Policies

GROM SOCIAL ENTERPRISES, INC.
CODE OF ETHICS AND BUSINESS CONDUCT
Adopted April 11, 2018

The business of Grom Social Enterprises, Inc. (the “Company”) shall be conducted with honesty and integrity and in accordance with the highest ethical and legal standards. This Code of Ethics and Business Conduct (the “Code”) has been adopted by the Company pursuant to Item 406 of Regulation S-K of the Securities and Exchange Commission in order to provide written standards and guidance to the Company’s directors, officers and employees (collectively, “Covered Persons”) to promote:

• Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
• Compliance with applicable governmental laws, rules and regulations;
• Full, fair, accurate, timely, and understandable disclosure in reports and documents that the Company files with, or submits to, the Securities and Exchange Commission and in other public communications made by the Company;
• The prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code; and
• Accountability for adherence to the Code.

This Code is the sole code of ethics adopted by the Company for the purposes of the Item 406 of Regulation S-K.

1. Honest and Ethical Conduct.

The Company is committed to compliance with the highest ethical standards in pursuing its business interests and expects Covered Persons to observe those standards. Stated generally, some of the ethical standards to which the Company is committed, and for which all Covered Persons are individually accountable, are as follows:

• Conducting the Company’s business in compliance with applicable governmental laws, rules, and regulations.
• Dealing ethically in transactions with contractors, suppliers, customers, employees and others.
• Avoiding situations where personal interests are, or appear to be, in conflict with the Company’s interests.
• Responsibly using and protecting the Company’s assets, including property, equipment, facilities, funds and information.
• Maintaining confidentiality of nonpublic information and not acting on such information for personal gain. Some of these ethical standards are discussed in more detail below.

2. Compliance with Law.

The Company and all Covered Persons should respect and comply with all of the applicable laws, rules and regulations of the United States and the other countries and state, local and other jurisdictions in which the Company conducts its business or in which the Company’s stock is traded. The Company is subject to legal requirements that are both numerous and complex. All Covered Persons should understand those laws that apply to them in the performance of their jobs and take steps to ensure that the parts of the Company’s operations with which they are involved are conducted in conformity with those laws. The failure of Covered Persons to adhere to the letter and the spirit of the law could result in both personal and corporate civil or criminal liability. Each Covered Person is personally responsible for complying with the law. In addition, each Covered Person is charged with the responsibility of reporting to the Compliance Officer (as defined in Section 8) any behavior or conduct related to the Company’s business or affairs that could reasonably constitute a criminal offense. If a Covered Person has questions or any concerns about whether his or her conduct or the conduct of others may result in personal or criminal liability, the Covered Person should seek specific guidance and advice from the Compliance Officer or from counsel, which may include the Company’s counsel.

These laws include:

• Prohibition on insider trading. U.S. Federal securities laws prohibit persons with access to or knowledge of material, non-public information about the Company from buying, selling, or otherwise trading in the Company’s securities. In addition, the Company has adopted a Corporate Policy and Procedure on Insider Trading, which prohibits trading in the Company’s securities at certain times and under certain circumstances.
• Foreign Corrupt Practices Act. The U.S. Foreign Corrupt Practices Act generally prohibits payments or gifts to foreign officials, political parties, or candidates for the purpose of influencing their decision, the decisions of foreign government, or gaining any improper advantage.
• Environmental compliance. The Company’s operations are subject to many laws and regulations regarding protection of the environment. This Code does not summarize all laws, rules and regulations applicable to the Company and its employees, officers and directors. Please consult the Compliance Officer, the Company’s counsel or the various guidelines that the Company has prepared on specific laws, rules and regulations for additional information. If you believe that directions from a manager or supervisor may violate applicable law, you should consult with the manager or supervisor, the Compliance Officer or legal counsel.

