Ethics

Corporate Code of Conduct and Ethics

Code of Ethics for Principal Executive Officer and Principal Financial Officer

Committees and Charters

Audit Committee

Compensation Committee

Nomination and Corporate Governance Committee

Contact the Board of Directors

You may communicate with the Board of Directors by writing to:

RegeneRx Corporate Secretary
3 Bethesda Metro
Suite 630
Bethesda, Maryland 20814

Complaint Procedures

To report complaints about RegeneRx’ accounting, internal accounting controls or auditing matters please call: 301-280-1992, ext. 301 at any time of the day or night or write to:

RegeneRx Audit Committee
3 Bethesda Metro
Suite 630
Bethesda, Maryland 20814

All complaints will be received and processed by RegeneRx’s Audit Committee. You may report your concerns anonymously or confidentially.

CORPORATE CODE OF CONDUCT AND ETHICS

Introduction

It is the policy of RegeneRx Biopharmaceuticals, Inc. (the “Company”) to conduct its business according to the highest moral, legal and ethical standards. The Company’s reputation for integrity is essential. Each director, officer and employee must contribute to the care and preservation of that asset.

This Code of Conduct and Ethics (the “Code of Conduct”) was adopted by the board of directors and sets forth basic principles to guide all directors, officers and employees of the Company (collectively, “Company Personnel”). No code of business conduct or ethics can, however, effectively substitute for the thoughtful behavior of an ethical director, officer or employee. This Code of Conduct is presented to assist Company Personnel in guiding their conduct to enhance the reputation of the Company.

This Code of Conduct has been drafted broadly. In that respect, it is the Company’s intent to exceed the minimum requirements of the law and industry practice. Mere compliance with the letter of the law is not sufficient to attain the highest ethical standards. Good judgment and great care must also be exercised to comply with the spirit of the law and of this Code of Conduct.

This Code of Conduct is intended to meet the standards for a code of ethics under the Sarbanes-Oxley Act of 2002, as amended, and the corporate governance rules of the American Stock Exchange (the “AMEX”). Any waiver of this Code of Conduct for any Company Personnel may be made only upon the affirmative vote of the Company’s board of directors and must be promptly disclosed to stockholders, as required by applicable law.

The Company intends to enforce the provisions of this Code of Conduct vigorously. Violations could lead to sanctions, including dismissal in the case of an employee. In some cases, conduct that violates the provisions of this Code of Conduct may result in civil and criminal liability.

Upholding this Code of Conduct is the responsibility of every director, officer and employee of the Company. Executive Officers of the Company are responsible for enforcement of this Code of Conduct among the employees who report to them.

Questions About the Code; Reporting Suspected Violations

Any questions about how to interpret this Code of Conduct should be raised with the compliance officer (the “Compliance Officer”) for this Code of Conduct. Neil Lyons, has been designated as the Compliance Officer for purposes of enforcing this Code of Conduct and he may be contacted by telephone at 301-280-1992 or by e-mail at nylons@regenerx.com.

If any Company Personnel knows of or suspects any illegal or unethical conduct, or any other violation of this Code of Conduct, they should promptly report this to the Compliance Officer. In dealing with any issues arising under, or relating to, this Code of Conduct, the Compliance Officer shall, to the extent necessary or appropriate, report to and/or confer with the members of the board and/or any of its committees. If any Company Personnel are not comfortable in doing so for any reason, or if they feel appropriate action is not being taken, they should contact the Company’s Chief Executive Officer or the Chairman of the board’s Nomination and Corporate Governance Committee or Audit Committee, as appropriate. No Company Personnel shall be required to identify themselves when reporting a violation.

To the extent possible, the Company will endeavor to keep confidential the identity of anyone reporting a violation of this Code of Conduct. The Company will also keep confidential the identities of Company Personnel about whom allegations of violations are brought, unless or until it is established that a violation has occurred. It is the Company’s policy that retaliation against employees who report actual or suspected violations of this Code of Conduct is prohibited; anyone who attempts to retaliate will be subject to disciplinary action, up to and including dismissal.

Compliance with Applicable Laws

The Company is committed to conducting its business in strict compliance with all applicable federal, state and local laws, rules and regulations, including, but not limited to, laws, rules and regulations related to securities, labor, employment and workplace safety matters. As a public reporting company with its stock trading on the AMEX, the Company is also subject to regulation by the Securities and Exchange Commission (“ SEC ”) and to the applicable corporate governance rules of the AMEX. All Company Personnel are expected at all times to conduct their activities on behalf of the Company in accordance with this principle. Any violation of applicable laws, rules and regulations by any Company Personnel should be reported to the Compliance Officer. Company Personnel should seek guidance whenever they are in doubt as to the applicability of any law, rule or regulation or regarding any contemplated course of action.

