Audit and Corporate Governance Committee Charter
Principles Governing Professional and Ethical Conduct
The Audit and Corporate Governance Committee (the "Committee") of the Board of Directors (the "Board") of HyperSpace Communications, Inc. (the "Company") shall assist the Board in oversight of: (1) the integrity of the Company's financial statements and internal controls, (2) the Company's compliance with legal and regulatory requirements, (3) the independent auditor's qualifications and independence, (4) the performance of the Company's internal audit function (if any) and independent auditor, (5) compliance with the Company's Code of Conduct for Employees, Officers and Directors and the Company's Code of Ethics for Senior Financial Officers, (6) development, updating and recommendation to the Board, as appropriate, of corporate governance policies applicable to the Company, and (7) monitoring of compliance with such policies. The Committee shall have the sole authority and responsibility to appoint, retain, determine funding for, oversee and, where appropriate, replace the independent auditor. The Committee shall also have all authority necessary to fulfill the duties and responsibilities assigned to the Committee in this Charter or otherwise assigned to it by the Board. The Committee shall have the power to conduct or authorize investigations into any matters within the Committee's scope of responsibilities. In connection with such investigations or otherwise in the course of fulfilling its responsibilities under this charter, the Committee shall have the authority to retain independent counsel, accounting and other professionals to assist the Committee without seeking Board approval with respect to the selection, fees or terms of engagement of any such advisors. In addition, the Committee may request any officer or employee of the Company, its independent legal counsel or independent auditor to attend a meeting of the Committee or to meet with any members of, or consultants to, the Committee. The Committee shall also have authority to determine appropriate funding from the Company for the payment of ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties.
The responsibilities of a member of the Committee shall be in addition to such member's duties as a member of the Board. The Committee when appropriate may form and delegate authority to subcommittees and may delegate authority to one or more designated members of the Committee.
The Committee shall be composed of two or more directors, as determined by the Board, each of whom shall meet the independence requirements established by the Board, the Securities and Exchange Commission, the American Stock Exchange and any other regulations applicable to the Company from time to time, including but not limited to Rule 10A of the Securities Exchange Act of 1934, as amended, and AMEX Rule 121A. Any director who has participated in the preparation of the financial statements of the Company or any of its current subsidiaries at any time during the past three years may not sit on the Committee.
Each Committee member must, at a minimum, be able to read and understand fundamental financial statements, including the Company's balance sheet, income statement and cash flow statement. At least one Committee member shall have past employment experience in finance or accounting, requisite professional certification in accounting, or any other comparable experience or background which results in the member's financial sophistication, including being or having been a chief executive officer, chief financial officer or other senior officer with financial oversight responsibilities, and shall be a "financial expert" in accordance with such regulations as may be applicable to the Company from time to time.
Appointment and Removal of Members
The members of the Committee shall be appointed by the Board on the recommendation of the Nominating Committee or the full Board. The Board may remove any member from the Committee at any time with or without cause.
Duties and Responsibilities:
The Committee shall have the following duties and responsibilities, in addition to any duties and responsibilities assigned to the Committee from time to time by the Board.
Audit Related Duties and Responsibilities
Engagement of Independent Auditor
· Select and retain the independent auditor; determine and approve compensation of the independent auditor; resolve disagreements between management and the independent auditor; oversee and evaluate the independent auditor; and, where appropriate, replace the independent auditor, with the understanding that the independent auditor shall report directly to and be overseen by the Committee.
· Pre-approve the retention of the independent auditor for all audit and such non-audit services as the independent auditor is permitted to provide the Company and approve the fees for such services, other than de minimis non-audit services allowed by relevant law. The Committee may pre-approve services by establishing detailed pre-approval policies and procedures as to the particular service; provided that the Committee is informed of each service pre-approved and that no pre-approval shall be delegated to management. In considering whether to pre-approve any non-audit services, the Committee or its delegees shall consider whether the provision of such services is compatible with maintaining the independence of the auditor.
· Ensure that the Committee's approval of any audit services is publicly disclosed pursuant to applicable laws, rules and regulations.