ARTICLE 38

PRODUCTIVITY FUND

A. 1. Commencing with September 1, 1984, for each yard tour of duty or road freight service trip that a crew is operated with one (1) conductor/foreman only or one (1) conductor/foreman and one (1) trainman/yardman, the Company will accrue to the appropriate employees’ Productivity Fund Account a liability in the amount shown in the schedule below no later than 15 calendar days after the last day of each payroll period. Each amount so accrued shall be a "Basic Amount".

SCHEDULE
	Amount*
Piedmont Division, Fund 72	$ 8.77
Georgia Division, Fund 60	$53.25
Alabama Division, Fund 75	$ 6.61
Tennessee Division, Fund 70	$16.10
Crescent Division, Fund 62	$53.25
GS&F, Fund 73	$10.75
* Not subject to future general wage increases or cost of living adjustments.

2. The Company shall furnish a statement to the General Chairpersons within 30 days after the close of each calendar month, showing the accrual of the Basic Amount made by the Company to the Productivity Fund Accounts for employees whom he represents, interest thereon, the number of yard tours of duty and/or road service trips applicable to the Productivity Fund Accounts, and the cumulative total for the fiscal year. A fiscal year shall run from October 1 through September 30 of the following year.

3. If it is found that additional information is needed for verification of 2. above, and if furnishing such information requires computer programming, etc., the Company shall have a reasonable time to furnish the additional information.

4. All data furnished by the Company to the General Chairperson shall otherwise be treated as confidential and in no circumstances may be reproduced, disclosed, or discussed other than for purposes of this Article.

B. In addition to accruing the Basic Amount specified in Paragraph A. of this Article, the Company shall also calculate and accrue interest on the Basic Amount, as follows:

1. The Company shall guarantee an earnings rate equal to the monthly average of the weekly auction rates on three-month treasury bills as published by the Federal Reserve Bank of New York. This rate is quoted on a discount basis and will be converted (increased) to the 30-day certificate of deposit equivalent yield.

2. The guaranteed earnings rate will be applied effective the last day of each calendar month to the total average daily amount (Basic Amounts and accrued interest) in each Productivity Fund Account.

C. 1. The Company shall divide the total number of yard tours of duty and/or road freight service trips credited to each protected employee for the fiscal year into the total amount accrued in each Productivity Fund Account for that fiscal year. The result shall be the value per share of each Productivity Fund Account (see Paragraph I. below). The phrase "total amount accrued... for that fiscal year" means the Basic Amounts accrued under Paragraph A. for the fiscal year plus interest accrued and calculated thereon pursuant to Paragraph B. of this Article during the fiscal year. The Company shall notify the General Chairperson of this result no later than 45 days after the end of the fiscal year.

2. When the total amount accrued in the current fiscal year is equal to not less than the full amount required to pay all protected employees 40% of their annual compensation for the preceding fiscal year, adjusted to include cost-of-living and general wage increases due in the current fiscal year, the Company shall discontinue accruing Basic Amounts plus interest thereon. If the total amount accrued is not adequate to pay all amounts due under this Article, the Company will make up the deficit.

3. Within seventy-five (75) days after the end of each fiscal year, the Company will prepare the checks, labeled "Southern UTU Employee Productivity Fund Account", less any withholding for federal income tax and such other withholding as required by law, and make distribution of such checks to protected employees by U.S. Mail. The Company will advise the General Chairpersons of all undeliverable checks, whereupon they will assist the Company in making deliveries.

4. The money from undeliverable and unclaimed checks shall be held and disposed of pursuant to applicable state laws.

5. Upon written request from the President of the United Transportation Union, payment of Basic Amounts accrued pursuant to Paragraph A., plus interest calculated and accrued under Paragraph B., shall be secured by the Company through the procurement of a letter of credit from a major financial institution acceptable to the Union.

D. 1. Interest accrued from the end of a fiscal year for four (4) payroll periods shall be credited to a "Claim Account" to be used for the resolution of any claims under appeal or subject to appeal in favor of protected employees. If it develops that this arrangement does not generate sufficient funds to satisfy legitimate claims of protected employees, the Union and the Company will agree on an equitable amount to be set aside from interest calculated on accrued amounts during the year to satisfy the needs of the Claim Accounts. If, at the end of six months following the close of that fiscal year, there remains a balance in any Claim Account in excess of the amount necessary to provide for claims then outstanding, the excess amount of such balance shall be added to the amount accrued for the current year.

2. Road freight service trips and yard tours of duty credited to each protected employee shall be shown on his/her detailed statement of earnings. Any dispute as to the number of trips or tours of duty credited must be appealed in writing by or on behalf of the employee to the Company’s Timekeeping Department within 45 days (approximately 30 days after pay day) from the end of a payroll period. If the employee does not appeal within the 45-day period, the count of trips or tours as shown will not be subject to appeal. The Company shall advise each employee of the disposition of his/her appeal within 30 days of the date submitted. If the dispute is not resolved, it will be barred unless appealed by the General Chairperson to the Company’s Director of Labor Relations within 30 days thereafter.

