|
VARIAN SEMICONDUCTOR EQUIPMENT ASSOCIATES, INC.
AUDIT COMMITTEE CHARTER
- Purpose
The purpose of the Audit Committee is to assist the Board of Directors’ oversight of:
- the integrity of the Company’s financial statements;
- the Company’s compliance with legal and regulatory requirements;
- the registered public accounting firm’s qualifications and independence; and
- the performance of the Company’s internal audit function and registered public accounting firm.
- Structure and Membership
- Number. The Audit Committee shall consist of at least three members of the Board of Directors.
- Independence. Each member of the Audit Committee shall meet the independence requirements applicable to audit committees established by the Board of Directors in accordance with applicable laws, rules, regulations, listing rules and any other applicable regulatory requirements.
- Financial Literacy. Each member of the Audit Committee shall be able to read and understand fundamental financial statements, including the Company’s balance sheet, income statement, and cash flow statement, at the time of his or her appointment to the Audit Committee. At least one member of the Audit Committee shall be an “audit committee financial expert” (as defined by the rules and regulations of the Securities and Exchange Commission) and at least one member shall meet the financial sophistication standards required by the rules of The Nasdaq Stock Market, Inc. All members of the Audit Committee shall participate in continuing education programs as set forth in the rules developed by the Nasdaq Listing and Hearings Review Council.
- Chair. Unless the Board of Directors elects a Chair of the Audit Committee, the Audit Committee shall elect a Chair by majority vote.
- Compensation. The compensation of Audit Committee members shall be as determined by the Board of Directors. No member of the Audit Committee may receive any compensation from the Company other than director’s fees.
- Selection and Removal. Members of the Audit Committee shall be appointed by the Board of Directors. The Board of Directors may remove members of the Audit Committee from such committee, with or without cause.
- Other Directorships. Generally, no members of the Audit Committee may serve on more than three audit committees of publicly traded companies (including the Company) at one time, unless approved by the Board of Directors.
- Authority and Responsibilities
General
The Audit Committee shall discharge its responsibilities, and shall assess the information provided by the Company's management and the registered public accounting firm, in accordance with its business judgment. Management is responsible for the preparation, presentation, and integrity of the Company's financial statements, for the appropriateness of the accounting principles and reporting policies that are used by the Company and for the determination by the Company of the adequacy of internal controls over financial reporting. The registered public accounting firm is responsible for auditing the Company's financial statements, for reviewing the Company's unaudited interim financial statements and for reporting on the Company’s internal controls. The authority and responsibilities set forth in this Charter do not reflect or create any duty or obligation of the Audit Committee to plan or conduct any audit, to determine or certify that the Company's financial statements are complete, accurate, fairly presented, or in accordance with generally accepted accounting principles or applicable law, or to guarantee the registered public accounting firm’s report.
Oversight of Registered Public Accounting Firm
- Selection. The Audit Committee shall be solely and directly responsible for appointing, evaluating and, when necessary, terminating the registered public accounting firm. The Audit Committee may, in its discretion, seek stockholder ratification of the registered public accounting firm it appoints.
- Independence. The Audit Committee shall take, or recommend that the full Board of Directors take, appropriate action to oversee the independence of the registered public accounting firm. In connection with this responsibility, the Audit Committee shall obtain and review a formal written statement from the registered public accounting firm describing all relationships between the registered public accounting firm and the Company, including the disclosures required by Independence Standards Board Standard No. 1. The Audit Committee shall actively engage in dialogue with the registered public accounting firm concerning any disclosed relationships or services that might impact the objectivity and independence of the auditor.
- Compensation. The Audit Committee shall have sole and direct responsibility for setting the compensation of the registered public accounting firm. The Audit Committee is empowered, without further action by the Board of Directors, to cause the Company to pay the compensation of the registered public accounting firm established by the Audit Committee.
- Pre-approval of Services. The Audit Committee shall pre-approve all audit services, which may entail providing comfort letters in connection with securities underwritings, and permitted non-audit services (other than de minimus non-audit services as defined by the Sarbanes-Oxley Act of 2002 and the applicable rules thereunder) to be provided to the Company by the registered public accounting firm. The Audit Committee shall cause the Company to disclose in its SEC periodic reports the approval by the Audit Committee of any non-audit services to be performed by the registered public accounting firm.
- Oversight. The registered public accounting firm shall report directly to the Audit Committee and the Audit Committee shall have sole and direct responsibility for overseeing the registered public accounting firm, including resolution of disagreements between Company management and the registered public accounting firm regarding financial reporting. In connection with its oversight role, the Audit Committee shall review the effectiveness of the audit of the Company’s financial statements and the audit process and, from time to time as appropriate, obtain and review the reports required to be made by the registered public accounting firm pursuant to paragraph (k) of Section 10A of the Securities Exchange Act of 1934 regarding:
- critical accounting policies and practices;
- alternative treatments of financial information within generally accepted accounting principles that have been discussed with Company management, ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the registered public accounting firm; and
- other material written communications between the registered public accounting firm and Company management.