Conflicts of Interest

The Company relies on the integrity and undivided loyalty of its directors, officers and employees to maintain the highest level of objectivity in performing their duties. Company Personnel are expected to avoid any situation in which their personal interests conflict, or have the appearance of conflicting, with those of the Company. Company Personnel must not allow personal considerations or relationships to influence them in any way when representing the Company in business dealings.

Conflicts of interest are prohibited as a matter of Company policy, except under guidelines approved by the board. A conflict situation can arise when an director, officer or employee takes actions or has interests that may make it difficult to perform work on behalf of the Company objectively and effectively. Conflicts also arise when Company Personnel, or a member of his or her family, receives improper personal benefits as a result of his or her position with the Company.

Company Personnel must exercise great care any time their personal interests might conflict with those of the Company. The appearance of a conflict often can be as damaging as an actual conflict. Prompt and full disclosure is always the correct first step towards identifying and resolving any potential conflict of interest. Non-employee directors are expected to make appropriate disclosures to the board and to take appropriate steps to recuse themselves from board decisions with respect to transactions or other matters involving the Company as to which they are interested parties or with respect to which a real or apparent conflict of interest exists.

The following sections review several common problems involving conflicts of interest. The list is not exhaustive. Company Personnel have a special responsibility to use his or her best judgment to assess objectively whether there might be even the appearance of acting for reasons other than to benefit the Company and to discuss any conflict openly and candidly with the Company. Conflicts of interest may not always be evident and Company Personnel should consult with the Compliance Officer if they are uncertain about any situation.

Payments and Gifts

Company Personnel who deal with the Company’s lenders, suppliers or other third parties are placed in a special position of trust and must exercise great care to preserve their independence. As a general rule, no Company Personnel should ever receive a payment or anything of value in exchange for a decision involving the Company’s business. Similarly, no Company Personnel should ever offer anything of value to government officials or others to obtain a particular result for the Company. Bribery, kickbacks or other improper payments are strictly prohibited.

The Company recognizes exceptions for token gifts, which are not excessive in value or are consistent with customary business practices, and customary business entertainment when a clear business purpose is involved. If you are in doubt about the policy’s application, the Compliance Officer should be consulted.

Personal Financial Interests; Outside Business Interests

Company Personnel should avoid any outside financial interests that might be in conflict with the interests of the Company. No Company Personnel may have any significant direct or indirect financial interest in, or any business relationship with, a person or entity that does business with the Company or is a competitor of the Company. A financial interest includes any interest as an owner, creditor or debtor. Indirect interests include those through an immediate family member or other person acting on his or her behalf. This policy does not apply to an employee’s arms-length purchases of goods or services for personal or family use or to the ownership of shares in a publicly held corporation.

Company Personnel should not engage in outside jobs or other business activities that compete with the Company in any way. Further, any outside or secondary employment by employees may interfere with the job being performed for the Company and is discouraged. Under no circumstances may Company Personnel have outside interests that are in any way detrimental to the best interests of the Company.

Company Personnel must disclose to the Compliance Officer any personal activities or financial interests that could negatively influence, or give the appearance of negatively influencing, your judgment or decisions with respect to the Company. The Compliance Officer will then determine if there is a conflict and, if so, how to resolve it without compromising the Company’s interests.

Corporate Boards

The director of an organization has access to confidential and sensitive information and charts the course of the entity. If Company Personnel are invited to serve as a director of an outside organization, the Company must take safeguards to shield both the Company and such individuals from even the appearance of impropriety. For that reason, any employee invited to join the board of directors of another organization (including a nonprofit or other charitable organization) must obtain the prior approval of the Chief Executive Officer or the Compliance Officer. Directors who are invited to serve on other the boards of directors of another organization should promptly notify the Chairman of the Board.

Corporate Opportunities

Company Personnel must not divert for personal gain any business opportunity available to the Company. The duty of loyalty to the Company is violated if any Company Personnel personally profits from a business opportunity that rightfully belongs to the Company. Company Personnel also are prohibited from using corporate property, information or position for personal gain. Company Personnel owe a duty to the Company to advance its legitimate interests when the opportunity to do so arises and, in the case of a non-employee director, such director is aware of the Company’s possible interest through use of corporate property, information or position.

Loans to Company Personnel

The Company will not make any loans to, or guarantee any personal loans of, Company Personnel.

Compliance with Securities Laws

As a public reporting company with its stock trading on the AMEX, the Company is subject to regulation by the SEC and to the applicable corporate governance rules of the AMEX and to compliance with federal, state and local securities laws, rules and regulations. The Company insists on strict compliance with the spirit and letter of the securities laws and Company Personnel must pay particular attention to potential violations thereof.

