**Exhibit 14.1**

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**IMAGEWARE SYSTEMS, INC.**

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**CODE OF BUSINESS CONDUCT AND ETHICS**

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**Introduction**

 

ImageWare Systems, Inc. (“ImageWare”) is committed to maintaining thehighest standards of business conduct and ethics.  This Code of Business Conduct and Ethics (the “Code”) reflectsthe business practices and principles of behavior that support thiscommitment.  We expect every employee,officer and director to read and understand the Code and its application to theperformance of his or her business responsibilities.  References in the Code to employees are intended to coverofficers and, as applicable, directors.

 

Officers, managers and othersupervisors are expected to develop in employees a sense of commitment to thespirit, as well as the letter, of the Code. Supervisors are also expected to ensure that all agents and contractorsconform to Code standards when working for or on behalf of ImageWare.  The compliance environment within eachsupervisor’s assigned area of responsibility will be a significant factor inevaluating the quality of that individual’s performance. In addition, anyemployee who makes an exemplary effort to implement and uphold our legal andethical standards will be recognized for that effort in his or her performancereview.  Nothing in the Code alters theat-will employment policy of ImageWare.

 

The Code addresses conduct that is particularly important to properdealings with the people and entities with whom we interact, but reflects onlya part of our commitment.  From time totime we may adopt additional policies and procedures with which our employees,officers and directors are expected to comply, if applicable to them.  However, it is the responsibility of eachemployee to apply common sense, together with his or her own highest personalethical standards, in making business decisions where there is no statedguideline in the Code.

 

Action by members of your immediate family, significant others or otherpersons who live in your household (referred to in the Code as “familymembers”) also may potentially result in ethical issues to the extent that theyinvolve ImageWare business.  Forexample, acceptance of inappropriate gifts by a family member from one of oursuppliers could create a conflict of interest and result in a Code violationattributable to you.  Consequently, incomplying with the Code, you should consider not only your own conduct, butalso that of your immediate family members, significant others and otherpersons who live in your household.

 

**YOU SHOULD NOT HESITATE TO ASK QUESTIONSABOUT WHETHER ANY CONDUCT MAY VIOLATE THE CODE, VOICE CONCERNS OR CLARIFY GRAYAREAS.  SECTION 16 BELOW DETAILSTHE COMPLIANCE RESOURCES AVAILABLE TO YOU. IN ADDITION, YOU SHOULD BE ALERT TO POSSIBLE VIOLATIONS OF THE CODE BYOTHERS AND REPORT SUSPECTED VIOLATIONS, WITHOUT FEAR OF ANY FORM OFRETALIATION, AS FURTHER DESCRIBED IN SECTION 16.**  Violations of the Code will not betolerated.  Any employee who violatesthe standards in the Code may be subject to disciplinary action, which,depending on the nature of the violation and the history of the employee, mayrange from a warning or reprimand to and

 

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including termination of employment and, in appropriate cases, civillegal action or referral for criminal prosecution.

 

**1.****            ****Honest and Ethical Conduct**

 

It is the policy of ImageWare to promote high standards of integrity byconducting our affairs in an honest and ethical manner.  The integrity and reputation of ImageWaredepends on the honesty, fairness and integrity brought to the job by eachperson associated with us.  Unyieldingpersonal integrity is the foundation of corporate integrity.

 

**2.****            ****Legal Compliance**

 

Obeying the law, both in letter and in spirit, is the foundation ofthis Code.  Our success depends uponeach employee’s operating within legal guidelines and cooperating with local,national and international authorities. We expect employees to understand the legal and regulatory requirementsapplicable to their business units and areas of responsibility.  We hold periodic training sessions to ensurethat all employees comply with the relevant laws, rules and regulationsassociated with their employment, including laws prohibiting insider trading(which are discussed in further detail in Section 3 below).  While we do not expect you to memorize everydetail of these laws, rules and regulations, we want you to be able todetermine when to seek advice from others. If you do have a question in the area of legal compliance, it isimportant that you not hesitate to seek answers from your supervisor or theCompliance Officer (listed in Section 16).

