**EXHIBIT 14.1**

 

**OVERLAND STORAGE, INC.**

**CODE OF BUSINESS CONDUCT AND ETHICS**

(ApprovedJune 10, 2004)

 

This Code of Business Conduct and Ethics (the “Code”) sets forth legaland ethical standards of conduct for directors, officers and employees ofOverland Storage, Inc. (the “Company”). This Code is intended to deter wrongdoing and to promote the conduct ofall Company business in accordance with high standards of integrity and incompliance with all applicable laws and regulations.  This Code applies to the Company and all of its subsidiaries andother business entities controlled by it worldwide.

 

If you have any questions regarding this Code or its application to youin any situation, you should contact your supervisor or the Company’s Chief Financial Officer.

 

**Compliance with Laws, Rules andRegulations**

 

The Company requires that all of its employees, officers and directorscomply with all laws, rules and regulations applicable to the Company whereverit does business.  You are expected touse good judgment and common sense in seeking to comply with all applicablelaws, rules and regulations and to ask for advice when you are uncertain aboutthem.

 

If you become aware of the violation of any law, rule or regulation bythe Company, whether by its officers, employees, directors, or any third partydoing business on behalf of the Company, it is your responsibility to promptlyreport the matter to your supervisor or to the Company’s Chief FinancialOfficer.  The Company’s WhistleblowerProtection Policy is specifically designed to encourage and assist employees inreporting complaints of improper or illegal activities relating to financialimpropriety.  The Policy can be found inthe “Finance Central” section of the Company’s Intranet under“Policies.”  While it is the Company’sdesire to address matters internally, nothing in this Code should discourageyou from reporting any illegal activity, including any violation of thesecurities laws, antitrust laws, environmental laws or any other federal, stateor foreign law, rule or regulation, to the appropriate regulatoryauthority.  Employees, officers anddirectors shall not discharge, demote, suspend, threaten, harass or in anyother manner discriminate or retaliate against an employee because he or shereports any such violation, unless it is determined that the report was madewith knowledge that it was false.  ThisCode should not be construed to prohibit you from testifying, participating orotherwise assisting in any state or federal administrative, judicial or legislativeproceeding or investigation.

 

The following is a summary of some of the important laws that apply tothe Company:

 

Antitrust – The Company is subjectto antitrust laws within the United States, and also in its internationaloperations.  In general, these lawsprohibit actions or agreements that may restrain trade or reducecompetition.  Violations includeagreements among competitors to fix or control prices, to boycott specificsuppliers or customers, to allocate products, territories or markets, or tolimit production or sale of products. Any activities with representatives of other

 

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companies,competitors, customers or suppliers may be carefully scrutinized and care mustbe taken to ensure that such activities cannot be viewed as antitrustviolations.

 

Foreign Business Operations**–**The Foreign Corrupt Practices Act prohibitsthe payment of money or anything of value to a foreign official, foreignpolitical party or candidate for foreign political office in order to obtainbusiness.  It also requires properaccounting controls and accurate and reasonably detailed books andrecords.  There is a reportingrequirement for violations or solicitations to violate.

 

Export Control**–**TheCompany’s technology, products and all technical data relating to the design,production and use of our products is subject to United States and foreignexport control laws and regulations. The import laws and regulations of the United States and other countriesapply as well.

 

Antiboycott**–**UnitedStates anti-boycott laws generally prohibit cooperation with internationalboycotts that the United States has not sanctioned.  The law requires reporting of any requests to engage in boycottactivity.  Questions regarding internationallaw should be directed to the Company’s Chief Financial Officer.

 

U.S. Embargoes**–**Embargoes restrict or, insome cases, prohibit companies, their subsidiaries and their employees fromdoing business with certain other countries or specific companies orindividuals identified on a list that changes periodically.

