Audit Committee Charter of Panera Bread Co
PANERA BREAD COMPANY
AUDIT COMMITTEE CHARTER
The primary purpose of the Audit Committee (the "Committee") is to
assist the Board of Directors (the "Board") in overseeing the accounting
and financial reporting processes of the Company and the audits of the
financial statements of the Company. The scope of oversight includes
financial reports and other financial information provided by the Company
to any governmental or regulatory body, the public or other users thereof,
the Company's systems of internal accounting and financial controls, and
the annual independent audit of the Company's financial statements.
In discharging its oversight role, the Committee is empowered to
investigate any matter brought to its attention with full access to all
books, records, facilities and personnel of the Company and the power to
retain outside counsel, auditors or other experts for this purpose. The
Board and the Committee are in place to represent the Company's
stockholders; accordingly, the outside auditor is ultimately accountable
to the Board and the Committee.
The Committee shall be comprised of not less than three members of
the Board, each of whom:
* meets the independence criteria set forth in Section 10A(m)(3) of the
Securities Exchange Act of 1934, as amended; and
* meets any additional director or audit committee independence
criteria established by Securities and Exchange Commission rules or
Nasdaq listing standards.
All Committee members also must be able to read and understand the
Company's fundamental financial statements at the time of their
appointment to the Committee. At least one member of the Committee must
have past employment experience in finance or accounting, requisite
professional certification in accounting or any other comparable
experience or background that results in his or her financial
sophistication such that he or she qualifies as an "audit committee
financial expert" as defined by regulations adopted by the Securities and
Any member of the Committee may be removed at any time by a majority
of the independent members of the Board of Directors.
The Committee's job is one of oversight and it recognizes that the
Company's management is responsible for preparing the Company's financial
statements and that the outside auditors are responsible for auditing
those financial statements. Additionally, the Committee recognizes that
financial management, as well as the outside auditors, have more time,
knowledge and more detailed information on the Company than do Committee
members; consequently, in carrying out its oversight responsibilities, the
Committee is not providing any expert or special assurance as to the
Company's financial statements or any professional certification as to the
outside auditor's work.
The Committee shall, among other duties:
* Review and reassess the adequacy of this Charter annually and
recommend any proposed changes to the Board for approval.
* Review an analysis prepared by management and the independent auditor
of significant financial reporting issues and judgments made in
connection with the preparation of the Company's financial
statements, including an analysis of the effect of alternative GAAP
methods on the Company's
financial statements and a description of any transactions as to
which management obtained Statement on Auditing Standards No. 50
* Review with management and the independent auditor the effect of
regulatory and accounting initiatives as well as off-balance sheet
structures on the Company's financial statements.
* Meet periodically with management to review the Company's major
financial risk exposures and the steps management has taken to
monitor and control such exposures.
* Select and retain the outside independent auditor, and pre-approve
the fees to be paid to the independent auditor in connection with
* Pre-approve the retention of the independent auditor for any
non-audit service and the fee for such service, and
* Recommend to the Board guidelines for the Company's hiring of
employees of the independent auditor who were engaged on the
* Ensure that the independent auditor does not provide any non-audit
services prohibited by applicable Securities and Exchange Commission
rules, and obtain from the independent auditor assurance that
Section 10A of the Securities Exchange Act of 1934 has not been
* Review with the independent auditor any problems or difficulties the
auditor may have encountered and any management letter provided by
the auditor and the Company's response to that letter. Such review
* any difficulties encountered in the course of the audit work,
including any restrictions on the scope of activities or access to
required information, and any disagreements with management, and
* any changes required in the planned scope of the internal audit,
including responsibilities, budget and staffing.
* Advise the Board with respect to the Company's policies and
procedures regarding compliance with the applicable laws and
regulations and with the Company's Standards of Business Conduct.
* Prior to the audit, discuss with the outside auditors the overall
scope and plans for their audit, including the adequacy of staffing
* Review with management and the outside auditors the audited financial
statements and disclosures to be included in the Company's Annual
Report on Form 10-K (or the Annual Report to Stockholders if
distributed prior to the filing of Form 10-K), including major issues
regarding accounting and auditing principles or major changes to the
Company's auditing and accounting principles and practices, as
suggested by the independent auditor, internal auditors or
management, as well as the adequacy of internal controls that could
significantly affect the Company's financial statements.
* Review and consider with the outside auditors the matters required to
be discussed by Statement of Auditing Standards Nos. 61 and 90.
* As a Committee, or through the Committee chair, review with
management and the outside auditors earnings press releases, earnings
guidance provided to analysts and rating agencies, the Company's
interim financial results and disclosures to be included in the
Company's quarterly reports, including the results of the independent
auditors' review of the quarterly financial statements, to be filed
with the SEC prior to the Company's filing of the Form 10-Q.
* Request from the outside auditors annually a formal written statement
delineating all relationships between the auditor and the Company and
periodic reports regarding the auditor's independence.
* Discuss with the outside auditors any such disclosed relationships
and their impact on the outside auditor's independence.
* Oversee the independence of the outside auditor and have the ultimate
authority and responsibility to select (or nominate for stockholder
approval), evaluate and, where appropriate, replace the outside
* Meet separately periodically with management and the independent
auditors to discuss issues and concerns warranting the Committee's
* Discuss with management and the outside auditors the quality and
adequacy of the Company's internal controls, and review management's
assertion on the effectiveness of internal controls and the
independent auditors' report thereon.
* Establish procedures for the (1) receipt, retention, and treatment of
complaints regarding accounting, internal controls, or auditing
matters and the (2) confidential anonymous submission by employees of
concerns regarding questionable accounting or auditing matters.
* Prepare the report to be included in the Company's annual proxy
statement as required by SEC regulations.
This Charter is intended to provide a set of flexible guidelines for
the effective functioning of the Committee.