ALL LOCAL CHAIRMEN                                                  June 20, 2002

BNSF NORTHLINES                                                           File: 7/3 Overlay Agreements

Dear Sirs and Brothers:

Enclosed you will find a recently signed letter of understanding intended to clarify the

implementation process for overlay agreements, as well as adjustments to pools and or extra

boards that are working under an overlay agreements. The understanding is applicable to all

existing overlays as wel1 as those that are subsequently implemented. As an update, we recently

signed agreements for overlays in 4 of the 5 Pools and the Extra Board at Lincoln, Nebraska, the

Extra Board at Spokane, Washington, the South Pool at Alliance, Nebraska, the North Pool at

Sterling, Colorado as well as the Extra Board at Sterling. Implementation of these overlays will

be incremental between now and early July. Although there are still other locations desiring

overlay agreements, most of the involved boards are below 10 in number of assigned employees.

Although we have been unable to secure overlay agreements for those smaller boards, we are

continuing to explore other options. If your Division wishes to be considered for an overlay or

your previous request has not been addressed in some fashion, please contact the Office. If you

have any questions regarding the attached letter of understanding please advise as well.

Fraternally,

Dennis R. Pierce

General Chairman

June 14.2002

Mr. Dennis R. Pierce

General Chairman

Brotherhood of Locomotive Engineers

801 Cherry Street, Suite 1010

Ft. Worth, TX 76102

Dear Dennis:

This is to clarify current application of existing pool and extra board regulation agreements and

resultant adjustments for those pools and extra boards working under an Overlay Agreement.

When Overlay Agreements are implemented, turns will be advertised per existing agreements,

including the schedule of work and rest for each of the involved turns. Bids will be accepted for

each turn, seniority prevailing. After initial assignment, engineers will not move between turns

in the same pool or extraboard except as outlined in existing agreements or herein.

When pools or extra boards working under overlay agreements are adjusted due to regulation and

turns call to be removed, the junior employee assigned to the involved pool/board will be

reduced from the involved pool/board. If the junior employee on the involved pool/board is not

assigned to a work/rest cycle that needs to be reduced, the junior employee on the cycle needing

reduction will be reassigned to the cycle held by the junior engineer on the pool/board, reducing

the most junior man in the pool/board from the. involved pool/board. However. the engineer

reassigned to a new work/rest cycle will retain his existing position and standing in the

pool/board rotation.

If this reflects our understanding please indicate by signing below.

Sincerely,

George A. Smallwood

Assistant Vice President-Manpower,

Training & Operating Practices, BNSF

I Concur,

Dennis R. Pierce

General Chairman