Use and Protection of Company Assets

Proper use and protection of the Company’s assets is the responsibility of all Company Personnel. Company facilities, materials, equipment, information and other assets should be used only for conducting the Company’s business and are not to be used for any unauthorized purpose. Company Personnel should guard against waste and abuse of Company assets in order to improve the Company’s productivity.

Confidentiality

One of the Company’s most important assets is its confidential corporate information. The Company’s legal obligations and its competitive position often mandate that this information remain confidential.

Confidential corporate information relating to the Company’s financial performance (e.g., quarterly financial results of the Company’s operations) or other transactions or events can have a significant impact on the value of the Company’s securities. Premature or improper disclosure of such information may expose the individual involved to onerous civil and criminal penalties.

Company Personnel must not disclose confidential corporate information to anyone outside the Company, except for a legitimate business purpose (such as contacts with the Company’s accountants or its outside lawyers). Even within the Company, confidential corporate information should be discussed only with those who have a need to know the information. Company Personnel’s obligation to safeguard confidential corporate information continues even after they leave the Company.

The same rules apply to confidential information relating to other companies with which the Company does business. Company Personnel who learn material information about such other companies through their work at the Company must keep it confidential and must not buy or sell stock in such companies until after the information becomes public. Company Personnel must not give tips about such companies to others who may buy or sell the stocks of such companies.

The Company has issued a detailed “Insider Trading Policy” regarding the use of confidential information in connection with trading in securities. You should become familiar with this policy and the procedures it requires. If you have any questions regarding trading in the Company’s securities or on the basis of confidential information, you should contact the Compliance Officer.

Dealings with the Press and Communications with the Public

The Company’s Chief Executive Officer and Chief Financial Officer are the Company’s principal public spokesmen. If someone outside the Company asks Company Personnel questions or requests information regarding the Company, its business or financial results, do not attempt to answer. All requests for information - from reporters, securities analysts, stockholders or the general public - should be referred to either the Chief Executive Officer or Chief Financial Officer, to handle the request or delegate it to an appropriate person.

Accounting Matters

It is unlawful for Company Personnel, or any other person acting under the direction of any such persons, to take any action to fraudulently influence, coerce, manipulate, or mislead the independent accountants engaged in the performance of an audit of the Company’s financial statements for the purpose of rendering such financial statements materially misleading. Any such action is a violation of this Code of Conduct. Any Company Personnel who engages in such conduct will be subject to sanctions under this Code of Conduct, including dismissal in the case of an employee, in addition to potential civil and criminal liability.

Records Retention

Company Personnel should retain documents and other records for such period of time as they and their colleagues will reasonably need such records in connection with the Company’s business activities. All documents not required to be retained for business or legal reasons, including draft work product, should not be retained and should be destroyed in order to reduce the high cost of storing and handling the vast amounts of material that would otherwise accumulate. However, under unusual circumstances, such as litigation, governmental investigation, or if required by applicable state and federal law and regulations, the Compliance Officer may notify Company Personnel if retention of documents or other records is necessary.

Fair Dealing

It is the Company’s policy to deal fairly with suppliers, competitors and Company Personnel. In the course of business dealings on behalf of the Company, no Company Personnel should take advantage of another person or party through manipulation, concealment, abuse of privileged information, misrepresentation of material facts or any other unfair business practice.

Discrimination and Harassment

The Company is firmly committed to providing equal opportunity in all aspects of employment and will not tolerate illegal discrimination or harassment of any kind. Company Personnel are encouraged to report any acts of discrimination or harassment to the Chief Executive Officer or Compliance Officer or to any member of the Nomination and Corporate Governance Committee of the board. If any Company Personnel are not comfortable providing their name, they may report anonymously. Any kind of retaliation against Company Personnel for raising these issues is strictly prohibited and will not be tolerated.

Health and Safety

The Company strives to provide Company Personnel with a safe and healthy work environment. Company Personnel have a responsibility for maintaining a safe and healthy workplace for all other Company Personnel by following safety and health rules and practices and reporting accidents, injuries and unsafe equipment, practices and conditions.

Violence and threatening behavior are not permitted. Company Personnel should report to work in a condition to perform their duties, free from the influence of illegal drugs and alcohol. The use of illegal drugs in the workplace will not be tolerated.

Enforcement

Violations of this Code of Conduct may lead to significant penalties, including dismissal.

Waivers

Any waiver of this Code of Conduct for executive officers or directors of the Company may be made only by the board, or by a committee of the board specifically authorized for this purpose, and must be promptly disclosed to the Company’s stockholders. Waivers of this Code of Conduct for non-officer employees may be made by the Chief Executive Officer, but only upon such employee making full disclosure in advance of the transaction in question. This Code of Conduct may be amended or modified at any time by the board.

