EXHIBIT 10.52

                           NEOMEDIA TECHNOLOGIES, INC

                      POLICY STATEMENT ON ETHICAL BEHAVIOR



A.       PURPOSE

         It is the policy of NeoMedia  Technologies,  Inc. (the "Company") to do
         business in compliance with all applicable  laws, rules and regulations
         and accepted  community  ethical and moral  standards.  It has been the
         Company's longstanding policy to maintain the highest ethical standards
         in the conduct of its affairs and in its  relationship  with customers,
         suppliers,  employees,  advisors and the  communities  and countries in
         which its operations are located.

         As an integral  member of the Company team,  you are expected to accept
         certain  responsibilities,  adhere to acceptable business principles in
         matters of  personal  conduct,  and  exhibit a high  degree of personal
         integrity at all times.  This not only involves sincere respect for the
         rights and  feelings  of  others,  but also  demands  that in both your
         business and personal life, you refrain from any behavior that might be
         harmful  to you,  your  co-workers,  or the  Company,  or that might be
         viewed unfavorably by current or potential customers,  or by the public
         at large.  Whether you are on duty or off, your conduct reflects on the
         Company.  You  are,  therefore,   encouraged  to  observe  the  highest
         standards of professionalism at all times.

         It would be  virtually  impossible  to cite  examples  of every type of
         activity  which  might give rise to a question  of  unethical  conduct.
         Therefore,  it is  important  that  each of us  rely  on our  own  good
         judgement in the performance of our duties and  responsibilities.  When
         those  situations  occur where the proper  course of action is unclear,
         request  advice  and  counsel  from  an  officer  of the  Company.  The
         reputation  and good  name of the  Company  depends  entirely  upon the
         honesty and integrity of each one of us.

         Employees should read this Policy Statement with the following in mind:

         1.       The  Company  requires  every  employee  to comply  with these
                  standards.

         2.       This  list  is  not  comprehensive.   The  Company  encourages
                  employees who have questions  about these  standards and their
                  application  to  employee  conduct to discuss  them with their
                  manager,  the Company's counsel, or with the manager in charge
                  of human resources or the Chief Financial Officer.

         3.       An  employee  who knows or has reason to know of any  activity
                  that violates or could violate these  standards  must promptly
                  report  the  matter to the  President  or the Chief  Financial
                  Officer.

         4.       Each  employee  will be given a copy of this Policy  Statement
                  and be asked to sign an Employee Acknowledgement Form.

<PAGE>

B.       RESPONSIBILITY FOR POLICY ENFORCEMENT

         These  principles set forth in this Policy Statement are to be strictly
         observed. Each manager should insure that appropriate procedures are in
         place  such  that  at  the  time  of  employment  or  promotion  into a
         management,  supervisory,  sales or purchasing position an acknowledged
         copy of this Policy  Statement is obtained for  permanent  retention in
         the employees' personnel file.

         In January of each year,

         1.       each Corporate officer and senior management personnel will be
                  asked  to  reaffirm  this  Policy  Statement  by  signing  and
                  returning  to the  Corporate  office  a copy  of  this  Policy
                  Statement, and

         2.       each  manager will ask all  employees to reaffirm  this Policy
                  Statement  by reviewing  the  statements  with each  employee,
                  obtaining two signed copies on the attached  form, one copy of
                  which will be retained in the employee's  personnel file. Each
                  manager  will  notify  the  President  or the Chief  Financial
                  Officer in  writing of  refusals  to sign,  or any  exceptions
                  requested to, this requirement.

         Because  violations are serious matters,  any infraction of this Policy
         Statement  will subject an  employee,  without  regard to position,  to
         disciplinary   action,   which  may   include   reprimand,   probation,
         suspension, reduction in salary, demotion or discharge depending on the
         seriousness of the offense. Claims of ignorance,  overzealousness, good
         intentions  or lack of injury  cannot  excuse  or  justify  acts  which
         violate  this  Policy  Statement.  In  addition,  similar  disciplinary
         measures will apply to any employee who directs,  orders or approves of
         such prohibited  activities,  or has knowledge of them and does not act
         promptly to correct  them in  accordance  with this  Policy  Statement.
         Appropriate  disciplinary  measures will be imposed on any employee who
         fails  to  carry  out the  management  responsibility  to  insure  that
         subordinates are adequately informed about this Policy Statement.