 

Disregard of the law will not be tolerated.  Violation of domestic or foreign laws, rules and regulations maysubject an individual, as well as ImageWare, to civil and/or criminalpenalties.  You should be aware thatconduct and records, including emails, are subject to internal and externalaudits, and to discovery by third parties in the event of a government investigationor civil litigation.  It is in everyone’sbest interests to know and comply with our legal and ethical obligations.

 

**3.****            ****Insider Trading**

 

Employees who have accessto confidential (or “inside”) information are not permitted to use or sharethat information for stock trading purposes or for any other purpose except toconduct our business.  All non-publicinformation about ImageWare or about companies with which we do business isconsidered confidential information.  Touse material non-public information in connection with buying or sellingsecurities, including “tipping” others who might make an investment decision onthe basis of this information, is not only unethical, it is illegal.  Employees must exercise the utmost care whenhandling material inside information.

 

**4.****            ****International Business Laws**

 

Our employees are expected to comply with the applicable laws in allcountries to which they travel, in which they operate and where we otherwise dobusiness, including laws prohibiting bribery, corruption or the conduct ofbusiness with specified individuals, companies or countries.  The fact that in some countries certain lawsare not enforced or that violation of those laws is not subject to publiccriticism will not be accepted as an excuse for noncompliance.

 

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In addition, we expect employees to comply with U.S. laws, rules andregulations governing the conduct of business by its citizens and corporationsoutside the U.S.

 

These U.S. laws, rules and regulations, which extend to all our activitiesoutside the U.S., include:

 

•      The Foreign CorruptPractices Act, which prohibits directly or indirectly giving anything of valueto a government official to obtain or retain business or favorable treatment,and requires the maintenance of accurate books of account, with all companytransactions being properly recorded;

 

•      U.S. Embargoes, whichrestrict or, in some cases, prohibit companies, their subsidiaries and theiremployees from doing business with certain other countries identified on a listthat changes periodically (including, for example, Angola (partial), Burma(partial), Cuba, Iran, Iraq, Libya, North Korea, Sudan and Syria) or specificcompanies or individuals;

 

•      Export Controls, whichrestrict travel to designated countries or prohibit or restrict the export ofgoods, services and technology to designated countries, denied persons ordenied entities from the U.S., or the re-export of U.S. origin goods from thecountry of original destination to such designated countries, denied companies ordenied entities; and

 

•      Antiboycott Compliance,which prohibits U.S. companies from taking any action that has the effect offurthering or supporting a restrictive trade practice or boycott that isfostered or imposed by a foreign country against a country friendly to the U.S.or against any U.S. person.

 

If you have a question as to whether an activity is restricted orprohibited, seek assistance before taking any action, including giving anyverbal assurances that might be regulated by international laws.

 

**5.****            ****Antitrust**

 

Antitrust laws are designed to protect the competitive process.  These laws are based on the premise that thepublic interest is best served by vigorous competition and will suffer fromillegal agreements or collusion among competitors.  Antitrust laws generally prohibit:

 

•      agreements, formal orinformal, with competitors that harm competition or customers, including pricefixing and allocations of customers, territories or contracts;

 

•      agreements, formal orinformal, that establish or fix the price at which a customer may resell aproduct; and

 

•      the acquisition ormaintenance of a monopoly or attempted monopoly through anti-competitiveconduct.

 

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Certain kinds of information, such as pricing, production andinventory, should not be exchanged with competitors, regardless of how innocentor casual the exchange may be and regardless of the setting, whether businessor social.

 

Antitrust laws impose severe penalties for certain types of violations,including criminal penalties and potential fines and damages of millions ofdollars, which may be tripled under certain circumstances.  Understanding the requirements of antitrustand unfair competition laws of the various jurisdictions where we do businesscan be difficult, and you are urged to seek assistance from your supervisor orthe Compliance Officer whenever you have a question relating to these laws.

 

**6.****            ****Environmental Compliance**

 

Federal law imposes criminal liability on any person or company thatcontaminates the environment with any hazardous substance that could causeinjury to the community or environment. Violation of environmental laws can involve monetary fines andimprisonment.  We expect employees tocomply with all applicable environmental laws.

