2003 Code of Ethics: SFA

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SCIENTIFIC-ATLANTA, INC.
CODE OF CONDUCT
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TABLE OF CONTENTS
  • Letter from the President...............................................................................................................3
    1.0 BUSINESS RELATIONSHIPS
    1.1 Customers............................................................................................................................5
    1.2 Employees............................................................................................................................5
    1.3 Business Partners .................................................................................................................5
    1.4 Suppliers ...............................................................................................................................6
    1.5 Governments........................................................................................................................6
    1.6 Communities .........................................................................................................................6
    2.0 BUSINESS PRACTICES
    2.1 Protecting Company Information ..........................................................................................6
    2.2 Proper Recording of Business and Financial Transactions..................................................7
    2.3 Proper Use of Company Assets............................................................................................8
    2.4 Business Communications………………………………………………………………………...7
    2.5 Potential Misuse of Company Business Decisions and Communications By Others…….…8
    2.6 Marketing and Advertising Materials.....................................................................................8
    2.7 Non-Discrimination................................................................................................................8
    2.8 Gifts and Entertainment ........................................................................................................8
    2.9 Competition ...........................................................................................................................9
    2.10 Conflicts of Interest ...............................................................................................................9
    2.11 Political Contributions..........................................................................................................10
    2.12 Charitable Donations...........................................................................................................10
    3.0 REGULATORY COMPLIANCE
    3.1 General……………………………………………………………………………………………..10
    3.2 Antitrust Law .......................................................................................................................11
    3.3 Improper Trading in Company Stock or Other Companies' Securities...............................11
    3.4 Environmental, Health and Safety Guidelines ....................................................................11
    3.5 Import and Export Compliance ...........................................................................................12
    3.6 Embargo/Anti-Boycott Laws................................................................................................12
    3.7 International Transactions...................................................................................................13
    3.8 Foreign Corrupt Practices Act.............................................................................................13
    4.0 AMENDMENTS AND WAIVERS................................................................................................13
    5.0 WHO TO CONTACT FOR INFORMATION ...............................................................................13
    6.0 REPORTING VIOLATIONS AND QUESTIONABLE CONDUCT...............................................14
  • APPENDIX I - Guidelines and Policies Regarding Trading of Securities ...................................15
    CERTIFICATION ...............................................................................................................................18
    INSERTS FOR EUROPEAN EMPLOYEES ONLY
  • Insert for Section 3 – REGULATORY COMPLIANCE................................................................19
  • APPENDIX II Insert – Guide to Competition Law (Europe) .......................................................21
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    Scientific-Atlanta, Inc. 5030 Sugarloaf Parkway Telephone 770 236-4624
    Lawrenceville, Georgia 30044 Fax: 770 236-4779
    James F. McDonald
    Chairman of the Board, President
    and Chief Executive Officer
    Dear Fellow Employee:
    I am pleased to present to you a copy of Scientific-Atlanta's Code of Conduct. The Code describes
    the business and ethical practices we expect each employee to follow in all Company activities.
    Our Company's success depends not only on the products we sell, but also on the way we conduct
    our business.
    The Code of Conduct includes CORE VALUES based on INTEGRITY, HONESTY and
    RELIABILITY and on compliance with applicable laws and regulations. We believe that adherence
    to these core values will help us to grow and expand the opportunities for both the Company and its
    employees. We must display these characteristics in our dealings with each other, our customers,
    suppliers, partners and the community.
    Your compliance with this Code will help ensure that all those who deal with our Company will clearly
    see that they are dealing with a world-class company which adheres to high ethical, moral, legal and
    business standards. Your compliance will also help to reduce our Company's and your personal
    exposure to legal and financial risks that may arise during your interactions with our suppliers,
    customers and competitors.
    This Code covers a number of ethical and business issues an employee may encounter. No Code
    can, however, provide all of the answers. You must examine each situation to ensure that you
    have acted ethically and in the best interest of the Company. One test of compliance with this
    Code is whether you would feel comfortable if your actions were disclosed publicly to your
    supervisor, friends, family and business associates.
    Please read the Code completely. Retain this copy and follow its guidance. Adhering to this Code
    will help you to be a more valuable and productive member of a more valuable and productive
    Company. In addition, the cooperation and support of all employees is required to maintain our
    standards of conduct and integrity. Thank you for your help.
    James F. McDonald
    Chairman of the Board, President and Chief Executive Officer
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    Procedure Number: 1POL2102 Issue Date: 05/17/95 Revision: 5.1 Revision Date: 5/02/03
    Procedure Name: Code of Conduct
    Written/Revised By: Michael Veysey Date: 5/02/03
    Approved By: Board of Directors Date: 05/17/95
    Concurrence: Date:
    (if necessary)
    The following core values set forth how we conduct ourselves in our dealings with customers, employees,
    suppliers, partners, competitors and the community seeking to improve every facet of our business through
    processes and procedures designed to optimize all our resources. These core values and this Code of
    Conduct apply to all employees of Scientific-Atlanta, Inc. and affiliates of Scientific-Atlanta, Inc., whether
    such employee is a permanent, contract or temporary employee. Compliance with this Code of Conduct is a
    condition of employment, and violations of the Code of Conduct may result in discipline or termination by the
    Company.
    CUSTOMERS
    We will meet in every reasonable way our customers' requirements and expectations.
    EMPLOYEES
    We will develop, train and support a world-class work force, treating employees with respect, and empowering
    them to achieve continuous improvement and excellence in quality and customer service.
    PROCESSES
    We will constantly review our procedures and our processes to ensure that we are effective and operate at the
    peak of our capability.
    IMPROVEMENTS
    We will diligently pursue improvements in every facet of our business.
    CORPORATE CITIZENSHIP
    We will promote the vitality, safety and well being of the communities in which we work.
    1.0 BUSINESS RELATIONSHIPS
    1.1 Customers. Our goal is to offer quality products and services at competitive prices, terms and conditions
    without compromising our ethical standards. We must treat our customers fairly, honestly and
    respectfully. We should not make unrealistic commitments on product performance, new product
    readiness, potential delivery dates or pricing. If we cannot keep our promises, customers may lose
    confidence in us. We must make every effort to meet the commitments we make to our customers on a
    timely basis. When we discover that we cannot meet a commitment, we will let the customer know as
    soon as possible. Then, we will do everything we reasonably can to minimize the negative impact. We
    should handle any disagreements with our customers in private. We never make disparaging remarks
    about our customers to others. We protect and never divulge confidential information regarding a
    customer's business.
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    1.2 Employees. Scientific-Atlanta continually strives to create a workplace where individuals are valued and
    treated with respect. The Company also strives to create a workplace environment which encourages,
    supports and empowers employees to exercise their individual initiative and entrepreneurial skills in
    achieving team and Company goals. We believe individual learning, growth and productivity are
    enhanced by this kind of atmosphere. To sustain a positive work environment, we must be able to
    express our ideas and opinions without fear of reprisal. We must seek the input of all team members and
    allow open debate on critical business issues. Because the market is so competitive, we must all try to
    resolve problems and work effectively as team contributors. No one person can do it by himself or herself.