         The Company's attorneys will advise management  concerning the legality
         of corporate conduct and, upon approval from an officer of the Company,
         should be called upon for guidance and counsel if any  questions  arise
         regarding  Company  policy or concerning any proposed  activities  that
         raise any question of possible conflict with this Policy Statement.

         As used in this Policy  Statement,  the term "Company" means and refers
         to  Neomedia   Technologies,   Inc.  and  all  of  its   divisions  and
         subsidiaries,  domestic and foreign,  and the term "employee" means and
         refers  to  the   directors,   officers   and   employees  of  Neomedia
         Technologies, Inc. and all of its divisions and subsidiaries.

C.       COMPLIANCE WITH LAWS AND REGULATIONS

         All  activities of the Company and its employees  shall be conducted in
         compliance with all federal, state and other laws, rules,  regulations,
         orders and judicial decrees. An officer or employee having any question
         as to the validity of any action  proposed to be taken on behalf of the
         Company shall submit it to the President for opinion.

         No claim of business  exigency,  increased sales or profits or business
         opportunity shall excuse any violation of this Policy Statement.
<PAGE>

         In addition to literal compliance with legal requirements, each officer
         and employee  must adhere to and comply with the  overriding  moral and
         ethical  standards  of our  society  in the  conduct of  business.  The
         Company's   interests  are  not  served  by  unethical   practices  and
         activities even though not in technical violation of the law.

D.       GIFTS OF ALL KINDS.

         The purpose of the policy relating to entertainment,  gifts, favors and
         gratuities  is to avoid any  implication  that  unfair or  preferential
         treatment  will be granted or received by the  Company's  employees  in
         their course of dealing on behalf of the Company. A basic consideration
         should  be that  public  disclosure  would not be  embarrassing  to the
         Company or the recipient. The following guidelines are provided for the
         applications of this policy:

         1.       Gifts of cash,  or cash  equivalents,  are  never  permissible
                  regardless of amount;

         2.       An especially  strict standard is imposed on gifts,  services,
                  or  considerations  of any kind  from  suppliers.  Only  those
                  considerations which are deemed common business courtesies and
                  are of an insignificant or nominal value to the recipient will
                  be permitted;

         3.       Gifts, favors, and entertainment may be given to others at the
                  Company's  expense only if they are  consistent  with accepted
                  business  practices  and are of such  limited  value that they
                  cannot be considered as a bribe or payoff.

E.       FAVORS.

         Employees  may not give or  receive  any gifts or favors to or from any
         customer,  supplier,  competitor  (other than a gift of nominal  value)
         without the prior  consent of a manager.  In no event shall an employee
         give or receive a gift in the form of cash, stocks,  bonds, options, or
         similar types of items.

         It is  impermissible  and may be  unlawful to give,  offer,  or promise
         anything of value for the purpose of influencing  someone in connection
         with  Company  business  or a  Company  transaction.  Similarly,  it is
         impermissible  and  may be  unlawful  to  solicit,  demand,  or  accept
         anything  of value with the intent of being  influenced  or rewarded in
         connection  with any Company  business or  transaction.  Therefore,  no
         employee may give or receive any gift it could  reasonably be viewed as
         being done to gain a business advantage.

         Employees  are not prevented  from  incurring  normal  business-related
         expenses  for  entertainment  or from  accepting  personal  mementos of
         minimal  value.  It is acceptable to  occasionally  allow a supplier or
         customer to pay for a business meal.

F.       BRIBES.

         The  Company  will  pay only  those  agents  with  whom it has a formal
         written  agreement and from whom it has an invoice detailing the amount
         to be paid.  Employees  must insure  that  vouchers  properly  identify
         commissions.
<PAGE>

         An  employee  may make  payment  to an agent for only the  amount  that
         constitutes  the proper  remuneration  for the service  rendered by the
         agent.  An employee may not make a commission  or any other  payment if
         that employee knows or has reason to know the payment will be used as a
         bribe.

G.       ANTITRUST LAWS AND TRADE REGULATIONS

         The antitrust laws and  regulations  shall be observed at all times, in
         all situations,  by all employees of the Company. At the heart of these
         laws, price-fixing,  including the exchange of pricing information with
         competitors,  and bid-rigging acts or arrangements  with competitors to
         divide or  allocate  markets or  customers  or exclude  others from the
         market,  are absolutely  prohibited.  Jail  sentences,  fines and heavy
         damages have been imposed on individuals and corporations violating the
         antitrust laws.

