CHARTER OF THE
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The primary function of the Audit Committee of the Schick Technologies
Board of Directors (the "Audit Committee" or "Committee") is to:
(i) Serve as an independent and objective party to oversee the Company's
accounting and financial reporting processes and internal control system
and complaints or concerns relating thereto.
(ii) Pre-approve all auditing services as well as non-audit services to be
provided by the auditor.
(iii) Review and oversee the audit efforts of the Company's independent
accountants, who shall be accountable and report to the Audit Committee.
(iv) Provide an open avenue of communication among the independent accountants,
financial and senior Management and the Board of Directors.
(v) If deemed necessary and appropriate, make periodic proposals to the Board
of Directors concerning the adoption of changes to the Company's
accounting and internal control environment.
The Audit Committee shall be appointed by the Board and shall be comprised
of three or more directors (the precise number to be determined by the Board),
all of whom shall be independent, as such term is defined in Nasdaq Marketplace
Rules, Rules 4200(a)(15) The members of the Committee shall be free from any
relationship that, in the opinion of the Board, would interfere with the
exercise of their independent judgment as members of the Audit Committee. All
members of the Audit Committee shall be able to read and understand financial
statements at the time of their appointment and shall have a working familiarity
with basic finance and accounting practices. Additionally, at least one member
of the Audit Committee shall be an Audit Committee "financial expert" as defined
by the SEC in its rules and shall have past employment experience in finance or
accounting, requisite professional certification in
accounting or any other comparable experience or background which results in the
individual's financial sophistication, including being or having been a chief
executive officer, chief financial officer or other senior officer with
financial oversight responsibilities.
Committee member may not accept any consulting, advisory, or other
compensatory fee from the Company, other than in his or her capacity as a Board
or Committee member and may not be an "affiliated person" of the Company or any
Unless a Chair is elected by the full Board, the members of the Audit
Committee may designate a Chair by majority vote of the full Audit Committee
The Audit Committee shall meet at least four times annually (in person or
telephonically), or more frequently as circumstances dictate, as follows:
(i) Once annually, or more frequently as circumstances dictate, prior to the
release of the Company's Annual Report on Form 10-K (or 10-KSB), with Company
Management, the Company's principal accounting officer, and with the Company's
independent accountants outside the presence of Company Management, consistent
with Section IV (ii) below;
(ii) Once each quarter: (a) prior to the release of the Company's Quarterly
Report on Form 10-Q, with the Company's independent accountants and Company
Management to review the Company's financials, consistent with Section IV(iii)
below. The Audit Committee shall determine, in the exercise of its discretion,
whether to meet with the Company's independent accountants outside the presence
of Company Management. The Chair of the Audit Committee may represent the entire
Committee for purposes of these meetings; (b) with the Company's Chief Executive
Officer; (c) with the Company's Chief Financial Officer ("CFO") or, in the
absence of a CFO, with the Company's principle accounting officer; and (d) with
the Company's Chief Operating Officer.
IV. RESPONSIBILITIES, DUTIES AND AUTHORITY
To fulfill its responsibilities and duties, the Audit Committee shall:
(i) Review and reassess this Charter annually, or more frequently as may be
deemed necessary or appropriate by members of the Audit Committee.
(ii) Review with Company Management and the independent accountants each Form
10-K Annual Report prior to its filing, and review and consider with the
independent accountants the matters required to be discussed by
Statement of Auditing Standards ("SAS") No. 61 as amended.
(iii) Review with financial Management and the independent accountants each
Form 10-Q quarterly report prior to its filing, and review with the
independent accountants the matters required to be discussed by SAS No.
100. The Chair of the Audit Committee may represent the entire Committee
for purposes of this review.
(iv) Review with Company management any financial information filed with the
S.E.C. or disseminated to the public, including any certification,
report, opinion, or review rendered by the independent accountants.
