As discussed during our latest Safety Assurance and Compliance Program (SACP) meeting, we will be revising the Policy for Employee Performance Accountability (PEPA) to emphasize the importance of signal and track authority rules. The changes in PEPA are relatively small, but they do increase the consequences for track authority and signal violations. We felt this step was necessary, given the number of train and on-track equipment collisions we've seen lately. The changes become effective March 1, 2001.

Enclosed is a copy of the revised PEPA policy. As you'll see, signal and track authority violations are considered serious, but they are subject to a six-month actual suspension, which is different from the suspensions applied to other serious violations. Employees who admit responsibility for the signal or track authority violation and request a waiver of investigation can have their actual suspension reduced to 30 days (the same as the suspension associated with other serious violations), followed by 30 days of rules training and peer presentations.

We wish this change in policy wasn't necessary, but we arc truly alarmed by the increase in collisions and authority and signal violations we are seeing. The lives of our employees and your members are at stake, as well as the overall safety of our operation. We must reverse the current trend and work to eliminate all signal and track authority violations. We hope this PEPA change sends a strong message about the importance of 100 percent compliance with track authority and signal rules.

Sincerely,
/s/Greg Stengem

Cc:    Matt Rose
Carl Ice
Dave Dealy
Craig Hill
Fred Gratke
Pat Carter
Mike Arita
John Fleps
Rollin Bredenberg
Jeff Campbell