2003 Audit Charter: SLR

CHARTER FOR THE
AUDIT COMMITTEE
OF
SOLECTRON CORPORATION
I. PURPOSE:
The purpose of the Audit Committee of the Board of Directors (the "Board") of Solectron
Corporation (the "Company") is to:
(A) assist the Board in oversight of (1) the integrity of the Company's financial statements;
(2) the independent auditors' qualifications and independence; and (3) the performance
of the Company's internal audit department and independent auditors;
(B) monitor (1) the integrity of the Company's financial reporting process, systems, and
systems of internal controls regarding finance, accounting, business conduct, and
regulatory compliance; and (2) the independence and performance of the Company's
independent auditors and internal audit department;
(C) provide an avenue of communication among the independent auditors, management, the
internal audit department, and the Board;
(D) oversee adherence to, and continuous improvement of, the Company's policies and
procedures regarding finance, accounting, business conduct, and regulatory compliance;
(E) review areas of potential significant financial risk to the Company;
(F) prepare the report that SEC rules require be included in the Company's annual proxy
statement; and,
(G) perform other duties as assigned by the Board.
The Audit Committee has the authority to conduct any investigation appropriate to fulfilling its
responsibilities, and it has direct access to the independent auditors as well as anyone in the
organization. The Audit Committee has the ability to retain, at the Company's expense, special legal,
accounting, or other consultants or experts it deems necessary in the performance of its duties.
At least annually, the Audit Committee shall conduct an evaluation of its performance and report
the results of that assessment to the Board.
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II. COMMITTEE MEMBERSHIP AND ORGANIZATION:
The Audit Committee shall be comprised of at least three directors of the Board. Each member of
the Audit Committee shall be "independent" and "financially literate" (as defined by NYSE
requirements and SEC rules). At least one member of the Audit Committee shall qualify as a
"financial expert" (as defined) and have accounting or related financial management expertise, as the
Board interprets such qualification in its business judgment, and in accordance with NYSE
requirements and SEC rules.
Audit Committee members shall be appointed by the Board on the recommendation of the
Nominating Committee. If an Audit Committee Chair is not designated or present, the members of
the Audit Committee may designate a Chair by majority vote of the Audit Committee membership.
No Audit Committee member shall simultaneously serve on the audit committees of more than
three public companies, subject to the Board's determination that such simultaneous service would
not impair the ability of such member to effectively serve on the Audit Committee and such
determination shall be disclosed in the Company's annual proxy statement.
No Audit Committee member shall receive compensation and benefits from the Company,
directly or indirectly, for services as a consultant or a legal or financial advisor, except the fees that
they receive for services as a director or Board Committee member.
The Audit Committee shall meet at least four times annually, or more frequently as circumstances
dictate. The Audit Committee shall meet separately, at least annually, in private sessions with
management, with the Head of the internal audit department, the independent auditors, and among the
members to perform its oversight functions most effectively, including discuss any matters that the
Audit Committee or each of these groups believes should be discussed. In addition, the Audit
Committee, or at least its Chair, should communicate with management and the independent auditors
quarterly to review the Company's financial statements and significant findings based upon the
independent auditors' limited review procedures.
III. COMMITTEE RESPONSIBILITIES AND DUTIES:
Review Procedures
1. Review and reassess the adequacy of this Charter at least annually. Submit the Charter to the
Board for approval and have the document published at least every three years in accordance with
SEC regulations.
2. Review the Company's annual audited financial statements and quarterly financial statements,
including the Company's disclosures under "Management's Discussion and Analysis of Financial
Condition and Results of Operations," prior to filing with the SEC. Review should include
discussion with management and independent auditors of significant issues regarding accounting
principles, estimates, practices, and judgments.
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3. In consultation with management, the independent auditors, and the internal auditors, consider the
integrity of the Company's financial reporting processes, and the effectiveness and adequacy of
the Company's internal controls systems. Review significant findings prepared by the
independent auditors and the internal audit department together with management's responses.
4. Discuss significant financial risk exposures and the steps management has taken to identify,
assess, monitor, manage, mitigate, and report such exposures.
5. Review with management and the independent auditors any significant accounting, legislative,
and regulatory developments which may impact the financial reporting environment for the
Company
6. Review and discuss with financial management and the independent auditors the Company's
quarterly financial results and draft press release prior to the release of earnings and/or the
Company's quarterly financial results prior to filing or distribution. Discuss any significant
changes to the Company's accounting principles and any items required to be communicated by
the independent auditors in accordance with SAS 61 (see item 10). The Chair of the Audit
Committee may represent the entire Audit Committee for purposes of this review.
7. Report after every Audit Committee meeting to the full Board on the Audit Committee's
activities, especially any significant issues and their resolution.
Independent Auditors
8. The Audit Committee shall have the sole authority to approve the hiring and firing of the
independent auditors, all audit engagement fees and terms, and all non-audit engagements (as
may be permissible) with the independent auditors. The Audit Committee shall review the
performance of the independent auditors and pre-approve audit and non-audit services provided
to the Company by the independent auditors and retain and terminate the independent auditors; in
this regard, the Audit Committee may delegate to one or more designated members the authority
to pre-approve audit and permissible non-audit services provided to the Company by the
independent auditors, provided such pre-approval decisions are presented to the full Audit
Committee at a later scheduled meeting.
9. Review the independent auditors' engagement letter and audit plan discuss scope, staffing,
locations, reliance upon management and internal audit, and general audit approach.
10. Prior to releasing the year-end earnings, discuss the results of the audit with the independent
auditors. Discuss certain matters required to be communicated to audit committees in accordance
with AICPA SAS 61. Regularly review with the independent auditors any audit problems or
difficulties and management's response.
11. Consider the independent auditors' judgments about the quality and appropriateness of the
Company's accounting principles as applied in its financial reporting.
12. At least on an annual basis, obtain and review a report by the independent auditors describing: the
audit firm's internal quality control procedures, and material issues raised by the most recent
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internal quality-control review, or peer review, of the audit 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 audit firm, and any steps taken to
deal with any such issues.
13. On an annual basis, review the independence of the independent auditors. Discuss with them all
significant relationships they have with the Company that could impair their independence. Set
clear hiring policies for employees or former employees of the independent auditors.
Internal Audit Department and Legal Compliance
14. Review the budget, plan, and changes in plan, activities, organizational structure, and
qualifications of the internal audit department, as needed.
15. Review the appointment, performance, and replacement of the Head of the internal audit
department.
16. Review significant reports prepared by the internal audit department together with management's
response and follow-up to these reports.
17. Review, approve, and monitor the content of and adherence to the Company's Code of Business
Conduct, including the codes of ethics for the Company's senior financial officers and any other
related policies.
18. Annually review a summary of Director and Officer T & E expenses, and any director and officer
related party transactions or conflicts of interest.
19. On at least an annual basis, review with the Company's counsel any legal matters that could have
a significant impact on the organization's financial statements, the Company's compliance with
applicable laws and regulations, and inquiries received from regulators or governmental agencies.
20. Annually prepare a report to shareholders as required by the SEC. The report should be included
in the Company's annual proxy statement.
21. Oversee compliance with the requirements of the SEC for disclosure of independent auditors'
services and Audit Committee's members, qualifications and activities.
22. Establish the procedures for receiving, retaining, and treating complaints received by the
Company regarding accounting, internal accounting controls, or auditing matters and procedures
for the confidential, anonymous submission by employees of concerns regarding questionable
accounting or auditing matters.