Exhibit 14.1**Ceradyne, Inc.****Code of Business Conduct and Ethics** ***March 18, 2008***
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Ceradyne, Inc.**Table of Contents**Table of Contents     Code of Business Conduct and Ethics  1      Introduction  3      Conflicts of Interest  4      Confidential Information  5      Gifts and Entertainment  6      Accuracy and Integrity of Books and Records  6      Protection and Proper Use of Company Assets  7      Political Contributions  7      Laws, Regulations and Government Related Activities  8      Foreign Governmental Payments  9      Equal Employment Opportunity and Affirmative Action  10      Food and Drug Laws  11      Safety and Health  11      Special Ethics Obligations for Employees with Financial Reporting Responsibilities  12      Antitrust Laws  13      Environmental Laws  13      Insider Trading In Securities  13      Discipline for Violations  14  Reporting Concerns  15  Waivers and Amendments of Code  15       March 18, 2008 Ceradyne Code of Business Conduct and Ethics Page 2
 

 
**Code of Business Conduct and Ethics*****Introduction***Ceradyne, Inc. (“Ceradyne” or the “Company”) has a strong commitment to business ethics and tocomplying with the laws that govern the conduct of our businesses worldwide. We believe that acommitment to honesty and integrity is a valuable asset that builds trust with our customers,suppliers, employees, shareholders and the communities in which we operate. To implement ourcommitment, this Code of Business Conduct and Ethics (“Code”) has been adopted by our Board ofDirectors and summarizes the standards that must guide our actions.While covering a wide range of business practices and procedures, these standards cannot and donot cover every issue that may arise, or every situation where ethical decisions must be made,but rather sets forth key guiding principles that represent Company policy and establishesconditions for employment at Ceradyne. This Code is meant to be read in conjunction with otherCompany policies.Ceradyne is committed to the highest level of ethical conduct, which is reflected in all theCompany’s business activities including, but not limited to, relationships with employees,customers, vendors, competitors, the government and the public. All of our employees, Officersand Directors, both domestic and foreign, must conduct themselves according to the language andspirit of this Code and seek to avoid even the appearance of improper behavior. We also expectother entities or individuals working on our behalf to be also guided by these standards.We must strive to foster a culture of honesty and accountability. Even well intentioned actionsthat violate the law or this Code may result in corrective and/or disciplinary action, which mayinclude termination. One of our Company’s most valuable assets is our reputation for integrity,professionalism and fairness. We should all recognize that our business actions are thefoundation of our reputation and adhering to this Code and applicable law is imperative.
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***Conflicts Of Interest***You must avoid any investment, interest, or association that interferes or might interfere withthe independent exercise of your individual best judgment, and with your obligation to performyour responsibilities in the best interests of the Company. Specifically: (1) You shall deal with all suppliers, customers and all other persons doing business withthe Company in an objective manner without favor or preference based upon personalfinancial considerations.  (2) You shall not accept from, or give to, any supplier, customer or competitor any gift orentertainment except as permitted under “Gifts and Entertainment” on page 6.  (3) You shall not do business with a close relative on behalf of the Company, unless thetransaction is on arms-length terms and is disclosed, in writing, to the Director of Human Resourcesor to the Chief Financial Officer of the Company who determines that thetransaction is not inconsistent with the purposes of this policy.  (4) You shall not, directly or indirectly, own any financial interest in, or hold anyemployment or managerial position with, any firm or corporation which is a competitor of orwhich seeks to do business with the Company if such interest or position may influence anydecision that you might make in the performance of your regular duties.  (5) You have the affirmative duty to disclose to the corporate officer responsible for yourfunction the existence of any personal financial interest in or employment or managerialposition with any firm or corporation which is a competitor of or which seeks to dobusiness with the Company, where the amount or nature of your interest might influence yourjudgment.    Each corporate officer shall review each such case with the Director of Human Resources orthe Chief Financial Officer, and they shall determine whether the existence of suchinterest or position is or may be in conflict with this policy or otherwise detrimentalto the best interest of the Company or any of its operations. If it is determined thatsuch conflict or detrimental effect may