3. Conflicts of Interest.

Conflicts of interest are prohibited as a matter of Company policy, except under guidelines approved by the Company’s board of directors. A “conflict of interest” exists when a person’s private interest interferes or conflicts, or appears to interfere or conflict, with the interests of the Company or the person’s duties to the Company. Conflicts of interest may also arise when a person, or members of his or her family, receives improper personal benefits as a result of his or her position in the Company or takes an action or has a personal interest that may adversely influence his or her objectivity or the exercise of sound, ethical business judgment. For example, a conflict of interest could exist if a Covered Person:

• Accepts a gift, service, payment or other benefit of more than nominal value from a competitor, supplier, or customer of the Company, or any entity or organization with which the Company does business or seeks to do business; provided normal course of business gatherings sponsored by customers or suppliers are permissible;
• Lends to, borrows from, or has a material interest (equity or otherwise) in a competitor, supplier, or customer of the Company, or any entity or organization with which the Company does business or seeks to do business;
• Accepts compensation (in any form) for services performed for the Company from any source other than the Company;
• Serves as a director, officer, partner, consultant, or in any other significant role, in any competitor, supplier, or customer of the Company, or any entity or organization with which the Company does business or seeks to do business;
• Acts as a broker, finder or other intermediary for the benefit of a third party in transactions involving the Company or its interests;
• Knowingly competes with the Company; or
• Conducts significant outside business activity that precludes the Covered Person from devoting appropriate time and attention to his or her responsibilities with the Company.

Covered Persons are also prohibited from (a) taking for themselves personally opportunities that properly belong to the Company or are discovered through the use of corporate property, information or position; (b) using corporate property, information or position for personal gain; and (c) competing with the Company. Covered Persons owe a duty to the Company to advance its legitimate interests when the opportunity to do so arises.

Conflicts of interest may not always be clear-cut, so if you have a question, you should consult with the Compliance Officer. The Board shall have the authority to evaluate and waive any conflict or apparent conflict of interest in the manner set forth in Section 9 below.

4. Confidentiality.

Covered Persons must maintain the confidentiality of confidential information entrusted to them by the Company, except when disclosure is expressly authorized by the Compliance Officer or is legally mandated. Whenever feasible, Covered Persons should consult the Compliance Officer or the Company’s counsel if they believe they have a legal obligation to disclose confidential information. Confidential information includes all non-public information that might be of use to existing or potential new shareholders or competitors of the Company, or harmful to the Company if disclosed.

5. Fair Dealing.

Each Covered Person should endeavor to deal fairly with the Company’s employees, officers, directors, customers, suppliers and competitors. No employee should take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts or any other unfair dealing practice.

6. Protection and Proper Use of Company Assets.

All Covered Persons should protect the Company’s assets and ensure their efficient use. Theft, carelessness and waste have a direct impact on the Company’s profitability. All Company assets should be used only for legitimate business purposes.

7. Public Reporting.

As a public company, it is of critical importance that the Company’s public disclosures, including filings with the Securities and Exchange Commission, be accurate and timely. A Covered Person may be called upon to provide necessary information to assure that the Company’s public disclosures are complete, fair and understandable. The Company expects Covered Persons to take this responsibility very seriously and to provide prompt, accurate answers to inquiries related to the Company’s public disclosure requirements.

All of the Company’s books, records, accounts and financial statements must be maintained in reasonable detail, must appropriately reflect the Company’s transactions and must conform both to applicable legal requirements and to the Company’s system of internal controls.

In addition, each Covered Person must promptly bring to the attention of his or her supervisor or the Compliance Officer any information that the Covered Person may have concerning (i) significant deficiencies in the design or operation of internal control over financial reporting that could adversely affect the Company’s ability to record, process, summarize and report financial data or (ii) any fraud, whether or not material, that involves management, directors, or other Covered Persons.

8. Compliance with this Code.

Any suspected violation of this Code shall be promptly reported to Jason Williams, the Company’s Secretary. He may be reached as follows:

Grom Social Enterprises, Inc., 2060 NW Boca Raton Blvd., #6, Boca Raton, FL 33431; Phone: (561) 287-5776; Email: jason@gromsocial.com.

If the Board receives information regarding an alleged violation of this Code, then the Board shall either directly or through the services of others under its supervision, which may include directors, members of management and outside counsel and advisors:

• evaluate such information as to gravity and credibility;
• if necessary, initiate an informal inquiry or a formal investigation with respect thereto;
• if appropriate, prepare a written report of the results of such inquiry or investigation, including recommendations as to the disposition of such matter;
• if appropriate, make the results of such inquiry or investigation available to the public (including disciplinary action); and
• if appropriate, recommend changes to this Code that the Board deems necessary or desirable to prevent similar violations of this Code.

