2004 Committee Charter: BC
(As amended through February 3, 2004)
The Audit Committee (the "Committee") shall provide assistance to the Board of Directors (the "Board") in fulfilling the Board's responsibility to oversee: (a) the Corporation's accounting, auditing and reporting practices; (b) the qualifications, independence and performance of the independent auditors; (c) the Corporation's system of internal controls, including the performance of the internal audit function; (d) the Corporation's disclosure policies and practices; (e) the quality and integrity of the Corporation's financial statements; and (f) compliance by the Corporation with legal and regulatory requirements. The Committee shall also prepare the report that the rules of the Securities Exchange Act of 1934 require to be included in the Corporation's annual Proxy Statement. Unless otherwise defined in this Charter, capitalized terms will have the meanings given to such terms in the Corporation's Principles and Practices of the Board of Directors (the "Principles and Practices").
In carrying out its duties, the Committee shall maintain free and open communication with the Board, the independent auditors, the internal auditors and members of Management.
The Committee's role is one of oversight and it recognizes that the Corporation's Management is responsible for preparing the Corporation's financial statements and that the independent auditors are responsible for auditing those financial statements. Consequently, in carrying out its oversight responsibilities, the Committee is not providing any expert or special assurance as to the Corporation's financial statements or any professional certification as to the work of the independent auditors.
· The Committee shall be comprised of at least three members of the Board, one of whom shall be appointed as the chairman of the Committee (the "Chair").
· The Board will appoint the Chair and members of the Committee following nomination by the Corporate Governance Committee.
· The Chair and members of the Committee will be rotated from time to time.
· All members of the Committee will be Independent Directors as defined by the New York Stock Exchange listing standards applicable to audit committees, and no member of the Committee can be an "affiliated person" as defined under applicable Securities and Exchange Commission rules and regulations.
· Each Committee member must be financially literate, or must become financially literate within a reasonable period of time after his or her appointment to the Committee.
· At least one Committee member shall have accounting or financial management expertise as defined by Regulation S-K under the Securities Exchange Act of 1934.
· If a Committee member serves on more than three public companies' audit committees, the Board must determine and disclose that such simultaneous service does not impair the member's ability to serve effectively.
· Directors' fees are the only compensation that Committee members may receive from the Corporation.
· Periodically, the Committee will meet separately with each of the independent auditors, the internal audit function staff and members of Management. Such private meetings will occur at least quarterly, or as requested by the Committee, the independent auditors or the internal audit staff. The Committee may ask members of Management or others to attend meetings and provide pertinent information as necessary.
Among other items, the Committee shall:
· Have the sole authority, at the Corporation's expense, to: (a) appoint; (b) terminate; (c) compensate; and (d) oversee the Corporation's independent auditors, which shall report directly to the Committee. The appointment of the Corporation's independent auditors shall be subject to Stockholder ratification.
· Have the sole authority to approve, and shall approve in advance, all audit and non-audit engagements of the independent auditors. The Committee may delegate one or more of its members to grant approvals of audit and non-audit services, each of which shall be reported to the full Committee at its next meeting.
· Review and evaluate the qualifications, performance and independence of the independent auditors, including its lead audit partner, and periodically present its conclusions to the Board.
· At least annually, obtain and review a report by the independent auditors describing: (a) the internal quality-control procedures used by the independent auditors; (b) any material issues raised by the most recent internal quality-control review or peer review of the independent auditors, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, with respect to one or more independent audits carried out by the independent auditors, and any steps taken to deal with such issues; and (c) all relationships between the independent auditors and the Corporation.
whether or not there should be a regular rotation of the independent
auditors, and monitor the periodic rotation of the independent auditors' lead
partner and the audit partner responsible for reviewing the audit.
· Review the performance of the Corporation's internal audit function (which shall report jointly to the Chair of the Committee and to Management).
· Review the adequacy and effectiveness of the Corporation's internal controls, any special audit steps adopted in light of any material control deficiencies, and the performance and qualifications of the internal audit function staff.
· Review and discuss significant findings on specific audits completed by the internal audit function and Management's responses to such findings, including any follow-up action undertaken as a result of such findings.
· Discuss any changes in the planned scope of the internal audit, and the coordination of the internal and external audit functions.
· Discuss with Management and the independent auditors the internal audit function responsibilities, budget and staffing.