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   occur, such determination will be communicated to you in writing and steps as arenecessary to correct the situation will be promptly instituted.  (6) You shall not accept any employment with another business entity, where such employmentwould interfere with your ability or desire to perform properly your duties to Ceradyne.  (7) You shall not compete with the Company for the purchase or sale of property, servicesor other interests.  (8) You shall not engage in any outside activity that might reasonably affect adverselyCeradyne’s interests.Situations involving a conflict of interest may not always be obvious or easy to resolve. Anyquestions regarding a conflict or potential conflict should be brought to the attention of yoursupervisor and the CFO.***Confidential Information***Confidential proprietary information generated and gathered in our business is a valuableCompany asset. Protecting this information plays a vital role in our continued growth andability to compete and all proprietary information should be maintained in strict confidence,except when disclosure is authorized by the Company or is legally required. Proprietaryinformation includes all non-public information that might be useful to competitors or whichcould be harmful to the Company or its customers if disclosed and includes, but is not limitedto, intellectual property such as trade secrets, know-how, inventions (whether patentable ornot), as well as business, research and new product plans, objectives and strategies, records,databases, salary and benefits data, employee medical information, customer, employee andsuppliers lists, and any unpublished financial or pricing information.Unauthorized use or distribution of proprietary information violates Company policy and couldresult in disciplinary action. It could also be illegal and result in civil or even criminalpenalties. Ceradyne respects the property rights of other companies and their proprietaryinformation, and we require our employees to protect such rights.An employee’s obligation to protect Ceradyne’s proprietary and confidential informationcontinues even after he or she leaves the Company. Employees leaving
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the Company must returnall proprietary information in their possession prior to their departure. These obligations areset forth in greater detail in the Ceradyne Employee Proprietary Information, Inventions andConfidentiality Agreement and the Ceradyne Employee Proprietary Information and ConfidentialityAgreement.***Gifts and Entertainment***Except as provided below, you shall not seek or accept, or offer or give any payments, fees,loans, services or gifts from or to any person or firm as a condition or result of doingbusiness with the Company. The Company’s policy is to permit gifts of nominal value, normalbusiness meals and entertainment, the exchange of customary reciprocal courtesies betweenemployees of the Company and their business associates, and similar customary and reasonableexpenditures to promote general business goodwill.Reasonable expenditures for gifts to and the entertainment of business contacts by Companyemployees may be made if the expenditures have been appropriately authorized by seniormanagement, comply with Ceradyne’s Travel/Expense Reimbursement Policy as revised from time totime, and are correctly recorded on the books of the paying entity. However, entertainment orgifts shall not be of an amount or nature that violate local custom, or are in violation of anylaw, or which could be construed as a bribe, or which could embarrass Ceradyne if publiclydisclosed..With respect to gifts to, and entertainment of government officials or employees, this policy issubject to the provisions of “Laws, Regulations, and Government Related Activities” on page 7and “Foreign Governmental Payments” on page 8.***Accuracy and Integrity of Books and Records***All of the Company’s books, records, invoices, accounts and other financial statements and datamust be maintained fairly, accurately and in reasonable detail and must conform both toapplicable legal requirements and to our systems of internal controls.Each employee shall maintain accurate and fair records of his or her time reports and expenseaccounts and any other Company records. No false or artificial entries shall be made,misleading reports issued or fictitious invoices paid or created.
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Records should only be maintained or destroyed according to the Company’s record retentionpolicies. In the event of pending or imminent litigation or government investigation, or if youhave any other questions, consult with the CFO, or a member of the Audit Committee of theCompany’s Board of Directors.***Protection and Proper Use of Company Assets***Protecting Company assets against loss, theft, misuse, and waste is the responsibility of everyemployee, Officer and Director. Theft, carelessness and waste directly impact ourprofitability. Any suspected incident of theft, or fraud or inefficient use of Company assetsshould be reported to your supervisor and the CFO. All reports of improper use of Companyassets will be investigated promptly and impartially.The purpose of the Company’s equipment, vehicles and supplies is to conduct Company business.They may not be used for non-Company business, and may not be sold, loaned, given away ordisposed of without proper authorization.***Political Contributions*** (1) No Company funds or services shall be paid or furnished to any political party or anycandidate for, or incumbent in, any public office for political purposes except asexpressly permitted pursuant to paragraphs (2) or (3) of this provision.  (2) United States (a) Federal Elections: It is unlawful for the Company to make acontribution or expenditure in connection with any United States federal election,or in connection with any primary election or political convention held to selectcandidates for any federal office.  (b) State and Local Elections: No contributions of the corporation’s fundsor resources to state or local officials or candidates shall be madewithout the prior written approval of the Chairman of the Board and the HumanResources Manager or Chief Financial Officer. (3) Other Countries