Acknowledgment

Company Personnel will be asked annually to sign a statement affirming that they have read and understood this Code of Conduct and that they are in compliance with this Code of Conduct.

CODE OF ETHICS FOR
PRINCIPAL EXECUTIVE OFFICER AND
PRINCIPAL FINANCIAL OFFICER

The Company expects the highest possible ethical conduct from its principal executive/financial officers. You are expected to fully comply with this Code of Ethics for Principal Financial Officer (the “Code”), as well as, to promote a culture of honest and ethical conduct and to ensure that everyone in the Company fully complies with this Code.

You must take all reasonable measures to protect the confidentiality of non-public information about the Company and its customers obtained or created in connection with your activities and prevent the unauthorized disclosure of such information unless required by applicable law or regulation or legal or regulatory process.

You are prohibited from directly or indirectly taking any action to fraudulently influence, coerce, manipulate or mislead the Company’s independent public auditors for the purpose of rendering the financial statements of the Company misleading.

You understand that you will be held accountable for your adherence to this Code. Your failure to observe the terms of this Code may result in disciplinary action, up to and including termination of employment. Violations of this Code may also constitute violations of law and may result in civil and criminal penalties for you and/or the Company.

If you have any questions regarding the best course of action in a particular situation, you should promptly contact the Audit Committee. You may choose to remain anonymous in reporting any possible violation of this Code.

Conflicts of Interests

As a Company principal financial officer, it is imperative that you avoid any investment, interest or association that interferes, might interfere, or might appear to interfere, with your independent exercise of judgment in the Company’s best interests. Engaging in any conduct that represents a conflict of interest is strictly prohibited. You must also avoid any personal activity, investment or association that could appear to interfere with good judgment concerning the Company’s best interests. You may not exploit your position or relationship with the Company for personal gain. You should avoid even the appearance of such a conflict. For example, there is a likely conflict of interest if you:

• Cause the Company to engage in business transactions with relatives or friends;
• Use nonpublic Company, client or vendor information for personal gain by you, relatives or friends (including securities transactions based on such information);
• Have more than a modest financial interest in the Company’s vendors, clients or competitors; receive a loan, or guarantee of obligations, from the Company or a third party as a result of your position at the Company; or
• Compete, or prepare to compete, with the Company while still employed by the Company.

There are other situations in which a conflict of interest may arise. If you have concerns about any situation, follow the steps outlined in the Section on “Reporting Violations of the Code.”

Accurate and Timely Periodic Reports

Full, fair, accurate, timely and understandable disclosures in all of the Company’s periodic reports, filed documents and other public communications is legally required and is essential to the success of its business. All officers must exercise the highest standard of care in preparing such reports in accordance with the following guidelines:

• All Company accounting records, as well as reports produced from those records, must be in accordance with the laws of each applicable jurisdiction;
• All records must fairly and accurately reflect the transactions or occurrences to which they relate;
• All records must fairly and accurately reflect, in reasonable detail, the Company’s assets, liabilities, revenues and expenses;
• The Company’s accounting records must not contain any false or intentionally misleading entries;
• No transactions should be intentionally misclassified as to accounts, departments or accounting periods;
• All transactions must be supported by accurate documentation in reasonable detail and recorded in the proper account and in the proper accounting period;
• No information should be concealed from the internal auditors or the independent auditors; and
• Compliance with the Company’s system of internal accounting controls is required

Compliance with Applicable Governmental Law, Rules and Regulations

You are expected to comply with both the letter and spirit of all applicable governmental laws, rules and regulations. If you fail to comply (or you prevent or penalize a subordinate for complying) with the ethical standards in this Code and/or with any applicable laws, you will be subject to disciplinary measures, up to and including immediate dismissal from the Company.

Prompt Internal Reporting of Violations of Code

Your conduct can reinforce an ethical atmosphere and positively influence the conduct of fellow associates. If you are powerless to stop suspected misconduct or discover it after it has occurred, you must promptly report the violation of the Code to the Audit Committee of the Company’s Board of Directors by sending a detailed note, with relevant documents, to the Audit Committee at 3 Bethesda Metro Center, Suite 630, Bethesda, Maryland 20814.

Self-Reporting. If you believe that you may have violated one of these standards, you are encouraged to report it immediately. The Company will consider the fact that you reported yourself in determining what action is appropriate.

Confidentiality: The Company will protect confidentiality to the extent practicable in the context of investigating your allegations and will inform only those individuals with a need to know in order for the Company to investigate and respond appropriately.

Anonymity: There may be instances where you want to report issues while remaining anonymous. The Company will consider information provided anonymously, but it is most helpful if you provide your name so that the Company may obtain additional information from you and inform you that it has responded to your complaint.

