II.        SENIORITY INTEGRATION AND CONSOLIDATION

The following seniority consolidations for Zones 2 and 3 will be made:

A.       1. New master seniority rosters for conductors, brakemen, yardmen (switchmen) and hostlers shall be created for Zone 2. The Zone 2 master seniority rosters will be comprised of the following:

a.        Employees holding seniority on the Oregon 3rd Seniority District;

b.       Employees holding seniority on the Oregon 4th Seniority District;

c.        Employees holding seniority on the Oregon 5th Seniority District;

      d.       Employees holding seniority on the former Spokane International Railroad ("SI") Seniority District;

e.       Employees holding seniority, pursuant to the Memorandum of Agreement dated October 1, 1982, effective November 1, 1982, "Hinkle North Consolidated Seniority District" or, pursuant to the Memorandum of Agreement dated December 16, 1996, on the Oregon Division Zone 2 Consolidated Seniority Roster (as amended by the September 16, 1998 Portland Hub Zone 1 Merger Implementing Agreement);

f.        Employees holding seniority on the UP Idaho Seniority District and, as of the date this Agreement is signed, assigned in the area for which Nampa is the source of supply (identified on Attachment "A") who elect pursuant to Article II, Section A, Paragraph 4.b.v. and Article VII, Section D, of this Agreement to permanently relocate to Zone 2; and,

g.       Employees holding seniority on Portland Hub Zone 1 and assigned to positions at Hinkle pursuant to Article II, Section B, Paragraphs 7.a. - 7.d. of the September 16, 1998 Merger Implementing Agreement for Portland Hub Zone 1 who elect, pursuant to Article II, Section A, Paragraph 4.b.iv. of this Agreement to permanently remain in this Zone 2.

2.        The Zone 2 master rosters shall include trainmen/yardmen on the rosters identified in Paragraph 1, above, who are borrowed out to other locations but will return to Zone 2 upon their release.

NOTE:         Employees who are borrowed out to locations on Zone 2 from other locations on the UP system, and who are
at their home terminal of their assignment on the date this Agreement is implemented must elect to remain in
Zone 2 or return to his or her home territory.
Employees who are at the away from home terminal of an assignment on the date of implementation will make
their election not later than return to the home terminal of such assignment. If such employees do not make an
election by the time this Agreement is implemented, except as set forth above, the employee will be
considered as having elected to remain in Zone 2 and will relinquish his or her seniority on their home territory.

3.       The Zone 2 master roster for each craft shall be created as follows:

a.        Employees identified in Section A, Paragraph 1of this Article II shall be placed on the appropriate Zone 2 master roster in dovetail order based on their retained seniority date in the craft - i.e., the employee's working seniority date in the craft.

i.         Idaho Seniority District trainmen permanently relocating to Zone 2 will, for purposes of placement on Zone 2 master rosters and the Hinkle-East sub-zone prior rights rosters, use their retained seniority dates - their working seniority date -- on the Idaho Seniority District rosters. Relocating employees placed on the Zone 2 master rosters and the Hinkle-East sub-zone prior rights seniority rosters will be treated as though they had originally hired on the Oregon 3rd Seniority District.

ii.        Employees covered by Article II, Section B, Paragraphs 7.a. - 7.d. of the September 16, 1998 Merger Implementing Agreement for Portland Hub Zone 1 who elect to permanently remain in Zone 2 will, for purposes of placement on the Zone 2 master rosters and the Hinkle-East sub-zone prior rights rosters, use their retained seniority dates - their working seniority dates - from the Zone 1 seniority rosters. Employees electing to remain in Zone 2 and placed on the Zone 2 master roster and the Hinkle-East sub-zone prior rights seniority rosters will be treated as though they had originally hired on the Oregon 3rd Seniority District.

b.        If in the process of ranking employees on the Zone 2 master roster(s) several employees have identical seniority dates, the roster order for such employees will be determined in accordance with applicable provisions of the Northwest District (Oregon) collective bargaining agreement, including the Letter of Understanding dated May 10, 2000.

4.        a. Zone 2 will be divided into two (2) prior rights sub-zones - a "Hinkle - North" sub-zone and a "Hinkle - East" sub-zone. These sub-zones will be comprised of the following:

i.        "Hinkle - North" prior rights sub-zone - Assignments and work in the territories comprising the former 4th, 5th and SI Seniority Districts - i.e., on the territory north of Hinkle to and including Eastport.

ii.        "Hinkle - East" prior rights sub-zone - Assignments and work in the territories comprising all of the former 3rd Seniority District, from Hinkle east (including Hinkle) to and, and including, Huntington, Oregon and the LaGrande - Nampa through freight pool.

b.        Prior rights rosters will be established for each of the Zone 2 sub-zones. Employees holding a working seniority date in one of the sub-zones, on implementation of this agreement, will be eligible for retention of sub-zone prior rights, unless the employee has retained prior rights on the other sub-zone. Such employees will be allowed to continue working in the sub-zone where they are currently employed, based on their December 16, 1996 Zone 2 consolidated seniority, however will retain prior rights in the sub-zone area of their pre-December 17, 1996 seniority date. Employees will be placed on the applicable sub-zone roster(s) in dovetail order based on their retained seniority date in the craft - i.e., the employee's working seniority date in the craft.