· Review accounting principles and financial statement presentations, including significant changes in the Corporation's selection or application of accounting principles.
· Review and discuss the Corporation's reporting and disclosure policies.
· Review and discuss with both Management and the independent auditors, prior to public disclosure, the Corporation's: (a) annual audited and quarterly financial statements: (b) 10-K and 10-Q reports, including the "Management's Discussion and Analysis of Financial Condition and Results of Operations"; and (c) annual and quarterly reports to Stockholders.
· Review the scope of the annual audit conducted by the independent auditors, and the independent auditors' opinion rendered with respect to the annual financial statements.
· Review and discuss with the independent auditors any audit problems or difficulties and other issues and recommendations identified by the independent auditors together with Management's responses.
· Review with the independent auditors any restrictions on the scope of the independent auditors' activities or access to requested information, and any significant disagreements with Management.
· Review with the independent auditors: (a) any accounting adjustments noted or proposed by the auditors that were passed (as immaterial or otherwise); (b) any communications between the independent auditors and the auditors' national office with respect to issues presented by the engagement; and (c) any management or internal control letter issued, or proposed to be issued, by the independent auditors to the Corporation.
· Review and discuss earnings announcements, financial information and earnings guidance provided to stockholders, analysts and rating agencies.
· Review legal, regulatory, environmental and other matters including any off-balance sheet or off-shore transactions that have or could have an impact on the financial structure or financial results of the Corporation, or any non-ordinary course of business financial transactions.
· Review and discuss policies regarding risk assessment and risk management, and significant risks and exposures confronted by the Corporation and steps Management has taken to monitor and control them.
· Review analyses and reports prepared by Management and/or the independent auditors concerning critical accounting policies and practices, and significant financial reporting issues and judgments or estimates made in connection with the preparation of the financial statements, including analyses of the effects of alternative generally accepted accounting principles methods on the financial statements.
· Review the effect of regulatory and accounting initiatives, as well as off-balance sheet structures, on the financial statements of the Corporation.
major issues regarding accounting principles and financial statement presentations,
including any significant changes in the Corporation's selection or
application of accounting principles, and major issues as to the adequacy of
the Corporation's internal controls and any special audit steps adopted in
light of material control deficiencies.
· Annually review and evaluate the Committee's charter and performance and, if necessary and appropriate, recommend changes to the Corporate Governance Committee of the Board.
· Recommend to the Board hiring practices for employees or former employees of the independent auditors consistent with Section 206 of the Sarbanes-Oxley Act of 2002 and the New York Stock Exchange Corporate Governance Rules.
· Conduct or authorize investigations into any matters within the Committee's scope of responsibility.
· At its sole discretion and the Corporation's expense, obtain advice and assistance from outside legal, financial, accounting or other experts.
· Report to the Board on the Committee's activities following each meeting of the Committee, including information related to the quality or integrity of the Corporation's financial statements, the Corporation's compliance with legal or regulatory requirements, the performance and independence of the Corporation's independent auditors and the performance of the internal audit function.
· Prepare the audit committee report required to be included in the Corporation's annual proxy statement stating whether the Committee has reviewed and discussed the audited financial statements with Management; has received and considered independence disclosures from the independent auditors; and has recommended to the Board that the Corporation's audited financial statements should be included in the Corporation's Annual Report on Form 10-K.
· Review any reports on internal controls in the Corporation's annual report to Stockholders.
· Establish procedures for the receipt, retention and treatment of complaints received by the Corporation regarding accounting, internal accounting controls or auditing matters, including appropriate procedures for the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.
· Monitor and consider implementation of best-demonstrated audit and control practices.
· Meet jointly on at least an annual basis with the Finance Committee to review and discuss matters relevant to both committees.
2003 Audit Charter: BC
AUDIT COMMITTEE CHARTER
The Audit Committee operates pursuant to a written charter, a copy of
INDEPENDENCE OF AUDIT COMMITTEE MEMBERS
The Board of Directors has determined that all members of the Audit
REVIEW WITH MANAGEMENT
The Audit Committee has reviewed and discussed Brunswick's audited
REVIEW AND DISCUSSIONS WITH INDEPENDENT ACCOUNTANTS
The Audit Committee has discussed with Ernst & Young LLP, Brunswick's
The Audit Committee has also received the written disclosures and the
Based on the review and discussions referred to above, the Audit Committee