Protection of Those Who Report Concerns or Assist in an Investigation: No one who in good faith reports a concern under this policy or provides information during an investigation will be subjected to retaliation for doing so. Any employee who retaliates or attempts to retaliate against an employee for reporting or providing information in good faith under this policy will be subject to disciplinary action, up to and including immediate termination of employment and in some cases could further be subject to criminal penalties (including imprisonment).

Duty to Cooperate: When the Company conducts an investigation, all employees have a duty to cooperate in providing complete and accurate information. Failing to cooperate in an investigation or providing false or misleading information will subject an employee to disciplinary action, up to and including termination of employment.

Destruction of Documents: You should also be aware that under the new corporate accountability laws, you could be subject to criminal penalties for tampering with, or destroying, documents or any other evidence related to an official investigation or inquiry regarding any of the Company’s activities. The same is true for documents relating to any threatened or pending litigation.

Your calls, detailed notes and/or emails will be dealt with confidentially. You have the commitment of the Company and of the Audit Committee of the Company’s Board of Directors that you will be protected from retaliation.

Your Personal Commitment to the Code of Ethics for Principal Executive/Financial Officer

I acknowledge that I have received and read the Code of Ethics for Principal Executive/Financial Officer and understand my obligation as an employee to comply with this Code.

I understand that my agreement to comply with this Code does not constitute a contract of employment.

AUDIT COMMITTEE

MEMBERSHIP

Chairman: Richard J. Hindin

Other members: Joseph C. McNay, L. Thompson Bowles

AUDIT COMMITTEE CHARTER

General

This Audit Committee Charter was adopted by the Board of Directors (the “Board”) of RegeneRx Biopharmaceuticals, Inc. (the “Company”) on August 11, 2006.

This Charter is intended as a component of the flexible governance framework within which the Board, assisted by its committees, directs the affairs of the Company. While it should be interpreted in the context of all applicable laws, regulations and listing requirements, as well as in the context of the Company’s Certificate of Incorporation and Bylaws, it is not intended to establish by its own force any legally binding obligations.

Mission

The Audit Committee shall assist the Board of Directors in fulfilling its fiduciary responsibility by serving as an informed and effective overseer of the company’s financial reporting process.

Membership Requirements

The Audit Committee shall be comprised of at least three directors. All members of the Committee shall be independent of management and the Company. Members of the Audit Committee shall be considered independent if they have no relationship to the Company that may interfere with the exercise of their independence from management and the Company. In that regard, to be considered independent, a member of the Audit Committee may not, other than in his or her capacity as a member of the Audit Committee, the board of directors, or any other board committee:

• Accept directly or indirectly any consulting, advisory, or other compensatory fee from the Company or any subsidiary, provided that, compensatory fees do not include the receipt of fixed amounts of compensation under a retirement plan (including deferred compensation) for prior service with the Company (provided that such compensation is not contingent in any way on continued service); or
• Be an affiliated person of the Company or any subsidiary thereof.

All Audit Committee members will be financially literate, and at least one member will have accounting or related financial management expertise in compliance with SEC and Exchange regulations and be designated the “Audit Committee Financial Expert” as that term is defined in Item 401(h) of Regulation S-K.

Duties and Responsibilities

The Audit Committee shall fulfill their oversight responsibility to shareholders, potential shareholders, the investment community and others relating to corporate accounting, reporting practices of the corporation, the quality and integrity of the financial reports of the corporation, the internal audit function, and the annual independent audit of the Company’s financial statements. It is the responsibility of the Audit Committee to maintain free and open communication between the Directors, the independent auditors and the financial management of the corporation.

The Audit Committee shall have the authority to conduct any investigation appropriate to fulfilling its responsibilities, and it shall have direct access to all books and records, facilities, the Company’s independent auditors as well as anyone in the organization. The Audit Committee shall have the ability to retain, at the Company’s expense, special legal, accounting, or other consultants or experts it deems necessary in the performance of its duties.

The primary responsibility of the Audit Committee is to oversee the company’s accounting and financial reporting process on behalf of the board and report the results of their activities to the board. Management is responsible for preparing the company’s financial statements, the independent auditors are responsible for auditing those financial statements and the Audit Committee is responsible for overseeing the audits of the financial statements. The committee in carrying out its responsibilities shall review its policies and procedures periodically in order to ensure they address current conditions and circumstances. The committee should take the appropriate actions to set the overall corporate “tone” for quality financial reporting to include sound business risk practices and ethical behavior as it pertains to financial reporting.

