**Exhibit 14.1**

 

**ESCHELON TELECOM, INC.**

**CODE OF ETHICS AND BUSINESSCONDUCT**

 

**Statement of General Policy**

 

This Code of Ethics and Business Conduct (the “Code”)has been adopted to provide guiding principles to all officers and employees ofEschelon Telecom, Inc. and its subsidiaries (collectively, the “Company”)in the performance of their duties.  Italso applies in many respects to the directors of the Company.  The Code should be read in conjunction withthe Company’s other policies that govern employee conduct.

 

The basic principle which governs all of our officers,directors and employees (“Insiders”) is that the Company’s business should becarried on with loyalty to the interest of our shareholders, customers,suppliers, fellow employees, strategic partners and other businessassociates.  In furtherance of theforegoing, no Insider shall:  (a) employany device, scheme or artifice to defraud the Company, another Insider or anyBusiness Associate; (b) engage in any act, practice or course of conductwhich operates or would operate as a fraud or deceit upon the Company , another Insider or any Business Associate.

 

The Company is committed to a high standard ofbusiness conduct.  This means conductingbusiness in accordance with the spirit and letter of applicable laws andregulations and in accordance with ethical business practices.  This Code, which applies to all Insiders andtheir Family Members, helps in this endeavor by providing a statement of thefundamental principles that govern the conduct of the Company’s business.  In addition, all Insiders and their FamilyMembers are responsible for complying with all laws and regulations coveringthe Company which are applicable to them.

 

# 1.             **Definition of Terms Used**

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## (a)           “BusinessAssociate” means any supplier of services or materials, customer, consultant,professional advisor, lessor of space or goods, tenant, licensor, licensee orpartner of the Company.

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## (b)           “Company”includes Eschelon Telecom, Inc. and each of its subsidiaries andaffiliated business entities.

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## (c)           “Insider”means any officer, director or employee of the Company.

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## (d)           “FamilyMembers” means as to a specific Insider, his or her Immediate Family Membersand any company, partnership, limited liability company, trust or other entitythat is directly or indirectly controlled by that Insider or by any ImmediateFamily Member of that Insider.

 

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## (e)           “ImmediateFamily Member” includes the spouse (or life partner) and children of an Insiderand any relative (by blood or marriage) of that Insider or spouse (or lifepartner) residing in the same household as such Insider.

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## (f)            “ComplianceOfficer” shall mean the Chief Financial Officer.

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# 2.             **Transactions with the Business Associates**

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## (a)           Inadhering to the foregoing basic principles, our Insiders and their FamilyMembers must not profit, directly or indirectly, due to their position in theCompany to the detriment, or at the expense, of the Company or any BusinessAssociate.  No Insider shall take for hisor her own advantage any corporate opportunity for profit, which he or shelearns about in his or her position with the Company.

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## (b)           Insidersand their Family Members are encouraged to patronize our BusinessAssociates.  However, no Insider orFamily Member shall sell to, or purchase from, a Business Associate any goodsor services except in the ordinary course of the Business Associate’sbusiness.  No Insider or Family Membershall borrow money or other property from a person known by the Insider to be aBusiness Associate, unless that Business Associate is regularly engaged in thebusiness of lending money or such other property, and the loan and the termsthereof are in the ordinary course of the Business Associate’s business.

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## (c)           No Insidershall make any payment or take any action to any government official, agent orrepresentative of the United States, any State or jurisdiction of the UnitedStates or of any foreign country without the prior consent of the ComplianceOfficer.  No Insider shall make anypayment or take any action in violation of the U.S. Foreign Corrupt PracticesAct.

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# 3.             **Non-Disclosure of Information**

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## (a)           No Insideror Family Member shall discuss with, or inform others about, any actual orcontemplated business transaction by a Business Associate or the Company exceptin the performance of the Insider’s employment duties or in an officialcapacity and then only for the benefit of the Business Associate or theCompany, as appropriate, and in no event for personal gain or for the benefitof any other third party.

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## (b)           No Insideror Family Member shall give any information to any third party about anybusiness transaction of the Company or its Business Associates that areproposed or in process unless expressly authorized to do so by the ComplianceOfficer.

 

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## (c)           No Insideror Family Member other than the Company’s Chief Executive Officer, ChiefFinancial Officer, Chief Information Officer and [Director of CorporateCommunications], if any, may discuss with any member of the press or media theCompany or its Business Associates except with the prior authorization of theCompliance Officer.  Insiders and FamilyMembers shall refer all press inquiries to the Compliance Officer.