    Communicating facts, not rumors, and respecting the privacy of others and the confidentiality of personal
    information are vital. We must also take time for small courtesies and thank people for a job well done
    even if it is part of their regular responsibilities. We should support and encourage our fellow employees,
    and never belittle or disparage them.
    1.3 Business Partners. Scientific-Atlanta's success in many cases depends on third-party business
    relationships. We honor our commitments to our business partners. We must always respect our
    partners' proprietary information and trade secrets. We comply with and do not remove any proprietary
    legends which are displayed on materials of our business partners. We cannot divulge this information to
    others outside the relationship, even if they are Scientific-Atlanta employees. We do not build lasting
    customer relationships by trying to look good at the expense of our business partners. We should handle
    any disagreements with our business partners directly and in private and not argue in front of the
    customer, regardless of who is responsible for delays, mistakes or problems.
    1.4 Suppliers. When we buy goods or services for Scientific-Atlanta, we must maintain our standards of
    ethical conduct. We must be fair, honest, and responsible in:
  • Choosing suppliers
  • Negotiating prices, terms and conditions
  • Meeting the obligations in our contracts
    To protect our reputation with suppliers, we cannot show favoritism or preference at the expense of
    a fair and open process. Purchasing decisions should always be based on defined criteria such as
    price, quality, service, reputation and the total business relationship with the supplier. We should not
    write purchasing requirements based on a particular supplier's products. Nor should we buy from
    suppliers simply because they purchase from us. We must respect and protect any confidential
    information shared by a supplier.
    1.5 Governments. When working with government agencies and officials in any country, we must know the
    regulations and policies governing our conduct. What is acceptable practice in the commercial market
    may violate strict rules and regulations in government interactions. When you sell to a government, you
    are obligated to know its procurement policies. In all our dealings with governments, our actions must
    comply with applicable laws and regulations. Do not offer or provide gifts, gratuities or political
    contributions or discuss employment opportunities with a government official. Even paying for a business
    meal is prohibited by some government policies. To prevent legal problems for ourselves or the
    Company, and because laws differ from country to country, you should work closely with the Legal
    Department when negotiating government contracts.
    1.6 Communities. Active involvement in the community promotes the well being of the community, the
    employee and the Company. The Company supports many community programs through monetary
    contributions and involvement by its officers. We encourage all employees to participate in community
    activities, and the Company has an active community volunteer program through its CareCorps group.
    The Company has also established the Scientific-Atlanta Foundation, a nonprofit organization, to promote
    the vitality, safety and well being of the community.
    1.7 Shareholders, Brokers, Media, etc. Sometimes inquiries about developments affecting the Company's
    business and prospects come from shareholders, members of the investment community and
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    representatives of the media. If you receive any inquiry of this kind, you should always refrain from
    providing any information that the Company has not publicly disclosed in press releases, reports to
    shareholders, etc. The best course is simply to refer the individual to the Vice President of Investor
    Relations.
    2.0 BUSINESS PRACTICES
    2.1 Protecting Company Information. Information about our Company's strategies, products, services and
    technical capabilities is critical to our success. It gives us our market advantage. Once exposed or stolen,
    it cannot be recovered. Even if we go to court and win, the information has become public and its value is
    diminished or destroyed. Employees must know how to protect Company information and must sign an
    "Employee Invention and Non-Disclosure Agreement."
    All of us are given Company information in trust. We must protect it and use it appropriately, whether the
    information is our own or has been obtained from our business partners, customers, suppliers or other
    third parties. For example, revealing information about Scientific-Atlanta's business plans or technical
    strategies to a competitor could result in a lost market advantage or breach a third-party agreement.
    Each of us has the responsibility to prevent proprietary information from being inappropriately shared. The
    nature of such proprietary information varies and includes business, financial or marketing plans; internal
    discussions and debates; employee information; engineering designs; prototypes; demonstrations; joint
    venture agreements; and manufacturing processes. Casual conversation and comments shared through
    electronic communications are two of the most common ways we inappropriately disclose information.
    Non-public Company information should not be discussed with friends, family or anyone other than
    coworkers who are involved in the matter. Be careful when talking to coworkers about our work,
    particularly at restaurants, trade shows, conferences, or on airplanes or mobile phones, or at any other
    place where others could overhear. The best strategy is not to discuss in any public place any information
    that has not been made public. Also, be sure not to leave memos, documents, drawings or other
    information in open or public areas. Erase white boards and chalk boards. Turn off computers when you
    leave work for the day or are going to be out of the office for an extended period of time. If you are
    working on your computer in a public place, e.g., on an airplane, make sure no one is reading the screen.
    Shred correspondence, notes, memoranda, charts, etc. which contain proprietary information.
    When dealing with proprietary information of the Company, be sure that you label all tangible forms of
    such information, including electronic mail, with this legend:
    SCIENTIFIC-ATLANTA PROPRIETARY INFORMATION
    This label should be used uniformly, and labels such as "Private", "Company Private" and other
    designations intended to designate proprietary information should not be used.
    You, as the author of the materials, are responsible for determining if the legend is needed. Not
    everything need be labeled with a proprietary legend. The following questions may help you in
    determining if a proprietary legend is needed.
  • Is the information proprietary in that it has not been publicly disclosed by the Company or by
    third parties?
  • Would disclosure of the information adversely impact the business of Scientific-Atlanta or a
    third party?
  • Would disclosure of the information provide a possible advantage or benefit to a competitor?
    2.2 Proper Recording of Business and Financial Transactions. The funds and assets of Scientific-Atlanta
    must be properly and accurately recorded on the official books and records in accordance with both
    generally accepted accounting principles and the Company's financial policies, with no false or artificial
    entries. The books of account, budget proposals, and books of original entry (especially bank accounts
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    where funds are deposited and disbursed) must honestly and accurately reflect the transactions they
    record in a timely manner. Such books and documents should not be organized in any way that would
    mislead or misinform. In summary, the documentation for transactions should meet the internal control
    criteria for adequate internal reporting and the materiality guidelines for external financial statement
    reporting.
    Accounting rules require that the books and records reflect certain events which impact the valuation of
    assets, or which result in liabilities for the Company, even though the final outcome of these events is not
    known. In other cases, no entries are required in the books and records, but the Company is required to
    disclose the nature of such events in its financial statements.
    If you are aware of any such events which could impact the Company's financial statements or related
    disclosures, it is essential that you communicate with appropriate financial management. All employees
    must adhere to standards that promote full, fair, accurate, timely, and understandable disclosure in reports
    and documents that Scientific-Atlanta files with, or submits to, the Securities and Exchange Commission
    and in other public communications made by Scientific-Atlanta. All employees are responsible for helping
    to maintain an effective internal control system within the Company.
