KROLL INC.

AMENDED AND RESTATED

AUDIT COMMITTEE CHARTER

(AS OF JUNE 3, 2003)

Purpose

      The Audit Committee (the “Committee”) is established by the Board of Directors (the “Board”) of Kroll Inc. together with its subsidiaries (collectively the “Company”) to oversee (1) the integrity of the financial statements of the Company, and its accounting and financial reporting processes including its disclosure controls and procedures, (2) the independent auditors’ qualifications, independence and performance, (3) the qualifications, independence and performance of the Company’s internal audit function and (4) the compliance by the Company with legal and regulatory financial requirements.

Limitation of Committee’s Role

      While the Committee has the responsibilities and powers set forth in this Charter, subject to legal and regulatory requirements, it is not the duty of the Committee to determine that the Company’s financial statements and disclosures are complete and accurate and are in accordance with generally accepted accounting principles and applicable rules and regulations; nor to plan or conduct audits. These are the responsibilities of Management and the Internal Audit Department, respectively. The independent auditors are responsible for carrying out the external audit of the Company’s financial statements in accordance with auditing standards generally accepted in the United States of America, and applicable laws, rules and regulations.

Reliance on Information Provided

      In adopting this Charter, the Board acknowledges that the Company’s Management and internal auditors, as well as the independent auditors, have more time, knowledge and detailed information about the Company than do Committee members; consequently, in carrying out its oversight responsibilities, subject to legal and regulatory requirements, the Committee is not providing any expert or special assurance as to the Company’s financial statements or any professional certification as to the independent auditors’ work or compliance with auditing standards generally accepted in the United States of America. Each member of the Committee shall be entitled to rely on the integrity of those persons and organizations within and outside the Company that provide information to the Committee and the accuracy and completeness of the financial and other information provided to the Committee by such persons or organizations absent actual knowledge to the contrary.

Committee Membership

 

 

 

      1. Number. The Committee shall consist of at least three members of the Board, as determined from time to time by the Board.

 

 

 

      2. Independence. Except as otherwise permitted by the Securities Exchange Act of 1934 (the “Exchange Act”) and the applicable rules of the Securities and Exchange Commission (the “Commission”) and the NASDAQ Stock Market (“NASDAQ”), each member of the Committee shall be “independent” as defined by the Exchange Act and the Sarbanes-Oxley Act of 2002 (“Sarbanes”), as appropriate, and the rules and regulations promulgated by the Commission and NASDAQ thereunder.

 

 

 

      3. Financial Literacy. Each member of the Committee shall be able to read and understand comparable financial statements, including the Company’s balance sheet, income statement and cash flow statement at the time of his or her appointment to the Committee. At least one member of the Committee shall be a “financial expert” as defined by applicable Commission and NASDAQ rules. All members of the Committee shall participate in continuing education programs as set forth in the rules developed by the NASDAQ Listing and Hearings Review Council.

 

 

 

      4. Chair. Unless a chairperson is designated by the Board, the members of the Committee may designate a chairperson (the “Chair”) by majority vote of the full Committee.

 

 

 

      5. Compensation. The compensation of the Chair and the other members of the Committee shall be as determined by the Board. No member of the Committee may receive any consulting, advisory or other compensatory fee from the Company other than fees paid in his or her capacity as a member of the Board or a committee thereof.

 

 

 

      6. Selection and Removal. Members of the Committee shall be appointed by the Board. The Board may remove members of the Committee, with or without cause at any time. Vacancies on the Committee shall be filled by majority vote of the Board at the next meeting of the Board following the occurrence of the vacancy.

Committee Authority and Responsibility

 

 

 

 

A. General

      The Committee shall have all authority necessary or implied in order to carry out its duties and responsibilities as well as such other duties as may be delegated from time to time by the Board. In carrying out such duties and responsibilities, the Committee’s policies and procedures should remain flexible in order to react to changing conditions and circumstances. The policies and procedures set forth herein are therefore set forth as a guide with the understanding that the Committee may alter or supplement them as appropriate.