         It is  expected  that  employees  whose  activities  are  significantly
         affected  by the  antitrust  laws  will  have a  working  knowledge  of
         permissible  and  impermissible  activities  involved in their work and
         will consult with their superiors and the Company's attorneys,  through
         appropriate  channels,  concerning  any  matter  on which  there is any
         question.

         It is the  responsibility  of all  officers  and  managers to make this
         policy known to, and regularly stress its importance to, employees over
         whom they have supervision,  and to administer and execute this policy.
         They shall continue to call upon the Company's attorneys,  after having
         obtained  proper  authorization,  for such  assistance  and  reviews of
         compliance   procedures  as  they  and  the  Company's  attorneys  deem
         advisable to insure the effectiveness of this policy.

H.       ELECTION CAMPAIGN LAWS

         Federal law  prohibits a  corporation  from  making a  contribution  or
         expenditure in connection with any election at which  Presidential  and
         Vice-Presidential electors, or a Senator or Representative to Congress,
         are to be voted for,  or in  connection  with any  primary  election or
         political  convention  or caucus held to select  candidates  for any of
         these offices.

         Most  states of the  United  States  and many  foreign  countries  have
         similar  laws   prohibiting   corporate   political   contributions  in
         connection with elections to political office.

         It is the policy of the Company that such laws shall be observed by all
         officers  and   employees   and  that  no  corporate   funds  shall  be
         contributed,  expended or reimbursed,  directly or indirectly,  for any
         purpose  contrary  to such  laws.  Any  officer  or  employee  asked to
         contribute  corporate funds, or to contribute funds in such a manner or
         amount  leading to the belief  that  corporate  funds  would be used in
         connection with any political  campaign,  shall immediately  notify the
         President or the Chief Financial Officer.

         This policy, it is emphasized,  relates not only to direct disbursement
         of Company funds but also to indirect contributions or payments made in
         any form or through any means, such as through consultants,  suppliers,
         customers or other third parties or by  reimbursement  to employees for
         personal contributions or payments.

         Even where  political  contributions  are  permitted by law, no Company
         funds in excess of $100.00 in each case shall be used for such purposes
         unless authorized by the President or Chief Financial Officer.
<PAGE>

         Each manager is responsible;

         1.       for disseminating  this policy and stressing its importance to
                  employees  over  whom  they  have  supervision  who  are  in a
                  position to make a contribution  of corporate  funds or obtain
                  reimbursements from the Company therefore,

         2.       for reviewing with the Company's attorneys any questions as to
                  the propriety of any  contribution or expenditure  which could
                  possibly  violate  this  policy  before such  contribution  or
                  expenditure is made, and

         3.       for  reporting  directly to the  President or Chief  Financial
                  Officer of the Company any violation or apparent  violation of
                  this policy.

         This policy does not prohibit or  discourage  any officers or employees
         from  engaging in political  activities  in an  individual  capacity on
         their own time at their  own  expense,  or  during  an unpaid  leave of
         absence,  or from making  political  contributions  or  expenditures of
         their personal funds, or from expressing  views and taking  appropriate
         action as Company  officers or employees with respect to legislative or
         political matters affecting the Company.

I.       RELATIONSHIP WITH GOVERNMENTAL AGENCIES AND OFFICIALS

         Payments,  regardless of amount, or gifts or entertainment of more than
         nominal value to employees of the United States and any other  domestic
         or  foreign  jurisdiction,  regardless  of  motive,  are  viewed by the
         Company  as  improper  and they are not to be  permitted.  In  addition
         federal law imposes criminal  penalties on Corporations and individuals
         violating  these  laws.  It is  important  that all  Company  personnel
         realize that our relationship with agencies and public officials should
         in all respects be of such a nature that the integrity  and  reputation
         of the  officials and the Company will not be impugned in the event the
         full details of the relationship, including any gifts or entertainment,
         become a matter of public record.

