"CLARE AND THE ENVIRONMENT"

• Clare is committed to conducting business in an environmentally responsible manner.
• To fulfill this commitment, we have established the following objectives:
• Compliance with all applicable laws and regulations
• Conservation of resources and pollution prevention through the reduction, reuse or recycling of materials and energy
• Reduction of pollutant emissions in all forms.
• Employee awareness of their impact on Clare's environmentally responsible status
• Periodic review and continual improvement of Clare's progress towards these objectives.

  Although Clare-Beverly has a well established EH&S program, in 1999 we challenged our program to deliver enhanced performance as measured by 14 parameters. For 10 of the 14 metrics, we surpassed our goals and consequently, reduced our impact on the environment and improved the safety of our workplace. The actual results were the following:

• Safety. Safety is a fundamental consideration in every activity at Clare. This basic belief allows us to continue to provide our employees with an extremely safe workplace. The last 9 months of 1999 were incident free and our accident rate is well below the industry standard.
• Chemical Usage and Emissions. Many of our successes are due to the application of 7-step problem solving techniques by employee teams. The Chemical Usage Reduction Team provided high double-digit reductions in all 4 of the categories we monitored. These reductions, which demonstrate the power of employee participation, benefit both the environment and the company's profitability.
• Water Usage. Water is a critical component of Clare's manufacturing operations, so any changes that affect its quality or quantity must be carefully evaluated. Even with these constraints, our cross-functional water team was able to reduce the Beverly facility's water usage by 35%. This means that several million gallons of water that would have been consumed were left undisturbed in the local watershed.
• Hazardous waste. The efficiency improvements that were implemented to reduce chemical usage also helped to reduce hazardous waste generation by 17%.

  There were a few categories in which we did not realize our goals. In both energy usage and solid waste generation, we encountered some difficulties that we could not overcome. In energy usage, the expansion of our cleanroom area and the addition of equipment created new energy demands that exceeded our conservation efforts. Likewise, our solid waste numbers were higher mainly because of the demolition debris generated during the closure of our Wakefield facility.

  Clare's 1999 EH&S performance surpassed our expectations while providing excellent benefits to the environment, our employees, and the company. We now look at 2000 and ask how we can continue to improve our performance. The following goals for the Beverly facility are the metrics we will use in 2000 to measure that improvement.