Appendix 5

Money Purchase Pension Plan

For NJ TRANSIT Rail Operations Employees

The following is a summary of the principle features to be incorporated in the proposed money purchase pension plan (Plan) for all NJ Transit Rail Operations (NJTRO) employees in the employment of NJTRO or hired after the effective date of the Plan.

The provisions of this plan can be modified in the development of the actual plan document if they are not inconsistent with the principle features summarized below.  NJTRO may adopt amendments which may be necessary or appropriate to qualify or maintain the status of the Plan under Section 401(a) of the Code or any other applicable section of law (including ERISA) and the Regulations issued thereunder as now in effect or hereafter amended or adopted.

Item 1. - Qualifications

The Plan will be a funded, defined contribution money purchase pension plan covered by Section 401(a) of the Internal Revenue Code as applicable to governmental plans.  All contributions made by the employer, as well as any earnings thereon and proceeds thereof, will be held in a separate trust that is exempt from taxation under Section 501(a) of the IRS code.

Item 2. - Eligibility

All full-time permanent employees will be covered under the Plan.  The Plan will have an effective date of July 1, 1989 or when the agreement employer covered by this plan ratify the new collective bargaining agreement of which this plan is a part of, whichever is later.

Eligible employees will commence participation immediately after they become permanent full-time employees of NJTRO.  All eligible employees will be required to participate in the Plan as a condition of their employment.

Item 3. - Contributions

NJTRO will contribute an amount equal to three percent of an employee's compensation into a participant's account.  For this purpose, compensation means all W-2 earnings, including all overtime and other payments, as well as deferred compensation, but will not include taxable group life insurance premiums and any other taxable employee benefits.  NJTRO contributions will be forwarded on a monthly basis to the trustee for investment.

Item 4. - Investments

The trust funds under the Plan will be invested by the Trustee in approved funds selected by the NJTRO Board.  Each participant will direct how the contributions to his or her individual account are to be invested and will have an opportunity, on a yearly basis, to shift the balance in his or her accounts between the different investment options.

Item 5. - Vesting

NJTRO contributions on behalf of participant will vest upon the participant's completion of three years of service as a full-time employee from the effective date of this plan, death while in covered employment with NJTRO, or on retirement from NJTRO service under the provisions of Railroad Retirement Act, as amended.  A participant whose employment terminates before vesting will forfeit the entire amount in his or her accounts derived from NJTRO contributions,which monies will be available to NJTRO to reduce future NJTRO contributions or other uses.

Item 6. - Distributions

The normal retirement age under the Plan will be age 62 or at retirement age under the Railroad Retirement system.  The Plan will provide an early retirement option for participants who reach age 55 and complete three years of effective service under the plan.  The normal form of benefits payable to a participant will be a life annuity with no survivorship benefit for a participant who is not married; for married participants, the normal form of benefits will be a joint and a 50% survivor annuity with his or her spouse as a joint annuitants, unless the participant with the consent of the spouse, elects another permissible form of an alternate benefit under the Plan (such as lump-sum distributions or a joint and two-thirds survivor annuity).

      Upon termination from service with NJTRO, the vested participant prior to his or her normal or early retirement date will have the option to withdraw his or her entire account balance or have the balance of his or her account held until such time as the participant would otherwise be entitled to retire.  For purpose of the Plan, termination shall not occur until all administrative remedies with respect to the termination have been fully exhausted.

      No withdrawals or loans from the participant's account will be permissible while the participant continues in employment or deemed employment with NJTRO.

Item 7. - Plan Administration

The Plan will be administered by NJTRO.  NJTRO Board will select a trustee under the Plan, an investment manager with whom the contributions are to be invested, and Administrator Manager of the Plan if different from the trustee.

      Account performance fees related to investment of an individual account as charged by the investment manager will be charged directly to the account of the participant involved.  Regular administrative fees, such as those for legal counsel, and accounting and auditing services will be borne by NJTRO.

Appendix 7

10.4% Differential

NJ Transit

McCarter Highway & Market St.

P O Box 10009

Newark, NJ  07101

December 29, 1982

Mr. J. P. Carberry, Vice President

Brotherhood of Locomotive Engineers

455 Empire Boulevard

Rochester, New York  14609

Dear Mr. Carberry:

This is to confirm the understanding reached during negotiations of the Agreement between New Jersey Transit Rail Operations, Inc. and the Brotherhood of Locomotive Engineers signed this date that the effective hourly rate of pay of the Engineer shall be no less than 10.4% greater than the effective hourly rate of pay of the Conductor for identical time on duty.  The effective hourly rate of pay shall be determined by taking the total daily compensation, including payments for arbitraries and allowance, and dividing it by the actual daily hours on duty or held for duty less any hours not on duty including layovers.

If the foregoing properly sets forth our understanding, please indicate your concurrence by affixing your signature in the space provided below.

Very truly yours,

(original signed by:)

Martin E. Robins

Deputy Executive Director

cc:  T. J. Cavan, General Chairman