Audit Committee Charter

Audit Committee Charter

AUDIT REVIEW COMMITTEE CHARTER

  • Purpose
      • The primary purpose of the Audit Review Committee (the “Committee”) shall be to assist the Chase Corporation Board of Directors (the “Board”) in fulfilling its oversight responsibilities to shareholders, potential shareholders, investment community and others relating to the integrity of the Company’s financial reporting process, including the performance of the Company’s systems of internal accounting and financial controls, the Company’s internal audit function, the independent auditors’ qualifications and independence, the Company’s process for monitoring compliance with applicable legal, regulatory and ethics programs, and the annual independent audit of the Company’s financial statements.  A purpose of the Committee shall also be to prepare the Audit Review Committee Report to be included in the Company’s proxy statement for the annual meeting of stockholders and any other meeting of stockholders at which members of the Board are to be elected. In discharging its oversight role, the Committee shall have the power to investigate any matter that comes to its attention, with full access to all books, records, facilities and personnel of the Company.  The Committee shall also have the power to retain (at the Company’s expense) outside counsel, auditors or other advisors as it determines necessary to carry out its purposes and to determine the engagement terms and fees of such outside counsel, auditors and other advisors.  The independent auditors are ultimately accountable to the Committee and shall report directly to the Committee.
      • The Committee shall review the adequacy of this Charter on an annual basis and recommend any proposed changes to the Board for approval.
      • Committee Structure and Operations
        • The Committee shall be comprised of not less than three (3) members of the Board, each of whom shall be independent as defined below.  The Committee’s composition will meet the requirements of the listing standards of the New York Stock Exchange and all applicable federal securities laws.  No member of the Committee shall serve on the audit committee of more than two other public companies.  If any member of the Committee ceases to meet these standards or requirements, the Committee member shall resign from the Committee. The members of the Committee shall be appointed by the Board, on the recommendation of the Nominating and Governance Committee.
        • Members of the Committee are prohibited from accepting any consulting, advisory, or other compensatory fees from the company, or any subsidiary thereof, other than in the member’s capacity as a member of the Board of Directors and any Board committee.  Members may not be an “affiliated person” of the issuer or any subsidiary apart from his or her capacity as a member of the Board and any board committee.
    • Independence
      • Committee members shall meet the standards for independence of the New York Stock Exchange and any applicable federal securities law.
    • Financial Expertise and Experience
      • At least one (1) member of the Committee shall be an “audit committee financial expert” as defined in rules promulgated by the Securities and Exchange Commission.  All members of the Committee shall be financially literate, as defined in the listing standards of the New York Stock Exchange.  
    • Primary Responsibility
      • The Committee’s job is one of oversight.  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 establishing and maintaining adequate internal control over financial reporting.  The independent auditor is responsible for auditing the Company’s financial statements and the Company’s internal control over financial reporting and for reviewing the Company’s unaudited interim financial statements.
      • The Committee shall have oversight of the internal audit function of the company. The Committee shall meet at least annually with internal auditor(s) to review financial controls and functions.
      • The Committee shall meet at least four times per year, or more often as necessary to perform the duties and responsibilities of the Committee as set forth herein. The Committee shall report to the Board at its next meeting after each Committee meeting.
    • The following are functions of the Committee in carrying out its oversight responsibility.
      • Selection and Compensation of the Outside Auditors
        • The Committee shall be directly responsible for the approval of appointment, compensation, retention, and oversight of the independent auditor in preparing and issuing an audit report or performing other audit, review or attest services for the Company pursuant to section 202 of the Sarbanes-Oxley Act.
      • Pre-Approval of Audit and Non-Audit Services
        • All audit services provided to the Company whether provided by the principal  independent auditor or other firms shall be pre-approved by the Committee.
        • Additionally, the Committee, or one or more of its members, shall review any non-audit services provided to the Company by its independent auditors and, except for certain de minimis services (less than $25,000) to the extent permitted by law, shall pre-approve any such non-audit services.  Further, the Committee shall pre-approve significant non-audit services provided to the Company by other firms.  The Committee, or one or more of its members, shall be responsible for determining the engagement terms and fees of any non-audit services to be provided by the independent auditors.  The Committee shall not approve the engagement of the Company’s independent auditors to perform any non-audit services that are prohibited by Section 10A (g) of the Securities Exchange Act of 1934, as amended, or any rules promulgated thereunder.
        • The decisions of any member of the Committee to whom authority is delegated to approve any activity by the independent auditors shall be presented to the full Committee at its next meeting.  The Committee shall consider whether the independent auditors’ performance of any proposed non-audit services is compatible with the independent auditors’ independence.
    • Meetings with and Reports from Independent Auditors and Internal Auditors
      • The Committee shall periodically meet with management, the internal auditors, and the independent auditors in separate executive sessions.
      • The Committee shall review and discuss with management and the independent auditors the audited financial statements and related footnotes and the Management’s Discussion and Analysis to be included in the Company’s Annual Report on Form 10-K (or the Annual Report to Shareholders if distributed prior to the filing of the Form 10-K). Such review and discussion shall include the analysis and judgment of management and the independent auditors about the appropriateness and quality, not just acceptability, of accounting principles, the reasonableness of significant judgments, adequacy of internal controls and disclosures of changes in internal controls and the clarity of the disclosures in the financial statements.  In addition, the Committee shall review and consider with management and the independent auditors the matters required to be discussed by Auditing Standard No. 16, Communications with Audit Committees (“AS 16”), as adopted by the PCAOB.  The Committee shall recommend to the Board whether, based on the review and discussions described herein, the financial statements should be included in the Company’s Annual Report on Form 10-K.
