The primary purpose of the Audit Committee is to assist the Board of Directors in fulfilling its oversight responsibilities in respect of the company’s audit, financial reporting, compliance programs, and Code of Business Conduct.
The Audit Committee shall be comprised of three or more directors as determined by the Board of Directors, the NASD, the SEC or other applicable regulatory agency. Each member shall be an independent director, and free of 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. (The Board may appoint under exceptional and limited circumstances one director who is not “independent” under NASD rules if it determines that membership on the Audit Committee is required by the shareholders; it is in the Company’s best interest; it is disclosed; and that director serves no more than 2 years and not as the Chair.) All members of the Committee shall have a working familiarity with basic finance and accounting practices, and at least one member shall have accounting or related financial management expertise. Members of the Committee shall serve at the pleasure of the Board.
Responsibilities and Duties
To fulfill its responsibilities and duties the Audit Committee shall:
a)Comply with the audit committee requirements set by the NASD and SEC.
b)Meet at least four times a year or more frequently as circumstances dictate.
c)Meet at least annually with financial management; the Director of Internal Auditing and the Independent Auditors in executive sessions to discuss any matters that the Committee or any of these groups believe should be discussed.
d)Meet annually with the company’s senior financial management to review the company’s major financial risk exposures
e)Approve and recommend to the Board, the selection of the Independent Auditors for the corporation, its divisions and subsidiaries.
f)Appoints, approves funding and oversees the Independent Auditor engagements.
g)Approve in advance all permissible non-audit services from the Independent Auditor in excess of $25,000; such approval may be delegated to any individual committee member. Non-audit services $25,000 or less, have a cap in the aggregate of 5% if the amount paid to the external auditors during the fiscal year must be approved by the Committee prior to completion.
h)a) Review with management and the auditors, the scope of the Independent Auditors’ audit plan and the Internal Auditors’ annual audit plan, which are based in part, on analyses of the financial statements and internal control risk.
i)Review the quarterly financial statements with financial management and the Independent Auditors prior to the filing of each Form 1OQ.
j)Review the financial statements contained in the Annual Report to shareholders with financial management and the Independent Auditors to determine that the Independent Auditors are satisfied with the disclosure and content of the financial statements to be presented to the shareholders.
k)Review recommendations made by the Independent Auditors and the Internal Auditors with respect to significant changes in accounting procedures and internal accounting controls, and management’s plan to implement the changes.
l)Obtain from the Independent Auditors a formal written statement that delineates all auditor relationships with the company that may impact objectivity and take appropriate action to ensure auditor independence.
m)Establish procedures for the receipt, retention, and treatment of complaints received regarding accounting, internal accounting controls or auditing matters. Establish procedures to ensure that all complaints are treated confidentially and anonymously.
n)Review the process for communicating the Code of Business Conduct to company personnel, and for monitoring compliance therewith.
o)If necessary, engage independent counsel and other advisors as dictated by the circumstances.
p)Report annually to the shareholders, describing the committee’s composition, responsibilities and how they were discharged, and any other information required by rule.
q)Confirm annually that all responsibilities outlined in this charter have been carried out.
r)Annually review the adequacy of this Audit Committee Charter and, if revised, submit to the Board of Directors for approval.
The Board of Directors approved this Charter on May 6, 2003.