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Audit Committee Charter Quicklinks
Preamble
Purpose
Composition
Meetings
Responsibilities and Duties
Annual Performance Evaluation

I. PREAMBLE

The Board of Directors of Wyeth (the "Board") recognizes its oversight and guidance role within Wyeth (the "Company"). The Audit Committee is a key committee utilized by the Board of Directors of Wyeth in the fulfillment of this oversight and guidance role.

II. PURPOSE

The purpose of the Audit Committee is to provide assistance to the Board of Directors of the Company in fulfilling its legal and fiduciary obligations and responsibilities to the shareholders, potential shareholders and the investment community with respect to matters involving the accounting, auditing, financial reporting, and internal control functions of the Company and its subsidiaries. In the fulfillment of said general purposes, the Audit Committee shall assist the Board in its oversight of (i) the integrity of the Company's financial statements, (ii) the Company's compliance with legal and regulatory requirements, (iii) the independent registered public accounting firm's qualifications and independence, and (iv) the performance of the Company's internal audit function and of the independent registered public accounting firm. The Audit Committee will fulfill these responsibilities and duties primarily by carrying out the activities enumerated in this Charter.

III. COMPOSITION

The Audit Committee shall be comprised of three or more directors as determined by the Board. The members of the Audit Committee will meet the independence, experience and other requirements of the New York Stock Exchange and all other applicable rules, regulations and statutes. Members must be 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 Audit Committee. All members of the Audit Committee shall have a working familiarity with basic finance and accounting practices or acquire such familiarity within a reasonable period of time after his or her appointment to the Audit Committee. At least one of the members must have accounting or related financial management expertise. At least one of the members should, to the extent practicable, be a financial expert as defined by applicable rules, regulations and statutes. A member of the Audit Committee may not simultaneously serve on the audit committee of more than three public companies unless such service is recommended by the Nominating and Governance Committee and approved by the Board, upon its determination that such
simultaneous service would not impair the ability of such member to effectively serve on the Company's Audit Committee. A member of the Audit Committee may not, other than in his or her capacity as a member of the Audit Committee, the Board of Directors, or any other Board committee, accept any consulting, advisory, or other compensatory fee from the Company, or be an affiliated person of the Company or any subsidiary thereof.

The Audit Committee members shall be appointed for one-year terms at the annual meeting of the Board of Directors and shall serve until a replacement for each such member is duly elected and qualified or until such member's resignation or removal from the Board of Directors or the Audit Committee. The members of the Audit Committee may be removed from the Committee, with or without cause, by a majority vote of the Board of Directors. The Chairman of the Audit Committee shall be designated by the Board of Directors. The Audit Committee may form and delegate authority to subcommittees in compliance with applicable law when deemed appropriate by the Audit Committee.

IV. MEETINGS

The Audit Committee shall meet at least quarterly, or more frequently as circumstances dictate. As part of its goal to foster open communication, the Audit Committee shall periodically meet separately with representatives of management, the vice president of the internal auditing department, and the independent registered public accounting firm to discuss any matters that the Audit Committee or each of them believes would be appropriate to discuss privately. At such quarterly meeting, the Audit Committee should meet with the independent registered public accounting firm and management to review the Company's financial statements in a manner consistent with that outlined in Section V of this Charter. The Chairman of the Audit Committee, any other member of the Audit Committee, the Chairman of the Board, the President, an Executive Vice President or the Chief Financial Officer may call meetings of the Audit Committee. The Audit Committee shall hold executive sessions as necessary and/or as convened by the Chairman of the Audit Committee. A majority of the Audit Committee members shall constitute a quorum. The action of a majority of those present at a meeting, at which a quorum is present, shall be the act of the Audit Committee. The Audit Committee may also take action by unanimous written consent or by conference communication by means of telephone or similar communications equipment by which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at such meeting. The Audit Committee shall keep a record of its actions and proceedings, and the Chairman of the Audit Committee shall make a report thereof from time to time to the Board of Directors.


