**Exhibit 14**

 

****STEINWAY MUSICALINSTRUMENTS, INC.CODE OF ETHICS AND PROFESSIONAL CONDUCT****

 

****OVERVIEW****

Ethicalbehavior in conducting business, recording transactions, reporting results, andeffecting communications is the foundation upon which our business reputationis based. No short-term benefit can outweigh the long-term detriment resultingfrom the violation of ethics. Therefore, through this policy, the Company hasinstituted a Code of Ethics and Professional Conduct (the “Code”). This policyaddresses many of the issues that one is likely to face in business. However,it is not exhaustive of all possible situations, so it is the responsibility ofeach individual to seek Company guidance regarding any potentially unethicalevents or transactions that are not addressed herein.

 

****POLICY****

****Compliance with Laws and Regulations****

TheCompany shall conduct business in accordance with all applicable laws, rules,and regulations of federal, state, provincial, and local governments, and otherappropriate private and public regulatory agencies. Each individual shallensure compliance with all such laws, rules, and regulations and shall neitherengage in nor encourage bribery, price fixing, kickbacks, collusion,information tipping, or any related practice that might be, or give theappearance of being, illegal or unethical.

 

****Business Conduct****

Theethical principles to which each individual should tailor his or her conductare outlined at the end of this document under “Ethical Principles.” At aminimum, each individual shall:

•                  Ensure that all transactions are recorded,all records are accurate and complete, and no service performed or productprovided by the Company appears on more than one invoice.

•                  Refrain from offering, providing, oraccepting costly entertainment or gifts to or from vendors, dealers, and otherswith whom we do business where any undue influence over a negotiation,contract, or other decision could occur or may be reasonably inferredtherefrom.

•                  Treat proprietary information of the Companyas a valued asset and diligently protect it from loss, negligent disclosure, ormisuse. Proprietary information includes but is not limited to: strategicinformation, price lists, customer lists, patents, trademarks, and technicalinformation regarding methods, products, processes, and equipment.

•                  Obtain proprietary information of others onlythrough legal and ethical methods and in accordance with standard industrypractice, authorized channels, or availability in the public domain. The use ofinformation obtained in an unauthorized manner is strictly prohibited.

•                  Provide full, fair, accurate, timely, andunderstandable information to co-workers, colleagues, and auditors. Thewithholding of information that must be disclosed, or otherwise misleadingauditors, lenders, investors, or other interested parties, is strictlyprohibited.

 

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•                  Refrain from making any statements to outsideparties which would be misleading, deceptive, untrue or disparaging in relationto the Company and its competitors, customers, or suppliers.

•                  Honor contracts, agreements, and assignedresponsibilities — neither promise more than one can reasonably expect todeliver nor make commitments not intended to be kept.

 

****Conflict of Interests****

Anycircumstance which produces, or reasonably appears to produce, a conflictbetween the personal interest of an individual and the interest of the Companyshall be considered a conflict of interests and is strictly prohibited.Conflicts of interests include, but are not limited to, the following:

•                  The use of Company property, information, orresources or reliance on Company actions or decisions by an individual or anindividual’s family members, friends, or associates for the purpose of personaladvantage or gain.

•                  Ownership interest, direct or indirectparticipation in, or employment by another entity that is an actual orpotential competitor, supplier, customer, or business affiliate of the Company.Acting as an officer, director, consultant, representative, agent advisor,employee, partner, or sole proprietor of an entity is considered to be “havingan interest”.

•                  Engagement in any outside activity,enterprise, or association which interferes with job performance. Participationin professional memberships, associations, or community activities areacceptable, and even encouraged, provided that participation is not so timeconsuming as to interfere with day-to-day job performance.

 

****Additional Requirements for Officers, Directors, and Audit CommitteeMembers****

Anofficer or director is prohibited from arranging, receiving, or renewing anyextension of credit, in the form of a personal loan, from the Company.

 

AnAudit committee member may not, other than in his or her capacity as a memberof the audit committee, the board of directors, or any other board or committee,accept any consulting, advisory, or other compensatory fee from the Company orbe an affiliated person of the Company.

