Applied Biosystems

Audit/Finance Committee Charter

(as amended through April 3, 2004)span

 

Audit Committee Charter Quicklinks

Organization

Purpose of the Committee

Responsibilities and Duties

Investigations, Advisors, and Funding.

Performance Evaluation.

Charter Review.




I.Organization.

The Audit/Finance Committee (the "Committee") shall consist of three or more directors as designated by the Board of Directors. All members of the Committee shall satisfy the independence, financial literacy, and expertise requirements as defined in the applicable listing standards of the New York Stock Exchange and applicable law.

Meetings of the Committee shall be called by the Chairman of the Board, the Secretary of the Corporation, a Co-Chairman of the Committee, or any two Committee members. The determination of a quorum for the transaction of business at any meeting shall be made in accordance with the By-Laws of the Corporation, and all matters shall be determined by a majority vote of the members present.

The Committee may delegate any of its responsibilities to a subcommittee comprised of one or more members of the Committee.

Back to Top

II. Purpose of the Committee.

The primary purpose of the Committee shall be to provide assistance to the Board of Directors in fulfilling its oversight responsibility to stockholders, potential stockholders, the investment community, and regulators relating to (1) the quality and integrity of the financial statements of the Corporation, (2) the Corporation's compliance with legal and regulatory requirements, (3) the independent auditors' qualifications, independence, and performance, (4) the performance of the Corporation's internal audit function, and (5) the fulfillment of the other responsibilities set forth herein.

The Committee's role is one of oversight. Management is responsible for preparing the Corporation's financial statements, and the independent auditors are responsible for auditing those financial statements. Management is responsible for the fair presentation of the information set forth in the financial statements in conformity with generally accepted accounting principles ("GAAP"). The independent auditors' responsibility is to provide its opinion, based on their audits, that the financial statements fairly present, in all material respects, the financial position, results of operations, and cash flows of the Corporation in conformity with GAAP. However, it is not the duty of the Committee to plan or conduct audits or to determine that the Corporation's financial statements are in conformity with GAAP, or to assure compliance with applicable laws and regulations, the Corporation's ethical standards, or environmental compliance programs.

Back to Top

III. Responsibilities and Duties.

In furtherance of the Committee's purpose, and in addition to any other responsibilities that may be assigned to it from time to time by the Board, the Committee shall have the following responsibilities and duties:

General

                                             On a periodic basis, meet separately with management, the Internal Audit Department, and the Corporation's independent auditors so as to enable the Committee to perform its oversight role hereunder.

                                             Permit direct access to the Committee by the Vice President, Internal Audit, the Director of Corporate Compliance, the Corporation's independent auditors, or any other person, with respect to control, accounting, finance, or compliance matters.

                                             Report its activities to the full Board on a regular and timely basis so that the Board is kept informed of its activities.

Independent Accountants

                                             Be directly responsible for the appointment (subject to ratification by the stockholders), retention, compensation, evaluation, oversight, and, where appropriate, replacement, of 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 performing other audit, review, or attest services. The independent auditors shall report directly to the Committee.

                                             Review and approve each year the scope and plan of the audit to be performed by the independent auditors, including areas of special emphasis where appropriate.

                                             Establish guidelines for the pre-approval of all audit and non-audit services to be performed by the independent auditors and, in accordance with such procedures, pre-approve all audit and non-audit services to be performed by the independent auditors.

                                             Following completion of the annual audit, review with management, the independent auditors, and the Internal Audit Department (1) the results of the audit, including any difficulties encountered or any restrictions on the scope of the independent auditors' activities or access to required or requested information, during the course of the audit, (2) any major issues as to the adequacy of the Corporation's internal controls, any special audit steps adopted in light of material control weaknesses or significant deficiencies, and any significant recommendations for change or improvement in administrative and internal control procedures, (3) management's handling of any proposed audit adjustments, (4) any significant disagreement among management and the independent accountants or the Internal Audit Department, and (5) analyses prepared by management and/or the independent accountants 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 GAAP methods on the financial statements.

                                             Review, at least annually, a report from the independent auditors as required by the Independence Standards Board (or any successor body) regarding the auditors' independence, and discuss such report with the independent auditors, and if so determined by the Committee, take appropriate action to satisfy itself of the independence of the auditors.

                                             Review, at least annually, a report by the independent auditors describing (1) such firm's internal quality-control procedures, (2) any material issues raised by the most recent internal quality-control review, or peer review (if applicable), of such firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting any independent audits carried out by such firm and the response of such firm to same, and (3) (to assess such firm's independence) all relationships between the independent auditors and the Corporation.