      The Committee’s specific responsibilities in carrying out its oversight role are delineated in the Audit Committee Checklist (Checklist). The Checklist will be updated annually to reflect changes in regulatory requirements, authoritative guidance, and evolving oversight practices. As the compendium of Committee responsibilities, the most recently updated Checklist will be considered to be an addendum to this charter.

 

 

 

 

B. Oversight of the Independent Auditors

 

 

 

 

      1. Selection. The Committee shall be solely and directly responsible for appointing, evaluating and, when necessary, terminating the independent auditors (subject, if applicable, to stockholder ratification).

 

 

 

      2. Compensation. The Committee shall be solely and directly responsibility for setting the compensation of the independent auditors. The Committee is empowered, without further action by the Board, to cause the Company to pay the fees and expenses of the independent auditors established by the Committee.

 

 

 

      3. Non-Audit Services. The Committee shall establish policies and procedures for the engagement of the independent auditors to provide such non-audit services as may be legally performed, and for determining the compensation to be paid for such services, and consider whether the independent auditors’ performance of any non-audit services is compatible with the independent auditors’ independence. The Committee shall cause the Company to disclose in its periodic reports filed with the Commission the approval by the Committee of any non-audit services to be performed by the independent auditors.

 

 

 

      4. Oversight. The independent auditors shall report directly to the Committee and the Committee shall be solely and directly responsible for overseeing the independent auditors — including resolution of disagreements between management and the independent auditors regarding financial reporting for the purpose of preparing or issuing an audit report or related work.

 

 

 

 

 

C. Financial Statement and Disclosure Matters

      These procedures are found in the Checklist.

 

 

 

 

D. Oversight of the Company’s Internal Audit Function

 

 

 

 

      1. Performance Review. The Committee shall review and evaluate the performance of the head of the Company’s internal auditing department and, if appropriate, recommend the selection of a new person. Any change in the incumbent in such position or in his or her compensation shall not be made without the approval of the Committee. The head of the Company’s internal auditing department shall have unrestricted access to the Committee as part of the Committee’s responsibility to assure the independence of the internal audit function. Further procedures are to be found in the Checklist.

Procedures and Administration

 

 

 

      1. Meetings. The Committee shall meet at least four times per year and more frequently as it believes is necessary or appropriate to fulfill its duties and responsibilities. The Committee may also act by unanimous written consent in lieu of a meeting. The Committee shall meet at least annually, in separate executive sessions, with (a) the Company’s management, (b) the head of the Company’s internal auditing department and (c) the Company’s independent auditors.

 

 

 

      2. Quorum. A majority of the Committee shall constitute a quorum for the taking of any action at any meeting of the Committee. A majority of the members of the Committee present in person or by means of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other shall constitute a quorum.

 

 

 

      3. Subcommittees. The Committee may form and delegate authority to subcommittees consisting of one or more members of the Committee when appropriate, including the authority to grant pre-approvals of audit and permitted non-audit services, provided that decisions of such subcommittee to grant pre-approvals shall be presented to the full Committee at its next scheduled meeting.

 

 

 

      4. Independent Advisors. The Committee shall have the authority, to the extent it deems necessary or appropriate, to retain independent legal, accounting or other advisors, who may be regular advisors to the Company. The Committee is empowered, without further action by the Board of Directors, to cause the Company to pay the fees and expenses of any advisors retained by the Committee.

 

 

 

      5. Administrative Expenses. The Committee is empowered, without further action by the Board, to cause the Company to provide appropriate funding for ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out the Committee’s duties.

 

 

 

      6. Reports to Board. The Committee shall keep such records of its meetings as it shall deem appropriate and make regular reports to the Board.

 

 

 

      7. Charter. The Committee shall review and reassess the adequacy of this Charter annually and recommend to the Board for approval any proposed changes which the Committee believes are necessary or appropriate.

 

 

 

      8. Review of Committee’s Performance. The Committee shall annually review the Committee’s own performance.

 

 

 

      9. Investigations. The Committee shall have the authority to conduct or authorize investigations into any matters within the scope of its responsibilities as it shall deem appropriate. The Committee shall have access to all books, records, facilities and personnel of the Company. The Company may request any Company personnel, or the Company’s outside legal counsel or independent auditors, to meet with the Committee or any of its members or advisors.