SCI Engineered Materials, Inc. (the “Company”) has a Business Conduct Policy applicable to all employees of the Company. The Chief Executive Officer (“CEO”) and all senior financial officers, including the principal financial officer, the principal accounting officer or controller, or any person performing a similar function (collectively, the “Senior Financial Officers”) are bound by the provisions set forth therein relating to ethical conduct, conflicts of interest, and compliance with the law. In addition to the Business Conduct Policy, the Chief Executive Officer and Senior Financial Officers are subject to the additional specific policies:

1. 1. The CEO and each Senior Financial Officer are responsible for full, fair, accurate, timely, and understandable disclosure in all reports and documents filed with or submitted to the Securities and Exchange Commission (the “SEC”) by the Company, and in any other public communications made by the Company.
   2. The CEO and each Senior Financial Officer shall promptly bring to the attention of the Audit Committee any information he or she may have concerning (a) significant deficiencies in the design or operation of internal controls which could adversely affect the Company’s ability to record, process, summarize, and report financial data, or (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s financial reporting, disclosures, or internal controls.
   3. The CEO and each Senior Financial Officer shall engage in honest and ethical conduct, and shall promptly bring to the attention of the CEO and to the Audit Committee any information he or she may have concerning any violation of the Company’s Business Conduct Policy, including any actual or apparent conflicts of interest between personal and professional relationships, involving any management or other employees who have a significant role in the Company’s financial reporting, disclosures, or internal controls.
   4. The CEO and each Senior Financial Officer shall comply with all applicable governmental laws, rules, and regulations, and shall promptly bring to the attention of the CEO and the Audit Committee any information he or she may have concerning evidence of a material violation of the securities or other laws, rules, or regulations applicable to the Company and the operation of its business, by the Company or any agent thereof, or of violation of the Business Conduct Policy or of these additional procedures.
   5. The Board of Directors shall determine, or designate appropriate persons to determine, appropriate actions to be taken in the event of violations of the Business Conduct Policy or of these additional procedures by the Chief Executive Officer or the Senior Financial Officers. Such actions shall be reasonably designed to deter wrongdoing and to promote accountability for adherence to the Business Conduct Policy and to these additional procedures, and shall include written notices to the individual involved that the Board has determined that there has been a violation, censure by the Board, demotion or re-assignment of the individual involved, suspensions with or without pay or benefits (as determined by the Board) and termination of the individual’s employment. In determining what action is appropriate in a particular case, the Board of Directors or such designee shall take into account all relevant information, including the nature and severity of the violation, whether the violation was a single occurrence or repeated occurrences, whether the violation appears to have been intentional or inadvertent, whether the individual in question has been advised prior to the violation as to the proper course of action and whether or not the individual in question had committed other violations in the past.