    2.3 Proper Use of Company Assets. Scientific-Atlanta recognizes that having the right tools and supplies to
    do our work effectively is critical to our success. To keep us equipped with everything from office supplies
    to cash and credit cards, to computer software and hardware, requires a major investment. When we use
    these assets for anything other than Company business—even inadvertently—we reduce profits for our
    Company and our shareholders. Scientific-Atlanta assets must be used as efficiently as possible and only
    for Company business. Any other use requires the prior approval of an authorized manager.
    Our reliance on computing technology demands particular care. For instance, to protect against potential
    computer viruses, be careful not to put borrowed or unauthorized software on Scientific-Atlanta systems.
    Never make unauthorized copies of licensed software for personal, Scientific-Atlanta, or customer use. To
    protect Scientific-Atlanta equipment from being misappropriated, follow scrap procedures for any excess
    equipment. Do not assume you can take it for personal use.
    2.4 Business Communications. Any statement, assertion, representation or warranty made by any
    employee of Scientific-Atlanta on behalf of Scientific-Atlanta in any written or oral business communication
    must be truthful, must not be misleading and must avoid exaggeration, inappropriate language and
    derogatory remarks or characterizations. This applies to communications of every type, including, but not
    limited to, contracts, agreements, e-mail, voice mail, telephone or wire communications, letters,
    memoranda and informal notes, regardless whether such communication is intended for use internally or
    for distribution to third parties. Specifically, employees may not backdate documents and must date
    documents as of the date of execution.
    Additionally, each employee of Scientific-Atlanta must understand that e-mail is not a private form of
    communication and that it creates a permanent record that remains part of Scientific-Atlanta's business
    records even after it has been deleted. Therefore, each employee must exercise the same care, caution
    and etiquette in sending an e-mail message as such employee would in sending non-electronic, written
    business communications.
    2.5 Potential Misuse Of Company Business Decisions And Communications By Others. Decisions
    made by the Company and communications distributed by the Company can impact the businesses of
    others, such as customers and vendors, and potentially may be misused by others in a manner which is
    not intended by the employee and which may be detrimental to Scientific-Atlanta. Although employees
    cannot control the actions of third parties, all employees should have an understanding and awareness of
    the potential for misuse of a business decision or communication by a third party and the impact such a
    decision or communication may have, regardless of whether it is misused, on the business relationship
    between Scientific-Atlanta and the third party.
    Prior to rendering any business decision or transmitting any type of business communication, the
    employee should evaluate whether a possibility exists that a third party could potentially misuse such
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    decision or communication, and should examine the impact such decision or communication may have on
    Scientific-Atlanta's business relationship with the third party. Should the employee perceive any potential
    for misuse, the employee should discuss this issue with his or her supervisor(s). Further, the employee
    should take all steps necessary to render business decisions and draft business communications so as to
    (i) minimize any potential misuse by a third party and (ii) maintain the nature of the business relationship
    with such third party as established by Scientific-Atlanta.
    2.6 Marketing and Advertising Materials. In preparing and using marketing and advertising materials, we
    must ensure that:
  • No false or misleading statements are used.
  • All Company trademarks are properly used with the appropriate designation symbol.
  • When we use the trademarks of another company, these marks are used correctly and their
    owners are given proper attribution.
    2.7 Non-Discrimination. Scientific-Atlanta is committed to recruit, hire, develop and promote employees
    without discrimination on the basis of race, sex, age, national origin, religion, disability or veteran status.
    We believe diversity strengthens our work force and enhances our competitiveness. As we expand our
    international focus, it is important that we develop an appreciation for differences in cultural background
    and approach.
    Scientific-Atlanta expects its employees to treat each other with respect and to learn to appreciate other
    backgrounds and cultures. We do not tolerate harassment based on race, sex, age, national origin,
    religion, disability or veteran status.
    2.8 Gifts and Entertainment. Whenever an employee deals with a supplier, customer or governmental
    agency, he or she has an obligation to act solely in the best interest of Scientific-Atlanta. This obligation
    applies not only to those acts formalized by written contracts, but also to the everyday business
    relationships with suppliers, customers, government officials and government employees.
    Employees of Scientific-Atlanta may not directly or indirectly solicit from suppliers for any purpose any
    cash, gifts, meals, entertainment, tickets to events or similar items, except that employees may solicit
    donations, whether in cash or in-kind, from suppliers as part of a general solicitation of donations for a
    charity, provided that such suppliers are treated in the same manner as all companies solicited.
    Employees of Scientific-Atlanta may give gifts, favors, meals, entertainment and similar items to customers
    and employees of customers in accordance with the following limitations. Employees may accept gifts,
    favors, meals, entertainment and similar items from suppliers if not directly or indirectly solicited by an
    employee, subject to the following limitations. Any gift, favor, meal or entertainment whether given or
    received should be of such a nature that would not violate any law or the policies of customers or suppliers
    and would not place the employee or Scientific-Atlanta in a compromising position. Except with respect to
    government officials or employees, Scientific-Atlanta employees may offer or accept:
  • gifts of nominal value (those which do not exceed one hundred dollars ($100.00) in value);
  • non-lavish meals and entertainment; and
  • tickets to events;
    provided that these courtesies are customary and reasonable, that they are extended or distributed widely
    to those who share essentially the same business relationship with the donor, that they do not show
    favoritism and that there is no appearance that they are being provided to influence a decision. One factor
    that should be considered when deciding whether courtesies are reasonable is the frequency of such
    favors to such customer.
    Any other gifts, favors, meals, entertainment or similar items require the approval of a Corporate Vice
    President or a Senior Vice President. Generally, employees may not accept expense paid trips from
    customers or suppliers unless the trip is beneficial to the Company and is approved in writing in advance
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    by a Senior Vice President not participating in the trip or event. If the refusal to accept a gift valued in
    excess of one hundred dollars ($100.00) might offend the donor, as it may in some countries, the gift
    should be turned over to the Company.
    If you have any questions about the propriety of accepting or offering a gift, favor, meal, entertainment or
    other item of value, you should contact a Corporate Vice President, a Senior Vice President, or the
    General Counsel.
    For those of us who work with government customers, it is important to understand that we do not
    entertain or provide any gifts to government employees, as this is prohibited by law and can result in
    termination of, or failure to be awarded, government contracts. United States law makes it a crime to offer
    or give a gift or a gratuity to a government official.
    2.9 Competition. Scientific-Atlanta sells in a highly competitive market. We compete aggressively but fairly
    and ethically. We rely on the strengths of our products and people and avoid disparaging the products of
    others or making false or misleading statements about their products.