J.       PROPER ACCOUNTING FOR FUNDS, ASSETS AND DISBURSEMENTS

         Employees are forbidden to use, directly or indirectly, corporate funds
         and assets for any unlawful purpose or to accomplish any unlawful goal.
         The  Company  also  prohibits  the   establishment  or  maintenance  of
         undisclosed or unrecorded funds and assets.

         All reporting information should be accurate and timely.  Employees may
         not make any false or misleading entries in any books and records.

         It is essential that at all times there be full and accurate accounting
         for funds  and other  assets of the  Company  by those  entrusted  with
         control over them and that all  disbursements  or uses of Company funds
         be legal and be fully  documented,  and be  accurately  recorded in its
         accounts. To this end, these standards must be observed:

         1.       The use of assets of the Company for any personal, unlawful or
                  improper purpose is strictly prohibited.
<PAGE>

         2.       No  undisclosed  or  unrecorded  fund or asset of the  Company
                  shall be established for any purpose.

         3.       No false or misleading  entries shall be made in the books and
                  records of the Company for any reason,  and no employee  shall
                  engage in any  arrangement  that  results  in such  prohibited
                  acts.

         4.       No payment on behalf of the Company shall be approved  without
                  adequate  supporting  documentation or made with the intention
                  or  understanding  that any part of such payment is to be used
                  for any purpose  other than that  described  by the  documents
                  supporting the payment.

         5.       No employee  shall  accept any bribes or  kickbacks or make or
                  offer any bribe to anyone  within or outside  the  Company for
                  any purpose of advantage to the Company or to any individual.

         6.       All  employees  having  management,   supervisory,   auditing,
                  accounting,   bookkeeping,   and  other  similar  and  related
                  responsibilities   shall  be  familiar  with  the   accounting
                  responsibilities  of the Foreign  Corrupt  Practices  Act, and
                  regulations thereunder and shall observe its provisions.

         7.       Employees  dealing  with  or in  foreign  countries  shall  be
                  familiar with the provisions of the Foreign Corrupt  Practices
                  Act,  and  regulations  thereunder,   and  shall  observe  its
                  provisions  in all  transactions  with  foreign  nationals  or
                  companies.

         Any officer or employee  having  knowledge  of any act or  circumstance
         which is  prohibited  by the  foregoing  paragraphs  shall  immediately
         report the matter to the  President or Chief  Financial  Officer of the
         Company. Any question as to the legality of any payment for consultants
         or other  similar  fees shall be  submitted  to the  President or Chief
         Financial Officer of the Company for opinion.

         The Chief Financial  Officer shall maintain  procedures to preclude the
         accumulation  of funds which are not  recorded on the books and records
         of the  Company.  The internal  accounting  department  shall  maintain
         suitable  written audit and other  controls to monitor  compliance  and
         reveal any violations of these policies.

K.       CONFLICTS OF INTEREST - OUTSIDE ACTIVITIES

         If an  employee  is hired for a position  that gives the  employee  the
         authority  to spend  Company  funds  or set  Company  policy,  it is an
         implicit  condition of his or her employment  that the employee use the
         authority in the Company's interest.

         Every  employee  is  prohibited  from  partaking  in  any  activity  or
         association  that  creates or appears to create a conflict  between the
         employee's personal interest and the Company's business  interests.  In
         addition, no employee must allow any situation or personal interests to
         interfere  with the  exercise  of  independent  judgment  or with  that
         employee's ability to act in the best interests of the Company.

         The term "conflict of interest"  describes any circumstance  that would
         cast doubt on an employee's  ability to act with total objectivity with
         regard to the  Company's  interest.  Each employee is expected to avoid
         any action or involvement  which would in any way compromise his or her
         actions on behalf of the Company.
<PAGE>

         Circumstances  in  which a  conflict  of  interest  on the  part of any
         employee shall be deemed to exist include,  but are not limited to, the
         following:

         1.       Relationships with suppliers, contractors or customers:

                  (a)      Ownership  of a material  interest  in any  supplier,
                           contractor,  subcontractor,  customer or other entity
                           (other than an affiliate  of the Company)  with which
                           the Company does business.

                  (b)      Acting in any capacity - including director, officer,
                           partner, consultant,  employee, distributor, agent or
                           the    like    -    for    suppliers,    contractors,
                           subcontractors,  customers or other  entities  (other
                           than an  affiliate  of the  Company)  with  which the
                           Company does business.

