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Audit Commitee Charter
1. Purpose. The Audit
Committee's purpose is (a) to assist the Board of Directors in
fulfilling its responsibility to oversee (1) the accounting and
financial reporting processes of the Company and the audits of the
financial statements of the Company, including the integrity of the
Company's financial statements, (2) the Company's compliance with
legal and regulatory requirements, (3) the independent auditor's
qualifications and independence, and (4) the performance of the
Company's independent auditors, and (b) to prepare the Audit
Committee report that is required by the rules of the SEC to be
included in the Company's annual proxy statement. In fulfilling its
purpose, the Committee should foster free and open communications
among the directors, the independent auditors and the financial and
senior management of the Company.
The Company's independent auditors are ultimately accountable to the
Board of Directors and the Audit Committee, and the Audit Committee
has the ultimate authority and responsibility to select, retain,
compensate and terminate the Company's independent auditors.
2. Composition. The Audit Committee shall consist of
at least three directors, each of whom is independent, within the
meaning of the Marketplace Rules and listing standards of the Nasdaq
Stock Market, Section 10A(m)(3) of the Securities Exchange Act of
1934, as amended, and the Rules promulgated by the Securities and
Exchange Commission. No member of the Audit Committee shall have
participated in the preparation of the financial statements of the
Company or any subsidiary of the Company at any time during the past
three years. All members of the Committee shall be able to read and
understand fundamental financial statements, including the Company's
balance sheet, income statement, and cash flow statement. At least
one member of the Audit Committee must have past employment
experience in finance or accounting, or other comparable experience
or background which results in the individual's financial
sophistication, including being or having been a chief executive
officer, chief financial officer or other senior officer with
financial oversight responsibilities. To the extent possible, at
least one member of the Committee shall be an "audit committee
financial expert" as such term is defined by the SEC and determined
in the good faith judgment of the Board of Directors.
The
Board of Directors shall appoint members of the Audit Committee and
its Chairman annually, considering the recommendation of the
Corporate Governance and Nominating Committee, and further
considering the views of the Chairman of the Board and Chief
Executive Officer, as appropriate. The members of the Audit
Committee shall serve until their successors are appointed and
qualify. The Board of Directors shall have the power at any time to
change the membership of the Audit Committee and to fill vacancies
in the Committee with new member(s) who satisfy the requirements set
forth in the preceding paragraph.
3. Resources and Authority of the Audit Committee.
The Audit Committee shall have the financial resources and authority
necessary to carry out its duties and responsibilities, including
the authority to select, retain, terminate and approve the fees and
other retention terms of special or independent counsel, accountants
or other advisors it deems appropriate, without seeking the approval
of the Board of Directors or management.
4. Compensation of Audit Committee Members. No
member of the Audit Committee may receive any compensation from the
Company other than (i) director's fees, including committee member
and committee chair fees, if any (in the form of cash, Company
stock, stock options or other in-kind consideration ordinarily
available to directors), (ii) a pension or other form of deferred
compensation from the Company for prior service that is not
contingent in any way on future service, and (iii) any other regular
benefits that other directors receive.
5. Responsibilities. The Committee will meet at
least four times each year or more frequently as circumstances
require. In connection with fostering open communication among
groups providing accounting, auditing and financial reporting
services for the Company, the Committee will meet periodically with
the independent auditors and financial and senior management in
separate sessions to discuss any matter that the Committee or any of
these groups believes should be discussed privately. The Committee
will also be responsible for setting clear hiring policies for
employees or former employees of the independent auditors and for
establishing procedures for (i) the receipt, retention and treatment
of complaints received by the Company regarding accounting, internal
accounting controls or auditing matters and (ii) the confidential,
anonymous submission by employees of the Company of concerns
regarding questionable accounting or auditing matters. The
Committee will also review and approve transactions with, or
involving conflicts of interest between, the Company and members of
the Board or officers of the Company or their affiliates.