In carrying out these responsibilities, the Audit Committee will:

• Obtain the board of directors’ approval of this charter and, at least annually, review and reassess the adequacy of this charter, and amend and update it as conditions dictate. In addition, a copy of this Charter shall be included in the annual report to shareholders or the proxy statement at least triennially or the year after any significant amendment to the Charter.
• Appoint the independent auditors to be selected, subject to shareholder approval, to audit the financial statements of the Company.
• Pre-approve all audit and non-audit services by the independent auditors and set the compensation of the independent auditors.
• Have a clear understanding with management and the independent auditors that the independent auditors are ultimately accountable to the Audit Committee, as the shareholders’ representatives; further the Audit Committee shall have the ultimate authority in deciding to engage, evaluate, and if appropriate, terminate independent auditor services.
• Meet with the independent auditors and financial management of the Company to review the scope of the proposed audit and fees for the current year and the audit procedures to be utilized. Submit to management an estimate of audit, non-audit administrative and other fees to be paid by management on behalf of the Audit Committee.
• Review such audit including any comments or recommendations of the independent auditors.
• Review with the independent auditors and with the Company’s financial and accounting personnel the adequacy and effectiveness of the internal auditing, accounting and financial controls of the Company, and elicit any recommendations that they may have for the improvement of such internal control procedures or particular areas where new or more detailed controls or procedures are desirable. Particular emphasis should be given to the adequacy of such internal controls to expose any payments, transactions or procedures that might be deemed illegal or otherwise improper. Further, the Audit Committee should periodically review Company policy statements in terms of their adequately representing an ethical code of conduct.
• Review reports received from regulators and also review other legal and regulatory matters that may have a material affect on the financial statements or related Company compliance policies.
• Periodically review the effectiveness of the internal audit function and make appropriate recommendations. This includes the independence of the internal audit function’s reporting obligations, the proposed internal audit plans for the coming year, and the coordination of such plans with the independent auditors.
• Inquire of management and the independent auditors about significant risks or exposures and assess the steps management has taken to minimize such risks to the Company.
• Prior to each Audit Committee meeting, the Audit Committee should receive a summary of findings from completed internal audits and a progress report on the proposed internal audit plan with explanations for any deviations from the original plan.
• Review the quarterly financial statements with financial management and the independent auditors prior to the filing of each Form 10-Q (or prior to the press release of results, if possible) to determine that the independent auditors do not take exception to the disclosure and content of the financial statements, and discuss any other matters required to be communicated to the committee by the auditors. The chair of the committee may represent the entire committee for purposes of this review.
• At all meetings of the Audit Committee, sufficient opportunity should be made available for the independent auditors to meet with members of the Audit Committee without members of management present. Among items to be discussed in these meetings are the independent auditor’s evaluation of the Company’s financial, accounting and auditing personnel, and the cooperation which the independent auditors received during the course of their audit. The committee shall inquire about significant accruals, reserves, estimates, contingencies, or any areas of dispute between management and the independent auditors.
• Review, process and retain any complaints received by the Compliance Officer, an employee of the Company or the independent auditor regarding accounting, internal accounting controls or auditing matters. Review, process and retain confidential, anonymous submissions by employees of the Company regarding questionable accounting or auditing matters.
• The Audit Committee shall cause an investigation to be made into any matter brought to its attention that is within the scope of its duties, with the power to retain independent outside counsel or other professionals for this purpose if, in its judgment, that is appropriate.
• Review the Company’s accounting/financial human resources and succession planning.
• Report the results of the annual audit to the board of directors. If requested by the board, the Audit Committee should invite the independent auditors to attend a full board of directors meeting to assist in reporting the results of the annual audit or to answer other directors’ questions (alternatively, the other directors, particularly the other independent directors, may be invited to attend the audit committee meeting during which the results of the annual audit are reviewed).
• On an annual basis, ensure receipt from the independent auditors of a formal written communication delineating all their relationships with, and professional services provided to, the Company as required by the Independence Standards Board under Standard No. 1, Independence Discussions with Audit Committees. In addition, the Audit Committee shall actively engage in a dialogue with the independent auditors with respect to the nature and scope of any disclosed relationships or professional services and take, or recommend that the board of directors take, appropriate action to ensure the continuing independence of the auditors.
• Review the report of the audit committee which shall appear in the Annual Report to Shareholders and in the Annual Report on Form 10-K disclosing whether or not the committee had reviewed and discussed with management and the independent auditors, as well as discussed within the committee (without management or the independent auditors present), the financial statements and the quality of accounting principles and significant judgments affecting the financial statements. In addition, the committee should indicate whether, based on its discussions with management and the auditors, its members became aware of material misstatements or omissions in the financial statements.
• The Audit Committee shall meet on at least a quarterly basis. Minutes of all meetings of the Audit Committee shall be submitted to the Board of Directors of the Company.
• Review and approve the disclosure that is to appear in the Company’s proxy statement for its annual meeting of shareholders that denotes the Committee has satisfied its responsibilities under this Charter for the prior year.
• On at least an annual basis, review with the Company’s counsel, any legal matters that could have a significant impact on the organization’s financial statements, the Company’s compliance with applicable laws and regulations, and inquiries received from regulators or governmental agencies.
• Review annually management’s policies and procedures for insuring high standards of ethical conduct by the corporation and its employees and ensure such policies and procedures are actively and consistently enforced.
• Periodically perform self-assessment of Audit Committee performance.
• Annually review policies and procedures as well as audit results associated with directors’ and officers’ expense accounts and perquisites, and annually review a summary of directors’ and officers’ related party transactions and potential conflicts of interest.
• Review and approve requests for any management consulting engagement to be performed by the independent auditors and be advised of any other study/work undertaken that is beyond the scope of the audit engagement letter.