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   No deviation from the prohibition set forth in paragraph (1) of this provision may bemade in any country outside the United States without the prior written approval of theDirector of Human Resources or to the Chief Financial Officer. Approval may be given onlyif the contribution will not violate the Foreign Corrupt Practices Act (discussed in“Foreign Governmental Payments” on page 8), and after there has been a determinationthat such payment or the furnishing of such services is consistent with the laws andhighest standards of business ethics and conduct of the country involved.***Laws, Regulations and Government Related Activities***Ceradyne’s objective is to compete in the marketplace on the basis of superior products,services and competitive prices. Each employee, Officer and Director of the Company shouldendeavor to deal fairly with customers, suppliers, competitors and one another at all times andin accordance with ethical business practices. No one should take unfair advantage of anyonethrough manipulation, concealment, abuse of confidential information, misrepresentation ofmaterial facts or any other unfair dealing practice. A violation of this policy will subjectthe employee to disciplinary action as well as potential civil or criminal penalties.As an international U.S. based company, Ceradyne is subject to laws and regulations both in theU.S. and abroad. Violation of governing laws and regulations is both unethical and subjectsCeradyne to significant risk in the form of fines, penalties and damaged reputation. Theemployees of the Company shall comply with the laws and highest standards of business ethics andconduct in every country in which the Company does business.Employees should understand that special requirements might apply when contracting with anygovernment body (including national, state, provincial, municipal, or other similar governmentdivisions in local jurisdictions). Because government officials are obligated to follow specificcodes of conduct and laws, special care must be taken in government procurement. Some keyrequirements for doing business with a government are: **•** Accurately representing which of Ceradyne’s products are covered by governmentcontracts;  **•** Not offering or accepting kickbacks, bribes, gifts, gratuities or anything else of valuewith the intent of obtaining favorable treatment from the recipient (a gift that 
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   is customary in the business sector may be perceived as a bribe by a government official);  **•** Not improperly soliciting or obtaining confidential information, such as sealedcompetitors’ bids, from government officials prior to the award of a contract.***Foreign Governmental Payments***     It is the policy of the Company to comply with the United States Foreign Corrupt PracticesAct (“FCPA”), and with local laws applicable to governmental payments. Paragraphs (1) through(8) below set forth the Company’s policy with respect to certain aspects of the FCPA. The FCPAis an anti-bribery and record keeping statute that applies to Ceradyne and its officers andemployees worldwide. (1) Payments to Government Officials**.**You shall not make (or condone) any paymentto secure, maintain, or direct business, or for any other purpose, to any governmentofficial. For these purposes, “government official” includes the employee of anygovernment owned or controlled entity or any public international organization, anypolitical party or party official, or any candidate for public office. Securing,maintaining, or directing “business” can include securing government licenses and permits.Payments made indirectly through a third party are also prohibited.  (2) Cash and Third Party Payments**.**To avoid even the appearance of impropriety, nopayments to any third party shall be made in cash other than documented petty cashdisbursements. No corporate checks shall be written to “cash,” “bearer,” or third partydesignees of the party entitled to payment. No payments shall be made outside the countryof residence of the recipient without the prior written approval of Ceradyne’s ChiefFinancial Officer.  (3) Consultants, Agents, and Representatives**.**You may not retain any consultant,agent, or representative on behalf of the Company until sufficient due diligence has beenperformed to enable you to conclude with reasonable assurance that the consultant, agent,or representative understands and will fully abide by the FCPA and this Code. Ceradyne musthave a written agreement with each of its consultants, agents, or representatives, and theagreement must specifically bind the consultant, agent, or representative to comply with this Code and to complywith the FCPA as if it directly applied to him or her.  (4) Business Entertainment, Gifts, and Travel Expenses**.**The Company’s policiesregarding business entertainment and gifts to employees of non-governmental customers areset forth at page 6 of this Code. Without prior written approval of Ceradyne’s ChiefFinancial Officer, no entertainment or gifts may be offered, or travel expenses paid, toany government official (as defined above).