      • The Committee shall review and discuss with management and the independent auditors, and approve, the Company’s interim financial results and the Management’s Discussion and Analysis to be included in the Company’s quarterly reports to be filed with the Securities and Exchange Commission. This review will occur prior to each filing by the Company of its Quarterly Report on Form 10-Q.
      • The Committee shall review and discuss with management and the independent auditors the accounting policies and assumptions which may be viewed as critical, the alternative treatments of financial information within generally accepted accounting principles that the independent auditors have discussed with management, the ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the independent auditors. The Committee shall review and discuss with management and the independent auditors any significant changes in the accounting policies of the Company and accounting and financial reporting pronouncements and proposed rules that may have a significant impact on the Company’s financial reports.
      • The Committee shall review and discuss with management and the independent auditors: 1). any financial or non-financial arrangements of the Company which do not appear on the financial statements of the Company but are necessary to understand how significant aspects of the Company’s business are conducted; and, 2). material transactions or courses of dealing with parties related to the Company.
    • At least annually, the Committee shall obtain and review a report by the independent auditors describing the following:
      • the independent auditors’ internal quality control procedures; and
      • any material issues raised by the most recent internal quality control review, peer review or PCAOB review of the independent auditors, or by any inquiry or investigation by governmental or professional authorities, within the preceding five (5) years respecting one (1) or more independent audits carried out by the outside auditors, and any steps taken to deal with any such issues.
      • The Committee shall evaluate the qualifications, performance and independence of the outside auditors and the lead audit partner (including the rotation of the lead audit partner) and present the conclusions of the Committee to the entire Board. In evaluating the outside auditors, the Committee shall consider whether it is appropriate to rotate independent auditing firms.
    • The Committee shall
      • request from the independent auditors annually, a formal written statement delineating all relationships between the auditors and the Company consistent with PCAOB Rule 3526; discuss with the independent auditors any such disclosed relationship and its impact on the independent auditors’ independence; determine any appropriate action in response to the independent auditors’ report to satisfy itself of the auditors’ independence.
      • The Committee shall meet separately with the independent auditors, with and without management present, to discuss the results of their audits, including any audit problems or difficulties and management’s response, as well as the responsibilities, budget and staffing of the Company’s internal audit function.
      • The Committee shall review and discuss with management and the independent auditors the Company’s legal and regulatory compliance programs, the Company’s internal control over financial reporting and the Company’s code of ethics for senior financial officers. The Committee shall review and discuss the Company’s legal and regulatory compliance programs with the Company’s General Counsel.
      • The Committee shall review and discuss the Company’s guidelines and policies to govern the process by which risk assessment and risk management is undertaken and its programs for monitoring and controlling major financial risks.
      • The Committee shall review and discuss with the Company’s Chief Executive Officer and Chief Financial Officer their evaluation of the Company’s disclosure controls and procedures.
      • The Committee shall review and discuss with the Company’s Chief Executive Officer and Chief Financial Officer the Company’s internal audit function.
    • Review and Approve Swaps
      • The Committee shall review and approve the Company’s decision to enter into all swaps transactions, including, without limitation, non-cleared swaps that are exempt from the mandatory swap clearing requirement and mandatory swap execution requirement established under applicable federal law, rules and regulations. The Committee may review and approve swap transactions submitted to it by management on (i) an individual transaction basis or (ii) a blanket basis, with respect to all non-cleared swaps that are exempt from the federal mandatory swap clearing and execution requirements, which approval must be reviewed at least annually.
      • Further, the Committee shall review, at least annually, the policy relating to the  Company’s use of the non-financial end-user exception (“Swaps Policy”), and shall report to the Board on the Company’s compliance with and implementation of the Swaps Policy, at least annually.  The Committee may delegate responsibility for implementation of the Swaps Policy to the Company’smanagement, as the Committee deems appropriate.
    • Other Matters
      • Legal Proceedings and Contingent Liabilities
        • The Committee shall review with management material and pending or overtly threatened legal proceedings involving the Company and other material contingent liabilities.
      • Press Releases and Information Provided to Analysts and Ratings Agencies
        • The Committee shall review, discuss and approve earnings press releases, as well as discuss financial information and earnings guidance provided to analysts and ratings agencies.  Such discussion may be done generally (through a discussion of the types of information to be disclosed and the types of presentations to be made).  In addition, the Committee may delegate the review and approval of individual earnings press releases to the Committee’s Chairman or another member of the Committee.
      • Proxy Statement Report
        • The Committee shall prepare the Audit Review Committee Report required by the rules of the Securities and Exchange Commission to be included in the Company’s proxy statement for the election of members of the Board of Directors.  The report will address all issues required by the Securities and Exchange Commission.
      • Procedures for Employee Complaints and Concerns
        • The 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 confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters.
      • Hiring Practices for Employees of Outside Auditor
        • The Committee shall set clear hiring practices for employees or former employees of the independent auditors.
      • Annual Self-Evaluation
        • The Committee shall perform an annual self-evaluation to determine the extent to which it fulfilled its obligations as described in this Charter or otherwise required by applicable listing standards, regulations or law.
      • Funding
        • The Committee is empowered, without further action by the Board, to cause the Company to pay (i) compensation of the independent auditor as determined by the Committee, (ii) the compensation of outside counsel, auditors and other advisors as determined by the  Committee, and (iii) the ordinary administrative expenses of the Audit Committee that are necessary or appropriate in carrying out its duties.
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