3. All appeals and notices of decision shall be in writing.

E. The Company shall keep accurate and detailed accounts of all accruals, disbursements, and other transactions hereunder and shall account separately for accrual of amounts due employees under this Article and interest thereon, which shall be open to inspection and audit at all reasonable times by any person designated by the General Chairperson.

F. It is understood that all disputes concerning the interpretation or application of this Article shall be resolved according to the procedures set forth in this Article and Section 3 of the Railway Labor Act.

G. 1. Any communication, statement, or notice addressed to any protected employee at the last post office address filed with the Company will be binding upon such person for all purposes under this Article and neither the General Chairperson nor the Company shall be obligated to search for or ascertain the whereabouts of any such person.

2. No later than November 1 of each year, each protected employee entitled to payments under this Article, who has changed his mailing address, must file advice of such change in writing with the Company’s designated officer.

3. Any notice or document required to be given to or filed with the Company shall be considered as given or filed if delivered, or mailed, first class postage prepaid, to an address designated by the Company from time to time for such purpose.

4. Except as otherwise required by this Article, notices to protected employees, other than replies to appeals, shall be given first class mail, to the last address on file with the Company.

H. 1. The Productivity Fund Accounts shall be terminated by an instrument in writing executed by the Company and the General Chairperson when there are no protected employees remaining in service with the Company.

2. On termination of the Productivity Fund Accounts, the Basic Amounts accrued hereunder plus interest calculated thereon shall continue to be held by the Company for payments in accordance herewith until all protected employees have received all payments due under this Article.

I. At the end of each year, each protected employee performing service will share in the division of the employees’ Productivity Fund Account(s), according to the number of yard tours of duty and/or road freight trips performed during that fiscal year. For equity purposes, each paid vacation day taken by a protected employee in road freight and/or yard service will be credited in computing his share of a Productivity Fund Account.

Example:
Amount in Account at the end of year	$288,000
Total number of road freight service trips and/or yard tours of duty by by protected employees only	12,000
$288,000 divided by 12,000 = $24 per share
Each protected employee receives $24 x the number of his trips or tours of duty.

J. The productivity sharing provided for above is limited to the extent that the total amount of a protected employee’s annual share of the employees’ Productivity Fund Account(s) cannot exceed 40% of his total compensation for that fiscal year.

Example: The protected employee earns $36,000 for service performed in the fiscal year. His payment from the fund for that fiscal year could not exceed $14,400 (40% of $36,000).

K. Payments made to protected employees out of the Productivity Fund Account shall not be included in computing vacation pay.

L. When computing 40% of a protected employee’s total compensation in any fiscal year, payments or credits received from the Productivity Fund Account(s) will not be included in the computation.

M. Payment made to protected employees out of the Productivity Fund will not be used in the computation of any monetary guarantees. Special Allowances (Lonesome Pay) paid under Article 38 will not be used in the computation of any monetary guarantees.

Monies paid employees under Article 38 (Special Allowance) and/or this Article 39 (Productivity Fund) will not be counted as earnings in calculating make-up pay due under existing or future monetary guarantees. Bulletins issued estimating the earnings of assignments for guarantee purposes will not include any payments anticipated from a Productivity Fund or Special Allowances.

N. A part-time union officer who is unable to work in road freight or yard service due to performing official union work will be credited for such actual days lost toward his number of tours of duty or trips in computing his share of the Productivity Fund Account. The General Chairperson will furnish as soon as possible, but not later than October 31 of each year, to the Company’s Payroll Accounting Department the information necessary to properly credit those individuals for the number of tours of duty or trips to be so computed.

QUESTIONS AND ANSWERS

Question #1: Does the number of days not worked while protecting the extra board go to the credit of the protected employee toward the number of tours of duty credited for the purpose of sharing in a Productivity Fund Account?

Answer: No, only actual service performed in freight or yard service is so credited.

Question #2: In the event of the death of a protected employee who is entitled to payment from a Productivity Fund Account, will his part be paid to the estate or beneficiary?

Answer: Yes, at the end of the year when disbursements are made.

Question #3: Paragraph I. provides that for each paid vacation day taken by a protected employee he will be credited with that day in computing his share of a Productivity Fund Account. Will "Personal leave" days taken by an employee also be credited in computing his share of a Productivity Fund Account?

Answer: No.

Question #4: How many shares will be credited for each week of vacation taken by a protected employee in road freight or yard service under this Article?

Answer: Seven.

Question #5: Will tours of duty in road or yard service on single position assignments such as but not limited to pilots, air bleeders, CRO's and utility persons, worked by protected employees be credited in computing their share of the Productivity Fund Account?

Answer: Yes.

Question #6: If an employee is due an adjustment in wages due to being used off his assignment, does he receive any additional yard tours or road freight trips other than those he actually performed for purpose of determining personal share count?

Answer: No.

Question #7: Is it understood to mean that only compensation from the Company will be considered when computing the 40% of total compensation for the fiscal year?

Answer: Yes. Compensation from any other source cannot be taken into account.

This page last updated: March 02, 2005