 

****Additional Requirements for Finance Personnel****

Dueto the sensitive nature of the information with which finance personneloperate, and the direct relationship between the activities of theseindividuals and the Company’s compliance with the rules and regulations ofgovernmental and private entities, all finance personnel shall:

•                  Adhere to the procedures implemented by theCompany regarding the documentation, reporting, and refining of internal anddisclosure controls and procedures.

•                  To the best of his or her knowledge, providehonest, timely, and accurate responses to all questionnaires, confirmations,and representations requested by the Company.

 

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•                  Report transactions properly, completely, andconsistently in accordance with the principles, rules, and regulations setforth by the applicable accounting and oversight bodies.

 

****IDENTIFICATION, REPORTING, AND RESOLUTION OF CODE VIOLATIONS****

Itis imperative that no employee, officer, or director allows his or herindependent judgment to be subordinated when dealing with a question of ethicsor professional conduct. Each individual has the responsibility to be aware ofand report possible violations of this Code and any applicable law as soon asthey become apparent. Failure to inquire about the appropriateness of aquestionable course of action or retaliation against any individual who reportsa suspected violation of this Code is considered a breach of the Code.Violations of this Code shall result in disciplinary action up to, andincluding, dismissal. A waiver of any component of the Code may be requested.Waivers shall be handled in accordance with the resolution and disciplinaryaction procedures outlined below.

 

Inquiriesregarding this Code should be directed to an individual’s supervisor/departmenthead, and the advice given or resolution reached should be fully documented andsigned by the individual and the supervisor/department head.Supervisors/department heads are required to seek the advice of the Company’sgeneral counsel in all cases where the appropriate response is not readilyapparent.

Individualsmay report suspected violations of this Code to a supervisor/department head, theCompany’s general counsel, or the audit committee. Inquiries or reports may bedirected as follows:

 

Dennis M. Hanson, General CounselSteinway Musical Instruments, Inc.800 South Street, Suite 305Waltham, MA 02453dhanson@steinwaymusical.com

 

Audit CommitteeSteinway Musical Instruments, Inc.800 South Street, Suite 305Waltham, MA 02453auditcommittee@steinwaymusical.com

 

Reportsmay be made anonymously. However a name and contact instructions must beprovided if a specific reply is sought.

 

Resolutionand determination of disciplinary action resulting from violations of the Codeby an individual will be determined in accordance with the following:

•                  If the individual is not an officer,director, senior financial officer, or controller, then the general counsel andthe operational and human resource head of the division for which theindividual provides services will review the alleged violation and determine,by majority vote, the disciplinary action to be taken. A final report detailingthe violation and the action taken must be provided to the individual andretained in the individual’s personnel file. Requested waivers shall be handledin the same manner.

•                  If the individual is an officer, director,senior financial officer, or controller of the Company, then the board ofdirectors will review the alleged violation

 

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and determine, by majority vote, the disciplinaryaction to be taken. The individual, if serving on the board of directors, isprohibited from participating in the vote. Requested waivers shall be handledin the same manner however, if a waiver is granted, immediate public disclosureis required. Accordingly, immediate notification must be provided to theCompany’s general counsel and director of communications by the board ofdirectors.

 

****ACKNOWLEDGEMENT OF THE CODE OF ETHICS AND PROFESSIONAL CONDUCT****

Eachemployee, officer and director will be presented with a copy of the Code. Dueto the significant reliance on finance personnel, officers, and directors, eachof these individuals will be asked to sign a form acknowledging that he or shehas read, understood, and complied with the Code. The Company will retain thesigned statement in the individual’s personnel file.

 

****ETHICAL PRINCIPLES****

Eachemployee, officer, and director of Steinway Musical Instruments, Inc. andsubsidiaries is expected to:

•                  Exercise reasonable and prudent professionaljudgment and act in the best interests of the Company.

•                  Share knowledge and maintain skills importantand relevant to one’s position in the Company.

•                  Refrain from engaging in any activity orassociation which would reflect negatively on the image or integrity of Companyor which would result in embarrassment to Company.

•                  Achieve responsible use of and control overassets or resources entrusted to you.

•                  Conduct oneself in an honorable, fair,competent, and professional manner.

•                  Proactively promote ethical behavior in thework environment.

•                  Act in good faith, responsibly, with duecare, competence, and diligence.

•                  Use or authorize company resources only forlegitimate business purposes.

•                  Perform duties in a competent, efficient, andeconomical manner.

 

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