    We do not accept proprietary information of competitors. If we hire an employee who has worked with a
    competitor, we do not ask for or accept any proprietary or confidential information of the competitor. If we
    receive proprietary information of anyone accidentally or without their knowledge and consent, it must be
    turned over to the Legal Department promptly and without review for return to its owner. We do obtain all
    knowledge about our competitors, customers and businesses which is generally and publicly available.
    2.10 Conflicts of Interest. Scientific-Atlanta expects every employee to adhere to the Company's standards of
    ethical and legal business conduct. These standards include honest and ethical conduct, including the
    ethical handling of actual or apparent conflicts of interest between personal and professional relationships.
    An employee has a conflict of interest when the employee is involved, directly or indirectly, in activities
    which interfere, could interfere or have the appearance of interfering with or influencing the objective
    performance of his or her duties and responsibilities to the Company. In particular, an employee of the
    Company cannot maintain a financial interest in, nor relationship with, another entity which constitutes a
    conflict of interest unless approved as provided below. A conflict of interest exists if an employee or
    his/her spouse, dependent child, or other dependent member of his/her immediate family has a material
    direct or indirect financial interest in, or relationship with, any person, firm or corporation which is a
    supplier, customer, partner, joint venturer or competitor of or with the Company.
    An interest will be deemed material if it:
  • Constitutes an ownership interest in a privately-held entity or constitutes a 1% or more
    ownership interest in a publicly-traded entity; or
  • Constitutes a value of 10% or more of the total value of the employee's assets; or
  • Involves service as an officer, director, partner, consultant or employee of another entity.
    In addition to the material interests specified above, a Scientific-Atlanta employee should not have
    any interest in another business which might appear to adversely affect the employee's judgment
    regarding the employee's job or loyalty to Scientific-Atlanta. Managers and officers should consult
    with the General Counsel before making investments in businesses which are major competitors of
    the Company.
    No officer of the Company or any business unit officer may serve as an officer or director of another entity
    without the prior written approval of the General Counsel.
    Any conflict of interest, or potential conflict of interest, must be reported to the General Counsel. No
    conflict of interest or apparent conflict of interest may be continued unless approved by the General
    Counsel and, in the case of an officer of the Company, approved by the Chief Executive Officer or the
    Audit Committee of the Board of Directors.
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    2.11 Political Contributions. Federal law and the applicable law of many states and countries prohibit
    corporations from making political contributions. Scientific-Atlanta, therefore, does not make political
    contributions. An employee's contributions to a candidate for elective office or to a political party cannot,
    directly or indirectly, be made with or reimbursed by Scientific-Atlanta funds. Similarly, employees may not
    devote any work time to any campaign for a candidate or political party. No employee shall use his or her
    influence or position of authority to encourage another employee to work for or on behalf of any candidate,
    political party or ballot issue or to make a contribution for any such purpose.
    However, the Federal Election Campaign Act does allow Scientific-Atlanta to establish a political action
    committee ("PAC"). The Scientific-Atlanta PAC has been established to enable employees to pool
    personal funds so that they can support political candidates. Participation in the PAC is voluntary and is
    kept confidential. No employee will be rewarded or penalized because of participation or lack of
    participation in any political activity, including the PAC. Any question in this regard should be addressed to
    the Legal Department.
    2.12 Charitable Donations. As stated in our CORE VALUES, Scientific-Atlanta has the responsibility to be a
    good corporate citizen, and therefore strives to promote the vitality, safety and well being of the
    communities in which we work. Toward that end, Scientific-Atlanta has established a Charitable
    Contributions Committee, and each fiscal year it allocates a portion of the Company's budget for
    distribution by that Committee.
    Because we cannot realistically support all who seek our help, the Committee from time to time adopts
    criteria and procedures for implementing Scientific-Atlanta's charitable giving. These criteria and
    procedures are not static, but rather are modified and changed to meet the changing needs of the
    communities in which we do business and the priorities of Scientific-Atlanta.
    In determining whether to make a particular charitable contribution, the Committee considers both the
    social benefit to the community and the tangible benefit to Scientific-Atlanta and its employees. Areas of
    particular emphasis have included health, education, the arts and civic activities and projects, such as
    Habitat housing and support for the 1996 Olympic Games.
    3.0 REGULATORY COMPLIANCE
    3.1 General. All employees of Scientific-Atlanta must comply with all federal, state, local and international
    laws, rules and regulations which are applicable to such employee's conduct with respect to the business
    of Scientific-Atlanta. No excuse or pressure can justify breaking any such law, rule or regulation.
    Furthermore, an employee of Scientific-Atlanta may not use a consultant, contractor, supplier, business
    partner or any other person or entity to engage in any conduct which would be prohibited by any
    applicable law, rule or regulation, this Code of Conduct or any other policy of Scientific-Atlanta. This Code
    of Conduct sets forth in the sections below a discussion regarding several areas of law which each
    employee of Scientific-Atlanta should be aware. Such discussion is not intended to reference all
    applicable laws, rules and regulations with which each employee is required to comply.
    3.2 Antitrust Law. All employees of Scientific-Atlanta must comply with applicable federal, state and
    international antitrust laws and rules. Because violations may subject the Company to severe penalties, it
    is crucial that everyone recognize the types of conduct and situations that may trigger risks of antitrust
    violations.
    When we come in contact with our competitors at seminars, trade shows and professional conferences,
    we never engage in conduct which is or might be considered to be collaboration on prices, marketing
    policies, terms of sale, costs or similar items. Discussions should be limited to those items on the meeting
    agenda. Our business arrangements with, and conduct toward, customers, distributors, sales
    representatives, business partners and other third parties must also comply with antitrust laws.
    No officer, employee, or agent has any authority to engage in any conduct inconsistent with the antitrust
    laws, nor to authorize, direct, or condone such conduct by any other person.
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    The antitrust laws of the United States and other countries are very complex and new guidelines are
    constantly evolving. The Company has adopted an Antitrust Compliance Policy which is set forth in the
    Company's Policy Manual, which you should read carefully.
    If you suspect that an antitrust problem has arisen, or you are confronted with conduct ambiguous under
    the antitrust laws, please promptly contact the Legal Department.
    3.3 Improper Trading in Company Stock or Other Companies' Securities. In the course of employment
    and while participating in activities on behalf of Scientific-Atlanta, employees frequently come into
    possession of confidential and highly sensitive information concerning the Company, its investments and
    business activities and potential investments and business opportunities, as well as information regarding
    our customers, suppliers or other companies with which we have contractual relationships or may be
    negotiating a transaction. Much of this information has a potential for affecting the market price of
    securities issued by the entities involved. Federal securities laws impose severe civil and criminal
    penalties on persons who, in connection with a purchase or sale of securities, improperly obtain or use
    material non-public information about the issuer of or market for such securities.
    Because this is a very technical area of law and one with many pitfalls, both for the Company and for
    employees, officers and directors individually, a further explanation is attached as Appendix I, "Guidelines
    and Policies Regarding Trading of Securities." If you have any doubt or questions about trading in the
    Company's securities or those of other companies that you have learned about in the course of your work
    for Scientific-Atlanta, call the General Counsel.
