Charters of the Board of Directors and its Committees

Board of Directors

The Board of Directors of Nymox Pharmaceutical Corporation is responsible for supervising the management of the business and affairs of the company with a view to the best interests of the company and its shareholders generally.

The Board reviews and approves matters relating to the strategic direction, business and operations and the organizational structure of the company. The Board's specific responsibilities include submitting any matter requiring shareholder approval to the shareholders, recommending candidates for election or appointment to the Board, approving the issuance of any securities and any related transactions, reviewing financings, investments, acquisitions, dispositions and other transactions not in the ordinary course of business, reviewing the compensation and performance of the company's officers, approving the issuance of any stock options pursuant to the company's Stock Option Plan, reviewing, approving and supervising the company's accounting principles and practices, financial statements and security filings, approving the annual budget, ensuring the proper and timely disclosure of material matters and appropriate communications with the shareholders, reviewing the corporate governance of the company and the Board, including compliance with relevant legal and ethical standards, and reviewing management practices and processes with respect to risk assessment and management and internal controls and audit functions.

The Board appoints the Chairman of the Board, establishes its Committees and appoints directors to serve as members of those Committees. The Board meets regularly as scheduled by the Board. Special meetings of the Board may be called by the Board, the Chairman of the Board, the President or CEO of the company or by any two Directors.

Audit Committee

Role

 

The primary role of the Audit Committee is to provide independent oversight of the quality and integrity of the accounting, auditing, and reporting practices of the company with a particular focus on financial statements and financial reporting to shareholders. The Committee is directly responsible for the appointment, compensation, and oversight of the public accounting firm engaged to prepare or issue an audit report on the financial statements of the company.

Membership

The Committee shall consist of three directors appointed by the Board who are independent of management and who are generally knowledgeable in financial and auditing matters and have the ability to read and understand fundamental financial statements including a company's balance sheet, income statement, and cash flow statement.

A member of the Committee must, as determined by the Board, meet the criteria for independence as set out in all applicable laws, rules and regulations, including the qualitative listing requirements for the Nasdaq Market and any applicable SEC rules and sections of the Sarbanes-Oxley Act, and be otherwise free of any relationship that would interfere with his or her individual exercise of independent judgment.

The Chair of the Committee must, as determined by the Board, possess the requisite financial management or accounting expertise or sophistication to meet the criteria for audit committee financial expert or equivalent as set out in all applicable laws, rules and regulations, including the qualitative listing requirements for the Nasdaq Market and any applicable SEC rules and sections of the Sarbanes-Oxley Act.

Responsibilities

The Audit Committee has the following responsibilities with respect to accounting, auditing, and reporting practices of the company:

  • appointing, retaining, overseeing, fixing the compensation for, and, where appropriate, replacing the public accounting firm engaged to prepare or issue an audit report on the financial statements of the company;
  • requiring the independent auditors to report directly to the Audit Committee;
  • pre-approving all audit services and permissible non-audit services as set out in all applicable laws, rules and regulations, including Section 202 of the Sarbanes-Oxley Act;
  • ensuring the receipt from the independent auditors of a formal written statement setting out all relationships between the auditors and the company, consistent with Independence Standards Board Standard 1, reviewing with the auditors on an ongoing basis any disclosed relationships, non-audit services and special engagements that may impact the objectivity or independence of the auditors and taking such appropriate action to oversee and ensure the auditors' independence;
  • reviewing the scope and results of the audit with the independent auditors;
  • meeting at least four times a year to review with management and the independent auditors the company's interim and year-end financial condition and results of operations;
  • resolving any disagreements between management and the independent auditors regarding financial reporting;
  • considering the adequacy of the internal accounting, bookkeeping and control procedures of the company;
  • reviewing with management and the independent auditors any significant risks or exposures to the company and assess the steps management has taken to minimize such risk to the company;
  • reviewing at least once each year the terms of all material transactions and arrangements between the company and its affiliates; and
  • reviewing all interim and year-end financial statements and reports prior to filing with the SEC or other regulatory authority.

