The purpose of the Audit Committee of the board of directors is to assist the board of directors in fulfilling its responsibilities for generally overseeing:
The committee is also responsible for preparing the report required by Securities and Exchange Commission (SEC) rules to be included in the company's proxy statement for the annual meeting of stockholders, and for performing such other duties and responsibilities as are enumerated in or consistent with this charter.The committee shall also serve as the company's qualified legal compliance committee subject to the provisions of Exhibit A, the Qualified Legal Compliance Committee Charter, until such time as the board of directors shall appoint a qualified legal compliance committee.
The following are the principal recurring responsibilities of the committee. The committee may perform such other functions as are consistent with its purpose and applicable law and as the board of directors or the committee deem appropriate. In carrying out its responsibilities, the committee believes its policies and procedures should remain flexible, in order to best react to changing conditions and circumstances.
The function of the Audit Committee is primarily one of oversight. The company's management is responsible for preparing the company's financial statements, and the independent auditor is responsible for auditing and reviewing those financial statements. The committee is responsible for assisting the board of directors in overseeing the conduct of these activities by management and the independent auditor. The committee is not responsible for providing any expert or special assurance as to the financial statements or the independent auditor's work.
Supplemental Description of
Audit Committee Member Qualifications and Requirements
The following details the requirements for service on the audit committee set forth in the attached audit committee charter that apply to the members of the audit committee:
Each member of the committee must meet the independence requirements of the Nasdaq Stock Market (Nasdaq), applicable rules and regulations promulgated by the SEC, standards established by the board of directors and other applicable laws. For purposes of this section, "family member" means a person's spouse, parents, children and siblings, whether by blood, marriage or adoption, or anyone residing in such person's home. A director is not independent if, among other factors, he or she:
Each member of the committee must be able to read and understand fundamental financial statements, including the company's balance sheet, income statement and cash flow statement.
No member of the committee may have participated in the preparation of the financial statements of the company or any of the company's current subsidiaries at any time during the past three years.
Audit Committee Financial Expert Requirement
At least one member of the committee shall be an "audit committee financial expert," as determined by the board of directors in accordance with SEC rules. An "audit committee financial expert" must have acquired, through either (i) education and experience as a principal financial officer, principal accounting officer, controller, public accountant or auditor or experience in one or more positions that involve the performance of similar functions, (ii) experience actively supervising a principal financial officer, principal accounting officer, controller, public accountant, auditor or person performing similar functions, (iii) experience overseeing or assessing the performance of companies or public accountants with respect to the preparation, auditing or evaluation of financial statements or (iv) other relevant experience, the following attributes:
At least one member of the committee shall be a financial expert as determined by the board of directors in accordance with the Nasdaq rules. This director must have past employment experience in finance or accounting, requisite professional certification in accounting, or any other comparable experience or background which results in the director's financial sophistication, including being or having been a chief executive officer, chief financial officer or other senior officer with financial oversight responsibilities. The financial expert required under the Nasdaq rules and the "audit committee financial expert" required under the SEC rules may be the same director if the board of directors determines such director meets the applicable requirements under both the Nasdaq and SEC rules.
Download PDF 20.6 KB = Add File to Briefcase
Joseph M. Zaelit