 

# 4.             **Preferential Treatment and Gifts**

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No Insider shall seek or accept for himselfor herself or for any Family Member any favors, preferential treatment, specialbenefits, special documents, gifts or other consideration as a result of suchInsider’s association with a Business Associate or the Company, except thoseusual and normal benefits directly provided by a Business Associate or theCompany.  The foregoing, however, doesnot prohibit receipt of gifts of nominal value.

 

# 5.             **Conflicts of Interest**

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## (a)           An Insidershall maintain a high degree of integrity in the conduct of the Company’sbusiness and maintain independent judgment. Each Insider must avoid any activity or personal interest that creates aconflict between his/her interests and the interests of the Company.  A conflict of interest arises any time such aperson has a duty or interest that may conflict with the proper and impartialfulfillment of such person’s duties, responsibilities or obligations to theCompany.  Conflicts of interest include,by way of example, a person:

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## •      making an investment that may affect his/her businessdecisions;

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## •      owninga meaningful financial interest in, or being employed by, an organization thatcompetes with the Company;

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## •      owninga meaningful financial interest in, or being employed by, an organization thatdoes, or seeks to do, business with the Company;

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## •      making a material decision on a matter where such person’sself-interests may reasonably call the appropriateness of the decision intoquestion; or

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## •      beingemployed by or accepting compensation from any other person as a result ofbusiness activity or prospective business activity affecting the Company.

 

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## (b)           An officeror employee that becomes aware of a personal interest which is, or may beviewed as, in conflict with that of the Company or a Business Associate shouldpromptly present the situation and the nature of the possible conflict to theCompliance Officer for appropriate consideration.  A director of the Company that becomes awareof a conflict of interest should bring the matter to the attention of the Boardof Directors of the Company.  The Insidershall refrain from further action until the situation has been addressed inwriting by the Compliance Officer or Board of Directors, as the case may be.

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## (c)           No Insideror Family Member shall personally benefit, directly or indirectly from anyCompany purchase or sale, or derive any other personal gain from any otherCompany activity, except when the transaction has been fully disclosed to andapproved in writing as provided in this Code.

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## (d)           No Insideror Family Member shall have any meaningful personal business or financialinterest in any Business Associate or competitor of the Company, withoutwritten consent of the Compliance Officer. For these purposes, holding 1% or less of the shares of a BusinessAssociate or competitor whose shares are publicly traded shall not be deemed “meaningful.”

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## (e)           No Insidershall hold any position with (including as a member of the board of directorsor other governing body) or perform services for a Business Associate or acompetitor of the Company, without written consent from the Board of Directors.

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## (f)            NoInsider shall provide any services to other business enterprises whichreasonably could be deemed to adversely affect the proper performance of his orher work for the Company or which might jeopardize the interests of theCompany, including serving as a director, officer, consultant or advisor ofanother business, without written consent from the Compliance Officer.

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## (g)           No Insidershall direct, or seek to direct, any Company business with any businessenterprise in which the Insider or his or her Family Member has a meaningfulownership position or serves in a leadership capacity, without written consentfrom the Board of Directors.

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# 6.             **Inside****Information**

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Securities laws and regulations prohibit the misuse ofmaterial non-public (“inside”) information when purchasing, selling orrecommending securities.  Each Insider issubject to the Company’s insider trading policy, as revised from time to time.

 

Inside information obtained by any Insider from anysource must be kept strictly confidential. All inside information should be kept secure and access to files andcomputer files containing such information should be restricted.  Insiders shall not use,

 

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act upon, or disclose to any third party including,without limitation, any Family Member, any material inside information, exceptas may be necessary for the Company’s legitimate business purposes to theextent approved, in advance, by the Compliance Officer.  Questions and requests for assistanceregarding inside information should be promptly directed to the ComplianceOfficer.

 

Information is generally considered “material” if (a) thereis a substantial likelihood that a reasonable investor would find theinformation important in determining whether to trade in a security, or (b) theinformation, if made public, would likely affect the market price of a company’ssecurities.  Inside information typicallyincludes, but is not limited to, knowledge of pending Company businesstransactions, corporate finance activity, mergers or acquisitions, unannouncedearnings and financial results and other significant developments affecting theCompany.

 

Insiders and Family Members are prohibited frominsider trading (buying or selling securities when in possession of material,nonpublic information) or tipping (passing such information on to someone whomay buy or sell securities).

