ROFIN-SINAR TECHNOLOGIES INC.
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS CHARTER
The primary function of the Audit Committee is to assist the Board of
Directors in fulfilling its oversight responsibilities by reviewing: the
financial reports and other financial information provided by the Corporation
to any governmental body or the public; the Corporation's systems of internal
controls regarding finance, accounting, legal compliance and ethics that
management and the Board have established; and the Corporation's auditing,
accounting and financial reporting processes generally. Consistent with this
function, the Audit Committee should encourage continuous improvement of, and
should foster adherence to, the Corporation's policies, procedures and
practices at all levels. The Audit Committee's primary duties and
responsibilities are to:
* Serve as an independent and objective party to monitor the Corporation's
financial reporting process.
* Review and appraise the audit efforts of the Corporation's independent
* Provide an open avenue of communication among the independent
accountants, financial and senior management and the Board of Directors.
The Audit Committee will primarily fulfill these responsibilities by carrying
out the activities enumerated in Section IV of this Charter.
The Audit Committee shall be comprised of two or more directors as determined
by the Board, each of whom shall be independent directors, and free from any
relationship that, in the opinion of the Board, would interfere with the
exercise of his or her independent judgment as a member of the Committee.
All members of the Committee shall have a working familiarity with basic
finance and accounting practices, and at least one member of the Committee
shall have accounting or related financial management expertise.
The members of the Committee shall be elected by the Board at the annual
organizational meeting of the Board or until their successors shall be duly
elected and qualified. Unless a Chair is elected by the full Board, the
members of the Committee may designate a Chair by majority vote of the full
The Committee shall meet at least one time annually, or more frequently as
circumstances dictate. As part of its job to foster open communication, the
Committee should meet at least annually with management and the independent
accountants in separate executive sessions to discuss any matters that the
Committee or each of these groups believe should be discussed privately.
IV. RESPONSIBILITIES AND DUTIES
To fulfill its responsibilities and duties the Audit Committee shall:
1. Review and update this Charter periodically, at least annually, as
2. Review the organization's annual financial statements.
3. Review with financial management and the independent accountants the
10-K prior to its filing. The Chair of the Committee may represent
the entire Committee for purposes of this review.
4. Recommend to the Board of Directors the selection of the independent
accountants, considering independence and effectiveness and approve
the fees and other compensation to be paid to the independent
accountants. On an annual basis, the Committee should review and
discuss with the accountants all significant relationships the
accountants have with the Corporation to determine the accountants'
5. Review the performance of the independent accountants and approve
any proposed discharge of the independent accountants when
6. At least once a year consult with the independent accountants out of
the presence of management about internal controls and the fullness
and accuracy of the organization's financial statements.
Financial Reporting Processes
7. In consultation with the independent accountants, review the
integrity of the organization's financial reporting processes, both
internal and external.
8. Consider the independent accountants' judgments about the quality
and appropriateness of the Corporation's accounting principles as
applied in its financial reporting.
9. Consider and approve, if appropriate, major changes to the
Corporation's auditing and accounting principles and practices as
suggested by the independent accountants or management.
10. Establish regular and separate systems of reporting to the Audit
Committee by each of management and the independent accountants
regarding any significant judgments made in management's preparation
of the financial statements and the view of each as to
appropriateness of such judgments.
11. Following completion of the annual audit, review separately with
each of management and the independent accountants any significant
difficulties encountered during the course of the audit, including
any restrictions on the scope of work or access to required
12. Review any significant disagreement among management and the
independent accountants in connection with the preparation of the
13. Review with the independent accountants and management the extent to
which changes or improvements in financial or accounting practices,
as approved by the Audit Committee, have been implemented. (This
review should be conducted at an appropriate time subsequent to
implementation of changes or improvements, as decided by the
Ethical and Legal Compliance
14. Establish, review and update periodically a Code of Ethical Conduct
and ensure that management has established a system to enforce this
15. Review management's monitoring of the Corporation's compliance with
the organization's Ethical Code, and ensure that management has the
proper review system in place to ensure that Corporation's financial
statements, reports and other financial information disseminated to
governmental organizations, and the public satisfy legal
16. Review, with the organization's counsel, legal compliance matters
including corporate securities trading policies.
17. Review any legal matter reported by the independent accountants that
could have a significant impact on the organization's financial
18. Perform any other activities consistent with this Charter, the
Corporation's By-laws and governing law, as the Committee or the
Board deems necessary or appropriate.
November 10, 1999
Rofin-Sinar Technologies Inc.
Board of Directors