MANAGERIAL CONDUCT - SUPPLEMENTAL REVIEW PROCESS
July 1,1999

Introduction and Scope

        Currently on the Union Pacific system there are specific policies and procedures that govern managerial conduct.  These include:

President Ike Evans' Empowerment Letter of March 30,1999
Union Pacific Railroad's Guidelines on Business Conduct
Union Pacific Corporation's Statement of Policy Concerning Business Conduct
Union Pacific's Policy Statement on Accident, Incident, Injury, Illness Reporting
Union Pacific's Drug and Alcohol Policy
Union Pacific's Policy on Equal Employment Opportunity
Union Pacific Value Line (1-800-998-2000)

        Each of the above policies provides a variety of mechanisms for reporting violations, processing complaints and determining whether disciplinary action is appropriate. These guidelines reinforce each of the above listed policies and provide a supplemental process for ensuring compliance. Managers are held personally accountable for adhering to all managerial conduct policies. In any instance where Managers violate or cause others to violate company rules, instructions, directives or policies and/or laws or regulations applicable to or associated with railroad operations, an employee may utilize either the enforcement mechanisms established under these guidelines or within the various managerial conduct policies.

        Union Pacific will determine and impose the appropriate level of discipline for any violations, including informal conferencing, formal conferencing, training and education, suspension (without pay), and termination of employment

        Employees who report, testify or participate in an investigation of any alleged violation of a managerial conduct policy will not be disciplined or subject to any retaliation for this protected activity. No employee will be disciplined, discriminated against or harassed as the result of their decision to empower themselves regarding safety issues that directly compromise personal safety. Employees will not be disciplined or discharged for violations of company rules, instructions, directives or policies and/or laws or regulations applicable to or associated with railroad operations when instructed to do so by a Manager, if promptly reported under these guidelines. The harassment or intimidation of anyone filing a report of a violation of a managerial conduct policy will not be tolerated.

Step 1. Any alleged acts in violation of a managerial conduct policy may be reported to the Superintendent or Department Head. (Such reports may be made through the employee's Labor Representative.) Labor Representatives receiving such reports will be responsible to research the facts and determine whether the facts warrant forwarding to the Superintendent for further handling.

Step 2. Upon receiving such reports, the Superintendent^will-promptly-conduct a thorough internal investigation, interview all involved parties, witnesses and gather all pertinent facts. If warranted, the Superintendent will take appropriate disciplinary action. Repeat offenses, when appropriate, will be handled in a progressive, escalating manner.

Step 3. The person filing the report will be notified of the results of the investigation they initiated within 30 days of the report having been received. Notification will include a written response acknowledging receipt of the initial complaint, advising determinations made and attesting that corrective action, if any, was assessed in accordance with these guidelines.

Step 4. When disciplinary action is assessed, a notation describing the incident and any corrective action taken will be placed into the Manager's Personal Record and reflected in the Manager's next annual performance review and evaluation.

        Issues of concern may be escalated to the Regional Vice President/General Chairman level for further handling. Records of previous handling will be included in this review. When warranted, the Regional Vice President will take additional corrective action.

        The effectiveness and application of this process will be reviewed semiannually in conjunction with the Discipline Monitoring Process and Measuring of Effectiveness Review, with Senior Management as set forth in Union Pacific's Policy and Procedures for Ensuring Rules Compliance. This review will recap all cases reported (under these guidelines) during the prior six months.

        These procedures and/or Labor's participation in drafting such, cannot and will not be used to supersede or circumvent the provisions of any collective bargaining agreement

        These guidelines are applicable to all employees under the direction of the Executive Vice President of Operations. General titles such as Regional Vice President Superintendent Department Head, Manager and Labor Representative appear throughout these guidelines. It is recognized that these titles may vary depending upon the craft or department involved. If different than indicated, the appropriate titles will be substituted and apply. V

        To resolve questions involving the application of these guidelines, please contact or forward the necessary documentation to the Policy Coordinator, 1416 Dodge Street, Room 625, Omaha, NE, 68179 (402) 271-5961.