 

This prohibition on insider trading applies to Companysecurities and also to the securities of Business Associates if such personlearns material, nonpublic information about them as a result of his or herposition with the Company.

 

Information is generally considered “nonpublic” unlessit has been adequately disclosed to the public, which means that theinformation must be publicly disclosed and adequate time must have passed forthe securities markets to absorb the information.  A delay of three business days is usuallyconsidered a sufficient period for routine information to be absorbed by themarket.  A longer period may be necessaryfor particularly significant or complex matters.

 

If an Insider leaves the Company, he or she mustmaintain the confidentiality of all inside information until it has beenadequately disclosed to the public.  Ifthere is any question as to whether information regarding the Company or anyBusiness Associate is material or has been adequately disclosed to the public,the Compliance Officer must be contacted.

 

# 7.             **Personal Securities Transactions**

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It is in the best interest of the Company and itsBusiness Associates that no Insider knowingly take advantage of a corporateopportunity for personal benefit or takes action inconsistent with such Insider’sobligations to the Business Associates. To that end, the Company has adopted its Securities Trading Policy (acopy of which is attached hereto as Annex 1 and incorporated herein bythis reference).  The Securities TradingPolicy applies to all Insiders and their Family Members.

 

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# 8.             **Guarding Corporate Assets**

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Insiders have a duty to safeguard Company assets,including its physical premises and equipment, records, customer informationand Company trademarks, trade secrets and other intellectual property.  Company assets shall be used for Companybusiness only.  Without specificauthorization, no Insider or Family Member may take, loan, sell,damage or dispose of Company property or use, or allow others to use, Companyproperty for any non-Company purposes.

 

# 9.             **Corporate Books and Records**

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## (a)           Insidersmust strive to ensure that all Company documents are completed as accurately,truthfully, in a timely manner and properly authorized.

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## (b)           Financialactivities and transactions must be recorded in compliance with all applicablelaws and accounting practices and in accordance with the generally acceptedaccounting principles designated by the Company.  The making of false or misleading entries,records or documentation is strictly prohibited.

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## (c)           Insidersmay never create a false or misleading report under the Company’s name.  In addition, no payments or establishedaccounts shall be used for any purpose other than as described by theirsupporting documentation.  No undisclosedfunds or assets may be established.

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## (d)           No Insidermay take any action to defraud, influence, coerce, manipulate or mislead anyother employee, officer or director, or any outside auditor or lawyer for theCompany for the purpose of rendering the books, records or financial statementsof the Company incorrect or misleading.

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## (e)           Errors, orpossible errors or misstatements in the Company’s books and records must bebrought to the attention of the Compliance Officer promptly upon discoverythereof.  The Compliance Officer shallpromptly inform the Chief Financial Officer of any such error or misstatement.

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## (f)            Allemployees and officers are expected to cooperate fully with the Company’soutside auditors and internal auditors, if any. No employee or officer shall impede or interfere with the financialstatement audit process.

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## (g)           Complaintsor concerns regarding auditing matters should be reported to the GeneralCounsel in accordance with the Company’s “whistleblower” policies that are setforth in a separate policy.

 

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# 10.           **Document Retention**

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## (a)           TheCompany seeks to comply fully with all laws and regulations relating to theretention and preservation of records. All Insiders shall comply fully with any Company policies regarding theretention and preservation of records that may be in effect from time totime.  Under no circumstances may Companyrecords be destroyed selectively or maintained outside Company premises ordesignated storage facilities.

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## (b)           If theexistence of a subpoena or impending government investigation becomes known toan Insider, he or she must immediately contact the Compliance Officer.  Insiders must retain all records anddocuments that may be responsive to a subpoena or pertain to aninvestigation.  Any questions regardingwhether a record or document pertains to an investigation or may be responsiveto a subpoena should be directed to the Compliance Officer before the record ordocument is disposed of.  Insiders shallstrictly adhere to the directions of the Compliance Officer in handling suchrecords or documents.

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# 11.           **Compliance with Internal Controls and DisclosureControls**

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## (a)           TheCompany has adopted a system of internal controls that must be strictly adheredto by all Insiders in providing financial and business transaction informationto and within the Company.  The internalcontrols are the backbone of the integrity of the Company’s financial recordsand financial statements.

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Each Insider shall promptly report to the ComplianceOfficer any actual or suspected breaches or violations of the Company’sinternal controls that come to the attention of the Insider.