 

It is our policy toconduct our business in an environmentally responsible way that minimizesenvironmental impacts.  We are committedto minimizing and, if practicable, eliminating the use of any substance ormaterial that may cause environmental damage, reducing waste generation anddisposing of all waste through safe and responsible methods, minimizingenvironmental risks by employing safe technologies and operating procedures,and being prepared to respond appropriately to accidents and emergencies.

 

**7.****            ****Conflicts of Interest**

 

We respect the rights of our employees to manage their personal affairsand investments and do not wish to impinge on their personal lives.  At the same time, employees should avoidconflicts of interest that occur when their personal interests may interfere inany way with the performance of their duties or the best interests ofImageWare.  A conflicting personalinterest could result from an expectation of personal gain now or in the futureor from a need to satisfy a prior or concurrent personal obligation.  We expect our employees to be free frominfluences that conflict with the best interests of ImageWare or might depriveImageWare of their undivided loyalty in business dealings.  Even the appearance of a conflict ofinterest where none actually exists can be damaging and should be avoided.  Whether or not a conflict of interest existsor will exist can be unclear.  Conflictsof interest are prohibited unless specifically authorized as described below.If you have any questions about a potential conflict or if you become aware ofan actual or potential conflict, and you are not an officer or director ofImageWare, you should discuss the matter with your supervisor or the ComplianceOfficer (as further described in Section 16). Supervisors may notauthorize conflict of interest matters without first seeking the approval ofthe Compliance Officer and filing with the Compliance Officer a writtendescription of the activity.  If thesupervisor is involved in the potential or actual conflict, you should discussthe matter directly with the Compliance Officer.  Officers and directors may seek authorization from the Nominatingand Corporate Governance Committee of the Board of Directors.  ***  ***Factorsthat may be considered in evaluating a potential conflict of interest are,among others:

 

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•      whether it may interferewith the employee’s job performance, responsibilities or morale;

 

•      whether the employee hasaccess to confidential information;

 

•      whether it may interferewith the job performance, responsibilities or morale of others within theorganization;

 

•      any potential adverse orbeneficial impact on our business;

 

•      any potential adverse orbeneficial impact on our relationships with our customers or suppliers or otherservice providers;

 

•      whether it would enhance orsupport a competitor’s position;

 

•      the extent to which it wouldresult in financial or other benefit (direct or indirect) to the employee;

 

•      the extent to which it wouldresult in financial or other benefit (direct or indirect) to one of ourcustomers, suppliers or other service providers; and

 

•      the extent to which it wouldappear improper to an outside observer.

 

Although no list can include every possible situation in which aconflict of interest could arise, the following are examples of situations thatmay, depending on the facts and circumstances, involve conflicts of interests:

 

•      **Employment by (including consulting for) or service on the board of a competitor,customer or supplier or other service provider.**  Activity that enhances or supports theposition of a competitor to the detriment of ImageWare****is prohibited, including employment by orservice on the board of a competitor. Employment by or service on the board of a customer or supplier or otherservice provider is generally discouraged and you must seek authorization inadvance if you plan to take such action.

 

•      **Owning, directly or indirectly, a significant financial interest in anyentity that does business, seeks to do business or competes with us. **In addition to the factorsdescribed above, persons evaluating ownership for conflicts of interest willconsider the size and nature of the investment; the nature of the relationshipbetween the other entity and ImageWare; the employee’s access to confidentialinformation and the employee’s ability to influence ImageWare decisions.  If you would like to acquire a financialinterest of that kind, you must seek approval in advance.

 

•      **Soliciting or accepting gifts, favors, loans or preferential treatmentfrom any person or entity that does business or seeks to do business withus. **See Section 11 forfurther discussion of the issues involved in this type of conflict.

 

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•      **Soliciting contributions to any charity or for any political candidatefrom any person or entity that does business or seeks to do business with us**.

 

•      **Taking personal advantage of corporate opportunities. **See Section 8 for furtherdiscussion of the issues involved in this type of conflict.

 

•      **Moonlighting without permission.**

 

•      **Conducting our business transactions with your family member or abusiness in which you have a significant financial interest. **Material related-partytransactions approved by the Audit Committee of the Board of Directors andinvolving any executive officer or director will be publicly disclosed asrequired by applicable laws and regulations.