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 (5) Facilitating Payments**.**“Facilitating payments” are small payments to agovernment official necessary to expedite or secure performance of a routine governmentalaction, such as obtaining official documents, processing governmental papers, or providingpostal or utility services. Facilitating payments never include payments made to assist inobtaining or retaining business. Although discouraged, facilitating payments may be madein countries other than the United States where such payments are a recognized and openpractice, but only with prior written approval of Ceradyne’s Chief Financial Officer.  (6) Political Contributions**.**In certain countries, political contributions arelawful and expected as a matter of good corporate citizenship. Under these circumstances,contributions may be appropriate if prudent in amount and otherwise consistent with theexercise of good judgment. As a matter of prudence, however, use of the funds or assets ofCeradyne to make political contributions, directly or indirectly, must be approved, inadvance and in writing, by Ceradyne’s Chief Financial Officer.  (7) Books and Records**.**You must help to ensure that corporate books and records(which include virtually all forms of business documentation) accurately and fairlyreflect, in reasonable detail, all transactions and dispositions of assets. No undisclosedor unrecorded fund or asset may be established or maintained for any purpose. You shallnot participate in falsifying any accounting or other business record, and you must respondfully and truthfully to any questions from Ceradyne’s internal or independent auditors.  (8) Compliance**.**Failure to comply with the FCPA or this Code will be grounds fortermination or other disciplinary action. Designated personnel will be asked to certifyannually that they have read this Code and have complied with its provisions. If you haveany questions about these policies or information concerning possible violations of theFCPA, you should contact Ceradyne’s Chief Financial Officer.***Equal Employment Opportunity and Affirmative Action***As described in detail in Ceradyne’s Employee Handbook, our policies are designed to ensure thatemployees are treated, and treat each other, fairly and with respect anddignity. In keeping with this spirit, conduct constituting unlawful harassment ordiscrimination by or against any employee, customer or supplier will not be tolerated.Prohibited conduct includes, in particular, harassment, violence, intimidation anddiscrimination based on race, color, national origin, ancestry, sex, age (40 or older),religious creed, marital status, veteran status, sexual orientation, gender, physical or mentaldisability (when otherwise qualified with reasonable accommodation) or any other characteristicprotected by applicable law.
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Unwelcome sexual advances and other unwelcome verbal or physical conduct of a sexual nature areprohibited. Sexual harassment may take many forms, from overt advances to demeaning comments,jokes, language and gestures. Sexual harassment may also occur when someone’s words or behaviorcreate a hostile work environment.Any person who believes this policy has been violated should report the incident to theirsupervisor, the director of Human Resources, the CFO, the CEO, or any member of the Board ofDirectors, and provide supporting details, witnesses, and documents. Depending on the nature ofthe complaint, the Company will conduct an appropriate investigation and take appropriatecorrective action against any person who violates this policy. Any violation of this policy mayresult in immediate discharge or other discipline.***Food and Drug Laws***It is the policy of the Company to comply, and all employees shall comply with, all applicablestatutes and regulations governing research, development, manufacture and distribution of foods,drugs, cosmetics, medical devices, diagnostic products or biological products.***Safety and Health***It is the Company’s policy and practice to promote safety on a continuing basis in all aspectsof its operations. By instituting engineering and administrative measures to control workplacehazards, Ceradyne has made the first step in achieving its goal: to provide our employees andvisitors with the safest working conditions possible. To keep the safety program revised andup-to-date, provisions have been made to promote input and feedback from all employees.The safety program also will allow management to track its progress toward its safety goal bydocumentation of incidents and other program aspects. Such documentation will provide measurableevidence for use in determining future policy changes. Ceradyne’s safety training programs aredesigned to ensure that employees are well informed and knowledgeable.The best protection we are able to provide to our employees is the power to make informeddecisions. This education, along with the involvement of affected
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departments and employees in the establishment of priorities and policies, make this safety program a progressive, dynamicinstrument designed to provide safety assurance for all employees, now and in the future.***Special Ethics Obligations for Employees with Financial Reporting Responsibilities***The Finance Department bears a special responsibility for promoting integrity throughout theorganization, with responsibilities to stakeholders both inside and outside of Ceradyne. TheChief Financial Officer and Finance Department personnel have a special role both to adhere tothese principles themselves and also to ensure that a culture exists throughout the company as awhole that ensures the fair and timely reporting of Ceradyne’s financial results and condition.Because of this special role, the Chief Financial Officer and all members of Ceradyne’s FinanceDepartment are bound by the following Financial Officer Code of Ethics, and by accepting thisCode of Business Conduct and Ethics, each agrees that he or she will, in his or her capacity asan employee of Ceradyne: **•** Act with honesty and integrity, avoiding actual or apparent conflicts of interest inpersonal and professional relationships;  **•** Provide information that is accurate, complete, objective, relevant, timely, andunderstandable to ensure full, fair, accurate, timely, and understandable disclosure inreports and documents that Ceradyne files with, or submits to, government agencies and inother public communications;  **•** Comply with rules and regulations of federal, state, provincial and local governments,and other appropriate private and public regulatory agencies;  **•** Act in good faith, responsibly, with due care, competence and diligence, withoutmisrepresenting material facts or allowing his or her independent judgment to besubordinated; and  **•** Respect the confidentiality of information acquired in the course of his or her workexcept when authorized or otherwise legally obligated to disclose.
