Investors :: Corporate Governance :: Audit Committee Charter
Audit Committee Charter
TERRAVIA HOLDINGS, INC.
A Delaware corporation
Audit Committee Charter
Adopted April 28, 2011
The Audit Committee is created by the Board of Directors of the Company (the “Board”) to:
- assist the Board in its oversight of
o the integrity of the financial statements of the Company;
o the qualifications, independence and performance of the Company’s independent auditor;
o the performance of the Company’s internal audit function; and
o compliance by the Company with legal and regulatory requirements; and
- prepare the Audit Committee report that the Securities and Exchange Commission rules require to be included in the Company’s annual proxy statement.
The Audit Committee shall consist of at least three members, comprised solely of directors deemed by the Board to be independent and who meet the independence and experience requirements of Nasdaq. The Board shall recommend nominees for appointment to the Committee annually and as vacancies or newly created positions occur. Committee members shall be appointed by the Board and may be removed by the Board at any time. The Board shall designate the Chairman of the Committee.
In addition to any other responsibilities that may be assigned from time to time by the Board, the Audit Committee is responsible for the following matters.
The Audit Committee shall be directly responsible for the appointment, compensation, retention and oversight of the work of any accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company (subject, if applicable, to stockholder ratification). Each such accounting firm shall report directly to the Audit Committee.
The Audit Committee shall pre-approve the audit services and non-audit services to be provided by the Company’s independent auditor pursuant to pre-approval policies and procedures established by the Audit Committee. The Audit Committee may delegate its authority to pre-approve services to one or more Audit Committee members, provided that such designees present any such approvals to the full Audit Committee at the next Audit Committee meeting.
The Audit Committee shall discuss with the independent auditor its responsibilities under generally accepted auditing standards, review and approve the planned scope and timing of the independent auditor’s annual audit plan(s) and discuss significant findings from the audit, including any problems or difficulties encountered.
The Audit Committee shall evaluate the independent auditor’s qualifications, performance and independence, and shall present its conclusions with respect to the independent auditor to the full Board on at least an annual basis. As part of such evaluation, at least annually, the Audit Committee shall:
- obtain and review a report or reports from the Company’s independent auditor;
o describing the independent auditor’s internal quality-control procedures;
o describing any material issues raised by (i) the most recent internal quality-control review, or peer review, of the auditing firm, or (ii) any inquiry or investigation by governmental or professional authorities, within the preceding five years, regarding one or more independent audits carried out by the auditing firm; and any steps taken to deal with any such issues;
o describing all relationships between the independent auditor and the Company consistent with applicable requirements of the PCAOB regarding the independent auditor’s communications with the audit committee concerning independence; and
o assuring that Section 10A of the Securities Exchange Act of 1934 has not been implicated;
- engage in a dialogue with the auditor with respect to any disclosed relationships or services that may impact the objectivity and independence of the auditor and take, or recommend that the full Board take, appropriate action to oversee the independence of the auditor;
- review and evaluate the lead audit partner of the independent auditor team(s);
- confirm and evaluate the rotation of the audit partners on the audit engagement team partners as required by law;
- consider whether the independent auditor should be rotated, so as to assure continuing auditor independence; and
- obtain the opinion of management and the internal auditors of the independent auditor’s performance.
The Audit Committee shall establish policies for the Company’s hiring of current or former employees of the independent auditor.
Financial Statements; Disclosure and Other Risk Management and Compliance Matters
The Audit Committee shall meet to review and discuss with management and the independent auditor:
- the annual audited financial statements, including reviewing the Company’s specific disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” prior to the filing of the Company’s Form 10-K; and
- the quarterly financial statements, including reviewing the Company’s specific disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” prior to the filing of the Company’s Form 10‑Q.
- The Audit Committee shall review with management, the internal auditors and the independent auditor, in separate meetings whenever the Audit Committee deems appropriate:
- ·any analyses or other written communications prepared by management and/or the independent auditor 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;
- the critical accounting policies and practices of the Company;
- the effect of off-balance sheet transactions and structures;
- any major issues regarding accounting principles and financial statement presentations, including any significant changes in the Company’s selection or application of accounting principles; and
- the effect of regulatory and accounting initiatives.
The Audit Committee shall, in conjunction with the Chief Executive Officer and Chief Financial Officer of the Company, review the Company’s disclosure controls and procedures and internal control over financial reporting. The review of internal control over financial reporting shall include whether there are any significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting that are reasonably likely to affect the Company’s ability to record, process, summarize and report financial information and any fraud involving management or other employees with a significant role in internal control over financial reporting. The Audit Committee shall also review any special audit steps adopted in light of material control deficiencies.
The Audit Committee shall review and discuss with the independent auditor any audit problems or difficulties and management’s response thereto, including those matters required to be discussed with the Audit Committee by the auditor pursuant to established auditing standards, as amended, such as:
- any restrictions on the scope of the independent auditor’s activities or on access to requested information;
- any accounting adjustments that were noted or proposed by the auditor but were “passed” (as immaterial or otherwise);
- any communications between the audit team and the audit firm’s national office regarding auditing or accounting issues presented by the engagement;
- any management or internal control letter issued, or proposed to be issued, by the auditor; and
- any significant disagreements between management and the independent auditor.
In connection with its oversight responsibilities, the Audit Committee shall be directly responsible for the resolution of disagreements between management and the auditor regarding the Company’s financial reporting.
The Audit Committee shall review the Company’s policies and practices with respect to risk assessment and risk management, including discussing with management the Company’s major financial risk exposures and the steps that have been taken to monitor and control such exposures.