                  (c)      Acceptance  of  payments,  services  or loans  from a
                           supplier,  contractor,   subcontractor,  customer  or
                           other entity (other than an affiliate of the Company)
                           with which the Company does  business.  This includes
                           gifts,  trips,  entertainment or other favors of more
                           than nominal value.

         2.       Ownership of property affected by Company action:

                  (a)      Ownership or  acquisition  of property,  the value of
                           which is likely to be  affected  by any action of the
                           Company or influenced by a decision or recommendation
                           of the employee owning such property.

                  (b)      Ownership or  acquisition of any property or interest
                           where   confidential   or   unpublished   information
                           obtained  through  the  Company  has in any way  been
                           considered in such ownership or acquisition.

         3.       Appropriation or diversion of corporate opportunity:

                  (a)      The  appropriation  by an officer or  employee or the
                           diversion  to others of any business  opportunity  in
                           which  it  is  known  or  it  could   reasonably   be
                           anticipated that the Company would be interested.

                  (b)      The   disclosure   of   any   "insider"    non-public
                           information about the Company.

         4.       Interest in or position with competitor:

                  (a)      Ownership by an employee of a material interest in an
                           enterprise in competition with the Company.

                  (b)      Acting as  director,  officer,  partner,  consultant,
                           employee  or  agent  of any  enterprise  which  is in
                           competition with the Company.

         These  prohibitions  and requirements are applicable to close relatives
         or members of the immediate family of any employee.

<PAGE>

         An interest is "material"  within the meaning of this policy when it is
         significant either by reference to the employee's financial position or
         in  reference  to the size of the  entity  involved.  In case of doubt,
         materiality should be presumed.

         The legal form of ownership will be of no  significance  in determining
         whether a possible conflict of interest may exist except that ownership
         of an aggregate of less than one tenth of 1% of the  securities  of any
         corporation  which has total assets of $50 million or more shall not be
         deemed to involve a conflict of interest under this policy and need not
         be reported.

         Employees  shall  not  engage  in any  outside  interest,  activity  or
         investment  which may be adverse to the  Company or  conflict  with its
         best  interests.  This  includes  engaging  in an  illegal  or  immoral
         enterprise, or accepting sales commissions, professional fees, or other
         forms of  remuneration  from outside the Company in connection  with or
         resulting  from  duties  or  responsibilities  as an  employee  of  the
         Company;  provided,  however,  that an employee  may,  with  management
         approval,  serve as a director  of another  company,  whether or not an
         affiliate of the Company,  give  lectures,  conduct  seminars,  publish
         articles and books, serve as a committee member,  trustee, or regent or
         in other  similar  capacities,  and  retain any fees,  honorariums,  or
         similar compensation received therefor.

         Any outside  interest or activities  which have been fully disclosed to
         the  Company,  and  approved in writing,  either at the time of initial
         employment of subsequent  thereto,  may continue in the manner approved
         until and unless advised to the contrary. Any employee who has doubt as
         to the propriety of any outside  interests or  activities  may obtain a
         clarification  at any time by submitting a written  request through the
         employee's  manager  and in cases  where  there is any doubt  about the
         application  of  the  policy  to  outside   interests,   the  Company's
         attorneys,  after receiving written authorization from the President or
         Chief Financial Officer to consult with the Company's attorneys.

L.       SECURITIES LAWS AND REGULATIONS

         United States securities  regulations,  which regulate  transactions in
         corporate  securities  (such  as  stocks  and  bonds),   impose  severe
         sanctions  against the use of "inside"  information in the purchase and
         sale of securities by officers and employees of a company for their own
         benefit  and  profit.   "Inside"  information  includes  any  important
         material  fact which may affect the  decision  of anyone  (including  a
         speculator) to buy, sell or hold a particular security.

         Until released to the public,  material information  concerning Company
         plans,   operations  or  financial   results  is  considered   "inside"
         information and, therefore,  confidential. Such data does not belong to
         the individual  employee who may handle it or otherwise come to know of
         it.  For any  person  to use such  information  for  personal  benefit,
         especially in connection with the trading of any Company securities, or
         to disclose such  information to others  outside the Company,  violates
         the law and is contrary to the Company's interests.

