AMPEX CORPORATION

PROPER BUSINESS PRACTICES POLICY

Scope: All employees, officers and directors of Ampex Corporation and its subsidiaries on a world-wide basis.  Unless the context requires otherwise, references to "Ampex" in this Policy include Ampex Corporation and its subsidiaries, and references to "employees" include all individuals covered by the Policy.

Purpose: To provide guidance for the conduct of business by Ampex employees in accordance with legal and ethical standards.

Policy: It is a fundamental policy of Ampex Corporation and its affiliated companies to conduct business with honesty and integrity and in accordance with the highest legal and ethical standards. This Policy provides guidance in specific situations. It is not possible to provide guidance for all situations that may arise.  Therefore, it is each individual employee's responsibility to exercise good judgment and act in a manner that will comply with all applicable legal requirements and will reflect favorably upon Ampex and the individual.

Employees shall comply with the spirit as well as the letter of this Policy. Employees shall not attempt to achieve indirectly, through the use of agents or other intermediaries, what is forbidden directly.

Implementation.  All managers are responsible for both ensuring that employees under their supervision are familiar with the Policy and for promoting compliance with the Policy. All officers, key managers, and other employees of Ampex designated by their respective managers will be required annually to certify that:

1. they have personally read and understand the Policy;
2. they have taken appropriate steps to bring the Policy to the attention of each employee under their supervision who is authorized to make commitments on behalf of Ampex or is in a position to influence decisions; and
3. they have complied with this Policy and know of no violations by employees under their supervision except violations that have been reported.

The form of certification required is attached as an addendum to this Policy.

Employees having questions on how to proceed or on interpretation of this Policy should consult their supervisors or the General Counsel of Ampex. Compliance with the Policy is essential. Violations will result in disciplinary action, including dismissal where warranted.

Questionable or Improper Payments or Use of Ampex Assets. The use of any funds or assets of Ampex for any unlawful or improper purpose is strictly prohibited.

No payment from Ampex's funds or assets shall be made to or for the benefit of a representative of any domestic or foreign government (or subdivision thereof), labor union, or any current or prospective customer or supplier for the purpose of improperly obtaining a desired government action, or any sale, purchase, contract or other commercial benefit.  This prohibition also applies to direct or indirect payments made through third parties or employees and is intended to prevent bribes, kickbacks or any other form of payoff.  In addition, employees of Ampex shall not accept payments of the kinds described in this paragraph. These prohibitions, as they apply to government contracts, are described in more detail under "Anti-kickback Act of 1986," below.

In the United States, nothing of value (for example, gifts or entertainment) may be provided to government personnel unless clearly permitted by law and any applicable regulation. Commercial business entertainment that is reasonable in nature, frequency and cost is permitted. Reasonable business entertainment would include, for example, a lunch, dinner, or occasional athletic or cultural event; gifts of nominal value (approximately $100 or less); entertainment at facilities of Ampex; or authorized transportation in Ampex's vehicles.  In addition, reasonable business entertainment includes traditional promotional events sponsored by Ampex.

All arrangements with third parties such as distributors or agents must be formalized in a written contract approved by the Law Department that provides for services that are in fact to be performed and for reasonable fees. Employment of a distributor or agent or commencement of significant business operations outside the United States must be approved by the chief executive officer of the appropriate Ampex subsidiary, in accordance with Ampex's policies and procedures.  With approval of the chief executive officer of the appropriate subsidiary, a gift of more than nominal value (approximately $100) may be made in a foreign country to an agent or employee of a present or prospective foreign customer if the gift is lawful under the laws of the United States, and lawful, customary and necessary to the conduct of business in the country where it is made.

So-called "facilitating payments" made in foreign countries to low-level government employees (for example, a small gift to a clerk to expedite the processing of an application) may be permissible in certain circumstances. Before such payments are made, however, it must be determined that:

1. the governmental action or assistance sought is proper for Ampex to receive;
2. the payments are customary and lawful in the country where made, are insubstantial in amount and are paid to a clerical or ministerial government employee; and
3. there is no reasonable alternative to making the payments.