The Audit Committee shall establish procedures for:
- the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and
- the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters.
The Audit Committee shall prepare the Audit Committee report that the Securities and Exchange Commission rules require to be included in the Company’s annual proxy statement.
The Audit Committee shall review the Company’s compliance with laws and regulations, including major legal and regulatory initiatives. The Audit Committee shall meet and discuss these matters with management and others as appropriate, including the General Counsel.
Reporting to the Board
The Audit Committee shall report to the Board periodically. This report shall include a review of any issues that arise with respect to the quality or integrity of the Company’s financial statements, the Company’s compliance with legal or regulatory requirements, the independence and performance of the Company’s independent auditor, the performance of the internal audit function and any other matters that the Audit Committee deems appropriate or is requested to include by the Board.
At least annually, the Audit Committee shall evaluate its own performance and report to the Nominating and Corporate Governance Committee on such evaluation.
The Audit Committee shall periodically review and assess the adequacy of this charter and recommend any proposed changes to the Nominating and Corporate Governance Committee.
The Audit Committee is authorized (without seeking Board approval) to retain special legal, accounting or other advisors and may request any officer or employee of the Company or the Company’s outside counsel or independent auditor to meet with any members of, or advisors to, the Audit Committee.
The Audit Committee shall have available appropriate funding from the Company as determined by the Audit Committee for payment of:
- compensation to any accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company;
- compensation to any advisers employed by the Audit Committee; and
- ordinary administrative expenses of the Audit Committee that are necessary or appropriate in carrying out its duties.
The Audit Committee may delegate its authority to subcommittees or the Chairman of the Audit Committee when it deems appropriate and in the best interests of the Company.
The Audit Committee shall meet as often as it determines is appropriate to carry out its responsibilities under this charter, but not less frequently than quarterly. The Chairman of the Audit Committee, in consultation with the other committee members, shall determine the frequency and length of the committee meetings and shall set meeting agendas consistent with this charter.
The Audit Committee shall meet separately, periodically, with management, with internal auditors (or other personnel responsible for the internal audit function) and with the independent auditor.
It is not the duty of the Audit Committee to plan or conduct audits or to determine that the Company’s financial statements are complete and accurate and are in accordance with GAAP and applicable rules and regulations. This is the responsibility of management and the independent auditor. Furthermore, while the Audit Committee is responsible for reviewing the Company’s policies and practices with respect to risk assessment and management, it is the responsibility of the CEO and senior management to determine the appropriate level of the Company’s exposure to risk.
Gary M. Pfeiffer has been a member of our board of directors since 2014. He retired in 2006 as the Senior Vice President and Chief Financial Officer of E.I. du Pont de Nemours and Company. He joined DuPont in 1974, where he held positions of increasing responsibility in finance and international operations, as well as in various DuPont divisions. Mr. Pfeiffer served as Secretary of Finance for the state of Delaware from January through June 2009. Mr. Pfeiffer is a director of Quest Diagnostics Incorporated and InterNAP, Inc. and served as a director of Talbots, Inc. from 2005 to 2012. He is the non-executive Chair of the Board of Directors of Christiana Care Health System, a regional hospital system located in Delaware. Mr. Pfeiffer is a valuable member of the board of directors due to his extensive executive experience, including in corporate finance, accounting, international operations, and strategic planning, with a multinational corporation operating in complex industries.
James R. Craigie has been a member of the board of directors since 2013. He has been the Chairman of Church & Dwight Co., Inc., a leading developer, manufacturer and marketer of household and personal care consumer packaged goods, since 2007. From June 2007 to December 2015, he was the Chairman and Chief Executive Officer of Church & Dwight, and from July 2004 through May 2007, he was the President and Chief Executive Officer of Church & Dwight. He has served on the board of directors of Church & Dwight since 2004. From December 1998 through September 2003, he was President, Chief Executive Officer and a member of the board of directors of Spalding Sports Worldwide and its successor, Top-Flite Golf Co. During the period from 1983 to November 1998, Mr. Craigie held various senior management positions with Kraft Foods Inc. Prior to entering private industry, he served for six years as an officer in the U.S. Navy/Department of Energy working for Admiral Rickover. He currently serves as a member of the boards of directors of Bloomin’ Brands, Inc., a casual dining company and the Gettysburg Foundation, a non-profit foundation involved with restoring the Gettysburg battlefields. Mr. Craigie holds an undergraduate degree from the University of Rochester and an M.B.A. from Harvard University. Mr. Craigie is a valuable member of the board of directors due to his consumer products and brand building experience, particularly in the food, household and personal care sectors, as well as his leadership experience.
Jerry Fiddler has been a member of our board of directors since 2004. He served as Chairman of our board of directors from 2004 to 2016, and has served as lead director since 2016. From 1981 to 2009 Mr. Fiddler was, at various times, the founder, Chief Executive Officer, Chairman and/or director of Wind River Systems, Inc., a publicly held software company, until it was acquired by Intel Corporation, a semiconductor company. Mr. Fiddler is the principal/CEO of Zygote Ventures, LLC. He serves on a number of private company and non-profit boards. Mr. Fiddler obtained an M.S. from the University of Illinois. Mr. Fiddler is a valuable member of the board of directors due to his leadership and corporate governance experience, his experience as Chief Executive Officer and Chairman of a public company, his service on the boards of directors of other private companies and non-profit entities and his extensive knowledge of the company due to his service on the board of directors since 2004, which brings historic understanding and continuity to the board of directors.