The Board shall enforce this Code through appropriate disciplinary actions. It shall determine whether violations of this Code have occurred and, if so, shall determine the disciplinary actions to be taken against any Covered Person who has violated the Code. The disciplinary actions available to the Board include counseling, oral or written reprimands, warnings, probations or suspensions (with or without pay), demotions, reductions in salary, terminations of employment, and restitution.

Reports of alleged violations should be factual, rather than speculative or conclusory, and should contain as much specific detail as possible to allow for proper assessment. The report should clearly set forth all the information the employee knows about the alleged violation. The report or complaint describing an alleged violation or concern should be candid and should set forth all of the information that the employee knows regarding the allegation or concern. In addition, the report or complaint should contain sufficient corroborating information to support the commencement of an investigation. The Company may, in its reasonable discretion, determine not to commence an investigation if a report or complaint contains only unspecified or broad allegations of wrongdoing without appropriate factual support.

For the avoidance of doubt, the jurisdiction of the Board shall include, in addition to the Covered Person that violated this Code, any other employee involved in the wrongdoing such as (i) persons who fail to use reasonable care to detect a material violation and (ii) persons who withhold material information about a suspected violation of this Code when requested to divulge such information.

Situations that may involve a violation of this Code may not always be clear. Covered Persons are encouraged to discuss questions or concerns about violations of laws, rules or regulations with the Compliance Officer.

9. Amendment and Waiver.

This Code may only be amended by the Board, and any waiver or implicit waiver of this Code must be approved by the Board. All amendments or waivers of the Code for a director or executive officer shall be disclosed in the manner prescribed by the Securities and Exchange Commission or any national securities exchange on which the Company’s securities are listed.

CHARTER OF THE COMPENSATION COMMITTEE OF THE
BOARD OF DIRECTORS OF
GROM SOCIAL ENTERPRISES, INC.

Effective June 1, 2018

The Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) of Grom Social Enterprises, Inc., a Florida corporation (the “Company”) is responsible for the overall design, approval and implementation of the executive compensation plans, policies and programs for officers and other key executives of the Company. This Charter outlines the purpose, composition and responsibilities of the Committee.

I. PURPOSE

The Committee has been established to: (a) assist the Board in seeing that a proper system of long-term and short-term compensation is in place to provide performance oriented incentives to attract and retain management, and that compensation plans are appropriate and competitive and properly reflect the objectives and performance of management and the Company; (b) assist the Board in discharging its responsibilities relating to compensation of the Company’s executive officers; (c) evaluate the Company’s Chief Executive Officer and set his or her remuneration package; (d) make recommendations to the Board with respect to incentive- compensation plans and equity-based plans; and (e) perform such other functions as the Board may from time to time assign to the Committee.

II. COMPOSITION

The Committee shall be composed of at least three, but not more than five, members (including a Chairperson), all of whom shall be “independent,” as such term is defined for directors and compensation committee members in the listing standards of the NASDAQ Stock Market LLC (“NASDAQ”), as determined by the Board. Additionally, members of the Committee shall qualify as “non-employee directors” for purposes of Rule 16b-3 under the Securities Exchange Act of 1934 and as “outside directors” for purposes of Section 162(m) of the Internal Revenue Code (“Section 162(m)”). The members of the Committee and the Chairperson shall be selected annually by the Board and serve at the pleasure of the Board. A Committee member (including the Chairperson) may be removed at any time, with or without cause, by the Board. The Committee shall have authority to delegate responsibilities listed herein to subcommittees of the Committee if the Committee determines such delegation would be in the best interest of the Company.

III. MEETING REQUIREMENTS

The Committee shall meet as necessary to enable it to fulfill its responsibilities, but at least twice each year. The Committee shall meet at the call of the Chairperson. The Committee may meet by telephone conference call or by any other means permitted by law or the Company’s Bylaws. A majority of the members, but not less than two members, shall constitute a quorum. The Committee shall act on the affirmative vote of a majority of the members present at a meeting at which a quorum is present. Without a meeting, the Committee may act by unanimous written consent of all members.

The Committee may ask members of management or others whose advice and counsel are relevant to the issues then being considered by the Committee to attend any meetings and to provide such pertinent information as the Committee may request.

The Chairperson of the Committee shall be responsible for leadership of the Committee, including preparing the agenda, presiding over Committee meetings, making Committee assignments, reporting on the Committee’s activities to the Board and being the lead liaison between the Committee and the Company’s management and compensation consultants.