 

•      **Exercising supervisory or other authority on behalf of ImageWare over aco-worker who is also a family member**.  The employee’s supervisor and/or the Compliance Officer willconsult with the Human Resources department to assess the advisability ofreassignment.

 

Loans to, or guarantees of obligations of, employees or their familymembers by ImageWare could constitute an improper personal benefit to therecipients of these loans or guarantees, depending on the facts andcircumstances.  Some loans are expresslyprohibited by law and applicable law requires that our Board of Directorsapprove all loans and guarantees to employees. As a result, all loans and guarantees by ImageWare must be approved inadvance by the Board of Directors or the Nominating and Corporate GovernanceCommittee of the Board of Directors.

 

**8.****            ****Corporate Opportunities**

 

You may not take personal advantage of opportunities for ImageWare thatare presented to you or discovered by you as a result of your position with us****or through your use of corporate propertyor information, unless authorized by your supervisor, the Compliance Officer orthe Nominating and Corporate Governance Committee of the Board of Directors, asdescribed in Section 7. Even opportunities that are acquired privately byyou may be questionable if they are related to our existing or proposed linesof business. Significant participation in an investment or outside businessopportunity that is directly related to our lines of business must bepre-approved. You cannot use your position with us****or corporate property or information for improper personalgain, nor can you compete with us****inany way.

 

**9.****            ****Maintenance of Corporate Books,Records, Documents and Accounts; Financial Integrity; Public Reporting**

 

The integrity of our records and public disclosure depends on thevalidity, accuracy and completeness of the information supporting the entriesto our books of account.  Therefore, ourcorporate and business records should be completed accurately andhonestly.  The making of false ormisleading entries, whether they relate to financial results or test results,is strictly prohibited.  Our recordsserve as a basis for managing our business and are important in meeting

 

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our obligations to customers, suppliers, creditors, employees,stockholders and others with whom we do business.  As a result, it is important that our books, records and accountsaccurately and fairly reflect, in reasonable detail, our assets, liabilities,revenues, costs and expenses, as well as all transactions and changes in assetsand liabilities.  We require that:

 

•      no entry be made in ourbooks and records that intentionally hides or disguises the nature of anytransaction or of any of our liabilities, or misclassifies any transactions asto accounts or accounting periods;

 

•      transactions be supported byappropriate documentation;

 

•      the terms of sales and othercommercial transactions be reflected accurately in the documentation for thosetransactions and all such documentation be reflected accurately in our booksand records;

 

•      employees comply with oursystem of internal controls; and

 

•      no cash or other assets bemaintained for any purpose in any unrecorded or “off-the-books” fund.

 

Our accounting records are also relied upon to produce reports for ourmanagement, stockholders and creditors, as well as for governmentalagencies.  In particular, we rely uponour accounting and other business and corporate records in preparing theperiodic and current reports that we file with the SEC.  Securities laws require that these reportsprovide full, fair, accurate, timely and understandable disclosure and fairlypresent our financial condition and results of operations.  Employees who collect, provide or analyzeinformation for or otherwise contribute in any way in preparing or verifying thesereports should strive to ensure that our financial disclosure is accurate andtransparent and that our reports contain all of the information about ImageWarethat would be important to enable stockholders and potential investors toassess the soundness and risks of our business and finances and the quality andintegrity of our accounting and disclosures. In addition:

 

•      no employee may take orauthorize any action that would cause our financial records or financialdisclosure to fail to comply with generally accepted accounting principles, therules and regulations of the SEC or other applicable laws, rules andregulations;

 

•      all employees must cooperatefully with our Accounting Department, as well as our independent publicaccountants and counsel, respond to their questions with candor and providethem with complete and accurate information to help ensure that our books andrecords, as well as our reports filed with the SEC, are accurate and complete;and

 

•      no employee should knowinglymake (or cause or encourage any other person to make) any false or misleading statement in any of ourreports filed with the SEC or knowingly omit (or cause or encourage any otherperson to omit) any information

 

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necessary to make the disclosure in any of our reports accurate in allmaterial respects.