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   Confidential information acquired in the course of his or her work will not be used for personal advantage.***Antitrust Laws***All employees shall comply with the antitrust laws. In order to avoid activities that may raiseinferences of a violation or result in allegation of a violation of the antitrust laws, thefollowing policies shall apply: (1) You shall not enter into any understanding, agreement, plan or scheme which you havereason to believe or have been advised by counsel for the Company to be illegal under anyof the antitrust laws.  (2) You shall not exchange or discuss with any competitor non-public information relatingto Company prices or pricing policies, distribution policies, supplier or customerselection or classifications, credit policies, or any other similar competitiveinformation.  (3) You shall not knowingly participate in any formal or informal meetings with thirdparties at which agreements or understandings of the type described in paragraph (1) arebeing made or at which information of the type described in paragraph (2) is beingexchanged or discussed.***Environmental Laws***You shall comply with all applicable environmental laws, rules and regulations, including thosedealing with emissions to the atmosphere, discharges to surface or underground works, drinkingwater supplies, solid and hazardous substances, community emergency response planning and toxicsubstances control.***Insider Trading In Securities***If a person possesses material non-public information concerning a corporation, it is illegalfor the person to trade in securities of the corporation. All directors, officers and employeesof the Company, and third parties who are in a confidential relationship with the Company, shallnot trade in or recommend the purchase or sale of Ceradyne common shares (or any other Ceradynesecurities) while they are in
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possession of “material information” regarding the operations orprospects of the Company that has not been publicly disclosed and disseminated to the investmentcommunity.You also shall abstain from trading in, or recommending the purchase or sale of, the securitiesof any other corporation of which you have obtained non-public “material information” as aresult of your employment by the Company.“Material information” is information which, if publicly disclosed, could reasonably be expectedto affect the market value of a corporation’s securities or to influence investor decisions withrespect to those securities. You should contact the CFO if you have any questions about yourability to buy or sell shares of Ceradyne stock.Specific examples of “material information” include unanticipated changes in annual andquarterly earnings or dividend rates, significant acquisitions, proposed tender offers or stocksplits, and senior management changes. Information regarding major new products, contractawards, expansion plans or significant litigation or regulatory proceedings may also fall in thecategory of “material information.”***Discipline for Violations***Disciplinary action may be taken for certain actions, including but not limited to,authorization or participation in actions that violate the Code; failure to report a violationof the Code; refusal to cooperate in the investigation of a violation of the Code; failure by aviolator’s supervisor(s) to detect and report a violation of the Code, if such failure reflectsinadequate supervision or lack of oversight; and retaliation against an individual for reportinga violation of the Code. Disciplinary action may, when appropriate, include termination of youremployment.The Company recognizes the need for this Code of Business Conduct and Ethics to be applied on aconsistent and even-handed basis. The CFO of the Company will have primary authority and responsibility for the enforcement of this Code, subject to thesupervision of the Board of Directors or, in the case of internal accounting controls orauditing matters, the Audit Committee of the Board of Directors. The Company will devote thenecessary resources to enable the CFO to establish such procedures as may be reasonablynecessary to create a culture of accountability and facilitate compliance with this Code.Questions concerning this Code should be directed to the CFO.
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***Reporting Concerns***If you have concerns regarding questionable accounting, internal controls or auditing matters,you may report them anonymously and confidentially to the Company’s Audit Committee by callingthe following toll free hot line numbers: 1-866-217-8589 if calling within the U.S./Canada and402-572-5439 from all other locations, or go to http://www.openboard.info/crdn/. An anonymousreport should provide enough information about the incident or situation to allow the Company tofully investigate the matter. Additional information regarding anonymous reporting is containedin the Company’s policy on “Ethics and Corporate Governance Hotline,” which is available to allemployees.If you have concerns regarding other illegal or unethical conduct in violation of this Code, youare encouraged to discuss these concerns with your supervisor, department Vice President, ourDirector of Human Resources, or our CFO by calling 1-714-549-0421.***Waivers and Amendments of Code***Any waiver of this Code for Directors, executive officers or other senior financial officers mayonly be made by the Board of Directors or its Audit Committee. Amendments to this Code may onlybe made by the Board of Directors. Waivers and amendments of this Code applicable to theCompany’s CEO, CFO, principal financial officer, principal accounting officer or controller, orpersons performing similar functions will be disclosed promptly to the public as required by lawand the rules and regulations of the SEC and NASDAQ.
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