LETTER of UNDERSTANDING
between
BNSF RAILWAY
and
BROTHERHOOD OF LOCOMOTIVE ENGINEERS AND TRAINMEN

The following Understanding was reached in conference today, wherein we verified proper rates of pay for road switchers on former Burlington Northern territories (former NP, GN, SPS, CBQ) resulting from the application of our on property settlements and the July 1,2007 BLET National and On Property Agreements. During our conference, we discussed the three different rate structures in effect for road switchers, (1) CBQ, (2) GN/SPS and (3) NP. The following reflects our understanding of how each respective road switcher rate was originally created, as well as how those resultant rates are to be adjusted going forward.

1. Former CBQ- It was understood in conference today that pursuant to BLE/BN Labor Agreement BN 4-14-88, OPS 1-88, all former CBQ road switchers (non trip rated) are to be paid on the basis of the CBQ Five Day Yard Rate based on weight on drivers of the locomotive consist used. The former CBQ five-day road switcher rate table will be corrected to reflect the same rates as the CBQ five-day yard rates and all former CBQ road switchers (non trip rated) will be paid using the resulting CBQ five-day road switcher rates. All GWI and COLA adjustments will be applied to the CBQ five day road switcher rates as they are applied to the CBQ five day yard rate; for GWI, the additive or differential for each weight on driver rate will be developed by applying the GWI to the "Less than 500,000 pounds" rate on the CBQ road switcher rate table and the amount so produced shall be added to each standard basic daily rate of pay on the CBQ five day road switcher rate table. For COLA, the daily value of the COLA will be added to each standard basic daily rate of pay on the CBQ five day road switcher rate table.

It is further understood that overtime payments, annulments, personal leave days and any other time or mileage based payments accrued while working a road switcher on former CBQ territories (non trip rate) will also be paid at the applicable weight on drivers rate on the corrected CBQ five-day road switcher rate table.

2. Former GN/SPS- It was understood in conference today that pursuant to BLE/BN Labor Agreement BN 4-14-88, OPS 1-88 and our March 5, 2004 settlement (attached), all former GN/SPS road switchers (non trip rated) are to be paid on the basis of the applicable GN or SPS Five Day Road Switcher Rate based on weight on drivers of the locomotive consist used. Pursuant to our March 5, 2004 settlement, the former GN/SPS 5 day road switcher rates were developed as follows. The GN/SPS five day road switcher rates in effect on July 1, 1997, which were equal to the five day yard rates in effect on July 1, 1997, were increased by applying a 4.85% increase to "Less than 500,000 pounds" rate on the GN and SPS road switcher rate tables. The additive or differential amount so produced was added to each standard basic daily rate of pay on the GN and SPS five day road switcher rate tables. All GWI and COLA's found in the June 1, 1996 and December 16, 2003 National and On Property Agreements were then applied as follows: The GN/SPS five day road switcher rates in effect are applying the 4.85% increase to the July 1, 1997 GN/SPS five day road switcher rates were increased by applying the applicable GWI increases to "Less than 500,000 pounds" rate on the GN and SPS road switcher rate tables and the amount so produced was added to each standard basic daily rate of pay on the GN and SPS five day road switcher rate tables. The daily value of any applicable COLA's was added to each standard basic daily rate of pay on the GN/SPS five day road switcher rate table.

The July 1,2007 Agreement was applied as follows: The GN/SPS day road switcher rate in effect on June 30, 2007 was reduced by removing the daily value of the four COLA's applied between July 1,2005 and January 1,2007 from each standard daily rate of pay on the GN/SPS five day road switcher rate table. The applicable GWI's found in the July 1, 2007 Agreement were then applied to the resulting June 30, 2005 value (pre COLA) of the GN/SPS five day road switcher rates as follows: the additive or differential for each five day road switcher weight on driver rate was developed by applying the GWI to the"Less than 500,000 pounds" rate on the GN/SPS road switcher rate table and the amount so produced was added to each standard basic daily rate of pay on the GN/SPS five day road switcher rate table.

All future GWI's will be applied in the same fashion; the GWI will be applied to the "Less than 500,000 pounds" rate on the then current GN/SPS road switcher rate table and the amount so produced will be added to each standard basic daily rate of pay on the GN/SPS five day road switcher rate table. For future COLA, the daily value of the COLA will be added to each standard basic daily rate of pay on the GN/SPS five day road switcher rate table. It is further understood that overtime payments, annulments, personal leave days and any other time or mileage based payments accrued while working a road switcher on former GN/SPS territories (non trip rated) will also be paid at the applicable weight on drivers rate on the corrected GN/SPS five-day road switcher rate table.

3. Former NP- It was understood in conference today that pursuant to BLE/BN Labor Agreement BN 4-14-88, OPS 1-88 and our November 28,2006 settlement (attached), all former NP road switchers (non trip rated) are to be paid on the basis of the applicable NP Five Day Road Switcher Rate based on weight on drivers of the locomotive consist used. Pursuant to our November 28, 2006 settlement, the former NP 5 day road switcher rates were developed as follows: The NP five day road switcher rates in effect on July 1, 2006, which were equal to the five day yard rates in effect on July 1, 2006, were increased by applying a 12.5% increase to "Less than 500,000 pounds" rate on the NP road switcher rate tables. The additive or differential amount so produced was added to each standard basic daily rate of pay on the NP five day road switcher rate tables.

The July 1,2007 Agreement was applied as follows: The NP five day road switcher rates in effect on July 1, 2006, which were equal to the five day yard rates in effect on July 1, 2006, (after applicable COLA's were removed and the July 1, 2005 and July 1, 2006 GWI were applied) was increased by 12.5% effective August 15, 2006 as follows: the additive or differential for each five day road switcher weight on driver rate was developed by adding a 12.5% increase to the "Less than 500,000 pounds" rate in effect on July 1, 2006 on the NP road switcher rate tables. The additive or differential amount so produced was added to each standard basic daily rate of pay on the NP five day road switcher rate tables. The NP five day road switcher rates in effect after applying the 12.5% increase to the July 1, 2006 NP five day road switcher rates were then increased by applying the July 1, 2007 1% GWI to "Less than 500,000 pounds" rate on NP road switcher rate tables and the amount so produced was added to each standard basic daily rate of pay on the GN and SPS five day road switcher rate tables.

All future GWI's will be applied in the same fashion; the GWI will be applied to the "Less than 500,000 pounds" rate on the then current NP road switcher rate table and the amount so produced will be added to each standard basic daily rate of pay on the NP five day road switcher rate table. For future COLA, the daily value of the COLA will be added to each standard basic daily rate of pay on the NP five day road switcher rate table.

It is further understood that overtime payments, annulments, personal leave days and any other time or mileage based payments accrued while working a road switcher on former NP territories (non trip rated) will also be paid at the applicable weight on drivers rate on the corrected NP five-day road switcher rate table.

The CBQ, GN, SPS and NP five day road switcher rates resultant from our understanding above are included and referenced with this Understanding as Attachments Q1-Q6, GN1-GN6, SPS1- SPS6 and NP1-NP12.