(v) Establish and maintain procedures for receiving and treating complaints
received by the Company regarding accounting, internal accounting
controls and auditing matters, and the confidential, anonymous
submission by employees of concerns regarding questionable accounting or
(vi) Have the sole authority to appoint, determine funding for, and oversee,
the Company's independent accountants. On an annual basis, the Audit
Committee shall request from the independent accountants a formal
written statement delineating all relationships between it and the
Company, consistent with Independence Standards Boards Standard No. 1,
and shall review and discuss with the accountants all significant
relationships the accountants have with the Company to determine their
impact on the accountants' independence.
(vii) Take appropriate action to oversee the independence of the independent
accountants, including the actions set forth in paragraph "(vi)" above.
(viii) Pre-approve all auditing services as well as non-audit services to be
provided by the auditor.
(ix) Review and evaluate the performance of the independent accountants and,
where appropriate, replace the independent accountants.
(x) Periodically consult with the independent accountants out of the
presence of Management about internal controls and the fullness and
accuracy of the Company's financial statements.
Financial Reporting Processes
(xi) In consultation with the independent accountants and the Company's
accounting personnel, review the integrity of the Company's financial
reporting processes, both internal and external.
(xii) Consider and approve, if appropriate, major changes to the Company's
accounting principles and practices as suggested by the independent
accountants or Management.
(xiii) If deemed necessary and appropriate, make periodic proposals to the
Board of Directors concerning the adoption of changes to the Company's
accounting and internal control environment.
(xiv) Establish regular and separate systems of reporting to the Audit
Committee by each of Management and the independent accountants
regarding any significant judgments made in Management's preparation of
the financial statements and the view of each as to appropriateness of
such judgments and additional items as required under the Sarbanes-Oxley
Act including Critical Accounting Policies, alternative treatments of
GAAP relating to material items that have been discussed with
management, the ramifications of such treatment and the preferred
treatment by the accounting firm, and other written communications with
management, i.e. management letter or schedule of material unadjusted
(xv) Following completion of the annual audit, review separately with each of
Management and the independent accountants any significant difficulties
encountered during the course of the audit, including any restrictions
on the scope of work or access to required information.
(xvi) Review and resolve any significant disagreement among Management and the
independent accountants in connection with the preparation of the
(xvii) Following completion of the annual audit, request from the independent
accountants either a verbal report or a written Management Letter (the
choice of which shall rest with the Audit Committee in the exercise of
its discretion) describing the deficiencies, if any, in the Company's
operational or control procedures as determined by the independent
(xviii) Review with the independent accountants and Management the extent to
which changes or improvements in financial or accounting practices, as
approved by the Audit Committee, have been implemented. (This review
should be conducted at an appropriate time subsequent to implementation
of changes or improvements, as decided by the Audit Committee.)
(xix) Review activities, organizational structure, and qualifications of the
Company's accounting and finance department.
(xx) Review, with the Company's counsel, legal compliance matters including
corporate securities trading policies.
(xxi) Review, with the Company's counsel, any legal proceedings that could
have a significant impact on the Company's financial statements.
(xxii) Perform any other activities consistent with this Charter, the Company's
By-Laws and governing law, as the Audit Committee or the Board deems
necessary or appropriate.
Advisors and Funding
(xxiii) The Committee shall have the authority to engage and the funds to pay
independent counsel and/or other advisors to assist it in carrying out
its duties, and responsibilities, as it deems appropriate.
(xxiv) The Committee shall have the authority to determine the appropriate
amount of funding to be provided by the Company for payment of
compensation to any registered public accounting firm engaged for the
purpose of preparing or issuing an audit report or performing other
audit, review or attest services for the Company.
(xxv) The Committee shall have the authority to determine the appropriate
funding to be provided by the Company for payment of ordinary
administrative expenses of the Committee that are necessary or
appropriate in carrying out its duties.
(xxvi) The Committee must review, in advance, any proposed transaction between
the Company and any related party. No such related-party transaction may
be consummated by the Company without the approval of the Committee.