IV. COMMITTEE RESPONSIBILITIES

In carrying out its oversight responsibilities, the Committee’s policies and procedures should remain flexible to enable the Committee to react to changes in circumstances. In addition to such other duties as the Board may from time to time assign, the Committee shall have the following responsibilities:

A. Compensation Policies

• 1. To review and make periodic recommendations to the Board as to the general compensation and benefits policies and practices of the Company;
• 2. To oversee the assessment of the incentives and risks arising from or related to the Company’s compensation policies and practices, including but not limited to those applicable to executive officers, and to evaluate whether the incentives and risks are appropriate;
• 3. To establish an overall compensation policy applicable to executive officers and periodically review that policy; and
• 4. To assess the results of the Company’s most recent advisory vote on executive compensation.

B. Chief Executive Officer Evaluation and Compensation

• 1. To (a) review and approve goals and objectives relevant to the Chief Executive Officer’s compensation package, (b) establish a procedure for evaluating the Chief Executive Officer’s performance, (c) annually evaluate the performance of the Chief Executive Officer in conjunction with the Nominating and Governance Committee in light of the goals and objectives established, and (d) review with the Chief Executive Officer the results of the Committee’s performance evaluation. The Chief Executive Officer may not be present during voting or deliberations on his or her compensation; and
• 2. To review, at least annually, and set the base salary and annual and long-term incentive compensation of the Chief Executive Officer, after taking into account the annual evaluation of the Chief Executive Officer.

C. Other Executive Officers’ Compensation and Evaluations

• 1. To (a) review and approve goals and objectives relevant to the other executive officers’ compensation packages, (b) establish a procedure for evaluating such executive officers’ performance, (c) annually evaluate such performance in light of the goals and objectives established, and (d) if requested by the Chief Executive Officer, have the Committee Chairperson review, after completion of the annual evaluation, with each executive officer the results of the Committee’s evaluation of such executive officer’s performance; and
• 2. To review, at least annually, and set the base salary and annual and long-term incentive compensation of the other executive officers, after taking into account the annual evaluation of each such executive officer referred to in the preceding paragraph and the input of the Chief Executive Officer.

D. Incentive-Compensation and Equity-Based Plans

• 1. To review and to make periodic recommendations to the Board as to the Company’s incentive-compensation plans and equity-based plans;
• 2. To administer the Company’s equity incentive plan, share tracking awards plans, employee stock purchase plan, supplemental executive retirement plan, change of control severance plan and any similar plans in accordance with their respective plan documents;
• 3. To review and approve or recommend to the Board, as applicable, (and for stockholder approval where required by applicable law, the Certificate of Incorporation, Bylaws or other policies) compensation and benefits policies, plans and programs and amendments thereto, and to determine eligible employees and the type, amount and timing of such compensation and benefits; and
• 4. To oversee the administration of such policies, plans and programs and, on an ongoing basis, to monitor them to assess whether they remain competitive and within the Board’s compensation objectives for executive officers and other members of senior management.

E. Other Duties

• 1. To review and discuss with management the Company’s Compensation Discussion and Analysis section (“CD&A”) and related disclosures that Securities and Exchange Commission (“SEC”) rules require be included in the Company’s annual report and proxy statement, recommend to the Board based on the review and discussions whether the CD&A should be included in the annual report and proxy statement, and oversee the preparation of the compensation committee report required by SEC rules for inclusion in the Company’s annual report and proxy statement;
• 2. To review and recommend employment agreements and severance arrangements for executive officers, including change-in-control provisions, plans or agreements;
• 3. To review and consider recommendations from the Nominating and Corporate Governance Committee with respect to the compensation and benefits of non- employee directors and to recommend any changes to the Board that the Committee deems appropriate;
• 4. To review the impact of executive compensation that is not deductible under Section 162(m) and to determine the Company’s policy with respect to the application of Section 162(m); and
• 5. To assess, at least annually, whether the work of compensation consultants involved in determining or recommending executive or director compensation has raised any conflict of interest that is required to be disclosed in the Company’s annual report and proxy statement.
• 6. To annually evaluate and the adequacy of the Committee’s charter.