The Audit Committee believes that this charter properly defines its responsibilities in accordance with applicable regulations. Further, the intent of this charter is to ensure the financial reporting of the Company is of the highest quality.

COMPENSATION COMMITTEE

MEMBERSHIP

Chairman: Richard Hindin

Other members: Mauro Bove, Joseph McNay, Albert Rosenfeld, L. Thompson Bowles

CHARTER

 General

This Compensation Committee Charter was adopted by the Board of Directors (the “Board”) of RegeneRx Biopharmaceuticals, Inc. (the “Company”) on June 23, 2005.

This Charter is intended as a component of the flexible governance framework within which the Board, assisted by its committees, directs the affairs of the Company. While it should be interpreted in the context of all applicable laws, regulations and listing requirements, as well as in the context of the Company’s Articles of Incorporation and Bylaws, it is not intended to establish by its own force any legally binding obligations.

Mission

The Compensation Committee is responsible for determining the compensation of the Company's Chief Executive Officer (“CEO”) and approving the compensation structure for senior management. The Committee will produce an annual report on executive compensation for inclusion in the Company's annual proxy statement that complies with the rules and regulations of the Securities and Exchange Commission.

Additionally, the Committee will regularly review the Company’s management resources, succession planning and development activities.

Membership

The Committee shall consist of two or more directors all of whom in the judgment of the Board of Directors shall be independent in accordance with the American Stock Exchange Company Guide. In addition, a person may serve on the Committee only if the Board of Directors determines that he or she (i) is a “Non-employee Director” for purposes of Rule 16b-3 under the Securities Exchange Act of 1934, as amended, and (ii) satisfies the requirements of an “outside director” for purposes of Section 162(m) of the Internal Revenue Code. Members of the Committee and the Committee Chair shall be appointed by and may be removed by the Board on the recommendation of the Nomination and Corporate Governance Committee.

Duties and Responsibilities

The Committee shall have the following duties and responsibilities:

• annually review and approve goals and objectives relevant to the Company’s CEO and other elected officers’ compensation.
• evaluate the performance of the CEO and other elected officers in light of the approved performance goals and objectives.
• annually review and determine base salary, incentive compensation and long-term compensation for the CEO and report the Committee’s determination to the Board. In determining long-term incentive compensation, the Committee shall consider, among other factors, the Company’s performance, relative stockholder return, the value of similar incentive awards to individuals at the CEO position at comparable companies and the awards given to the CEO in past years.
• annually review and approve base salary, incentive compensation and long-term incentive compensation for senior management.
• make recommendations to the Board of Directors with respect to new cash-based incentive compensation plans and equity-based compensation plans.
• in consultation with and based upon the advice of outside counsel, monitor the disclosure and prepare an annual report on executive compensation for inclusion in the Company’s proxy statement.
• review executive officer compensation for compliance with Section 16 of the Securities Exchange Act and Section 162(m) of the Internal Revenue Code, as each may be amended from time to time, and any other applicable laws, rules and regulations.
• annually review employee compensation strategies, benefits and equity programs.
• review and approve employment agreements, severance arrangements and change in control agreements and provisions when, and if, appropriate, as well as any special supplemental benefits.
• administer the Company's stock plans.
• determine and certify the shares awarded under corporate performance-based plans.
• grant options and awards under the stock plans.
• advise on the setting of compensation for senior executives whose compensation is not otherwise set by the Committee.
• conduct an annual review of the Committee’s performance, periodically review the adequacy of the Committee’s charter and recommend changes to the Board as needed.
• regularly report to the Board on the Committee’s activities.
• delegate responsibility to subcommittees of the Committee as necessary or appropriate.
• perform any other duties or responsibilities expressly delegated to the Committee by the Board from time to time.