i.         Employees acquiring seniority on Zone 2 master rosters subsequent to December 16, 1996, will not acquire prior rights in either of the two sub-zones identified in Paragraph a, above, except as provided for in this Article II, Section A, Paragraph 4. Employees acquiring seniority on Zone 2 subsequent to December 16,1996, will be considered as "common" employees on Zone 2.

ii.        Eligible trainmen/yardmen possessing a seniority date prior to December 17, 1996, on the Hinkle North Seniority District will be granted prior rights on the Hinkle - North sub-zone.

iii.       Eligible trainmen/yardmen possessing a seniority date prior to December 17, 1996, on the former Oregon 3rd Seniority District will be granted prior rights on the Hinkle - East sub-zone.

iv.       Trainmen/yardmen'covered by Article II, Section B, Paragraphs 7.a. - 7.d. of the September 16, 1998 Merger Implementing Agreement for Portland Hub Zone 1 who elect to remain in Zone 2 will be granted prior rights in the Hinkle - East sub-zone and will be slotted into the Hinkle-East sub-zone and the Zone 2 master seniority rosters in accordance with the employee's retained Zone 1 seniority date in the craft - i.e., the employee's working seniority date in the craft.

(a)      Employees covered by Article II, Section B, Paragraphs 7.a. 7.d. of the Portland Hub Zone 1 Merger Implementing Agreement will be given a one-time opportunity to elect to either remain in Zone 2 or relocate to Portland Hub Zone 1.

(b)      Those employees who elect to remain in Zone 2 will permanently relinquish all seniority rights and standing in Portland Hub Zone 1.

(e)      Coincident with implementation of this Agreement, Article II, Section B, Paragraphs 7.a. - 7.d. of the September 16, 1998 Merger Implementing Agreement for Portland Hub Zone

1 will automatically terminate.

v.        Eligible trainmen/yardmen holding seniority on the Idaho Seniority District who elect, pursuant to this Agreement, to permanently relocate to Zone 2 will be granted prior rights on the Hinkle - East sub-zone and will be slotted into the Hinkle-East sub-zone and the Zone 2 master seniority rosters in accordance with their retained Idaho Seniority District seniority date in the craft - i.e., their working seniority date in the craft.

(a)      Eligible trainmen/yardmen holding seniority on the Idaho Seniority District will, prior to implementation of this Agreement, be given a one-time opportunity to elect to either remain in Zone 3 or relocate to Zone 2.

(b)      Eligible employees who elect to relocate to Zone

2 will permanently relinquish all seniority rights in Zone 3.

vi.       If in the process of ranking employees on the sub-zone prior rights roster(s) several employees have identical seniority dates, the roster order for such employees will be determined in accordance with applicable provisions of the Northwest District (Oregon) collective bargaining agreement, including the Letter of Understanding dated May 10, 2000.

e.        Former Oregon 4th Seniority District trainmen identified on Attachment "B" shall be given prior rights to assignments originating in the territory comprising the former Oregon 4th Seniority District.

d.        Existing agreement rules and arrangements governing prior rights for employees in the territory comprising Zone 2 are, effective with implementation of this Agreement, superceded by the provisions set forth herein.

5.        Zone  2  vacancies  shall  be filled   in  accordance with  existing Agreement provisions, subject to the following:

a.        References to "district" in existing provisions governing the filling of vacancies or new positions shall be changed to either "Zone" or "sub-zone," as may be appropriate.

b.        The parties will, on request of either party to this Agreement, meet prior to implementation to ensure existing Agreement provisions permit the timely and efficient filling of vacancies or new positions in Zone 2 and to confirm any necessary understandings, modifications and/or clarifications attendant thereto.

B.       1. New master seniority rosters for conductors, brakemen, yardmen (switchmen) and hostlers shall be created for Zone 3. The Zone 3 rosters shall be comprised of employees holding seniority on the Idaho Seniority District rosters, subject to the following:

a.       The new Zone 3 master seniority rosters will include employees holding seniority on the Idaho Seniority District who may be borrowed out to other locations but will return to Zone 3 upon their release.

b.        The Zone 3 master rosters will not include trainmen/yardmen who elect, pursuant to this Agreement, to permanently relocate to Zone 2.

e.        The Zone 3 master rosters will not include trainmen/yardmen from outside the territory comprising Zone 3 who are borrowed out to locations in Zone 3.

d.        Existing agreement rules and arrangements governing prior rights for employees in the territory comprising Zone 3 are, effective with implementation of this Agreement, superceded by the provisions set forth herein.

2.        a. Employees acquiring seniority on Idaho Seniority District rosters on or prior to May 22, 2000, will be given prior rights in Zone 3.

b.       Employees acquiring seniority on Zone 3 subsequent to the date this Agreement is signed will not acquire prior rights on Zone 3 and will be considered as a "common" employee. Such employees will be required to protect all work and/or assignments in Zone 3.