The
Committee's specific responsibilities in performing its oversight
role are set forth in the Audit Committee Responsibilities Checklist
that is attached as an addendum to this Charter. The
responsibilities checklist will be updated periodically to reflect
changes in regulatory requirements, authoritative guidance and
evolving oversight practices.
6. Limitation of Audit Committee's Role. While the
Audit Committee has the responsibilities and powers set forth in
this Charter, it is not the duty of the Audit Committee to plan or
conduct audits or to determine that the Company's financial
statements and disclosures are complete and accurate and are in
accordance with generally accepted accounting principles and
applicable rules and regulations. Management is responsible for the
preparation, presentation and integrity of the Company's financial
statements and for the appropriateness of the accounting principles
and reporting policies used by the Company. The independent
auditors are responsible for auditing the Company's financial
statements and for reviewing the Company's unaudited interim
financial statements.1. Purpose. The Audit
Committee's purpose is (a) to assist the Board of Directors in
fulfilling its responsibility to oversee (1) the accounting and
financial reporting processes of the Company and the audits of the
financial statements of the Company, including the integrity of the
Company's financial statements, (2) the Company's compliance with
legal and regulatory requirements, (3) the independent auditor's
qualifications and independence, and (4) the performance of the
Company's independent auditors, and (b) to prepare the Audit
Committee report that is required by the rules of the SEC to be
included in the Company's annual proxy statement. In fulfilling its
purpose, the Committee should foster free and open communications
among the directors, the independent auditors and the financial and
senior management of the Company.
The
Company's independent auditors are ultimately accountable to the
Board of Directors and the Audit Committee, and the Audit Committee
has the ultimate authority and responsibility to select, retain,
compensate and terminate the Company's independent auditors.
2. Composition. The Audit Committee shall consist of
at least three directors, each of whom is independent, within the
meaning of the Marketplace Rules and listing standards of the Nasdaq
Stock Market, Section 10A(m)(3) of the Securities Exchange Act of
1934, as amended, and the Rules promulgated by the Securities and
Exchange Commission. No member of the Audit Committee shall have
participated in the preparation of the financial statements of the
Company or any subsidiary of the Company at any time during the past
three years. All members of the Committee shall be able to read and
understand fundamental financial statements, including the Company's
balance sheet, income statement, and cash flow statement. At least
one member of the Audit Committee must have past employment
experience in finance or accounting, or other comparable experience
or background which results in the individual's financial
sophistication, including being or having been a chief executive
officer, chief financial officer or other senior officer with
financial oversight responsibilities. To the extent possible, at
least one member of the Committee shall be an "audit committee
financial expert" as such term is defined by the SEC and determined
in the good faith judgment of the Board of Directors.
The
Board of Directors shall appoint members of the Audit Committee and
its Chairman annually, considering the recommendation of the
Corporate Governance and Nominating Committee, and further
considering the views of the Chairman of the Board and Chief
Executive Officer, as appropriate. The members of the Audit
Committee shall serve until their successors are appointed and
qualify. The Board of Directors shall have the power at any time to
change the membership of the Audit Committee and to fill vacancies
in the Committee with new member(s) who satisfy the requirements set
forth in the preceding paragraph.
3. Resources and Authority of the Audit Committee.
The Audit Committee shall have the financial resources and authority
necessary to carry out its duties and responsibilities, including
the authority to select, retain, terminate and approve the fees and
other retention terms of special or independent counsel, accountants
or other advisors it deems appropriate, without seeking the approval
of the Board of Directors or management.
4. Compensation of Audit Committee Members. No
member of the Audit Committee may receive any compensation from the
Company other than (i) director's fees, including committee member
and committee chair fees, if any (in the form of cash, Company
stock, stock options or other in-kind consideration ordinarily
available to directors), (ii) a pension or other form of deferred
compensation from the Company for prior service that is not
contingent in any way on future service, and (iii) any other regular
benefits that other directors receive.