    3.4 Environmental, Health and Safety Guidelines. Scientific-Atlanta is committed to the health and safety
    of its employees and their families. Our policy is to maintain a safe and healthy workplace for the benefit
    of our employees, customers and suppliers and to comply with applicable health, safety and
    environmental regulations. We require employees to comply with all safety requirements and to report any
    conditions they consider may be unsafe either in our workplace or our products. In the same manner, we
    expect employees to comply with environmental laws and requirements and to report any environmental
    concerns. Any questions and reports regarding health, safety and environmental issues should be
    submitted to the Company's Safety/Environmental Coordinator.
    3.5 Import and Export Compliance. Scientific-Atlanta and its worldwide offices and facilities comply with all
    export laws and regulations. All United States origin commodities and technology are controlled by either
    the Export Administration Act or the Arms Export Control Act. All non-United States origin commodities
    and technology require a proper export license from the appropriate non-United States authority. All
    exports and re-exports of commodities and technology must have an appropriate export license from the
    appropriate non-United States authority prior to export from any Company facility. Failure to comply with
    these laws can result in fines, criminal penalties and suspension of export privileges for the Company.
    Individual employees may also be subject to civil and criminal penalties for knowing violations of export
    laws.
    Export of commodities includes:
  • Sending or taking of a commodity out of the country of origin in any manner; or
  • Transferring registration of a commodity to another foreign entity or person; or
  • Re-exportation of a commodity; or
  • Performance of a service, repair, or upgrade to a commodity.
    Export of technical data includes:
  • An actual shipment or transmission (physically, telephonically, orally, visually, electronically,
    etc.) of technical data out of the country of origin; or
  • Any release of technology or source code to a foreign national; or
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  • Any re-export or retransmission of technical data.
    These definitions are very broad. Not only do Company products, technologies and components require
    export review, but any and all items that we export require proper export licensing and documentation.
    This includes any test equipment, trade show displays and giveaways, demonstration and prototype
    commodities, laptop computers and software used during international travel and non-Company produced
    equipment and firmware. Any questions should be directed to the Import/Export Compliance Office of the
    Legal Department.
    There are some restrictions on exports and re-exports. Some technologies and components cannot be
    licensed for export at all or can be exported only to certain countries or end users. Due to national
    security, foreign security, UN and country imposed embargoes or sanctions, certain countries and certain
    parties may not receive commodities or technical data. All exports must be properly screened and
    licensed prior to any export or re-export taking place from any Company facility.
    When the Company imports products or components, we must keep records as required by import laws
    and regulations, determine the correct country of origin and use the correct harmonized tariff
    classifications. Failure to comply with import regulations, including incorrect documentation, can subject
    the Company to both civil and criminal fines and penalties and can lead to the loss of the right to use
    certain favorable import treatments.
    In addition to complying with legal requirements, it is the policy of Scientific-Atlanta to take advantage of
    import regulations worldwide to minimize duty outlays and freight costs and to take advantage of duty
    drawbacks, free trade zones and other applicable import programs. Employees should contact the
    Import/Export Compliance Office of the Legal Department for information and assistance on all import
    matters. A more complete description of the Company's import/export policies is in the Company's Policy
    Manual.
    3.6 Embargo/Anti-Boycott Laws. We do not cooperate in any boycott or restrictive trade practice which is
    prohibited or penalized under U.S. law. Any request for such participation or information that would be
    used by boycotting countries must be reported promptly to the Legal Department. Exports to or imports
    from countries proscribed or under embargo by the United States are generally prohibited. Occasional
    sanctions and trade restrictions may also be imposed on certain countries for a variety of foreign policy
    reasons. It is unlawful to conduct business with these countries until the embargoes, sanctions or trade
    restrictions are lifted.
    3.7 International Transactions. When your business involves international transactions, it is important to
    take into consideration the applicable laws of any other country involved. Often these laws will require that
    the documentation or structure of the transaction differ significantly from transactions in the United States.
    Failure to recognize and address these differences can have serious consequences to the Company.
    Employees of the Company should not assume that the principles of contracting that generally apply in all
    of the states of the United States will apply in a contract involving a foreign entity. You should contact the
    Legal Department for review and assistance on any international transaction.
    3.8 Foreign Corrupt Practices Act. Scientific-Atlanta and its subsidiaries are subject to, and require that all
    employees comply with the United States Foreign Corrupt Practices Act. This law prohibits Scientific-
    Atlanta, its employees, officers, directors, stockholders or agents from making an offer, payment, promise
    to pay or authorization of payment (directly or indirectly) of any money or gift to a foreign official, foreign
    political party, or candidate for political office in order to influence any decision of such official or party to
    affect a governmental act which may assist in obtaining, retaining or directing business to any person or to
    the Company. The same restrictions also apply to payments or offers made by any consultants, sales
    representatives, distributors, joint venture partners or any other third party acting on behalf of the
    Company. A more complete description of the requirements of this law and Company policy relating to
    this law is set forth in the Policy Regarding Compliance with Anti-corruption Laws (1POL2104) of the
    Corporate Compliance and Policy Manual.
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    The law also prohibits payments to officers or employees of a nationalized or government-owned industry
    in a foreign country or arranging to provide a job for a friend or relative of a foreign official in exchange for
    favorable treatment of the Company.
    The law does allow small gratuities or tips to be paid to certain officials to perform "routine governmental
    actions." Reasonable entertaining and subsidizing visits of customers are also allowed. Because of the
    serious consequences of a violation of this law, any payments to any official of a foreign government
    should be approved in advance by the Legal Department.
    4.0 AMENDMENTS AND WAIVERS
    Except as herein otherwise expressly provided, no amendments or waivers of the Code of Conduct
    or its provisions can be made without prior approval of the Board of Directors of Scientific-Atlanta,
    Inc.
    5.0 WHO TO CONTACT FOR INFORMATION
    If you have a question about any of the issues discussed in this booklet, your first resource is your
    manager. In most cases, he or she can help you resolve the issue or help you locate the appropriate
    source to help. If you are a manager and you cannot resolve the issue or locate the appropriate source to
    help, you should contact the Legal Department.
    As soon as you are aware of a government investigation of the Company, you should immediately
    notify the Company's Compliance Officer or the Legal Department.
    If you need to go outside the normal management chain for some reason, the following departments may
    be able to help.