         Under  the  rules  of  the  United  States   Securities   and  Exchange
         Commission,  anyone who is in possession of material inside information
         is an  "insider".  This includes not only  knowledgeable  directors and
         officers  but also  non-management  employees  and persons  outside the
         Company  (wives,  friends,  brokers,  printers and others) who may have
         acquired  the  information  directly  or  indirectly  from  inside  the
         Company.  These rules prohibit insiders from trading in or recommending
         the  Company's   securities  while  such  inside  information   remains
         undisclosed  to the general  public.  The  securities  include not only
         those of the Company,  but also the  securities of any company of which
         you have acquired important,  non-public  knowledge as a result of your
         employment. Specifically, you should not trade in the securities of any
         company  which,  to  your  knowledge,  is  under  consideration  as  an
         acquisition by the Company.
<PAGE>

         The  insider  is  allowed  to  purchase,   sell  or  recommend  Company
         securities or the  securities of another  company only after the inside
         information  has  been  publicly  disclosed,  and  then  only  after  a
         reasonable  time has elapsed for the  information to be absorbed by the
         general public.

         The Company has rigidly  defined  channels  through which data proposed
         for public release must flow. No disclosure of inside information which
         could be material should be made without first consulting the Company's
         attorneys,  after receiving written authorization from the President or
         Chief Financial Officer to consult with the Company's attorneys.

         Regulations  which are  designed  to protect the  investing  public are
         strictly  enforced,  and both  civil and  criminal  action can be taken
         against  both the  individual  and  company  involved.  If you have any
         doubts as to whether a  contemplated  securities  transaction  might be
         deemed a  violation  of the  "insider"  trading  rule,  you may,  after
         receiving  proper  authorization,  request an opinion of the  Company's
         attorneys.

         Employees  are  prohibited  from  investing  in any  of  the  Company's
         customers, suppliers, or competitors unless the securities are publicly
         traded  and the  investments  are on the same  terms  available  to the
         general  public  and  not  based  on  any  "inside  information".  This
         prohibition  applies to all forms of investments  and to all employees,
         directors,  officers,  and agents of the  Company  and their  immediate
         families.

         In  general,  employees  should not have any  financial  interest  in a
         customer,  supplier, or competitor that could cause divided loyalty, or
         even the appearance of a divided loyalty.

M.       DISCLOSING CONFIDENTIAL INFORMATION

         Employees have an ethical duty not to disclose confidential information
         gleaned  from  business   transactions  and  to  protect   confidential
         relationships  between the Company and its  customers,  suppliers,  and
         shareholders.

         Business  information  that has not been  made  public  (e.g.,  insider
         information)   shall   not  be   released   to   private   individuals,
         organizations,  or government  bodies unless  demanded by legal process
         such as a subpoena or court order. Employees shall not use confidential
         information  obtained in the course of their employment for the purpose
         of advancing any private interest or otherwise for personal gain.

         Employees should refer any requests for information  (reference checks,
         credit  reporting,  etc.)  about  present  or former  employees  of the
         Company to the  manager in charge of the human  resources  function  or
         Chief Financial Officer for handling.
<PAGE>

N.       CONFIDENTIALITY

         The Company possesses and will continue to possess information that has
         been  created,  discovered,  and  developed  by the  Company;  has been
         disclosed to the Company under the  obligation of  confidentiality;  or
         has otherwise  become known to the Company or in which property  rights
         have been  assigned or conveyed to the Company,  which  information  is
         confidential to the Company and which  information has commercial value
         in the  business  of the  Company.  All such  information,  except such
         information  as is  known  or  becomes  known  to  the  public  without
         violation  of  the  terms  of  this  paragraph,   is  hereafter  called
         "Confidential and Proprietary Information".

         By  way  of   illustration,   but  not  limitation,   Confidential  and
         Proprietary  Information includes customer lists,  subscriptions lists,
         details of author or consultant contracts,  pricing policies, financial
         statements,  projections,  marketing  plans or strategies,  new product
         developments  or  plans,  business  acquisition  plans,  new  personnel
         acquisition  plans,  trade  secrets,  operation  methods,  software and
         computer programs.

         During the employee's employment with the Company and after termination
         (whether  voluntary or involuntary)  of the employee's  employment with
         the Company or any of its  affiliates,  the employee  shall keep secret
         and  retain  in  strictest   confidence  all  such   Confidential   and
         Proprietary  Information.  Nothing contained in this paragraph shall be
         deemed to  prevent  the  employee  from  utilizing  his or her  general
         knowledge,  intellect,  experience,  and skills for gainful  employment
         after termination of employment with the Company.