 

**Conflicts of Interest**

 

A “conflict of interest” occurs when an individual’s personal interestmay interfere in any way with the performance of his or her duties or the bestinterest of the Company. A conflicting personal interest could result from anexpectation of personal gain now or in the future or from a need to satisfy aprior or concurrent personal obligation. We expect our employees, officers anddirectors to be free from influences that conflict with the best interests ofthe Company. Even the appearance of a conflict of interest where none actuallyexists can be damaging and should be avoided. Whether or not a conflict ofinterest exists or will exist can be unclear. Conflicts of interest areprohibited unless specifically authorized as described below.

 

If you have any questions about a potential conflict or if you becomeaware of an actual or potential conflict and you are not an officer or directorof the Company, you should discuss the matter with your supervisor or the ChiefFinancial Officer.  Supervisors may notauthorize conflict of interest matters without first seeking the approval ofthe Chief Financial Officer and filing with the Chief Financial Officer awritten description of the authorized activity. If the supervisor is involvedin the potential or actual conflict, you should discuss the matter directlywith the Chief Financial Officer. Officers and directors may seek authorization(1) from the Nomination and Corporate Governance Committee of the Board ofDirectors or (2) in the case of a transaction described in SEC Regulation S-K,Item 404(a) (“Related Party Transaction”) from the Audit Committee of the Boardof Directors.  Factors that may beconsidered in evaluating a potential conflict of interest are, among others:

 

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•                                          whether itmay interfere with the employee’s job performance, responsibilities or morale;

 

•                                          whether theemployee has access to confidential information;

 

•                                          whether itmay interfere with the job performance, responsibilities or morale of otherswithin the organization;

 

•                                          any potentialadverse or beneficial impact on our relationships with our customers orsuppliers or other service providers;

 

•                                          whether itwould enhance or support a competitor’s position;

 

•                                          the extent towhich it would result in financial or other benefit (direct or indirect) to theemployee;

 

•                                          the extent towhich it would result in financial or other benefit (direct or indirect) to oneof our customers, suppliers or other service providers; and

 

•                                          the extent towhich it would appear improper to an outside observer.

 

The following are examples of situations that may, depending on thefacts and circumstances, involve conflicts of interest:

 

•                                          **Employmentby (including consulting for) or service on the board of a competitor, customeror supplier or other service provider.** Activity that enhances orsupports the position of a competitor to the detriment of the Company isprohibited, including employment by or service 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 any entity thatdoes business, seeks to do business or competes with us.** In additionto the factors described above, persons evaluating ownership for conflicts ofinterest will consider the size and nature of the investment; the nature of therelationship between the other entity and the Company; the employee’s access toconfidential information and the employee’s ability to influence the Companydecisions. If you would like to acquire a financial interest of that kind, youmust seek approval in advance.

 

•                                          **Solicitingor accepting gifts, favors, loans or preferential treatment from any person orentity that does business or seeks to do business with us.** See“Gifts and Gratuities” below for further discussion of the issues involved inthis type of conflict.

 

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•                                          **Takingpersonal advantage of corporate opportunities.**

 

•                                          **ConductingCompany business with a family member, significant other or person who sharesyour household or a business in which you have a significant financialinterest.** Material related-party transactions approved by the AuditCommittee and involving any executive officer or director will be publiclydisclosed as required by applicable laws and regulations.

 

•                                          **Exercisingsupervisory or other authority on behalf of the Company over a co-worker who isalso a Family Member.** The employee’s supervisor will consult withthe Human Resources department to assess the advisability or reassignment.

 

**Insider Trading**

 

Employees, officers and directors who have material non-publicinformation about the Company or other companies, including our suppliers andcustomers, are prohibited by law and Company policy from trading in securitiesof the Company or such other companies, as well as from communicating suchinformation to others who might trade on the basis of that information.  To help ensure that you do not engage inprohibited insider trading and avoid even the appearance of an impropertransaction, the Company has adopted an Insider Trading Policy, which can befound in the “Finance Central” section of the Company’s Intranet.