    Who to Call: What they can help with:
    Compliance Officer
    Issues involving compliance issues
    Legal Department Issues involving government contracts, governmental
    relations, proprietary information, antitrust, international
    issues, and any other concerns about ethics issues or
    possible improper or illegal conduct
    Issues involving import/export classifications, export licenses
    and other compliance issues
    Issues involving political donations
    General Counsel Issues involving conflict of interest and trading in Company
    securities
    Finance Department Issues involving business controls, asset management and
    other financial matters
    Human Resources Issues involving employment matters
    Corporate Safety Coordinator Issues involving environmental regulations, or employee and
    safety regulations
    Security Issues involving physical security of facilities
    Director of Community Affairs Issues involving charitable donations and community volunteer
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    programs
    Vice President of
    Corporate Communications
    Issues involving contact with shareholders, financial analysts
    and the media
    You may also contact the Company's Corporate Compliance Committee, which is responsible for
    ensuring that the standard of conduct for all Company employees complies with all legal
    requirements, Company Compliance Policies and all other company policies. Members of the
    Company's Corporate Compliance Committee are set forth in the Corporate Compliance Policy.
    6.0 REPORTING VIOLATIONS AND QUESTIONABLE CONDUCT
    If you are aware of or suspect any questionable conduct or potential violation of the law or this Code of Conduct,
    you should promptly report these concerns to your manager. If for some reason you cannot report them to your
    manager (e.g., he is involved in the matter giving rise to the violation), you should promptly report them to the
    General Counsel. Every effort will be made to maintain confidentiality if you request it and there will be no reprisals
    for reporting any type of problem. If an investigation is required, Scientific-Atlanta will conduct an impartial
    investigation and take appropriate action to provide accountability for adherence to this Code of Conduct. You may
    also contact the Compliance Officer or a member of the Corporate Compliance Committee.
    6.1 Anonymous Reports
    If you feel you need to report a problem anonymously, or cannot get the matter resolved with your
    manager, you can call the following numbers:
    In Atlanta: 770-236-4839
    Outside Atlanta: 770-236-4839
    Your call will be answered by a voice messaging system. You can leave an anonymous message or a
    message with your name and telephone number if you need assistance or wish to receive a report on the
    disposition of your matter.
    Please remember it is more difficult to investigate and gather further information from an anonymous
    source.
    To file a report by mail, including anonymous reports, address it to:
    Legal Department-Ethics and Compliance Issues
    Scientific-Atlanta, Inc.
    5030 Sugarloaf Parkway
    Lawrenceville, Georgia 30044
    6.2 Audit Committee Whistleblower Procedures
    Anyone may submit on a confidential, anonymous basis any concerns regarding financial statement
    disclosures, accounting, internal accounting controls or auditing matters directly to the Audit
    Committee by calling the audit committee hotline, which is completely administered by a third party.
    You can call the audit committee hotline at [___________].
    Any attorney of the Company may submit on a confidential, anonymous basis if he or she so
    desires, any evidence of a material violation of securities law or breach of fiduciary duty or similar
    violation by the Company or any Company agent by setting forth evidence of the violation in writing
    and forwarding it in a sealed envelope to the Chair of the Audit Committee, in care of the Corporate
    Secretary, such envelope to be labeled with the following legend: "To Be Opened by the Audit
    Committee Only." If such attorney would like to discuss any matter with the Audit Committee, the
    employee should indicate this in the submission and include a telephone number at which he or she
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    might be contacted if the Audit Committee deems it appropriate. Any such envelopes received by
    the Corporate Secretary shall be forwarded promptly to the Chair of the Audit Committee.
    Concerns, complaints or evidence of violations described above in this Section 6.1 may also be
    submitted via the Company's confidential voice messaging system described in Section 6.1 above.
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    APPENDIX I - GUIDELINES AND POLICIES REGARDING TRADING OF SECURITIES
    The Company directs your attention to various provisions of law, particularly the federal securities laws, which
    could affect your transactions in the securities of Scientific-Atlanta and of other corporations, particularly those with
    which the Company has certain ongoing relationships.
    Company Stock Covered
    Scientific-Atlanta has common stock listed and available for trading on the New York Stock Exchange: Symbol -
    SFA.
    Ownership of Stocks
    It is not the Company's policy to discourage its employees from owning its stock as a long-term investment.
    Whether or not to invest in the Company's stock is, however, your own decision and should be governed by
    ordinary investment principles.
    "Short-Swing" Transactions by Officers and Directors
    The federal securities laws contain provisions relating to a so-called "short-swing" transaction, which, in simplified
    terms, refers to a purchase followed by a sale, or a sale followed by a purchase, within any six-month period. The
    Securities and Exchange Commission ("SEC") defines the officer group that is subject to various reporting
    obligations and to potential liability for profits arising from prohibited "short-swing" transactions. As regards the
    Scientific-Atlanta officer group, it is the Company's position that the only individuals covered are the executive
    officers and the Company's principal accounting officer.
    Liability for short-swing transactions is automatic in the sense that actual use of "inside" information need not be
    shown. Also, neither lack of familiarity with the rules nor inadvertent non-compliance will excuse a violation.
    Questions often arise in connection with stock options, and the application of the SEC's rules to typical option
    transactions is discussed under the heading "Stock Option Plans" below. Given, however, the complexities of the
    rules, the only safe course to assure compliance with both the SEC's rules and Company policy is for each
    individual who has any question or uncertainty about a transaction involving Company stock to check with the
    Legal Department.
    "Insider" Trading in Company Stock
    You may already be aware of the other prohibitions imposed by the federal securities laws on the misuse of socalled
    "inside" information. The media frequently report instances in which the federal authorities and private
    parties have brought legal proceedings (including criminal indictments) based on violations of these laws. In brief,
    the rule is that you may not buy or sell the Company's stock (including Company stock transactions through the
    Company's 401(k) plan) or advise others to buy or sell at a time when you have knowledge of material information
    regarding the business of the Company that has not been made public.
    As a result of several notorious instances of large profits having been made through the use of "inside" information,
    the SEC has in recent years stepped up its surveillance system and enforcement activities. The Enforcement
    Division of the SEC has been particularly active in attacking improper use of "inside" information, and a number of
    instances have been uncovered in which outside advisors have allegedly made enormous trading profits by taking
    advantage of non-public information regarding impending tender offers or corporate acquisitions.
    The SEC can bring an action in the federal courts to impose a penalty of up to three times the amount of the profit
    gained (or loss avoided) from transactions by any person "in possession of material non-public information." In
    addition, jail terms for criminal securities law violations can be for as long as ten years and criminal fines can reach
    $1,000,000 for individuals and $2,500,000 for corporations.
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    When is it proper to purchase or sell the Company's stock? In the absence of any non-public special
    circumstances known to you, it is fair to assume that no difficulties should arise if purchases or sales of securities
    are made within what is sometimes called the "window period" which begins on the third trading day after the
    Company publicly releases its quarterly earnings reports and continues through the twelfth trading day after such
    release. This is, however, no more than a rule of thumb which has not been expressly upheld by court decisions,
    and you should not regard it as affording complete protection any more than you should assume that transactions
    not within such period are likely to create liability. Given the uncertainties which abound in this area, it may often
    be prudent to seek the advice of the Legal Department. Legal considerations aside, however, it is Company policy
    that corporate officers should buy or sell Company stock only during the "window period," except in special
    circumstances (which should first be discussed with the General Counsel). This policy does not, of course, prevent
    stock optionees from exercising at any time their rights to purchase Company stock under their employee stock
    option agreements provided there is not a simultaneous sale of the stock.
