BJ's Wholesale Club, Inc.
Charter of the Audit Committee of the Board of Directors
The purpose of the Audit Committee is (i)
to assist the Board of Directors' oversight of the integrity of the Company's
financial statements, the Company's compliance with legal and regulatory
requirements, the independent auditors' qualifications and independence and the
performance of the Company's internal audit functions and independent auditors;
and (ii) to prepare an audit committee report as required by the Securities and
Exchange Commission to be included in the Company's annual proxy statement.
The Audit Committee shall consist of at least three
directors of the Board of Directors, one of whom shall be designated as
chairperson. Except as otherwise permitted by the applicable rules of the New
York Stock Exchange, each member of the Audit Committee shall be independent as
defined by such rules.
Each member of the Company's Audit Committee must be
financially literate (or must become financially literate within a reasonable
period of time after his or her appointment to the Audit Committee), and at
least one member of the Audit Committee shall have accounting or related
financial management expertise, both as determined in the Board of Directors'
business judgment. No member of the Audit Committee may receive, directly or
indirectly, any consulting, advisory or other compensatory fee from the Company
or any of its subsidiaries, other than fees paid in his or her capacity as a
member of the Board of Directors or a committee of the Board.
Members of the Audit Committee shall be appointed by the Board
of Directors, upon the recommendation of the Nominating and Corporate
Governance Committee. Unless otherwise determined by the Board (in which case
disclosure of such determination shall be made in the Company's annual proxy
statement), no member of the Audit Committee may serve on the audit committee
of more than two other public companies. The Board of Directors may remove
members of the Audit Committee from such committee, with or without cause.
The Audit Committee shall discharge its responsibilities,
and shall assess the information provided by the Company's management and the
independent auditors, in accordance with its business judgment.
Management is responsible for the preparation, presentation
and integrity of the Company's financial statements and for the appropriateness
of the accounting principles and reporting policies that are used by the
Company. The independent auditors are responsible for auditing the Company's
financial statements and for reviewing the Company's unaudited
interim financial statements. The authority and responsibilities set forth in
this Charter do not reflect or create any duty or obligation of the Audit
Committee to plan or conduct any audit, to determine or certify that the
Company's financial statements are complete, accurate, fairly presented, or in
accordance with generally accepted accounting principles or applicable law, or
to guarantee the independent auditors' report.
The Audit Committee shall:
- Review the qualifications and independence of
the Company's independent auditors, who shall report directly to the Audit
Committee. In particular, the Audit Committee shall:
- Appoint, evaluate, and, when
circumstances warrant, discharge the independent auditors;
- Oversee the work of the
independent auditors, including resolution of disagreements between
Company management and the independent auditors regarding financial
- Set compensation of the
independent auditors and is empowered, without further action by the
Board of Directors, to cause the Company to pay the compensation of the
independent auditors established by the Audit Committee;
- Pre-approve all services
(audit and non-audit) to be provided to the Company by the independent
auditors, provided, however, that de minimis
non-audit services may instead be approved in accordance with applicable
New York Stock Exchange and Securities and Exchange Commission rules;
- Conduct a post-audit review
of the financial statements and audit findings, including any significant
suggestions for improvements provided to management by the independent
- Review the nature of any
non-audit services performed by the independent auditors;
- At least annually, the Audit
Committee shall assess the independent auditors' independence. In
connection with this assessment, the Audit Committee shall obtain and
review information, including written statements from the independent
auditors, describing all relationships between the auditors and the
Company or any other relationships that may adversely affect the
independence of the auditors, and otherwise assess the independence of
the independent auditors as set forth in Independence Standards Board
Standard No. 1. The Audit Committee shall engage in an active dialogue
with the auditors concerning any disclosed relationships or services that
might impact the objectivity and independence of the auditors; and
- Receive and consider the
reports required to be made by the independent auditors regarding:
critical accounting policies and practices; alternative treatments within
generally accepted accounting principles for policies and practices
related to material items that have been discussed with Company
management, including ramifications of the use of such alternative disclosures
and treatments, and the treatment preferred by the independent auditors;
and other material written communications between the independent
auditors and Company management.
- Review and discuss with management and the
independent auditors the Company's annual audited financial statements,
including a discussion with the auditors of their judgment as to the
Company's accounting principles, the Company's disclosures under
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" and the matters about which Statement on
Auditing Standards No. 61 requires discussion.
- Consider whether it will recommend to the
Board of Directors that the Company's audited financial statements be
included in the Company's Annual Report on Form 10-K.
- Review with management and the independent
auditors the results of any significant matters identified as a result of
the independent auditors' interim review procedures prior to the filing of
each Form 10-Q, and discuss with the Company's management and independent
auditors the Company's quarterly financial statements, including the
Company's disclosures under "Management's Discussion and Analysis of
Financial Condition and Results of Operations."