Ampex's assets are not maintained for use by employees for non-business related purposes.

Anti-Kickback Act of 1986. In connection with government contracts, the federal Anti-Kickback Act of 1986 (41 U. S. Code §§51-58) (the "Anti-Kickback Act") prohibits any type of payoff for the purpose of improperly obtaining or rewarding favorable treatment in connection with a prime contract or subcontract. When entering into any contract with the government or a government contractor, the managers responsible for the contract must insure that Ampex is in compliance with the requirements of the Anti-Kickback Act. (Copies of the Anti-Kickback Act are available from the General Counsel.)  Any contracts directly with the government require Ampex, as a prime contractor, to have in place and follow procedures designed to prevent and detect violations of the Anti-Kickback Act.  The adoption and enforcement of this Policy is only the first step in meeting this requirement.  In addition, managers must educate their employees, as well as subcontractors, about Ampex's policy regarding kickbacks, and subcontractors must be required to certify that they are complying with the Anti-Kickback Act.  Procurement procedures must minimize the opportunity for kickbacks. Any manager needing assistance in assuring compliance with the Anti-Kickback Act should contact the General Counsel.

Political Contributions. Although Ampex encourages its employees to contribute personal time and money to the political party of their choice, laws of the United States prohibit Ampex from making any contribution or expenditure in connection with any U. S. federal election. Various states also have enacted legislation prohibiting corporations from making political contributions in connection with state elections.

It is Ampex's policy not to make political contributions, directly or indirectly, in support of any party or candidate in any federal, state or local U. S. election.  For this purpose, the purchase of tickets for dinners, advertising in political program booklets, use of Ampex's duplicating facilities, compensated employee activity, employee contributions reimbursed through expense accounts and similar donations in kind are considered political contributions and are prohibited.

Ampex may on occasion contribute to local initiative or referendum campaigns where Ampex's interests are directly involved and where permitted by local law.  All such proposed contributions shall be approved in advance by the Chief Executive Officer of Ampex Corporation and shall be cleared in advance with the General Counsel of Ampex to ensure full compliance with applicable state and local regulations and reporting requirements.

In certain foreign countries where corporate political contributions are permitted by law and encouraged by local custom, contributions may be appropriate and are permitted where approved by Ampex's Vice President having responsibility for foreign sales, with the concurrence of the General Counsel and the Chief Executive Officer of Ampex Corporation.

Conflicts of Interest. A conflict of interest is deemed to exist whenever an employee is in a position, as a result of the nature or responsibilities of his or her employment with Ampex, to further any personal financial interest of the employee or anyone associated with the employee (such as family members).

For example, the following situations would be considered conflicts of interest:

1. An employee's investment or financial interest in, or holding a position with, any supplier, customer or competitor of Ampex (except for an investment in publicly traded securities as described below).
2. An employee's acceptance of, or giving permission for a member of the employee's family to accept, gifts or favors of more than nominal value (approximately $100 or less) from an actual or prospective customer, supplier or competitor of Ampex, or any governmental official or employee. This does not preclude an employee's acceptance of reasonable business entertainment, such as a lunch or dinner, or events involving normal sales promotion, advertising or publicity.
3. An employee's disclosure or use of confidential information gained by reason of employment by Ampex for profit or advantage for the employee or anyone else. (This is discussed in more detail below.)
4. An employee's competition with Ampex in the acquisition or disposition of rights or property.
5. The following situations would not be considered conflicts of interest:
6. Ownership of publicly traded securities of a supplier, customer or competitor of Ampex, having a market value of $25,000 or less.
7. A transaction considered customary and conducted on standard commercially available terms, such as a home mortgage or bank loan.
8. A transaction or relationship disclosed in accordance with this Policy and determined by Ampex not to be a prohibited conflict of interest.

