**Exhibit 14**

 

KOSSCORPORATION

 

CODEOF ETHICS

 

TheBoard of Directors (the “Board”) of Koss Corporation, a Delaware corporation (the “Company”), have adopted this Code ofEthics for the Company’s directors, officers and employees (the “Code”).

 

I.              PURPOSE

 

ThisCode is intended to focus the Board, management and our employees on areas ofethical risk, provide guidance to help them recognize and deal with ethicalissues, provide mechanisms to report unethical or unlawful conduct, and to helpenhance and formalize our culture of integrity, honesty andaccountability.  This Code is alsodesigned to establish the policies and appropriate standards concerningbusiness conduct, responsibilities and conflicts of interest.  This Code applies to the directors and employeesof the Company.

 

II.            WAIVERS

 

Anywaiver of Parts III A and B of this Code with respect to a director, anexecutive officer, and each financial or accounting officer at the level of theprincipal accounting officer or controller or above, may be made only by theBoard and shall be promptly disclosed as required in accordance with the rules andregulations promulgated by the SEC and Nasdaq.  Waivers with respect to other employees maybe made only by the Board.  The Board shall carefully evaluate any requestedwaiver and shall ensure that all waivers of this Code will not harm the Companyor its reputation.  No waivers of therequirements of Parts III. C through G of this Code may be granted.

 

III.           POLICIES

 

*A.**           **Conflicts of Interest*

 

TheCompany requires disclosure of related-party transactions and conflicts ofinterest, and seeks to avoid such transactions as well as the appearance ofconflicts, where practicable.  A conflictof interest occurs when the private investments, business affairs or financialinterests of an individual employee or the employee’s immediate familyinterfere with the interests, assets, or business of the Company as a whole.Potential conflicts must be fully and promptly disclosed to the Company’sdesignated Compliance Officer, his/her designee or a member of the Board.

 

*B.**           **Corporate Opportunities*

 

ThisCode prohibits (i) taking personally, participating or investing in on apersonal basis, or diverting to others any business or investment opportunitiesthat the employee learns about through the use of corporate property,information or position or that are discovered or disclosed in the course ofthe Company’s business, (ii) using Company property, information orposition for personal gain, and (iii) competing with the Company.  Directors and employees owe a duty to theCompany to advance its legitimate interests when the opportunity to do soarises.

 

*C.**           **Confidentiality*

 

Directorsand employees of the Company should maintain the confidentiality of informationentrusted to them by the Company or its customers, except when disclosure isauthorized or legally mandated. Confidential information includes all non-public information that mightbe of use to competitors, or harmful to the Company or its customers, ifdisclosed.

 

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*D.**           **Fair Dealing*

 

Eachdirector and employee of the Company should endeavor to deal fairly with theCompany’s customers, suppliers, competitors and employees.  None should attempt to take unfair advantageof anyone through manipulation, concealment, abuse of privileged information,misrepresentation of material facts or any other unfair-dealing practice.

 

*E.**           **Protection and Proper Use of Company Assets*

 

Directorsand employees should protect the Company’s assets and seek to ensure the properuse of the Company’s and its customers’ property, electronic communicationsystems, information resources, materials, facilities, and equipment.  All assets should be used and maintained withreasonable care and respect, guarding against waste and abuse, and Companyassets or property should never be borrowed or removed without expresspermission from the department head responsible for that asset.  In the case of executive officers anddirectors, any loan or removal of Company property or assets requires approvalby the Chairman of the Board of Directors and disclosure to the Board.Directors and employees should be cost-conscious and alert to opportunities toimprove performance while reducing costs. All Company assets should be used only for legitimate business purposes.

 

*F.**           **Compliance with Laws, Rules and Regulations*

 

Directorsand employees of the Company will conduct the business of the Company inaccordance with all applicable laws, rules and regulations, and shallcomply with applicable policies and procedures of the Company, including thisCode.

 

*G.**           **Reporting of Illegal or Unethical Behavior*

 

Directorsand employees of the Company must report any knowledge or reasonable suspicionof violations of any laws, rules or regulations or any violations of thisCode.  Such report must comply with thereporting procedures described in Section IV(A) of this Code.