The Committee may, in its sole discretion, employ a compensation consultant to assist in the evaluation of the compensation of the Company's CEO or other elected officers. The Committee shall have the sole authority to approve the fees and other retention terms with respect to such a compensation consultant. The Committee also has the authority as necessary and appropriate, to consult with other outside advisors to assist in its duties to the Company.

Meetings

The Compensation Committee shall meet at least two times each year and at such other times as it deems necessary to fulfill its responsibilities.

NOMINATION AND CORPORATE GOVERNANCE COMMITTEE

MEMBERSHIP  

Chairman: Richard Hindin

Other members: Mauro Bove, Joseph McNay, Albert Rosenfeld, L. Thompson Bowles

CHARTER

Mission

The Nomination and Corporate Governance Committee is responsible for identifying individuals qualified to become Board members and recommending to the Board director nominees for the next annual meeting of stockholders. The Committee leads the Board on its annual review of the Board’s performance and recommends to the Board director candidates for each committee for appointment by the Board. The Committee may, at its sole discretion and has sole authority to, engage and terminate director search firms and has the sole authority to approve the fees and other retention terms with respect to any such firms. The Committee also has the authority, as necessary and appropriate, to consult with outside advisors to assist in their duties to the Company.

The Committee takes a leadership role in shaping corporate governance policies and practices, including recommending to the Board the Corporate Governance Guidelines applicable to the Company and monitoring Company compliance with said policies and Guidelines.

Membership

The Committee shall consist of directors all of whom in the judgment of the Board of Directors shall meet the independence requirements under the American Stock Exchange Company Guide as in effect from time to time and all other applicable laws, rules and regulations governing director independence. Members of the Committee and the Committee Chair shall be appointed annually by, and may be removed by, the Board on the recommendation of the Committee.

Duties and Responsibilities

The Committee shall have the following duties and responsibilities:

Corporate Governance

• review and assess the adequacy of the Company’s policies and practices on corporate governance and recommend any proposed changes to the Board for approval.
• review adherence by directors to corporate guidelines regarding transactions with the Company.
• review and assess the adequacy of the Company’s Code of Conduct and Ethics and other internal policies and guidelines and monitor that the principles described therein are being incorporated into the Company’s culture and business practices.
• consider, and review periodically, director qualification standards and recommend any proposed changes to the Board for approval.
• review periodically with the Chief Executive Officer the succession plans relating to positions held by elected corporate officers, and to make recommendations to the Board with respect to the selection of individuals to occupy these positions.
• consider questions of possible conflicts of interest of Board members and of our senior executives.

Board Nominees

• develop and recommend to the Board the criteria for Board membership; criteria should include, among other things, integrity, independence, diversity of experience, leadership and the ability to exercise sound judgment.
• consider, recommend and recruit candidates to fill new positions on the Board.
• review candidates recommended by stockholders.
• conduct the appropriate and necessary inquiries into the backgrounds and qualifications of possible candidates.
• recommend the Director nominees for approval by the Board and the stockholders at the next annual meeting of stockholders.

Board Committees

• recommend to the Board the number, identity and responsibilities of Board committees and the Chair and members of each committee.
• develop committee member qualifications and advise the Board on appointments and removal from committees or from the Board, rotation of committee members and Chairs, and committee structure and operations.
• review the adequacy of the charters adopted by each committee of the Board, and recommend changes as necessary.

Board Composition, Operations and Compensation

• review the appropriateness of the size of the Board relative to its various responsibilities. Review overall composition of the Board, taking into consideration such factors as business experience and specific areas of expertise of each Board member, and make recommendations to the Board as necessary.
• make recommendations on the structure of Board meetings.
• report annually to the Board with an assessment of the Board’s performance.
• monitor the orientation and continuing education programs for directors.
• recommend matters for consideration by the Board.
• periodically review and recommend to the Board the compensation structure for non-employee directors for Board and committee service.
• establish Director retirement policies.

Committee Activities

• regularly report to the Board on the Committee’s activities.
• delegate responsibility to subcommittees of the Committee as necessary or appropriate.
• oversee the evaluation of the Board and its committees and management.
• prepare an annual performance evaluation of the Committee, and periodically assess the adequacy of its charter and recommend changes to the Board as needed.
• Assist management in the preparation of the disclosure in the Company’s annual proxy statement regarding the operations of the Committee.
• perform any other duties or responsibilities expressly delegated to the Committee by the Board from time to time.

In carrying out its responsibilities, the Committee may draw on the expertise of management and the corporate staff and, when appropriate, may hire outside legal, accounting or other experts or advisors to assist the Committee with its work.

Meetings

The Committee will normally meet at least once per year or on a more frequent basis as necessary to carry out its responsibilities. Upon the request of the Board, the Committee shall submit the minutes of all meetings of the Committee to, or discuss the matters discussed at each Committee meeting with, the Board.