5. Responsibilities. The Committee will meet at
least four times each year or more frequently as circumstances
require. In connection with fostering open communication among
groups providing accounting, auditing and financial reporting
services for the Company, the Committee will meet periodically with
the independent auditors and financial and senior management in
separate sessions to discuss any matter that the Committee or any of
these groups believes should be discussed privately. The Committee
will also be responsible for setting clear hiring policies for
employees or former employees of the independent auditors and for
establishing procedures for (i) the receipt, retention and treatment
of complaints received by the Company regarding accounting, internal
accounting controls or auditing matters and (ii) the confidential,
anonymous submission by employees of the Company of concerns
regarding questionable accounting or auditing matters. The
Committee will also review and approve transactions with, or
involving conflicts of interest between, the Company and members of
the Board or officers of the Company or their affiliates.
The
Committee's specific responsibilities in performing its oversight
role are set forth in the Audit Committee Responsibilities Checklist
that is attached as an addendum to this Charter. The
responsibilities checklist will be updated periodically to reflect
changes in regulatory requirements, authoritative guidance and
evolving oversight practices.
6. Limitation of Audit Committee's Role. While the
Audit Committee has the responsibilities and powers set forth in
this Charter, it is not the duty of the Audit Committee to plan or
conduct audits or to determine that the Company's financial
statements and disclosures are complete and accurate and are in
accordance with generally accepted accounting principles and
applicable rules and regulations. Management is responsible for the
preparation, presentation and integrity of the Company's financial
statements and for the appropriateness of the accounting principles
and reporting policies used by the Company. The independent
auditors are responsible for auditing the Company's financial
statements and for reviewing the Company's unaudited interim
financial statements.
|
When Typically Performed |
|
Annually |
Quarterly |
A/N |
| 1. |
Retain and, when appropriate, terminate the Company's independent auditors. |
X |
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X |
| 2. |
Approve all
audit engagement fees and terms, as well as all permitted
non-audit engagements with the Company's independent auditors. |
X |
|
X |
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3. |
Review and
evaluate the qualifications, performance and independence of the
lead audit partner (or similar designation) of the independent
auditors. |
X |
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4. |
Require the
independent auditors (the "firm") to submit to the Committee at
least annually a report describing (i) the firm's internal
quality-control procedures; (ii) any material issues raised by
the most recent internal quality-control review, or peer review,
of the firm, or by any inquiry or investigation by governmental
or professional authorities, within the preceding five years,
respecting one or more independent audits carried out by the
firm, and any steps taken to deal with any such issues; and
(iii) all relationships between the independent auditors and the
Company. |
X |
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5. |
Review a formal
written statement from the outside auditors delineating all
relationships between the auditor and the Company, consistent
with Independence Standards Board Standard 1; evaluate the
qualifications, performance and independence of the outside
auditors, including actively engaging in a dialogue with the
auditors with respect to all of their relationships or services
that may impact their objectivity and independence; determine
whether the auditors' quality controls are adequate and the
provision of permitted non-audit services is compatible with
maintaining the auditors' independence; present conclusions to
the Board of Directors and take, or recommend that the Board of
Directors take, appropriate action to oversee the independence
of the outside auditors. |
X |
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6. |
Confer with the
independent auditors as to the scope of their proposed audits,
including directing special attention to specific matters or
areas deemed by the Committee or the independent auditors to be
of special significance; and confirm the auditors' understanding
that they have the authority and responsibility to inform the
Committee of any unresolved issues they encounter. |
X |
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7. |
Meet separately
no less often than every quarter with management and the
independent auditors. |
|
X |
X |
|
8. |
Review the
findings and recommendations of the independent auditors on
completion of their annual audit. |
X |
|
|
|
9. |
Review with the
independent auditors any material difficulties the auditors
encountered in the course of their audit work, including any
restrictions on the scope of the independent auditors'
activities or on access to requested information. |
X |
|
X |
|
10. |
Review with the
independent auditors, outside the presence of management, the
matters required to be discussed under generally accepted
auditing standards relating to the conduct of the audit, any
significant disagreements with management and unresolved issues,
