed by the parties to this Agreement that references to the masculine gender include both the masculine gender and feminine gender