 

If you are uncertain about the constraints on your purchase or sale ofany Company securities or the securities of any other company that you arefamiliar with by virtue of your relationship with the Company, you shouldconsult with the Company’s ChiefFinancial Officer before making any such purchase or sale.

 

**Confidentiality**

 

Employees, officers and directors must maintain the confidentiality ofconfidential information entrusted to them by the Company or other companies,including our suppliers and customers, except when disclosure is authorized bya supervisor or is legally mandated. Unauthorized disclosure of any confidential information isprohibited.  Additionally, employeesshould take appropriate precautions to ensure that confidential or sensitivebusiness information, whether it is proprietary to the Company or another company,is not communicated within the Company except to employees who have a need toknow such information to perform their responsibilities for the Company.  Further guidance is contained with theEmployee Handbook posted under the “HR Central” section of the Company’sIntranet.  Specifically, you arereferred to the Confidentiality, Trade Secrets and Professional Conductparagraphs of Section 3 of the Handbook.

 

Third parties may ask you for information concerning the Company.  Subject to the exceptions noted in thepreceding paragraphs, employees, officers and directors (other than theCompany’s authorized spokespersons) must not discuss internal Company matterswith, or disseminate internal Company information to, anyone outside theCompany, except as required in the performance of their Company duties andafter an appropriate confidentiality agreement is

 

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in place.  This prohibition applies particularly toinquiries concerning the Company from the media, market professionals (such assecurities analysts, institutional investors, investment advisors, brokers anddealers) and security holders.  Allresponses to inquiries on behalf of the Company must be made only by theCompany’s authorized spokespersons.  Ifyou receive any inquiries of this nature, you must decline to comment and referthe inquirer to your supervisor or one of the Company’s authorizedspokespersons.

 

You also must abide by any lawful obligations that you have to yourformer employer.  These obligations mayinclude restrictions on the use and disclosure of confidential information,restriction on the solicitation of former colleagues to work at the Company andnon-competition obligations.

 

**Honest and Ethical Conduct and FairDealing**

 

Employees, officers and directors should endeavor to deal honestly,ethically and fairly with the Company’s suppliers, customers, competitors andemployees.  Statements regarding theCompany’s products and services must not be untrue, misleading, deceptive orfraudulent.  You must not take unfairadvantage of anyone through manipulation, concealment, abuse of privilegedinformation, misrepresentation of material facts or any other unfair-dealingpractice.

 

**Protection and Proper Use ofCorporate Assets**

 

Employees, officers and directors should seek to protect the Company’sassets.  Theft, carelessness and wastehave a direct impact on the Company’s financial performance.  Employees, officers and directors must usethe Company’s assets and services solely for legitimate business purposes ofthe Company, except for incidental personal use of computers, telephones, andother miscellaneous assets in accordance with Company policies.

 

Employees, officers and directors must advance the Company’s legitimateinterests when the opportunity to do so arises.  You must not take for yourself personal opportunities that arediscovered through your position with the Company or the use of property orinformation of the Company.

 

**Gifts and Gratuities**

 

The use of Company funds or assets for gifts, gratuities or otherfavors to employees or government officials is prohibited, except to the extentsuch gifts are in compliance with applicable law, insignificant in amount andnot given in consideration or expectation of any action by the recipient.

 

Employees, officers and directors must not accept, or permit any memberof his or her immediate family to accept, any gifts, gratuities or other favorsfrom any customer, supplier or other person doing or seeking to do businesswith the Company, other than items of insignificant value.  Any gifts that are not of insignificantvalue should be returned immediately and reported to your supervisor.  If immediate return is not practical, theyshould be given to the Company for charitable disposition or such otherdisposition as the Company, in its sole discretion, believes appropriate.

 

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Common sense and moderation should prevail in business entertainmentengaged in on behalf of the Company. Employees, officers and directors should provide, or accept, businessentertainment to or from anyone doing business with the Company only if theentertainment is infrequent, modest and intended to serve legitimate businessgoals.

 

Bribes and kickbacks are criminal acts, strictly prohibited bylaw.  You must not offer, give, solicitor receive any form of bribe or kickback anywhere in the world.

