APPENDIX A

AUDIT COMMITTEE CHARTER

A. PURPOSE

        The Audit Committee (the "Committee") is appointed by the Board of Directors (the "Board") of NetRatings, Inc. (the "Company") to assist the Board in monitoring (1) the integrity of the financial statements of the Company, (2) the independent auditors' qualifications and independence, (3) the performance of the Company's internal audit function and independent auditors, and (4) the compliance by the Company with legal and regulatory requirements.

        The Committee shall prepare the report required by the rules of the Securities and Exchange Commission to be included in the Company's annual proxy statement.

B. COMMITTEE MEMBERSHIP

        The Committee shall consist of no fewer than three members. The Board shall appoint the chairperson of the Committee, and if the Board does not appoint a chairperson, the Committee shall elect a chairperson from its own membership. Committee members may be replaced by the Board.

        The members of the Committee shall meet the independence and experience requirements of The NASDAQ Stock Market, Inc. and applicable law, including the Sarbanes-Oxley Act of 2002 (the "Act"). All members of the Committee must be able to read and understand fundamental financial statements at the time of their appointment and at least one member of the Committee shall be an "audit committee financial expert," as defined under the Act and the regulations promulgated thereunder, unless the Board shall have determined that the members of the Committee have sufficient expertise in financial statement oversight that such expert is not necessary, which determination shall be disclosed in the Company's applicable Form 10-K.

C. MEETINGS

        The Committee shall meet as often as it determines, but no less than four times per year. A majority of the members of the Committee shall constitute a quorum for the transaction of business. The Committee may ask members of management or others to attend Committee meetings and to provide pertinent information, as necessary in the judgment of the Committee. The Committee shall also meet periodically with the chief financial officer, the Company's internal auditor, if any, and the independent auditors in separate executive sessions. The Committee may create subcommittees that shall report to the Committee.

D. RESPONSIBILITIES OF THE AUDIT COMMITTEE

        The Committee's policies and procedures should remain flexible in order to best react to changing conditions and to help ensure that the Company's accounting and reporting practices accord with all requirements and are of the highest quality. The Company shall provide the Committee with appropriate funding, as determined by the Committee, to compensate (i) the registered public accounting firm engaged for the purpose of rendering an audit report or related work or performing other audit, review or attest services and (ii) any advisers employed by the Committee.

        In carrying out its responsibilities, the Committee shall do the following:

Audit Committee Charter

The Committee shall review and reassess the adequacy of this Charter at least annually and recommend any proposed changes to the Board for approval.

 

Include a copy of this Charter as an appendix to the Company's proxy statement at least once every three years, but in the event that the Charter is materially amended, include the Charter as an appendix to the Company's proxy statement in such year.

Oversight of the Independent Auditors

The Committee shall have the sole authority for the appointment and retention (or termination) of the independent auditors (subject, if applicable, to stockholder ratification) and shall be solely responsible for oversight of the work of the independent auditors and for the compensation of the independent auditors. The independent auditors shall report directly to the Committee.

The Committee shall approve in advance all audit services and all permissible non-audit services provided by the independent auditors, consistent with applicable law and exchange requirements.

Review and discuss with the Board any relationship between the independent auditors and the Company that may adversely affect the independence of the independent auditors.

Review the performance of the independent auditors and the experience and qualifications of the senior members of the independent auditors' team.

Require the rotation of the lead and concurring audit partner every five years, and the rotation of certain other significant audit partners off of the Company's audit engagement for a period of two years after seven years of service.

Consider at an appropriate time whether in order to assure continuing auditor independence, it is appropriate to adopt a policy of rotating the independent auditing firm itself on a regular basis.

Consider whether the independent auditors' provision and implementation of permitted non-audit services to the Company is compatible with maintaining the independent auditors' independence and is consistent with applicable law and stock exchange requirements.

Review of Financial Statements and Disclosure Matters

Review and discuss with management and the independent auditors the annual audited and quarterly financial statements of the Company, including management's discussion and analysis, prior to filing such financial statements with the Securities and Exchange Commission or public distribution thereof and recommend to the Board whether the audited financial statements should be included in the Company's Form 10-K.

Prior to release, review the Company's earnings press releases, including the use of non-GAAP financial measures, as well as financial information and earnings guidance provided to analysts and ratings agencies.

Receive from the independent auditors a report of all critical accounting policies and practices, all alternative treatments of financial information that have been discussed and the ramifications of such alternate treatments, including the treatment preferred by the independent auditors, and all material communications between the independent auditors and management.

Determine, as regarding new transactions or events, the independent auditor's reasoning for the appropriateness of the accounting principles and disclosure practices adopted by management.

Consider and approve, if appropriate, major changes to the Company's auditing and accounting principles and practices as suggested by the independent auditors or management.

 

Review and discuss with management and the independent auditors the Company's internal controls and procedures, including the Company's compliance with Section 404 of the Sarbanes Oxley Act.

Review any significant disagreement or changes required in the independent auditors' audit plans among management and the independent auditors in connection with the preparation of the financial statements.

Review with management and the independent auditors the effect of regulatory and accounting initiatives as well as off-balance sheet structures on the Company's financial statements.

Review with management and approve all transactions or courses of dealing with parties related to the Company.

Inquire of management and the independent auditors about any potential risks or exposures and assess the steps management should take or has taken to minimize such risk.

General Oversight Responsibilities

Meet with the independent auditors and the financial management to review the scope of the audit proposed for the current year and the audit procedures to be utilized, and at its conclusion, review the audit, including the comments or recommendations of the independent auditors. In addition, the Committee will discuss with the independent auditors the matters to be required to be discussed by SAS 61.

Review the internal audit plans, if any, proposed for the coming year, and the coordination of such plans with the work of the independent auditors.

Establish guidelines for the Company's hiring of employees or former employees of the independent auditors who were engaged on the Company's account.

Review with the independent auditors out of the presence of management, the financial and accounting personnel, the adequacy of the accounting and financial controls, computerized information system controls and security, and any other matters that the Committee believes should be discussed privately.

Retain such outside counsel, experts and other advisors as it determines appropriate to assist in the full performance of its functions.

Obtain assurance from the independent auditors that the independent auditors have complied with section 10A of the Securities and Exchange Act of 1934.

Submit the minutes of its meetings to, or discuss the matters discussed at each Committee meeting with, the Board.

Legal and Ethical Compliance

Establish procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters. Additionally, the Committee shall establish procedures so that any complaints from employees can be submitted confidentially and anonymously.

Review with the Company's legal counsel any legal and regulatory matters that may have a material impact on the Company's financial statements, compliance policies and programs.

Review with management and the independent auditor any correspondence with regulators or governmental agencies regarding the Company's financial statements, auditing or accounting policies.

Perform any other activities consistent with this Charter, the Company's Certificate of Incorporation and Bylaws and governing law, as the Committee or the Board deems necessary or appropriate.