3.        a. Employees holding seniority on Zone 3 master seniority rosters on the date this Agreement is signed shall be placed on the bottom of the applicable UP/UTU Salt Lake Hub Merged Rosters in the same relative order as they stand on the Zone 3 master rosters.

b.        Employees acquiring seniority subsequent to May 22, 2000, in Zone 3 will be considered as "common" employees in this territory. Such employees will be required to protect work, vacancies and/or assignments in both Zone 3 and the Salt Lake Hub in accordance with understandings reached by the parties pursuant to Paragraph 4 and the Note below.

NOTE:         During the period preceding implementation of this Agreement, the parties will meet to finalize
any necessary modifications and/or clarifications required to ensure, that as a result of the
seniority arrangements provided herein, vacancies, new positions, etc. in the Salt Lake
Hub and in Zone 3 are filled/protected in a timely and efficient manner. In connection with those
discussions, the parties will also earnestly explore expanding seniority and work
opportunities for employees in the Salt Lake Hub to include this Zone 3.

4.        Employees holding prior rights in Zone 3 will be required to protect/fill Salt Lake City Hub vacancies in accordance with the following:

a.        Zone 3 prior rights employees will be required to first protect assignments in Zone 3.

b.       Employees holding prior rights in Zone 3 and unable to hold an assignment in Zone 3 will be required to protect/fill any road service vacancy or position, including, but not limited to, local freight, road switchers, and road or combination extra board(s), on the territories listed below:

i.         Salt Lake City / Ogden - Green River (Salt Lake and Evanston Subdivisions)

ii.        Salt Lake City / Ogden - Elko (Salt Lake, Lakeside, Lynndyl [to Smelter] and Shatter Subdivisions)

iii.       Salt Lake City / Ogden - Pocatello (Salt Lake and Ogden Subdivisions)

(a).     Zone 3 prior rights employees will not be required to protect vacancies in the Salt Lake City -Milford through freight pool, on the extra board protecting that pool, or assignments originating on the Lynndyl Subdivision outside the Salt Lake City terminal.

(b).     Zone 3 prior rights employees will not be required to protect vacancies in the Salt Lake City -Provo, Helper and/or Grand Junction through freight pool(s), on the extra board(s) protecting this service or other positions originating on the Provo Subdivision outside the Salt Lake City terminal.

NOTE:         The parties agree to meet within one hundred twenty (120) days of
implementation of this Agreement to finalize arrangements and
procedures governing the exercise of this seniority, employee
obligations associated therewith and applicable CMS vacancy
procedures.

(e).     Zone 3 prior rights trainmen will not be required to protect/fill yard service assignments or vacancies outside of Zone 3.

5.        Trainmen/yardmen identified on Attachment "A" (Idaho) of this Agreement who do not relocate to Zone 2 will, subject to the terms and conditions set forth herein, retain the right to exercise their Zone 3 trainman seniority to positions at Nampa, including to "Nampa" positions in the LaGrande - Nampa through freight pool.

6.        Trainmen/yardmen identified on Attachment "B" (Oregon 4th Seniority District) of this Agreement will, subject to the terms and conditions set forth herein, retain the right to exercise their Oregon 4th District seniority to the "Hinkle" positions in the Spokane - Hinkle through freight pool and will retain their right to exercise their Hinkle-North sub-zone and Zone 2 master seniority rights.

7.        New positions or permanent vacancies at Nampa, other than "Nampa" positions in the LaGrande - Nampa pool, for which there are no bidders/applicants shall be filled as follows:

a.        Force assign the junior conductor holding a "Nampa" position in the LaGrande - Nampa pool; or

b.        If there are no conductors holding "Nampa" positions in the LaGrande - Nampa pool, the vacancy will be filled in accordance applicable UP Eastern District Agreement provisions.

NOTE:         A vacancy on a "Nampa" position in the LaGrande - Nampa pool resulting from
assignment of a trainman listed on Attachment "A" to another vacancy at Nampa will be filled on
a temporary basis by a Zone 2 trainman. It is not intended that in these circumstances the
involved vacancy will be permanently transferred to Zone 2. A trainman with rights to the Nampa
vacancy may claim the position in the LaGrande - Nampa through freight pool, seniority
permitting, if he or she is not needed on another Nampa vacancy.

C.       Trainmen/yardmen who chose to relocate and placed on the Zone 2 master roster(s) shall relinquish all seniority outside the territory comprising Zone 2.

D.       Except as set forth in Section B of this Article II, employees placed on the Zone 3 master seniority roster(s) shall relinquish all seniority outside the territory comprising Zone 3. Likewise, all seniority inside Zone 3 held by trainmen/yardmen outside Zone 3 shall, except as set forth in Section B of this Article II, be eliminated.

E.       An employee on an authorized leave of absence, holding an official position - i.e., with the Carrier or UTU -- or who is dismissed from service and later reinstated will be placed on the appropriate Zone 2 or Zone seniority roster (master and sub-zone, where appropriate). The parties will create a roster for such inactive employees until they return to service in either Zone 2 or Zone 3, at which time they will be placed on the appropriate seniority roster(s) and removed from the inactive roster.