    Trading in the Stock of Other Corporations
    A number of court decisions under the federal securities laws have made it clear that liability may also be imposed
    on persons who obtain material non-public information concerning a corporation other than the one by which they
    are employed and who then engage in transactions in the securities of that corporation. Although the outer limits of
    the situations in which such liability may be imposed on "tippees" remain unclear, a duty to refrain from trading on
    the basis of undisclosed information is clearly present in those instances where the individual from whom the
    "inside" information is obtained has a fiduciary or confidential relationship to the corporation in question.
    In order to avoid both the possibility of such litigation and possible embarrassment to the Company, we strongly
    recommend that all employees refrain from trading in the stock or other securities of other corporations in any
    situation where there is reason to believe that any resulting trading profits might be attributed to their possession of
    confidential information. Particular care should be observed in the case of transactions in the securities of other
    corporations with which the Company or its subsidiaries have ongoing contractual relationships.
    Short Sales
    The federal securities laws also make it unlawful for directors and certain officers of the Company to make any
    short sale of the Company's stock. It is also against Company policy for any of its employees (whether or not an
    officer) to effect short sales in its stock. This is equally true in the case of short sales "against the box," i.e., where
    the employee holds a number of shares of the Company's stock at least equal to the number of such shares sold
    short. Short sales tend to be speculative in nature and usually reflect a profit objective inconsistent with that of the
    Company's shareholders generally.
    Puts and Calls
    It is Company policy that officers and employees refrain from writing either call options to purchase the Company's
    stock or put options to sell such stock. Transactions of this kind may be analogous to short sales or may reflect a
    profit objective inconsistent with that of the Company's shareholders. Moreover, under the SEC's rules governing
    "short-swing" transactions, the writing by an officer within the defined group of a call or put with respect to the
    Company's equity securities would constitute the sale or purchase, respectively, of the underlying equity securities
    and exercise by the purchaser, or expiration without exercise, of the put or call within six months would expose the
    officer to "short-swing" liability.
    It is also Company policy that officers and employees refrain from transactions in publicly traded puts and calls with
    respect to the Company's stock. Under the SEC's "short-swing" rules, puts and calls are "derivative securities" that
    are treated the same as the stock itself. Typically, publicly traded puts and calls expire within six months and their
    purchase and sale within that period therefore would give rise to liability exposure on the part of officers subject to
    the SEC's rules. In any event, transactions in these derivative securities are more analogous to speculation than
    genuine investment in the Company's stock.
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    Margin Trading
    Open market purchases of the Company's securities by use of margin credit should be avoided. Such purchases
    give the appearance of speculation, and for various reasons it may become necessary or desirable to reduce the
    margin indebtedness by selling the securities during a period when the purchaser may be in possession of material
    non-public information.
    Stock Option Plans
    Under the SEC's rules regarding "short-swing" transactions, in general, corporate officers who are subject to the
    rules may exercise their options and immediately sell the option stock without giving rise to liability for recovery of
    profits. Company policy also permits such an exercise and immediate sale after that date. Under the "short-swing"
    rules, both the option exercise and the sale may take place at any time. However, it is Company policy that,
    although the option exercise may take place at any time, a sale of the option stock should be made only during the
    "window period" as defined above. Obviously, if you do plan to sell option stock immediately, the option exercise
    should also take place during the "window period."
    Illustrative of the complexity of the SEC's rules is the fact that in some circumstances the sale of option stock
    immediately following an option exercise could result in liability. If the optionee has purchased in the open market
    (e.g., on the New York Stock Exchange) shares of Scientific-Atlanta stock within six months prior to the sale of the
    option stock, or if the open market purchase is made within six months after the sale, the sale transaction would be
    matched with the purchase and the officer would be liable for any resulting "profit." The officer may never have
    intended to gain this "profit," but, as previously mentioned, inadvertent violations are not excused. This example
    again underscores the advisability of first checking with the Legal Department or one's own counsel.
    One further caution is in order with respect to option exercises. Optionees who choose to hold their option stock
    may have to borrow funds to pay for a substantial part of the purchase price of the stock covered by an exercise or
    for the income taxes due as a result of an exercise. The Company does not seek to impose a flat prohibition
    against all borrowing by optionees from any bank with which the Company itself does substantial business. On the
    other hand, it would contravene Company policy if any optionee were to offer, expressly or by implication, to
    provide or maintain Company business with the bank as a means of extracting preferential loan terms (whether in
    connection with an option exercise or otherwise) that would not have been made available regularly to other bank
    customers of comparable creditworthiness.
    This same principle would apply to use of the corporate position in some other direct or indirect way to obtain more
    favorable terms than might otherwise be possible. In this context, unusually favorable loan terms may also present
    an appearance of impropriety which should be scrupulously avoided. Accordingly, borrowings from a bank with
    which the Company has an important relationship should be made only if you are personally satisfied that the
    foregoing criteria have been met.
    THE LAW IN THIS AREA NOT ONLY IS CHANGING RAPIDLY, BUT VERY OFTEN IS DIFFICULT TO APPLY
    TO INDIVIDUAL FACT SITUATIONS. THIS APPENDIX CONTAINS BASIC GUIDELINES ONLY.
    ACCORDINGLY, THE ADVICE OF THE LEGAL DEPARTMENT MUST BE SOUGHT PROMPTLY WHENEVER
    THERE IS ANY QUESTION ABOUT PROPOSED OR COMPLETED ACTIONS REGARDING PURCHASES OR
    SALES OF COMPANY STOCK.
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    CERTIFICATION
    I acknowledge that I have received a copy of the Scientific-Atlanta, Inc. Code of Conduct, Version [5.0] and that I
    have read it and my questions have been answered.
    I understand that I am required to comply with the policies described in the Code.
    If I have a question or concern about complying with the Code or about a possible violation of the Code by me or
    another employee, I will report the matter to the Law Department.
    Signature Date
    Print Name
    Employee Number Location
    This signed Certification should be delivered to your Human Resources representative.
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    [INSERT FOR CODE OF CONDUCT FOR EUROPEAN EMPLOYEES]
    SECTION 3 - REGULATORY COMPLIANCE
    Competition Law
    All employees of Scientific-Atlanta must comply with applicable national, European, and United States
    competition laws and rules. Because violations may subject the Company to severe penalties, it is crucial
    that everyone recognize the types of conduct and situations that may trigger risks of competition violations.
    When we come in contact with our competitors at seminars, trade shows and professional conferences, we
    never engage in conduct which is or might be considered to be collaboration on prices, marketing policies,
    terms of sale, costs or similar items. Discussions should be limited to those items on the meeting agenda.
