Xerox Corporation is committed to leadership in environmental protection. We have long been a leader in research and
applied technology in environmental health and safety. We are committed to incorporating the latest advances in environmental technology into our products and operations worldwide.

Corporate Environmental Health and Safety Policy
Xerox Corporation is committed to the protection of the environment and the health and safety of its employees, customers and neighbors.

This commitment is applied worldwide in developing new products and processes.

• Environmental health and safety concerns take priority over economic considerations.               
• All Xerox operations must be conducted in a manner that safeguards health, protects the environment, and conserves valuable materials and resources.

• Xerox is committed to the continual improvement of its performance in environmental protection and resource conservation.

• Xerox is committed to designing products for optimal recyclability and reusability. We are equally committed to exploring every opportunity to recycle or reuse waste materials generated by our operations.

This policy is an expression of how Xerox people think and act.

• We reclaim and recycle materials used in our manufacturing processes, including metal-alloy photoreceptors used
  in our products (35 million pounds of metal annually) and many plastics.

• We use permanent parts-shipping containers and carts in manufacturing operations which we return to our suppliers for refilling and reuse.

• We were first in the United States to incorporate automatic energy-saving modes into the design of copiers, printers, and other equipment.

• We were first in the United States to introduce two-sided copying and two-sided laser printing, thereby halving paper usage.

• We use recycled-content, corrugated cartons for shipping consumable supplies, and we are working to increase this use.

• We are reclaiming and remanufacturing about 1 million finished piece parts worldwide each year, representing a total value of approximately $200 million.

• Some 35% of the solid waste – approximately 6,500 tons – from our largest, worldwide manufacturing site, in Webster, N.Y., is being either recycled or used as an alternative to fossil fuel. Significant quantities of solid waste are also being recycled at a growing number of other Xerox sites.

• We recycle waste paper from our corporate headquarters in Stamford, Connecticut, and from our facilities in Rochester, N.Y., Oklahoma City, Leesburg, VA, Los Angeles and San Francisco.

• We are eliminating the use of ozone-depleting chlorofluorocarbons in packaging, service materials and manufacturing operations.

• Where possible, we use natural, biodegradable cleaners and water in place of chemical solvents in our
  machine-refurbishing operations.

• We are marketing recycled-content copying and duplicating paper in several regions of the world and plan to expand this program to other regions.

• We market an electronic typewriter employing a patented technology that reduces the sound of its daisywheel printing mechanism to 52 decibels, about 15 decibels quieter than standard daisy-wheel typewriters and actually quieter than normal conversation.

• We introduced employee van- and car-pool programs in our major metropolitan locations. In the Los Angeles area we are using vans converted to run on cleaner-burning propane fuel.

• We improved the fuel mileage of our vehicle fleet (including trucks) from an average of 13 miles per gallon to 20 miles per gallon during the 1980’s.

• We instituted energy-management programs in all our major facilities.

• We conducted a full environmental survey of all Xerox locations, worldwide, and instituted remedial programs where necessary to bring more than 35 sites around the world up to our corporate environmental and safety standards.

• We are a leading practitioner of full disclosure of health and safety information for the materials in our products.

• We are founding sponsors of the National Office-Paper Recycling Project. Managed by the U.S. Conference of Mayors, the Project is a consortium of user corporations, paper and packaging manufacturers, waste-management companies and public-sector organizations. It is a public- and private-sector partnership dedicated to the development of a comprehensive national office-paper recycling strategy.

Four years before the first Earth Day, Xerox demonstrated its commitment to protecting the environment. In 1966, we
proposed a sewage-treatment system to the Town of Webster, N.Y., the community where the company’s first major
research, engineering and manufacturing facilities were about to expand.

Under an agreement formalized in March of that year, Xerox provided construction and start-up funding of $1.7 million,
over a four year period, for a sewage system valued at $3.5 million. The complete system was designed to serve the needs of the Town for up to 50 years.

The funding from Xerox was credited against the company’s annual use fees. As the heaviest early user, Xerox paid the
bulk of the operating costs for many years.

In 1980, Xerox formalized its commitment to the environment worldwide by establishing a corporate environmental health and safety organization. Since that time, an extensive effort has been made to identify and improve health, safety, and environmental standards and practices. In many cases, this has led to substantial expenditures to upgrade company
facilities to meet the resulting stricter standards.