 

**PoliticalContributions**

 

No Company funds or assets may be directly or indirectly used forpolitical contributions or to support political activities, unless specificallyapproved by the Chief Executive Officer. The term “political contributions” includes local, state or nationalfund-raising events of all kinds, any funds or gifts, and the free ordiscounted use of property or services that could be used directly orindirectly to support a political candidate, party, committee or organizationanywhere worldwide.

 

**Accuracy of Books and Records andPublic Reports**

 

Employees, officers and directors must honestly and accurately reportall business transactions.  You are responsiblefor the accuracy of your records and reports. Accurate information is essential to the Company’s ability to meet legaland regulatory obligations.

 

All Company books, records and accounts shall be maintained inaccordance with all applicable regulations and standards and accurately reflectthe true nature of the transactions they record.  The financial statements of the Company shall conform togenerally accepted accounting policies (“GAAP”) and the Company’s own internalaccounting policies.  No undisclosed orunrecorded account or fund shall be established for any purpose.  No false or misleading entries shall be madein the Company’s books or records for any reason, and no disbursement ofcorporate funds or other corporate property shall be made without adequatesupporting documentation.

 

It is the policy of the Company to provide full, fair, accurate, timelyand understandable disclosure in reports and documents filed with, or submittedto, the Securities and Exchange Commission and in other public communications.

 

**Concerns Regarding Accounting orAuditing Matters**

 

As discussed earlier, the Company has established a WhistleblowerProtection Policy specifically designed to encourage and assist employees inreporting complaints of improper or illegal activities relating to financialimpropriety.  This includes concernsregarding questionable accounting or auditing matters or complaints regardingaccounting, internal accounting controls or auditing matters.  The Whistleblower Protection Policy can befound in the “Finance Central” section of the Company’s Intranet under“Policies.”  In connection with thisPolicy, the Company has retained an outside third party call center called“MessagePro” that enables

 

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employees toanonymously report complaints. Employees can reach the dedicated line established for this purpose bycalling the toll-free telephone number **(866)469-6894**.  All concerns andcomplaints received through MessagePro are forwarded to the Chairman of theCompany’s Board of Directors and investigated by the Audit Committee of theBoard.

 

**Dealings with Independent Auditors**

 

No employee, officer or director shall, directly or indirectly, make orcause to be made a materially false or misleading statement to an accountant inconnection with (or omit to state, or cause another person to omit to state,any material fact necessary in order to make state statements made, in light ofthe circumstances under which such statements were made, not misleading to, anaccountant in connection with) any audit, review or examination of theCompany’s financial statements or the preparation or filing of any document orreport with the SEC.  No employee,officer or director shall, directly or indirectly, take any action to coerce,manipulate, mislead or fraudulently influence any independent public orcertified public accountant engaged in the performance of an audit or review ofthe Company’s financial statements.

 

**Waivers of this Code of BusinessConduct and Ethics**

 

While some of the policies contained in this Code must be strictlyadhered to and no exceptions can be allowed, in other cases exceptions may bepossible.  Any employee or officer whobelieves that an exception to any of these policies is appropriate in his orher case should first contact his or her immediate supervisor.  If the supervisor agrees that an exceptionis appropriate, the approval of the Company’s Chief Financial Officer must be obtained.  The ChiefFinancial Officer shall be responsible for maintaining a record of allrequests for exceptions to any of these policies and the disposition of suchrequests.

 

Any executive officer or director who seeks an exception to any ofthese policies should contact the Company’s Chief Executive Officer. Any waiver of this Code for executive officers or directors or anychange to this Code that applies to executive officers or directors may be madeonly by the Board of Directors of the Company and will be disclosed as requiredby law or stock market regulations.