 

Any employee who becomes aware of any departure from these standardshas a responsibility to report his or her knowledge promptly to a supervisor,the Compliance Officer or one of the other compliance resources described inSection 16.

 

**10.****         ****Fair Dealing**

 

We strive to outperform our competition fairly and honestly.   Advantages over our competitors are to beobtained through superior performance of our****productsand services, not through unethical or illegal business practices.  Acquiring proprietary information fromothers through improper means, possessing trade secret information that wasimproperly obtained, or inducing improper disclosure of confidentialinformation from past or present employees of other companies is prohibited,even if motivated by an intention to advance our interests.  If information is obtained by mistake thatmay constitute a trade secret or other confidential information of anotherbusiness, or if you have any questions about the legality of proposedinformation gathering, you must consult your supervisor or the ComplianceOfficer, as further described in Section 16.

 

You are expected to deal fairly with our customers, suppliers,employees and anyone else with whom you have contact in the course ofperforming your job.  Be aware that theFederal Trade Commission Act provides that “unfair methods of competition incommerce, and unfair or deceptive acts or practices in commerce, are declaredunlawful.”  It is a violation of the Actto engage in deceptive, unfair or unethical practices, and to makemisrepresentations in connection with sales activities.

 

Employees involved in procurement have a special responsibility toadhere to principles of fair competition in the purchase of products andservices by selecting suppliers based exclusively on normal commercialconsiderations, such as quality, cost, availability, service and reputation,and not on the receipt of special favors.

 

**11.****         ****Gifts and Entertainment**

 

Business gifts and entertainment are meant to create goodwill and soundworking relationships and not to gain improper advantage with customers orfacilitate approvals from government officials.  The exchange, as a normal business courtesy, of meals orentertainment (such as tickets to a game or the theatre or a round of golf) isa common and acceptable practice as long as it is not extravagant. Unlessexpress permission is received from a supervisor, the Compliance Officer or theNominating and Corporate Governance Committee of the Board of Directors, giftsand entertainment cannot be offered, provided or accepted by any employeeunless consistent with customary business practices and not (a) of more thantoken or nominal monetary value, (b) in cash, (c) susceptible of beingconstrued as a bribe or kickback, (d) made or received on a regular or frequentbasis or (e) in violation of any laws. This principle applies to our transactions everywhere in the world, evenwhere the practice is widely considered “a way of doing business.” Employeesshould not accept gifts or entertainment that may reasonably be deemed toaffect their judgment or actions in the performance of their duties.  Our customers,

 

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suppliers and the public at large should knowthat our employees’ judgment is not for sale.

 

Under some statutes, such as the U.S. Foreign Corrupt Practices Act,giving anything of value to a government official to obtain or retain businessor favorable treatment is a criminal act subject to prosecution andconviction.  Discuss with yoursupervisor or the Compliance Officer any proposed entertainment or gifts if youare uncertain about their appropriateness.

 

**12.****         ****Protection and Proper Use of CompanyAssets**

 

All employees are expected to protect our assets and ensure theirefficient use.  Theft, carelessness andwaste have a direct impact on our profitability.  Our****property, suchas office supplies, computer equipment, buildings and products, are expected tobe used only for legitimate business purposes, although incidental personal usemay be permitted.  You may not, however,use our corporate name, any brand name or trademark owned or associated withImageWare or any letterhead stationery for any personal purpose.

 

You may not, while acting on behalf of ImageWare or while using ourcomputing or communications equipment or facilities, either:

 

•      access the internal computersystem (also known as “hacking”) or other resource of another entity withoutexpress written authorization from the entity responsible for operating thatresource; or

 

•      commit any unlawful orillegal act, including harassment, libel, fraud, sending of unsolicited bulkemail (also known as “spam”) in violation of applicable law, trafficking incontraband of any kind, or espionage.

 

If you receive authorization to access another entity’s internalcomputer system or other resource, you must make a permanent record of thatauthorization so that it may be retrieved for future reference, and you may notexceed the scope of that authorization.