The Audit Committee has the additional responsibilities for:

  • reviewing the evaluation of the effectiveness of the design and operation of the company's disclosure controls and procedures as conducted by the Disclosure Committee;
  • establishing procedures for the handling complaints regarding accounting, internal accounting controls, or auditing matters, including procedures for the receipt, retention and treatment of such complaints and for the confidential and anonymous submission by employees of the company or its affiliates of concerns regarding questionable accounting or auditing matters; and
  • reviewing and assessing on an annual basis the adequacy of this charter and recommending to the Board any changes that in the opinion of the Committee are needed to comply with or to reflect any changes in applicable law, rules or regulations, regulatory requirements, authoritative guidance, and evolving oversight practices or to otherwise enable the Committee to properly discharge its duties to the shareholders.

The Chair of the Audit Committee has the responsibility of making regular reports of the Committee's activities to the Board, including any recommendations or findings with respect to the quality and integrity of the accounting, auditing, and reporting practices of the company.

Authority

The Committee may meet by telephone, either in executive session or with management and/or the independent auditors.

The Committee shall have the power to conduct or authorize investigations into any matters within the Committee's scope of responsibilities.

The Committee may ask members of management or other employees of the company to attend at a meeting of the Audit Committee and provide pertinent information as necessary.

The Committee may meet with the independent auditors in executive session to discuss any matters that, in the opinion of the Committee or the independent auditors, should be discussed in private.

The Committee shall have the power and authority to retain and determine funding for independent counsel, accountants, or other advisors to assist it in the conduct of any investigation as set out in applicable law, rules or regulations, including Section 301 of the Sarbanes-Oxley Act.

Other Functions

The Audit Committee will perform such other functions as required by applicable law, rule or regulation, by the Company's charter or bylaws, or by the Board of Directors.

Corporate Governance Committee

The Corporate Governance Committee consists of the independent directors of the company.

This Committee has the general mandate of providing an independent and regular review of the management, business and affairs of the company. It meets in executive session prior to each Board meeting.

This Committee also reviews the corporate governance of the company to ensure compliance, relevance and effectiveness. This Committee reviews such matters as the company's By-Laws, Articles of Incorporation and Code of Conduct, the composition and mandates of the Board of Directors and its Committees, the performance of the Board as a whole and any consulting, loan and other material business arrangements, contracts or transactions between the company and any director, officer or employee. The Committee reports its findings and recommendations concerning corporate governance to the Board as a whole.

This Committee also reviews and approves director nominations to ensure each nominee meets the requisite requirements under applicable corporate and securities laws, rules and regulations and otherwise possesses the skills, judgment and independence appropriate for a director of a public corporation.

Human Resources and Compensation Committee

The Human Resources and Compensation Committee establishes and reviews overall policy and structure with respect to compensation and employment matters, including the determination of compensation arrangements for directors, executive officers and key employees of the company. The Committee is also responsible for the administration and award of options to purchase shares pursuant to the company's option and share purchase plans. The members of this Committee are the independent directors of the company with the company's CEO being an ex officio member of the Committee. When considering the compensation arrangements for the CEO, the Committee meets in executive session without the presence of the company's CEO.

The Board shall affirmatively determine the independence of Compensation Committee members (other than ex officio members) from the Company and senior management, taking into consideration all factors specifically relevant to determining whether a director has a relationship to the company which is material to that director’s ability to be independent of management in connection with the duties of a Compensation Committee member. These factors include any consulting, advisory, or other compensatory fees paid by the company to the director and any affiliation of the director with the company or its subsidiaries or affiliates.

To assist in carrying out its responsibilities and duties, the Committee may, in its sole discretion, retain or obtain the advice or services of a compensation consultant, legal counsel or other advisor. In choosing such an advisor, the Committee shall consider the degree of the advisor’s independence from the company, including any services provided by the advisor to the company, fees received from the Company, policies and procedures of the advisor that are designed to prevent conflicts of interest, any business or personal relationship between the advisor and a member of the Committee or a member of management, and any company stock owned by the advisor. The Committee shall be directly responsible for the appointment, compensation, oversight, and termination of its compensation advisor and the company shall provide for appropriate funding, as determined by the Committee, for payment of reasonable compensation to the advisor. The advisor shall report directly to the Committee. The Committee is not bound by advice or recommendations of its compensation advisor and shall exercise its own judgment in carrying out its responsibilities and duties.

The Committee shall review and reassess the adequacy of this Charter on an annual basis and submit any proposed amendments to this Charter to the Board for its consideration and approval with such further amendments as the Board deems necessary and appropriate.

Communications Committee

The Communications Committee establishes and reviews overall policy, practices and controls as they relate to the company's communications to the public and its shareholders about its business and affairs other than financial statements and related security filings within the mandate of the Audit Committee.