Actual or potential conflicts of interest involving an employee or family members shall be reported in writing to the employee's immediate supervisor, who shall consult with the General Counsel to determine whether a conflict of interest actually exists and to recommend measures to be taken to neutralize the adverse effect of the conflict of interest reported.  This procedure shall be applied so as to minimize its effect on the personal affairs of employees consistent with the protection of Ampex's interests.

No employee should permit himself or herself to be placed in a position that might give rise to the appearance that the employee has a conflict of interest.

Disclosure and Use of Confidential Information. Employment by Ampex creates a relationship of confidence and trust between Ampex and each employee with respect to any information of a confidential or proprietary nature that may be disclosed to the employee during the course of his or her employment.  Employees should consider any information that has not been fully disclosed to the public as confidential and proprietary to Ampex.  This includes, but is not limited to, proprietary technical information, product and marketing plans, business strategies, financial information, forecasts, personnel information and customer lists.  Confidential information may relate to Ampex or to its customers, suppliers or competitors.  No employee shall disclose such confidential information to third parties (including family, relatives, or business or social acquaintances) who do not need to know it for legitimate business reasons of Ampex.  This obligation applies both during employment and after its termination for any reason.  These responsibilities of employees with respect to confidential information are also described in the Employee Discovery and Proprietary Information Agreement signed by each employee.

In addition to refraining from disclosure of confidential information, no employee shall engage in any action to take personal advantage of any confidential information (such as trading in Ampex securities). This prohibition is discussed more fully in Policy No. 1.19.13, entitled "Securities Trading by Ampex Personnel."

Books and Records of Ampex. Ampex's books, records and accounts shall accurately and fairly reflect the transactions of Ampex in reasonable detail and in accordance with local legal requirements and with Ampex's accounting practices and policies.

For example:

1. No false or deliberately inaccurate entries (such as over-billing) shall be made for any reason.  Discounts, rebates, credits and allowances do not create over-billings when lawfully granted; the reasons for the grant should be set forth in Ampex's records, including the party requesting the treatment.
2. No payment shall be made with the intention or understanding that all or any part of it is to be used for any purpose other than that described by the documents supporting the payment.
3. No undisclosed or unrecorded funds or assets shall be established for any purpose.
4. No false or misleading statements, written or oral, shall be made to any internal or external accountant or auditor with respect to Ampex's financial statements or documents to be filed with any governmental agency.
5. No contract will be written with the specific intent to assist a customer or supplier to evade tax or legal requirements.

Payment of Amounts Due Customers, Agents or Distributors. All commission, distributor or agency arrangements must be in writing and provide for services to be performed and for a fee that is reasonable in amount and reasonably related to the services to be rendered –  i.e., not in excess of normal rates for the product sold and the place of doing business.

All payments for fees, commissions, discounts or rebates must be made by an Ampex check or draft (not by cashier's check or in currency) in the name of the agent, distributor or customer and must be (i) personally delivered to the payee in the country in which the business was transacted, or (ii) mailed to the payee's business address or designated bank in the country in which the business was transacted.  Where the payee presents an opinion from a reputable local counsel that payment outside the country in which the business was transacted does not violate any law of such country, such payment may be permitted upon approval from the General Counsel of Ampex.

A credit memorandum is the preferred method of effecting a rebate and should be issued to the customer unless an Ampex check or draft (not a cashier's check or currency) is necessary due to the nature of the transaction.  Any check or draft should refer to the sales invoices involved and indicate the amount of discount or rebate and number of units.

All payments for fees, commissions, discounts or rebates shall be fully disclosed in the accounting records maintained by the controller's offices for each subsidiary. Proper documentation of contracts and agreements shall be maintained.

Reporting Violations. All employees of Ampex are responsible for bringing violations of this Policy to the attention of senior corporate management, through normal reporting channels or by reporting violations to a member of the Law Department. In addition, all managers are responsible for taking corrective action when problems involving this Policy come to their attention. Where appropriate, violations of this Policy (including but not limited to the payment of kickbacks) may be reported to law enforcement officials.