                                             Following completion of the annual audit and in conjunction with the other annual reviews listed above, review with management and the Internal Audit Department the independent auditors' qualifications, performance, and independence, including review and evaluation of the lead partner, and present to the Board the Committee's conclusions regarding this review.

                                             Establish hiring policies for employees or former employees of the independent auditors.

Financial Reporting

                                             Review with management and the independent auditors the Corporation's quarterly and annual financial statements, notes, and related information prepared by management, including the Corporation's disclosures under "Management's Discussion and Analysis of Financial Condition and Results of Operations" and any report or opinion rendered by the independent auditors, and recommend that the annual financial statements, notes, and related information be included in the Corporation's Annual Report on Form 10-K.

                                             Review significant accounting and reporting issues, including recent accounting and regulatory pronouncements and initiatives, and any off-balance sheet structures, and consider their potential impact on the Corporation's financial statements.

                                             Review major issues regarding accounting principles and financial statement presentations, including significant changes to the Corporation's selection or application of accounting principles and practices and auditing practices.

                                             Discuss generally with management the Corporation's earnings press releases, as well as financial information and earnings guidance provided to analysts and ratings agencies.

Internal Audit

                                             Review, and discuss with the independent auditors, the activities, staffing, qualifications, and department budget of the Internal Audit Department and review and approve each year the scope and plan of audit services to be performed by the Internal Audit Department.

                                             Review policies and procedures with respect to officers' expense accounts, including their use of corporate assets, and consider the results of any review of these areas by the Internal Audit Department or the independent auditors.

                                             Review significant matters contained in reports prepared by the Internal Audit Department.

Corporate Compliance

                                             " Regularly monitor the functioning of the Corporation's programs for compliance with legal and ethical standards.

                                             " Periodically review significant pending litigation affecting the Corporation and the findings of any significant examinations or investigations by judicial, governmental, or regulatory agencies.

                                             " Review policies and practices with respect to intergroup transactions and intergroup conflicts or potential conflicts under the Corporation's tracking stock structure.

                                             " Establish procedures for the receipt, retention, and treatment of complaints received by the Corporation regarding accounting, internal accounting controls, or auditing matters, and for the confidential, anonymous submissions by employees of concerns regarding questionable accounting or auditing matters.

Corporate Finance

                                             Review the Corporation's financial strategies, policies, and programs, its capital structure, and the management of its Balance Sheet.

                                             Review and make suggestions concerning management recommendations to the Board of Directors regarding financings for the Corporation, including the sale or purchase of corporate securities and the placement of long-term debt.

                                             Review the employment and security of the Corporation's liquid assets, including review of short and long-term investment and currency risk strategies.

                                             Review and make recommendations to the Board of Directors regarding financial impact and methods of financing acquisitions and divestitures by the Corporation.

                                             Review the Corporation's dividend policies and payments.

                                             Review the Corporation's pension and savings plan policies, procedures, and performance.

                                             Review the Corporation's guidelines and policies with respect to risk assessment and risk management.

Disclosure Controls and Procedures and Internal Control Over Financial Reporting

                                             Review the process used by management to evaluate and report on the effectiveness of, and changes in, internal control over financial reporting, and to ascertain the occurrence of any fraud involving management or other employees who have a significant role in the Corporation's internal control over financial reporting.

                                             Review any disclosures made to the Committee by the Corporation's Chief Executive Officer or Chief Financial Officer during their certification process for the Form 10-K and Form 10-Q regarding any significant deficiencies or material weaknesses in the design or operation of the Corporation's internal control over financial reporting or any fraud involving management or other employees who have a significant role in the Corporation's internal control over financial reporting.

Annual Report

                                             Prepare a report of the Committee for inclusion in the Corporation's proxy statement, in accordance with applicable rules and regulations.

Back to Top

IV. Investigations, Advisors, and Funding.

The Committee shall have the authority to conduct or authorize investigations into any matters within its scope of responsibilities and shall have the authority to retain independent legal, accounting, or other advisors as it deems necessary or appropriate to conduct such investigations or to carry out its responsibilities. The Corporation shall provide for appropriate funding, as determined by the Committee, for the payment of compensation to such legal, accounting, or other advisors and to the Corporation's independent auditors for the purpose of preparing or issuing an audit report or performing other audit, review, or attest services. The Corporation shall also provide for appropriate funding, as determined by the Committee, for funding the ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties.

Back to Top

V. Performance Evaluation.

The Committee shall evaluate its performance on an annual basis

Back to Top

VI. Charter Review.

The Committee shall review and reassess the adequacy of this Charter on an annual basis.