Review of Audited Financial Statements
- Discussion of Audited Financial Statements. The Audit Committee shall review and discuss with the Company's management and the registered public accounting firm the Company's audited financial statements, including the matters about which Statements on Auditing Standards §380 requires discussion.
- Recommendation to Board Regarding Financial Statements. The Audit Committee shall consider whether it will recommend to the Board of Directors that the Company's audited financial statements be included in the Company's Annual Report on Form 10-K.
- Audit Committee Report. The Audit Committee shall prepare for inclusion where necessary in a proxy or information statement of the Company relating to an annual meeting of security holders at which directors are to be elected (or special meeting or written consents in lieu of such meeting), any report required by the rules and regulations of the Securities and Exchange Commission.
Review of Other Financial Disclosures
- Registered Public Accounting Firm Review of Interim Financial Statements. The Audit Committee shall direct the registered public accounting firm to use its best efforts to perform all reviews of interim financial information prior to disclosure by the Company of such information and to discuss promptly with the Audit Committee and the Chief Financial Officer any matters identified in connection with the auditor's review of interim financial information which are required to be discussed by Statement on Auditing Standards Nos. 61, 71 and 90. The Audit Committee shall direct management to advise the Audit Committee in the event that the Company proposes to disclose interim financial information prior to completion of the registered public accounting firm’s review of interim financial information.
Controls and Procedures
- Oversight. The Audit Committee shall coordinate the Board of Director’s oversight and assessment of the effectiveness of the Company’s internal and external financial reporting processes, the Company’s internal accounting controls, the Company’s disclosure controls and procedures and the Company’s code of conduct. The Audit Committee shall review with the Company’s management and the registered public accounting firm, the adequacy of internal controls over financial reporting, the scope and results of the registered public accounting firm’s review of management’s assessment of internal control over financial reporting, the disclosure regarding internal accounting controls and disclosure controls and procedures and attestations required by applicable rules and regulations of the Securities and Exchange Commission. The Audit Committee shall receive and review the certifications of the CEO and CFO required by applicable laws, rules, regulations, listing rules and any other applicable regulatory requirements.
- Procedures for Complaints. The Audit Committee shall establish procedures for (i) the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters; and (ii) the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters.
- Oversight of Related Person Transactions. The Audit Committee shall review the Company’s policies and procedures for reviewing and approving or ratifying “related person transactions” (defined as transactions required to be disclosed pursuant to Item 404 of Regulation S-K), including the Company’s Related Person Transaction Policy, and recommend any changes to the Board. In accordance with the Company’s Related Person Transaction Policy and Nasdaq rules, the Audit Committee shall conduct appropriate review and oversight of all related person transactions for potential conflict of interest situations on an ongoing basis.
- Additional Powers. The Audit Committee shall have such other duties as may be delegated from time to time by the Board of Directors.
- Procedures and Administration
- Meetings. The Audit Committee shall meet at least quarterly and as often as it deems necessary in order to perform its responsibilities. The Audit Committee shall meet separately with (i) the registered public accounting firm, (ii) Company management and (iii) the Company’s internal auditors. The Audit Committee shall keep such records of its meetings as it shall deem appropriate. The Audit Committee shall be governed by the same rules regarding meetings, actions without meetings, notices, waivers of notice, quorum and voting requirements as are applicable to the Board of Directors.
- Subcommittees. The Audit Committee may form and delegate authority to grant pre-approval of audit or permitted non-audit services to one or more subcommittees (including a subcommittee consisting of a single member), as it deems appropriate from time to time under the circumstances. Any decision of a subcommittee to pre-approve audit or non-audit services shall be presented to the full Audit Committee at its next scheduled meeting.
- Reports to Board. The Audit Committee shall report regularly to the Board of Directors.
- Charter. At least annually, the Audit Committee shall review and reassess the adequacy of this Charter (which shall be included in the Company’s annual proxy statement at least once every three years or promptly after any significant amendment) and recommend any proposed changes to the Board for approval.
- Independent Advisors. The Audit Committee shall have the authority to engage and determine funding for such independent legal, accounting and other advisors as it deems necessary or appropriate to carry out its responsibilities. Such independent advisors may be the regular advisors to the Company. The Audit Committee is empowered, without further action by the Board of Directors, to cause the Company to pay the compensation of such advisors as established by the Audit Committee.
- Investigations. The Audit Committee shall have the authority to conduct or authorize investigations into any matters within the scope of its responsibilities as it shall deem appropriate, including the authority to request any officer, employee or advisor of the Company to meet with the Audit Committee or any advisors engaged by the Audit Committee..
.
|