V. ADVISORS TO THE COMMITTEE

The Committee shall have the authority, in its sole discretion, to retain or obtain the advice of such outside counsel, experts, and other advisors, as it deems necessary to carry out its duties, including any compensation consultant used to assist the Committee in the evaluation of director, Chief Executive Officer or executive compensation. The Committee shall be directly responsible for the appointment, compensation and oversight of the work of any outside counsel, experts, and other advisors retained by the Committee, and will receive appropriate funding, as determined by the Committee, from the Company to pay for such advisor’s services. The Committee shall assess the independence of outside counsel, experts, and other advisors (whether retained by the Committee or management) that provide advice to the Committee, in accordance with NASDAQ listing standards. The Committee shall comply with the Company’s then-current level review of contracts and budget procedures.

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CHARTER OF THE NOMINATING AND GOVERNANCE COMMITTEE
OF THE BOARD OF DIRECTORS OF
GROM SOCIAL ENTERPRISES, INC.

Effective June 1, 2018

This Charter outlines the purpose, composition and responsibilities of the Nominating and Governance Committee (the “Committee”) of the Board of Directors (the “Board”) of Grom Social Enterprises, Inc., a Florida corporation (the “Company”).

I. PURPOSE

The Committee is responsible for: (a) assisting the Board in determining the desired experience, mix of skills and other qualities to provide for appropriate Board composition, taking into account the current Board members and the specific needs of the Company and the Board; (b) identifying qualified individuals meeting those criteria to serve on the Board; (c) proposing to the Board the Company’s slate of director nominees for election by the stockholders at the Annual Meeting of Stockholders and nominees to fill vacancies and newly created directorships; (d) reviewing candidates recommended by stockholders for election to the Board and stockholder proposals submitted for inclusion in the Company’s proxy materials; (e) advise the Board regarding the size and composition of the Board and its committees; (f) proposing to the Board directors to serve as chairpersons and members on committees of the Board; (g) coordinating matters among committees of the Board; (h) proposing to the Board the slate of corporate officers of the Company and reviewing the succession plans for the executive officers; (i) recommending to the Board and monitoring matters with respect to governance of the Company; (j) overseeing the Company’s compliance program; and (k) such other functions as the Board may from time to time assign to the Committee.

II. COMPOSITION

The Committee shall be composed of at least three, but not more than five, members (including a Chairperson), all of whom shall be “independent” as such term is defined for directors in the listing standards of the NASDAQ Stock Market LLC (“NASDAQ”), as determined by the Board. The members of the Committee and the Chairperson shall be selected annually by the Board and shall serve at the pleasure of the Board. A Committee member (including the Chairperson) may be removed at any time, with or without cause, by the Board. The Committee shall have authority to delegate responsibilities listed herein to subcommittees of the Committee if the Committee determines such delegation would be in the best interest of the Company.

III. MEETING REQUIREMENTS

The Committee shall meet as necessary to enable it to fulfill its responsibilities, but at least once each year. The Committee shall meet at the call of the Chairperson. The Committee may meet by telephone conference call or by any other means permitted by law or the Company’s Bylaws. A majority of the members, but not less than two members, shall constitute a quorum. The Committee shall act on the affirmative vote of a majority of the members present at a meeting at which a quorum is present. Without a meeting, the Committee may act by unanimous written consent of all members.

The Committee may ask members of management, or others whose advice and counsel are relevant to the issues then being considered by the Committee, to attend any meetings and to provide such pertinent information as the Committee may request.

The Chairperson of the Committee shall be responsible for leadership of the Committee, including preparing the agenda, presiding over Committee meetings, making Committee assignments, reporting on the Committee’s activities to the Board and being the lead liaison between the Committee and the Company’s management. In addition, the Chairperson of the Committee shall convene regular meetings of the independent directors of the Company, no less than three per year, usually in conjunction with the regular Board meetings.

IV. COMMITTEE RESPONSIBILITIES

In carrying out its oversight responsibilities, the Committee’s policies and procedures should remain flexible to enable the Committee to react to changes in circumstances. In addition to such other duties as the Board may from time to time assign, the Committee shall have the following responsibilities:

A. Board Candidates and Nominees

• 1. To identify, evaluate, and recommend to the Board for nomination the Company’s candidates for election or reelection as directors at the Annual Meeting of Stockholders or by appointment by the Board in the event of a vacancy or newly- created directorship, including consideration of prospective candidates proposed for the Committee’s consideration by any stockholder;
• 2. To review the desired experience, mix of skills and other qualities to provide for appropriate Board composition, taking into account the current Board members, the specific needs of the Company and the Board, the rules and regulations of the Securities and Exchange Commission (“SEC”) and NASDAQ listing standards;
• 3. To conduct candidate searches, interview prospective candidates and conduct programs to introduce candidates to the Company, its management and operations, and confirm the appropriate level of interest of such candidates;
• 4. To conduct appropriate inquiries into the background and qualifications of potential nominees; and
• 5. To recommend to the Board qualified candidates for the Board who bring the background, knowledge, experience, skill sets and expertise that would strengthen and increase the diversity of the Board.