- Discuss generally the types of information to
be disclosed in the Company's earnings press releases, as well as in
financial information and earnings guidance provided to analysts, rating
agencies and others.
- At least annually, obtain and review a report
by the independent auditors describing the firm's internal quality-control
procedures, and 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.
- In connection with its oversight role, from
time to time as appropriate, review with the independent auditors:
Coordinate the Board of Directors' oversight
of the Company's internal control over financial reporting (including
review of the Company's process of ensuring accurate and reliable
financial reporting), disclosure controls and procedures and code of
business conduct and ethics. Pursuant to such coordination, the Committee
- any audit problems or
difficulties the independent auditors encountered in the course of the
audit work and management's response, including any restrictions on the
scope of the independent auditors' activities or on access to requested
information and any significant disagreements with management;
- major issues as to the
adequacy of the Company's internal controls and any special audit steps
adopted in light of material control deficiencies;
- analyses prepared by
management and/or the independent auditors setting forth significant
financial reporting issues and judgments made in connection with the
preparation of the financial statements, including analyses of the
effects of alternative generally accepted accounting principles methods
on the financial statements; and
- the effect of regulatory and
accounting initiatives, as well as off-balance sheet structures, on the
financial statements of the Company.
- At least annually, ascertain
through discussions with management the adequacy of the Company's system
of internal controls, discuss such system with the independent auditors
and the Company's Vice President, Manager of Internal Audit, and
coordinate the Board of Directors' oversight of the performance of the
Company's internal audit function;
- Review the appointment and
dismissal of the Vice President, Manager of Internal Audit;
- Receive and review the
reports of the CEO and CFO required by Rule 13a-14 of the Exchange Act;
- Review and approve the
Internal Audit Department's annual plan; and
- Review reports issued by the
Internal Audit Department summarizing its findings, recommendations and
responses from management as to the corrective actions to be implemented.
- Discuss the Company's policies with respect to
fraud, risk assessment and risk management, including guidelines and
policies to govern the process by which allegations of fraud and the
Company's exposure to risk are handled.
- Establish policies regarding the hiring of
employees or former employees of the Company's independent auditors.
- On at least an annual basis, review with the
Company's counsel any legal matters that could have a significant impact
on the Company's financial statements.
- Institute, conduct or authorize investigations
into any matters within the scope of its responsibilities as it shall deem
appropriate, and the Audit Committee shall have the authority to request
any officer, employee or advisor of the Company to meet with the Audit Committee
or any advisors engaged by the Audit Committee.
- Be authorized, without further action by the
Board of Directors, to engage such independent legal, accounting and other
advisors as it deems necessary or appropriate to carry out its
responsibilities. Such independent advisors may be the regular advisors to
the Company. The Audit Committee is empowered, without further action by
the Board of Directors, to cause the Company to pay the compensation of
such advisors as established by the Audit Committee. In addition, the
Audit Committee is empowered, without further action by the Board of
Directors, to cause the Company to pay the ordinary administrative
expenses of the Audit Committee that are necessary or appropriate in
carrying out its duties.
- Regularly update the Board of Directors about
the Audit Committee's activities.
- At least annually, review and reassess the
adequacy of the Audit Committee Charter and present the revised or
unchanged charter annually to the Board of Directors for approval.
- At least annually, evaluate its
- Prepare for inclusion where necessary in a
proxy or information statement of the Company relating to an annual
meeting of security holders at which directors are to be elected (or
special meeting or written consents in lieu of meeting), the report
described in Item 306 of Regulation S-K of the Securities and Exchange
- Establish procedures for (i)
the receipt, retention and treatment 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.
- Have such other duties as may be delegated
from time to time by the Board of Directors.
The Audit Committee will meet as often as it deems
necessary or appropriate in its judgment, either in person or telephonically,
and at such times and places as the Audit Committee determines. The Audit
Committee may also act by unanimous written consent in lieu of a meeting. As it
deems appropriate, the Audit Committee shall periodically meet separately with
the independent auditors, Company management and the Company's internal
auditors, including the Chief Financial Officer and the Vice President, Manager
of Internal Audit. The majority of the members of the Audit Committee shall
constitute a quorum at any meeting. The Audit Committee may form and delegate
authority to one or more subcommittees (including a subcommittee of a single
member) as it deems appropriate from time to time under the circumstances. Any
decision of a subcommittee to preapprove audit,
review, attest or non-audit services shall be presented to the full Audit
Committee at its next scheduled meeting. The Audit Committee shall keep such
records of its meetings as it shall deem appropriate.