    Our business arrangements with, and conduct towards, customers, distributors, sales representatives,
    business partners and other third parties must also comply with competition laws.
    No officer, employee, or agent has any authority to engage in any conduct inconsistent with the competition
    laws, nor to authorize, direct or condone such conduct by any other person.
    The competition laws of the European Union, the United States and other countries are very complex and
    new guidelines are constantly evolving. The Company has adopted a "Guide to Competition Law (Europe)"
    which you should read carefully and comply with (see Appendix II).
    If you suspect that a competition problem has arisen, or you are confronted with conduct ambiguous under
    the competition laws, please promptly contact the Legal Department.
    Improper Trading in Company Stock or Other Companies' Securities
    In the course of employment and while participating in activities on behalf of Scientific-Atlanta, employees
    frequently come into possession of confidential and highly sensitive information concerning the Company, its
    investments and business activities and potential investments and business opportunities, as well as
    information regarding our customers, suppliers or other companies with which we have contractual
    relationships or may be negotiating a transaction. Much of this information has a potential for affecting the
    market price of securities issued by the entities involved. Insider dealing is a serious criminal offense both in
    the United States and the European Economic Area. U.S. Federal securities laws impose severe civil and
    criminal penalties on persons who, in connection with a purchase or sale of securities, improperly obtain or
    use material non-public information about the issuer of or market for such securities.
    Because this is a very technical area of law and one with many pitfalls, both for the Company and for
    employees, officers and directors individually, a further explanation is attached as Appendix I, "Guidelines
    and Policies Regarding Trading of Securities." If you have any doubt or questions about trading in the
    Company's securities or those of other companies that you have learned about in the course of your work for
    Scientific-Atlanta, call the General Counsel.
    Money Laundering
    Based on EC Money Laundering Directive (91/308/EEC), the member states of the European Economic
    Area have enacted legislation governing money laundering. In the European Economic Area money
    laundering is a criminal offense. It is an offense to assist a money launderer; to convert, to transfer, to
    conceal or disguise, to acquire, to possess or to use property, knowing that such property is derived from
    criminal activity or from an act of participation in such activity; and to tip off someone about an investigation
    into money laundering. If convicted, one can be severely sentenced under the Member States law, even
    when the activities were carried out in the territory of another Member State or in that of a third country.
    Under Company procedures you must report any knowledge or suspicions of money laundering to the
    General Counsel. The General Counsel will review the circumstances to determine if a report should be
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    made to the police. If you are contacted by the police, immediately consult with the Legal Department to
    ensure that the "tipping off" offense is not committed. Disclosures to the General Counsel in accordance
    with Company procedures will not be regarded as breach of any restriction imposed by statute or otherwise.
    It can be an offense for a person to fail to report his knowledge or suspicions about money laundering,
    gained in course of his trade, profession, business or employment, according to company disclosure
    procedures, or to the police.
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    [INSERT FOR CODE OF CONDUCT FOR EUROPEAN EMPLOYEES]
    APPENDIX II - GUIDE TO COMPETITION LAW (EUROPE)
    Purpose of Competition Law.
    There is a cooperation between the antitrust authorities of the EU and the US. EU competition rules have
    similar objectives as the US – to create efficiency and to ensure consumers the best and most innovative
    products and services, at the lowest price.
    EU competition rules apply to:
    1. companies acting in combination ("Collusive Behaviour");
    2. companies abusing a monopoly or dominant position; and
    3. merger with a "Community Dimension."
    EC rules are designed to apply to merger and joint ventures between sizeable firms achieving a substantial
    turnover within the European Union.
    Rules apply throughout the European Union and the European Economic Area.
    This compliance guide focuses on the competition laws of the European Community and on procedures to
    be followed by all employees in order to avoid breaches of EC competition laws. However, national
    competition laws apply alongside EC competition laws.
    National competition laws in the European Union can apply in addition to, or to the exclusion of, EC
    competition laws. The general principles in this guide should help to ensure compliance with the national
    competition laws, but it is always necessary to inform the Legal Department before engaging in any
    competition-sensitive activity which may affect commerce in any Member State.
    Companies Acting in Combination ("Collusive Behaviour") - Article 81 EC Treaty
    Prohibits restrictive practices arising from joint actions of companies applicable to contracts and concerted
    practices, formal and informal, which distort competition within the common market and affect trade between
    EU Member States to an appreciable extent.
    Examples:
    1. price fixing;
    2. limiting production or technical development;
    3. sharing markets;
    4. discriminating between trading parties to put them at a competitive disadvantage; and
    5. tying arrangements (where acceptance of one contract is dependent on party accepting another,
    unconnected contract).
    Parties can seek clearance from EC if they can show these restrictions are:
    1. indispensable;
    2. do not eliminate competition; and
    3. confer benefits, especially to consumers.
    EC Commission has issued Regulations (Block Exemptions) exempting arrangements which comply with the
    provisions specified from the obligation to obtain clearance from the Commission. Unless you have cleared
    the matter with the Office of the General Counsel, you should assume that any restriction of the above will be
    void and may result in a fine being imposed on the Company. This is especially true in case of any
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    provisions which may have the effect of allowing the Company to share markets with its competitors, or will
    enable the Company and its competitors to stop competing with each other in particular product markets.
    Companies Abusing a Monopoly or Dominant Position - Article 82 EC Treaty
    Article 82 of EC treaty prohibits a company which has a monopoly, or is in a dominant position in a particular
    market from abusing its market power and thereby distorting competition in EU Member States.
    "Dominant" means: a position of economic strength enabling the business to behave to an appreciable
    extent independently of its competitors and customers and is assessed by reference to market power. (In
    some markets, market shares as little as 30% have been perceived as "dominant").
    Abuses:
    1. price fixing;
    2. limiting production or technical development;
    3. discriminating between trading parties to place them at competitive disadvantage; and
    4. tying arrangements
    Enforcers
    EC Commission is responsible for EU competition policy. Parties may complain to DG IV (the Competition
    Directorate); however, it is the policy of the EC Commission to encourage national courts to be responsible
    for enforcing competition law. In such case, party suffering loss may obtain an injunction to stop the anticompetitive
    practice or claim damages.
    The EC Commission has wide powers to obtain information for investigation including "Dawn Raids"
    (unannounced visits to premises to gather evidence with power to search and take materials it considers
    necessary, including personal belongings, e-mails and contents of diaries and briefcases). Legal papers
    prepared by outside legal counsel are protected, not legal papers prepared by in-house counsel.
    The Penalties
    EC Commission can impose fines on business with intentional or negligent breach of competition rules up to
    ten percent (10%) of worldwide group turnover of the business in the preceding business year and fines for
    refusing to supply information which has been formally requested, for supplying incorrect or incomplete
    information or for obstructing an official of the European Commission in the exercise of his or her duty.