SGI has stringent design standards in place that prohibit and/or restrict the use of certain hazardous substances in our products. Many of these restrictions have been in place for years covering substances such as asbestos, Poly Chlorinated Biphenyls (PCBs), ozone depleting compounds (ODCs/CFCs), mercury and other heavy metals. However, we are continually updating our design criteria to ensure that our products comply with global material restriction requirements.

Partnering with our supply chain is critical as we work to comply with these material restriction requirements. SGI communicates its environmental policy, practices, and expectations to suppliers and contractors via a number of supply chain management tools.

SGI is committed to using environmentally-friendly alternatives to identified hazardous substances in applications where suitable alternatives have been identified and in cases where equivalent performance has been qualified for use in our products.

For more details on our compliance approach to RoHS, REACH and Conflict Minerals reporting and disclosure, please see below.

EU RoHS - European Union Restriction of the Use of Certain Hazardous Substances ("RoHS") - Directive 2002/95/EC

The RoHS Directive is a European Union (EU) law that restricts the use of 6 hazardous substances in electrical and electronic equipment (EEE) that is sold, distributed or used in the EU. The law went into effect on July 1, 2006 and was amended in 2011 (Directive 2011/65/EU).

The RoHS Directive restricts and or limits 6 substances: Lead, Mercury, Cadmium, Hexavalent Chromium, Polybrominated Biphenyls (PBB), and Polybromintated Diphenyl Ethers (PBDEs). SGI is committed to RoHS Directive compliance and supports its objective.

The RoHS Directive is based on a Supplier Declaration of Conformity approach and SGI actively works with its suppliers to certify that its products meet the RoHS Directive's restriction and marking requirements. SGI has determined that all current and recent (post 1 July 2006) SGI products are in compliance with the RoHS Directive's substance restrictions.

Some of SGI's high-end products continue to use lead in an application that is covered by a current RoHS Directive exemption where the EU has determined that functionally equivalent material replacements for lead are not yet available. To ensure that product quality is not jeopardized, SGI currently plans to continue to use this exemption until a suitable and functionally equivalent replacement is identified or until the exemption expires.

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EU REACH - European Union Registration, Evaluation, Authorisation and Restriction of Chemicals -Regulation (EC) 1907/2006

The European Union's REACH Regulation entered into force on 1 June 2007. The Regulation establishes a legislative framework for the regulation of chemical substances that are manufactured or imported into the European Community with the goal of protecting human health and the environment. SGI is committed to compliance with REACH and supports its objectives.

Under REACH, the European Chemicals Agency (ECHA) is authorized to identify and publish a list of chemical substances that are deemed to be "substances of very high concern" (SVHC). The identification of a substance as an SVHC and its inclusion in the REACH Candidate List trigger legal obligations, which are linked to the listed substance and its use in preparations and articles.

As a manufacturer of articles that may include SVHCs, SGI has an obligation under Article 33 of REACH to identify, and disclose whether any of its products contain listed SVHCs in a concentration above 0.1 percent weight by weight when measured at the finished article level.

Based upon SGI's product-specific knowledge and the current version of the SVHC Candidate List (December 2012), SGI products and packaging do not contain SVHC substances in a concentration above 0.1 percent weight by weight when measured at the article level with the following possible exceptions:

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US CONFLICT MINERALS RULE - Securities and Exchange Commission - 17 CFR Parts 240 and 249b pursuant to Section 1502 of the Dodd-Frank Act

The U.S. Securities and Exchange Commission (SEC) adopted its final rule implementing Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act on 22 August 2012. The objective of the rule is to reduce funding for armed groups that are abusing human rights in the "conflict region" as defined in the final rule. SGI is committed to compliance with the SEC Conflict Minerals Rule and supports its intended objective.

This new rule requires publicly traded companies to: (1) determine whether conflict minerals (tin, tantalum, tungsten, gold or similar derivatives) are used in their products and, if so, determine if the minerals originated from the Democratic Republic of Congo (DRC) or its immediately adjoining countries; and (2), if so, conduct due diligence regarding the source and chain of custody of these conflict minerals to determine whether the conflict minerals financed or benefitted armed groups.

The rule will require publicly traded companies to submit forms and reports to the SEC annually that disclose the company's determinations and due diligence measures. Publicly traded companies must submit forms and reports to the SEC no later than 31 May 2014 and annually, thereafter.

SGI is currently conducting conflict minerals due diligence with its supply chain partners and is prepared to provide the necessary SEC reports and disclosures by the 31 May 2014 deadline.

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