 

Unsolicited bulk email is regulated by law in a number ofjurisdictions.  If you intend to sendunsolicited bulk email to persons outside of ImageWare, either while acting onour behalf or using our computing or communications equipment or facilities,you should contact your supervisor or the Compliance Officer for approval.

 

All data residing on or transmitted through our computing andcommunications facilities, including email and word processing documents, isthe property of ImageWare and subject to inspection, retention and review byImageWare, with or without an employee’s or third party’s knowledge, consent orapproval, and in accordance with applicable law. Any misuse or suspected misuseof our****assets must be immediatelyreported to your supervisor or the Compliance Officer.

 

**13.****         ****Confidentiality**

 

One of our most important assets is our confidential information.  As an employee of ImageWare, you may learnof information about ImageWare that is confidential and proprietary.  You also may learn of information beforethat information is released to the general public.

 

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Employees who have received or have access to confidential informationshould take care to keep this information confidential.  Confidential information may includebusiness, marketing and service plans, financial information, productarchitecture, source codes, inventions, designs, databases, customer lists, pricingstrategies, personnel data, personally identifiable information pertaining toour employees, customers or other individuals (including, for example, names,addresses, telephone numbers and social security numbers), and similar types ofinformation provided to us by our customers, suppliers and partners. Thisinformation may be protected by patent, trademark, copyright and trade secretlaws.

 

In addition, because we interact with other companies andorganizations, there may be times when you learn confidential information aboutother companies before that information has been made available to thepublic.  You must treat this informationin the same manner as you are required to treat our****confidential and proprietary information.  There may even be times when you must treatas confidential the fact that we have an interest in, or are involved with,another company.

 

You are expected to keep confidential and proprietary informationconfidential unless and until that information is released to the publicthrough approved channels (usually through a press release, an SEC filing or aformal communication from a member of senior management, as further describedin Section 14).  Every employee hasa duty to refrain from disclosing to any person confidential or proprietaryinformation about us or any other company learned in the course of employmenthere, until that information is disclosed to the public through approvedchannels.  This policy requires you torefrain from discussing confidential or proprietary information with outsidersand even with other ImageWare employees, unless those fellow employees have alegitimate need to know the information in order to perform their jobduties.  Unauthorized use ordistribution of this information could also be illegal and result in civilliability and/or criminal penalties.

 

You should also take care not to inadvertently disclose confidentialinformation.  Materials that containconfidential information, such as memos, notebooks, computer disks and laptopcomputers should be stored securely. Unauthorized posting or discussion of any information concerning ourbusiness, information or prospects on the Internet is prohibited.  You may not discuss our business,information or prospects in any “chat room,” regardless of whether you use yourown name or a pseudonym.  Be cautiouswhen discussing sensitive information in public places like elevators,airports, restaurants and “quasi-public” areas within ImageWare,****such as lunchrooms.  All ImageWare emails, voicemails and othercommunications are presumed confidential and should not be forwarded orotherwise disseminated outside of ImageWare, except where required forlegitimate business purposes.

 

In addition to the above responsibilities, if you are handlinginformation protected by any privacy policy published by us, then you musthandle that information solely in accordance with the applicable policy.

 

**14.****         ****Media/Public Discussions**

 

It is our policy to disclose material information concerning ImageWareto the public only through specific limited channels to avoid inappropriatepublicity and to ensure that all those

 

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with an interest in the company will have equal access toinformation.  All inquiries or callsfrom the press and financial analysts should be referred to the Chief ExecutiveOfficer or the Chief Financial Officer. We have designated these individuals asour official spokespersons for financial matters, marketing, technical andother related information.  Unless theyhave made a specific exception, these designees are the only people who maycommunicate with the press on behalf of ImageWare. You also may not provide anyinformation to the media about us off the record, for background,confidentially or secretly.

 

**15.****         ****Waivers**

 

Any waiver of this Code for executive officers (including, whererequired by applicable laws, our principal executive officer, principalfinancial officer, principal accounting officer or controller (or personsperforming similar functions)) or directors may be authorized only by our Boardof Directors or, to the extent permitted by the rules of the American StockExchange, a committee of the Board and will be disclosed to stockholders asrequired by applicable laws, rules and regulations.