O.       DOCUMENTS

         All  memoranda,  notes,  lists,  records and other  documents  (and all
         copies  thereof) made or complied by the employee or made  available to
         the  employee  concerning  the  business  of the  Company or any of its
         affiliates  shall be the  Company's  property and shall be delivered to
         the Company promptly upon the termination of the employee's  employment
         with the  Company  or any of its  affiliates  or at any  other  time on
         request.

P.       OUTSIDE EMPLOYMENT

         No  employee  may serve as an  employee,  director,  or  officer of any
         supplier or customer  without the prior written approval of the manager
         in  charge  of human  resources  or the  Chief  Financial  Officer.  An
         employee  may never  serve as an  employee,  director,  or officer of a
         competitor  but may serve as an adviser or  consultant to a supplier or
         customer if that employee  conducts business as a representative of the
         Company.  Officers  of the  Company  may  not  engage  in  any  outside
         employment  other  than  work  as a  volunteer,  which  is done on such
         individual's  own time,  and other than  employment  for an  affiliated
         company of the Company which such  employment  has been approved by the
         Board of Directors of the Company.

         Any employee who does perform outside work has a special responsibility
         to avoid any conflict with the Company's  business  interests.  Outside
         work  cannot  be  performed  on  the  Company's  time  other  than  any
         employment  for  an  affiliated  company  of  the  Company  which  such
         employment has been approved by the Board of Directors of the Company.
<PAGE>

Q.       DOING BUSINESS WITH FAMILY MEMBERS

         If an employee  wishes to do  business on behalf of the Company  with a
         member of that employee's  immediate family or other relative or with a
         company of which a relative is an officer,  director, or principal, the
         employee  must first  disclose  the  relationship  and obtain the prior
         written approval of the President or the Chief Financial Officer of the
         Company.

R.       PRODUCT INTEGRITY

         In  connection  with the  design,  development,  testing,  manufacture,
         advertising,  sale or service of the Company's products,  all employees
         are  directed  to  adhere to  engineering,  manufacturing  and  ethical
         standards  which  provide  proper  design,  performance,  operation and
         maintenance of the Company's products.

         In connection with the sale of Company products, its advertising, sales
         promotions and customer  presentations  should accurately set forth any
         product specifications, capabilities or limitations. Representations of
         this type must be fully  documented by sound  engineering  and testing.
         Any overstatement or misstatement  either  affirmatively or by omission
         is to be strictly avoided.

         At the time of its sale,  each Company  product  should comply with all
         applicable  industry  standards,  and all  state,  federal  or  foreign
         statutes, regulations or codes, then in existence.

         The   individual   or   individuals   having   continuing   design  and
         manufacturing  responsibility  for a product shall be  responsible  for
         seeing that the product is in  compliance  with  applicable  standards,
         statutes,  codes  or  regulations,  and for  certification  of  product
         compliance.  Every such  individual  is expected to have and maintain a
         good working knowledge of the applicable standards, statutes, codes and
         regulations  relating to the products over which they have  supervisory
         responsibility.

         Managers who have any questions  under this policy should call upon the
         President  or the Chief  Financial  Officer  for an  opinion  as to the
         proper course of action.

         Any employee who believes he has  knowledge of any Company  product not
         in  conformity  with  these  standards  is  expected  to call it to the
         attention of the  relevant  management  personnel  so that  appropriate
         corrective action can be taken.

S.       REPORTS AND ASSURANCES

         Officers and employees having responsibilities within the areas covered
         by this Policy  Statement will be required to execute  periodic written
         reports  and  assurances  (under  oath if deemed  necessary)  regarding
         compliance  by them  and by  those  under  their  supervision  with the
         principles set forth in this Policy Statement.
<PAGE>


                            EMPLOYEE ACKNOWLEDGEMENT




I hereby  certify that I have received and read copies of the  Company's  Policy
Statement on Ethical  Behavior and that I fully  understand my  obligations  and
responsibilities and agree to fully comply with these policies.


Witness:


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Signature                                   Signature


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Name                                        Name


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Date                                        Division, Subsidiary or Branch


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                                            Title


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