B. Board of Directors

• 1. To assess and make recommendations to the Board regarding the size and composition of the Board in light of the operating and regulatory requirements of the Company and a consideration of appropriate areas of expertise to be represented on the Board;
• 2. To recommend to the Board policies pertaining to the roles, responsibilities, retirement age, tenure and removal of directors;
• 3. To review the Directors and Officers questionnaires prepared annually by the Company’s directors;
• 4. To assist the Board in assessing whether directors and prospective directors are “independent” within the meaning of the rules and regulations of the SEC and NASDAQ listing standards;
• 5. To review the suitability for continued service as a director of each Board member when he or she has a significant change in status, such as an employment change, and to recommend whether or not such director should be re-nominated; and
• 6. In conjunction with the Compensation Committee, to consider the appropriateness of the non-employee director compensation program, and make recommendations to the Board regarding director compensation.

C. Committees of the Board

• 1. To assess and make recommendations to the Board regarding the size, composition, scope of authority, responsibilities, and reporting obligations of each committee of the Board;
• 2. To annually propose to the Board directors to serve as chairpersons and members of each committee of the Board, and to review and recommend additional committee members as needed;
• 3. To coordinate matters between the committees of the Board and review and coordinate proposed revisions to committee charters; and
• 4. To recommend that the Board establish such special committees as may be necessary or appropriate to address ethical, legal or other matters that may arise.

D. Evaluations and Management Development

• 1. To oversee the performance of the Board and its Committees;
• 2. To work with the Company’s senior management to consider, adopt and oversee director orientation and continuing education programs;
• 3. To recommend to the Board candidates for election as corporate officers of the Company as the Committee may from time to time deem appropriate;
• 4. In conjunction with the Compensation Committee, to conduct an annual review of the performance of the Chief Executive Officer;
• 5. To periodically review executive officer succession plans, including receiving and considering recommendations from the Company’s Chief Executive Officer regarding succession at the Chief Executive Officer and other executive officer levels; and
• 6. To review the Directors and Officers questionnaires prepared annually by the Company’s executive officers.

E. Corporate Governance

• 1. To develop, evaluate and oversee issues and developments with respect to governance of the Company;
• 2. To oversee the Company’s compliance program, including the Company’s codes of conduct and the Company’s policies and procedures for monitoring compliance; and at least annually, meet to review the implementation and effectiveness of the Company’s compliance program with the chief compliance officer, who shall have the authority to communicate directly to the Committee, promptly, about actual and alleged violations of law or the Company’s codes of conduct, including any matters involving criminal or potential criminal conduct.
• 3. To periodically review the Company’s Corporate Governance Guidelines and recommend changes to the Board as appropriate;
• 4. To periodically review and recommend changes to Company policies approved by the Board from time to time;
• 5. To periodically review and recommend changes to the Company’s Certificate of Incorporation and Bylaws; and
• 6. To periodically review and make recommendations to the Board regarding the appropriateness of the Company’s Stockholder Rights Plan as a whole and its specific terms, and other modifications to the Company’s takeover and structural defenses.

F. Miscellaneous

• 1. To evaluate stockholder proposals submitted for inclusion in the Company’s proxy materials and recommend to the Board whether the Company shall support or oppose the proposal;
• 2. To recommend ways to enhance services to and improve communications and relations with the Company’s stockholders; and
• 3. To annually evaluate the adequacy of the Committee’s charter.

V. ADVISORS TO THE COMMITTEE

The Committee may retain, at the Company’s expense, legal, accounting or other advisors as it deems necessary to carry out its duties, and shall receive appropriate funding, as determined by the Committee, from the Company for payment of compensation to any such advisors. The Committee shall have sole authority to retain and terminate any such advisors, including the sole authority to negotiate and approve reasonable fees and retention terms of such advisors. The Committee shall comply with the Company’s then-current level review of contracts and budget procedures.

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