Prompted by environmental-safety problems that were being experienced by other companies, Xerox in 1984 voluntarily undertook a survey of its worldwide facilities. The survey’s purpose was to determine whether any condition existed that posed unacceptable risks to our neighbors. Where such conditions were found, they were quickly rectified, even where no legal requirement existed.

For instance, at one location near warehouses for food and pharmaceuticals, stored drums of arsenic and selenium were
removed. At another Xerox facility near a nursing home, chlorine was eliminated from the manufacturing process.

Concurrently, Xerox surveyed worldwide locations where industrial solvents had been used. This survey focused on possible groundwater or solid deposits of such solvents either adjacent to or underneath each facility.

Where such deposits were found, action was taken immediately to prevent the material from migrating, the appropriate
government agencies were notified, and remedial plans were developed and implemented with the concurrence of the
agencies. At locations not covered by environmental laws, Xerox took voluntary remedial action.

In the product-development area, Xerox has set corporate standards for environmental protection and product safety that exceed the requirements of many governments around the world. These standards are built into the design specification for our products. We have also taken steps to anticipate and safeguard against the possible misuse of our products.

Design standards now under development will mandate that all future products be designed to minimize environmental
impact and maximize parts recycling and remanufacture.

Xerox has also introduced many product innovations that conserve energy and reduce waste, such as two-sided copying and printing, energy saving modes in products, and on-demand printing made possible by high-speed masterless duplicators, laser printers, and the recently introduced Xerox DocuTech Publishing Series. In addition, Xerox has been working to conserve natural resources by:

• Recycling or reusing components of printed wiring boards.

• Repairing and remanufacturing parts from used products wherever possible. This includes power supplies,
  motors, paper-transport systems and metal rollers. The total value for 1990 is expected to be greater than $200 million.

• Limiting machine emissions to levels well below government standards, to ensure the health and comfort of our
  customers.

As part of our environmental policy, we actively recycle many solid-waste materials.   We:

• Annually send about 8 million pounds (22% of total solid waste) of separated corrugated boxes and waste
  paper from Monroe County and 2 million pounds from greater Los Angeles operations to paper mills for processing into new products.

• Send about 5 million pounds (13% of the total) of solid waste annually from Monroe County, N.Y., operations
  to processing plants to replace fossil fuels in the production of process steam.

• Recycle plastics used in parts production. (Scrapped plastic parts are ground up, and the material is reused.)

• Recycle carrier beads from the developer used in 9000 Series duplicators.

In addition to actively recycling solid waste, we reclaim many materials used in manufacturing processes. These
include metals, solvents, and other chemicals. We:

• Reclaim metals from used photoreceptors.
  Average annual yields are:
  800,000 pounds of nickel
  600,000 pounds of aluminum
  160,000 pounds of selenium

• Recover and recycle approximately 34 million pounds of metal and other material annually from scrapped
  parts, representing a recovery value of $1.8 million.

• Developed and applied reclamation and treatment procedures for chemicals used in the manufacturing process.

Xerox has taken the position that pollution prevention and conservation of natural resources are major elements
in our drive for continuing leadership status as a total quality company. Toward that end, we:

• Replaced chemical solvents, which are harmful to the environment, with citric acid and water-based cleaners
  in our photoreceptor-drum and machine refurbishing operations. This practice annually avoids 1.5 million pounds
  of chlorinated hydrocarbon waste and an associated half million pounds in air emissions.

• Initiated a program for reusable parts-shipping containers and carts. This substantially reduces the need for
  new cartons and wood pallets, conserving timber resources. At current annual rates, this will avoid the generation
  of 10,000 tons of waste and save up to $15 million annually. This performance is expected to improve as the use
  of reusable containers increases.

• Use recycled-content corrugated cartons for shipping consumable supplies. This, too, conserves timber resources.

• Are installing state-of-the-art recovery systems in our organic photoreceptor plants to reduce the methylene chloride
  emissions from a manufacturing process by approximately 90 to 98%, depending on the process in use. This will
  bring our emissions, which are already within government-permitted levels, substantially below those permitted levels.