V. RESPONSIBILITIES AND DUTIES

In carrying out its duties and responsibilities, the following should be considered within the authority of the Audit Committee:

  1. The sole authority to hire, subject to shareholder ratification, and fire, the independent registered public accounting firm and to approve the engagement fees in connection therewith.

  2. The responsibility to directly oversee the work of any independent registered public accounting firm employed by the Company, including the resolution of any disagreement between management and the independent registered public accounting firm regarding financial reporting, for the purpose of preparing or issuing an audit report or related work.

  3. The sole authority to approve in advance all audit and legally permitted non-audit services to be provided by any independent registered public accounting firm; provided, however, that pre-approval of non-audit services will not be required if:

    1. the aggregate amount of fees for all such non-audit services provided to the Company constitutes not more than five percent of the total amount of revenues paid by the Company to its independent registered public accounting firm during the fiscal year in which the non-audit services are provided;

    2. such services were not recognized by the Company at the time of the engagement to be non-audit services; and

    3. such services are promptly brought to the attention of the Audit Committee and approved prior to the completion of the audit by the Audit Committee or by one or more members of the Audit Committee to whom authority to grant such approvals has been delegated by the Audit Committee.

  4. The sole authority to delegate to one or more designated members of the Audit Committee who are independent directors of the Board of Directors of the Company, the authority to grant pre-approval of audit and non-audit services as described in Section (3) above, so long as it is presented to the full Audit Committee at the next scheduled meeting.

  5. At least annually, to obtain and review a report by the independent registered public accounting firm describing: the firm's internal quality-control procedures; 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 to assess the auditor's independence, all relationships between the independent registered public accounting firm and the Company.

  6. At least annually, to evaluate the independent registered public accounting firm's qualifications, performance and independence, which evaluation shall include the review and evaluation of the lead partner of the independent registered public accounting firm and a review of the report referred to in (5) above. In making its evaluation, the Audit Committee shall take into account the opinions of management and the Company's internal auditors. The Audit Committee shall further ensure the rotation of the lead audit partner at least every five years and confirm with any independent registered public accounting firm retained to provide audit services for any fiscal year that the lead (or coordinating) audit partner (having primary responsibility for the audit), or the audit partner responsible for reviewing the audit, has not performed audit services for the Company in each of the five previous fiscal years of the Company. The Audit Committee shall decide as to whether the Company is obtaining high-quality audits and whether rotation of the independent registered public accounting firm would be helpful. The Audit Committee shall present its conclusions with respect to the independent registered public accounting firm to the full Board.

  7. To instruct the Company's independent registered public accounting firm that they are to directly report to the Audit Committee.

  8. To meet, review and discuss the annual audited financial statements and quarterly financial statements prior to dissemination, with management and the independent registered public accounting firm, including reviewing the Company's specific disclosures under "Management's Discussion and Analysis of Financial Condition and Results of Operations."

  9. To generally discuss the types of information to be disclosed, including the use of "pro forma" or "adjusted" non-GAAP information, and the type of presentation to be made with respect to earnings press releases and financial information and earnings guidance provided to analysts and rating agencies.

  10. To review in consultation with the independent registered public accounting firm, management and the internal auditors, the integrity of the Company's financial reporting process, both internal and external. In that connection, the Committee should obtain and discuss with management and the independent registered public accounting firm reports from management and the independent registered public accounting firm regarding: (i) all critical accounting policies and practices to be used by the Company; (ii) analyses prepared by management and/or the independent registered public accounting firm setting forth significant financial reporting issues and judgments made in connection with the preparation of the financial statements, including all alternative treatments of financial information within generally accepted accounting principles that have been discussed with the Company's management, the ramifications of the use of the alternative disclosures and treatments, and the treatment preferred by the independent registered public accounting firm; (iii) major issues regarding accounting principles and financial statement presentations, including any significant changes in the Company's selection or application of accounting principles; (iv) major issues as to the adequacy of the Company's internal controls and any specific audit steps adopted in light of material control deficiencies; and (v) any other material written communications between the independent registered public accounting firm and the Company's management.