 

**Reporting and Compliance Procedures**

 

Everyemployee, officer and director has the responsibility to ask questions, seekguidance, report suspected violations and express concerns regarding compliancewith this Code.  Any employee, officeror director who knows or believes that any other employee or representative ofthe Company has engaged or is engaging in Company-related conduct that violatesapplicable law or this Code should report such information to his or hersupervisor or to the Company’s Chief Financial Officer as described below.  You may report such conduct openly oranonymously without fear of retaliation. The Company will not discipline, discriminate against or retaliateagainst any employee who reports such conduct, unless it is determined that thereport was made with knowledge that it was false, or who cooperates in anyinvestigation or inquiry regarding such conduct.  Any supervisor who receives a report of a violation of this Codemust immediately inform the Company’s Chief Financial Officer.

 

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You may report violations of this Code, on a confidential basis, bycontacting the Company’s****ChiefFinancial Officer.  In addition,you may also anonymously report Code violations by using the Company’sWhistleblower line noted above.

 

If the Company’s Chief Financial Officer receives information regardingan alleged violation of this Code, he or she shall, as appropriate,(a) evaluate such information, (b) if the alleged violation involves anexecutive officer or a director, inform the Board of Directors of the allegedviolation, (c) determine whether it is necessary to conduct an informalinquiry or a formal investigation and, of so, initiate such inquiry orinvestigation and (d) if the alleged violation involves an executiveofficer or a director, report the results of any such inquiry or investigation,together with a recommendation as to the disposition of the matter, to theBoard of Directors or a committee thereof. Employees, officers, and directors are expected to cooperate fully withany inquiry or investigation by the Company regarding an alleged violation ofthis Code.  Failure to cooperate withany such inquiry or investigation may result in disciplinary action, up to andincluding discharge.

 

The Company shall determine whether violations of this Code haveoccurred and, if so, shall determine the disciplinary measures to be takenagainst any employee who has violated this Code.  In the event that the alleged violation involves an executiveofficer or a director, the Chief Executive Officer and the Board of Directors,respectively, shall determine whether a violation of this Code has occurredand, if so, shall determine the disciplinary measures to be taken against suchexecutive officer or director.

 

Failure to comply with the standards outlined in this Code will resultin disciplinary action including, but not limited to, reprimands, warnings,probation or suspension without pay, demotions, reductions in salary, dischargeand restitution.  Certain violations ofthis Code may require the Company to refer the matter to the appropriategovernmental or regulatory authorities for investigation or prosecution.  Moreover, any supervisor who directs orapproves of any conduct in violation of this Code, or who has knowledge of suchconduct and does not immediately report it, also will be subject todisciplinary action, up to and including discharge.

 

**Dissemination and Amendment**

 

This Code shall be distributed to each new employee, officer and directorof the Company upon commencement of his or her employment or other relationshipwith the Company and shall also be distributed annually to each employee,officer and director of the Company, and each employee, officer and directorshall certify that he or she has received, read and understood the Code and hascomplied with its terms.

 

The Company reserves the right to amend, alter or terminate this Codeat any time for any reason.  The mostcurrent version of this Code can be found in the Policies section of“HR Central” on the Company’s Intranet.

 

This document is not an employment contract between the Company and anyof its employees, officers or directors.

 

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**Code of Ethics Certification**

 

 

I,                                                          dohereby certify that:

(Print Name Above)

 

1.                                       Ihave received and carefully read the Code of Business Conduct and Ethics ofOverland Storage, Inc.

 

2.                                       Iunderstand the Code of Business Conduct and Ethics.

 

3.                                       Ihave complied and will continue to comply with the terms of the Code ofBusiness Conduct and Ethics.

 

 
| Date:  |        |   |   |
|--------|-------------|--------|--------|
|   | (Signature) |

 

**EACH EMPLOYEE, OFFICERAND DIRECTOR IS REQUIRED TO SIGN, DATE AND RETURN THIS CERTIFICATION TO THEHUMAN RESOURCES DEPARTMENT WITHIN 30 DAYS OF ISSUANCE.  FAILURE TO DO SO MAY RESULT IN DISCIPLINARYACTION.**

 

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