 

**16.****         ****Compliance Standards and Procedures**

 

***Compliance Resources***

 

To facilitate compliance with this Code, we have implemented a programof Code awareness, training and review. We have established the position of Compliance Officer to oversee thisprogram.  The Compliance Officer is aperson to whom you can address any questions or concerns.  The Compliance Officer, David Loesch, may bereached at (858) 673-8600 extension 613. In addition to fielding questions or concerns with respect to potentialviolations of this Code, the Compliance Officer is responsible for:

 

•              investigatingpossible violations of the Code;

 

•              training newemployees in Code policies;

 

•              conducting annualtraining sessions to refresh employees’ familiarity with the Code;

 

•              distributing copiesof the Code annually via email to each employee with a reminder that eachemployee is responsible for reading, understanding and complying with the Code;

 

•              updating the Code asneeded and alerting employees to any updates, with appropriate approval of theNominating and Corporate Governance Committee of the Board of Directors, toreflect changes in the law, ImageWare operations and in recognized bestpractices, and to reflect ImageWare experience; and

 

•              otherwise promotingan atmosphere of responsible and ethical conduct.

 

Your most immediate resource for any matter related to the Code is yoursupervisor.  He or she may have theinformation you need, or may be able to refer the question to another

 

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appropriate source.  There may,however, be times when you prefer not to go to your supervisor.  In these instances, you should feel free todiscuss your concern with the Compliance Officer.  If you are uncomfortable speaking with the Compliance Officerbecause he or she works in your department or is one of your supervisors,please contact Wayne G. Wetherell, our Chief Financial Officer.

 

Employees may ask questions about ImageWare policy, seek guidance onspecific situations or report violations of the Code by (i) calling ourCompliance Hotline at extension 613, (ii) sending an email to our ComplianceEmail Box at dloesch@erols.com, or (iii) delivering the question or complaintvia regular mail to the Compliance Officer or another individual identified inthe preceding paragraph.  Employeesshould make every effort to report their concerns using one or more of themethods specified above.  The complaintprocedure is specifically designed to allow an employee to bypass a supervisorhe believes is or may be engaged in prohibited conduct under the Code.  Anonymous reports should be factual insteadof speculative or conclusory, and should contain as much specific informationas possible to allow the persons investigating the report to adequately assessthe nature, extent and urgency of the investigation.

 

***Clarifying Questionsand Concerns; Reporting Possible Violations***

 

If you encounter a situation or are considering a course of action andits appropriateness is unclear, discuss the matter promptly with yoursupervisor or the Compliance Officer; even the appearance of impropriety can bevery damaging and should be avoided.

 

If you are aware of a suspected or actual violation of Code standardsby others, you have a responsibility to report it.  You are expected to promptly provide a compliance resource with aspecific description of the violation that you believe has occurred, includingany information you have about the persons involved and the time of theviolation.  Whether you choose to speakwith your supervisor or the Compliance Officer, you should do so without fearof any form of retaliation.  We willtake prompt disciplinary action against any employee who retaliates againstyou, up to and including termination of employment.

 

Supervisors must promptly report any complaints or observations of Codeviolations to the Compliance Officer. If you believe your supervisor has nottaken appropriate action, you should contact the Compliance Officerdirectly.  The Compliance Officer willinvestigate all reported possible Code violations promptly and with the highestdegree of confidentiality that is possible under the specificcircumstances.  Neither you nor yoursupervisor may conduct any preliminary investigation, unless authorized to doso by the Compliance Officer.  Yourcooperation in the investigation will be expected. As needed, the ComplianceOfficer will consult with legal advisors, the Human Resources department and/orthe Nominating and Corporate Governance Committee of the Board ofDirectors.  We will strive to employ afair process by which to determine violations of the Code.

 

If the investigation indicates that a violation of the Code hasprobably occurred, we will take such action as we believe to be appropriateunder the circumstances. If we determine that an employee is responsible for aCode violation, he or she will be subject to disciplinary action up

 

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to, and including, termination of employment and, in appropriate cases,civil action or referral for criminal prosecution.  Appropriate action may also be taken to deter any future Codeviolations.

 

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