 

Each Insider shall promptly report to the ComplianceOfficer any actual or suspect fraudulent or questionable transactions oroccurrences that come to the attention of the Insider.  Potentially fraudulent transactions include,without limitation, embezzlement, forgery or alteration of checks and otherdocuments, theft, misappropriation or conversion to personal use of Companyassets, and falsification of records.

 

Each Insider is encouraged to bring to the attentionof the Compliance Officer any changes that the Insider believes may improve theCompany’s system of internal controls.

 

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## (b)           TheCompany has adopted a system of disclosure controls to assure that allimportant information regarding the business and prospects of the Company isbrought to the attention of the Chief Executive Officer and Chief FinancialOfficer of the Company.  The accuracy andtimeliness of compliance is critical to this system of disclosure controls andnecessary to enable those officers to provide the financial statement andperiodic report certifications required by federal law.

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Each Insider shall strictly adhere to the system ofdisclosure controls, including the internal reporting responsibilities assignedto him or her by the Company.

 

Each Insider shall promptly report in accordance withCompany policy any significant event or occurrence (whether positive ornegative) that arises in the course of the Insider’s duties andresponsibilities.  Events or occurrencesinclude those that affect or may affect the Company or its Business Associates,competitors or industry.  General economicconditions need not be reported.

 

## (c)           EachInsider shall be candid in discussing matters concerning internal controls andbusiness disclosures with the Company’s management, internal auditors, outsideauditors, outside counsel and directors. Factual information is important. Opinions and observations are strongly encouraged.

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## (d)           Complaintsor concerns regarding auditing matters should be reported to the [VicePresident of Risk Management] in accordance with the Company’s “whistleblower”policies that are set forth in a separate policy.

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# 12.           **Implementation of the Code**

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While each Insider is individually responsible forcompliance with the Code, he or she does not do so in a vacuum.  The Company has the resources, people andprocesses in place to answer questions and guide Insiders through difficultdecisions.

 

## (a)           ComplianceOfficer Responsibility.  The ChiefExecutive Officer, reporting directly to the Company’s Board of Directors, hasbeen designated the “Compliance Officer.” The Compliance Officer is responsible for overseeing, interpreting andmonitoring compliance with the Code.  TheCompliance Officer reports periodically to the Company’s Disclosure Committeeand Audit Committee regarding all aspects of administering and enforcing of theCode.

 

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## (b)           ReportingViolations.  If an Insider knows ofor suspects a violation of applicable law or regulations, this Code or any ofthe Company’s other policies, he or she must immediately report that informationto the Compliance Officer, [the Vice President of Risk Management] or to theAudit Committee of the Board of Directors. No Insider who reports an actual or suspected violation in good faithwill be subject to retaliation.

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## (c)           Investigationsof Violations.    Reported violationswill be promptly investigated and treated confidentially to the extentpossible.  It is imperative that theperson reporting the violation not conduct a preliminary investigation of hisor her own.  Investigations of alleged violationsmay involve complex legal issues. Persons who act on their own may compromise the integrity of aninvestigation and adversely affect both themselves and the Company.

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# 13.           **Enforcement**

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The Compliance Officer will take such action he or shedeems appropriate with respect to any Insider who violates, or whose FamilyMember violates, any provision of this Code, and will inform the Board OfDirectors of the Company of all material violations.  Any alleged violation by the ComplianceOfficer should be reported promptly to the Audit Committee of the Board ofDirectors for its consideration and such action as the committee, in its solejudgment, shall deem warranted.

 

The Compliance Officer will keep records of allreports created under this Code and of all action taken under this Code.  All such records will be maintained in suchmanner and for such periods as are required under applicable Federal and statelaw.

 

# 14.           **Condition of Employment or Service**

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All Insiders shall conduct themselves at all times in thebest interests of the Company. Compliance with this Code shall be a condition of employment and ofcontinued employment with the Company, and conduct not in accordance with thisCode shall constitute grounds for disciplinary action, including termination ofemployment.

 

This Code is not an employment contract nor isit intended to be an all inclusive policy statement on the part of theCompany.  The Company reserves the rightto provide the final interpretation of the policies it contains and to revisethose policies as deemed necessary or appropriate.

 

 

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I acknowledge that I have read this Code of Ethics andBusiness Conduct (a copy of which has been supplied to me and which I willretain for future reference) and agree to comply in all respects with the termsand provisions hereof.  I alsoacknowledge that this Code of Ethics and Business Conduct may be modified orsupplemented from time to time, and I agree to comply with those modificationsand supplements, as well.

 

 
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