  11. To review periodically the effect of regulatory and accounting initiatives, as well as off-balance sheet structures, on the financial statements of the Company.

  12. To engage and compensate from the Company's funds independent counsel and other advisers, as the Audit Committee determines appropriate to carry out its duties.

  13. To discuss policies with respect to risk assessment and risk management and to discuss the Company's major financial risk exposures and the steps management has taken to monitor and control such exposures.

  14. To review with the independent registered public accounting firm any audit problems or difficulties and management's response, including, but not limited to, any restrictions on the scope of the independent registered public accounting firm's activities or on access to requested information (and any significant disagreements with management), any accounting adjustments that were noted or proposed by the independent registered public accounting firm but were passed as immaterial or otherwise, any communications between the audit team and the independent registered public accounting firm's national office respecting auditing or accounting issues presented by the engagement, and any "management" or "internal control" letter issued, or proposed to be issued, by the independent registered public accounting firm to the Company. The review shall also include discussion of the responsibilities, budget and staffing of the Company's internal audit function.

  15. To review and approve, if appropriate, the operations and responsibilities of the Internal Audit Department and any changes thereto.

  16. To review the adequacy and effectiveness of the Company's accounting and internal control policies and procedures through inquiry and discussions with the Company's independent registered public accounting firm, internal auditors and management of the Company and approve the charter of the Company's Disclosure Committee and any amendments thereto.

  17. To establish procedures for (i) the receipt, retention, treatment, processing and resolution 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.

  18. To set hiring policies for employees or former employees of the independent registered public accounting firm all in accordance with applicable legal restrictions. At a minimum, these policies should provide that any independent registered public accounting firm may not provide audit services to the Company if the Chief Executive Officer, Controller, Chief Financial Officer, chief accounting officer or any person serving in an equivalent capacity for the Company was employed by the independent registered public accounting firm and participated in the audit of the Company within one year of the initiation of the current audit.

  19. To meet annually with the general counsel, and outside counsel when appropriate, to review legal and regulatory matters, including any matters that may have a material impact on the financial statements of the Company.

  20. To report regularly to the Board including, but not limited to, any issues that may arise with respect to the quality or integrity of the Company's financial statements, the Company's compliance with legal or regulatory requirements, the performance and independence of the Company's independent registered public accounting firm or the performance of the internal audit function.

  21. To direct preparation of and approve the Audit Committee Report required by the rules of the Securities and Exchange Commission to be included in the Company's annual proxy statement.

  22. To review the findings of the Business Ethics Policy, as incorporated in the Code of Conduct, and report to the Board of Directors such findings.

  23. To perform such additional activities and consider such other matters within the scope of its responsibilities as the Audit Committee or the Board deems necessary or appropriate.

VI. ANNUAL PERFORMANCE EVALUATION

The Audit Committee shall conduct a review and evaluation, at least annually, of the functioning of the Audit Committee, including but not limited to reviewing the compliance of the Audit Committee with this Charter. In addition, the Audit Committee shall review and reassess, at least annually, the adequacy of this Charter and recommend to the Nominating and Governance Committee of the Board of Directors for consideration by the Board of Directors any improvements to this Charter that the Audit Committee considers necessary. The Audit Committee shall conduct such evaluations and reviews in such manner as it deems appropriate.


Effective as of February 23, 2006; amended as of February 23, 2006, March 3, 2005 and March 5, 2003; adopted by the Board of Directors on April 27, 2000.

Committee Members
Chairperson John D. Feerick
Committee Member Richard L. Carrión
Committee Member John P. Mascotte
Committee Member John R. Torell III
   
 

Legend
Committee Chair = Chairperson
Committee Member = Member
Financial Expert = Financial Expert
 

Wyeth > Corporate Governance > Charter of the Audit Committee
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