 

*H.**           **Disclosure.*

 

Theinformation in the Company’s public communications, including SEC filings, mustbe full, fair, accurate, timely and understandable.  All directors and employees of the Companyare responsible for acting in furtherance of this policy.  In particular, directors and executiveofficers are required to maintain familiarity with the disclosure requirementsapplicable to the Company commensurate with their duties and are prohibitedfrom knowingly misrepresenting, omitting or causing others to misrepresent oromit, material facts about the Company to others, whether within or outside theCompany, including the Company’s independent auditors.  In addition, any director or employee who hasa supervisory role in the Company’s disclosure process has an obligation todischarge such supervisory responsibilities in good faith and in the Company’sbest interests.

 

IV.           COMPLIANCESTANDARDS AND PROCEDURES

 

ThisCode is designed to provide a method to report conduct that directors andemployees suspect violates this Code. The Company encourages participation by all employees in this effort.

 

Ifactions have taken place, may be taking place, or may be about to take placethat violate any law, rule or regulation or any provision of this Code, itshould be brought to the attention of appropriate authorities within theCompany.

 

*A.**           **Procedure to Report Violations or Suspected Violations*

 

1.             Failure to report a known violation of these policies may result indisciplinary action up to and including dismissal.  If an employee has knowledge of or reasonablysuspects misconduct or a violation of this Code, the matter should first bebrought to the attention 

 

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of his/her immediatesupervisor or, in the case of a director with knowledge, to the attention ofthe Chief Executive Officer or the Board.

 

2.             If the conduct in question involves a reporting individual’s supervisor,the reporting individual believes that a supervisor has not dealt with thematter properly, or feels they cannot discuss the matter with a supervisor, thereporting individual may raise the matter with the next level of management orreport it to the Board.  If a reportingindividual is uncomfortable reporting to any of the above persons, or feelsthat the report has not been dealt with properly, the individual may report itdirectly to the Compliance Officer or a representative of the Board.

 

3.             In reviewing a report, a manager should consider whether the reportalleges or implicates a violation of this Code and if so, he or she must reportit immediately to the next level of management and the Company’s designatedCompliance Officer, or where appropriate, to a representative of the Board.

 

4.             When reporting misconduct or suspected misconduct, the Company prefersthat the reporting individual discloses his/her identity in order to facilitatethe Company’s ability to take appropriate steps to address the report,including conducting an investigation.  If anyonewishes to remain anonymous, he/she may do so; however, they should be awarethat if they do not identify themselves, the Company may not have sufficientinformation to properly investigate their allegations.  When a report relates to anaccounting or auditing issue, the complaint procedures adopted by the AuditCommittee of the Board supersede these provisions, but only to the extent theseprovisions are inconsistent.

 

5.             Any employee involved in any capacity in an investigation of a possibleviolation of any law, rule or regulation, or any provision of this Code,should maintain the confidentiality of the investigation and should not discussthe subject matter of the investigation with anyone other than thoseparticipating in the investigation, unless required by law or when seekingtheir own legal advice, if necessary.

 

*B.**           **Consequences of Failure to Comply*

 

1.             If a director or employee violates this Code, fails to properly report aviolation of this Code or intentionally submits a false report, he/she will besubject to discipline. In the event of a violation of any law, rule orregulation, the violation may be reported to the appropriate law enforcementauthorities. The discipline imposed will vary depending on the nature,severity, and frequency of the violation as well as the status of the personinvolved.  Discipline will be imposed forviolations of this Code, failure to report violations and withholding relevantand material information concerning violations. Directors and employees will beinformed of the charges against them and will be given the opportunity toexplain their actions before any disciplinary action is imposed.

 

2.             Varying levels of disciplinary action may be imposed, including:

 

(a)           Verbal Warning

(b)           Written Warning

(c)           Written Reprimand

(d)           Probation

(e)           Suspension

(f)            Termination or Removal

 

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3.             Offenders may also be subject to criminal prosecution and civilliability, including compensating the Company or other injured parties fortheir loss.

 

4.             No employee may be retaliated against for reporting in good faith to theCompany, in accordance with this Code, any suspected misconduct or violation ofthis Code.  Any employee who believes heor she has been retaliated against, or threatened with retaliation, shouldinform the Director of Human Resources, the Compliance Officer or arepresentative of the Board immediately. Employees or directors who violate this non-retaliation policy will besubject to discipline.  Individuals areexpected to act responsibly and ethically in reporting under this Code.  Employees and directors must not use thisCode or any of its procedures in bad faith or in a false or frivolous manner.

 

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