including, without limitation, any accounting adjustments that
were noted or proposed by the independent auditors but were
"passed" as immaterial or otherwise and any communications
between the independent audit team and the audit firm's national
office respecting auditing or accounting issues presented by the
engagement. Resolution of any such matters is to be coordinated
with management. |
X |
|
X |
|
11. |
Review any
"management" or "internal control" letter issued, or proposed to
be issued, by the independent auditors to the Company. |
X |
|
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12. |
A. Review with
management and the independent auditors the Company's year-end
audited financial statements to be included in the Company's
annual report on Form 10-K and the independent auditors' report
thereon, including the Company's disclosures under the caption
Management's Discussion and Analysis ("MD&A"), and recommend to
the Board of Directors whether the Company's year-end audited
financial statements should be included in the Company's Form
10-K. |
X |
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B. Review with
management and the independent auditors the Company's quarterly
financial statements, including the Company's disclosures under
"MD&A". |
|
X |
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|
13. |
Review with the
independent auditors (i) analyses prepared by management and/or
the independent auditors setting forth significant financial
reporting issues and judgments made in connection with the
preparation of the financial statements, including analyses of
the effects of alternative GAAP methods on the financial
statements, (ii) the effect of regulatory and accounting
initiatives, as well as off balance sheet structures, on the
financial statements of the Company, (iii) critical accounting
policies of the Company and (iv) any other major issues
regarding accounting principles and financial statements. |
X |
|
|
|
14. |
Review
disclosures, if any, made to the Audit Committee by the
Company's CEO and CFO during their certification process for the
Form 10-K and Form 10-Q regarding any significant deficiencies
in the design or operation of internal controls or material
weaknesses therein and any fraud involving management or other
employees who have a significant role in the Company's internal
controls. |
|
X |
X |
|
15. |
A. Prior to
disclosure, review and discuss the quarterly and annual earnings
releases. |
X |
X |
|
|
16. |
Discuss with
the independent auditors their judgments about the clarity of
the Company's financial disclosure practices and the quality and
appropriateness of the accounting principles and estimates and
other judgments applied in the Company's financial reporting. |
X |
|
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17. |
Consider and
approve, if appropriate, changes to accounting principles
applied in the Company's financial reporting. |
|
|
X |
|
18. |
Review, in
consultation with the independent auditors and the financial
management of the Company, the adequacy and effectiveness of the
Company's internal controls and procedures for financial
reporting and the independent auditors' annual report on
management's assessment thereof. |
(beginning FY 05)
X |
|
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19. |
Discuss with
management the Company's major financial risk exposures and the
steps management has taken to monitor and control such
exposures, including the Company's policies with respect to risk
assessment and risk management. |
X |
|
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20. |
Assess
procedures for (i) the receipt, retention and treatment of
complaints received by the Company regarding accounting,
internal accounting controls or auditing matters and (ii) the
confidential, anonymous submission by employees of the Company
of concerns regarding questionable accounting or auditing
matters. |
X |
|
X |
|
21. |
Prepare the
Audit Committee report that is required by the rules of the SEC
to be included in the Company's annual proxy statement. |
X |
|
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22. |
Consider
periodically and recommend to the Board of Directors, as
appropriate, changes to the Committee's Charter and to this
checklist. |
X |
|
X |
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23. |
Prepare and
review with the Board of Directors an annual performance
evaluation of the Audit Committee, which evaluation must compare
the Committee's performance with the requirements of this
Charter, and set forth goals and objectives of the Committee for
the upcoming year. |
X |
|
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24. |
Consult with
and retain such advisors and consultants as the Committee deems
necessary, including legal counsel (who may be counsel to the
Company), accountants and other advisors. |
|
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X |
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25. |
Report to and
review with the Board of Directors any issues that arise with
respect to the quality or integrity of the Company's financial
statements, the Company's compliance with legal or regulatory
requirements, and the performance and independence of the
Company's independent auditors. |
|
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X |
|
26. |
Report all
actions taken at its meetings to the Board of Directors at the
next following meeting of the Board. |
|
X |
X |
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