The Audit Committee ("Committee") of Hudson United Bancorp (the "Company") shall be members of and appointed by the Board to assist the Board in monitoring (1) the integrity of the financial statements of the Company, (2) the compliance by the Company with legal and regulatory requirements and (3) the qualifications, independence and performance of the Company's internal auditor (internal audit function is presently outsourced) and external auditor ("independent auditor").
Committee Membership and Meetings
The Board on the recommendation of the Nominating and Governance Committee shall appoint the members of the Committee and the Chairman of the Committee. The members of the Committee shall meet the independence and experience requirements of The New York Stock Exchange and the Sarbanes-Oxley Act of 2002. In particular, all Committee members must be financially literate, as such qualification is interpreted by the Company's board in its business judgment, or must become financially literate within a reasonable period of time after his or her appointment to the Committee, and at least one member shall be an "audit committee financial expert," as defined by the Securities and Exchange Commission ("SEC") regulations.
The Committee shall meet at least quarterly per year or more frequently as circumstances require. The Committee shall be comprised of not fewer than three (3) directors. The Committee may conduct a telephonic meeting if needed.
A majority of the Audit Committee shall constitute a quorum. The Audit Committee may act by a majority of the members present at a meeting of the Committee. In the event of a tie vote on an issue, the Chairpersonšs vote shall decide the issue.
Committee Authority and Responsibilities
The Committee shall be directly responsible for and have the sole authority to appoint or replace the independent auditor, and shall have the sole authority to pre-approve all audit engagement fees and terms and pre-approve all non-audit engagements with the independent auditors in accordance with the rules of the New York Stock Exchange ("NYSE") and Section 10A(i)(1)(B) of the Exchange Act. The independent auditor shall report directly to the Committee. The Committee shall consult with management but shall not delegate its responsibilities hereunder.
The Committee shall receive from the independent auditor reports on critical accounting policies and practices, alternative treatments and material communications with management as required by Section 10A(k) of the Exchange Act.
The Committee shall prepare the "Audit Committee Report" required by SEC regulations to be included in the Company's annual proxy statement.
The Committee shall have the authority, to the extent it deems necessary or appropriate, to retain independent legal, accounting or other consultants to advise the Committee. The Company shall provide for appropriate funding, as determined by the Committee, for payment of compensation to the independent auditor for the purpose of rendering or issuing an audit report and to any advisors or consultants employed by the Committee. The Committee may request any officer or employee of the Company or the Company's outside counsel or independent auditor to attend a meeting of the Committee or to meet with any members of, or consultants to, the Committee. The Committee shall meet with management, the internal auditor and the independent auditor in separate executive sessions at least quarterly. The Committee may appoint and delegate authority to subcommittees when appropriate.
The Committee shall make regular reports to the Board. The Committee shall review and reassess the adequacy of this Charter annually and recommend any proposed changes to the Board for approval.
The Committee, to the extent it deems necessary or appropriate, shall:
(a) All critical accounting policies and practices to be
(b) all alternative treatments of financial information within generally accepted accounting principles ("GAAP") that have been discussed with management, ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the independent auditor.
(c) other material written communications between the independent auditor and management, such as any management letter or schedule of unadjusted differences.
(a) the independent auditor's internal quality-control
(b) any material issues raised by the most recent internal quality-control review, or peer review, of the firm, or by any inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more independent audits carried out by the firm,
(c) any steps taken to deal with any such issues, and
(d) all relationships between the independent auditor and the Company.
Evaluate the qualifications, performance and independence of the independent auditor, including considering whether the auditor's quality controls are adequate and the provision of permitted non-audit services is compatible with maintaining the auditor's independence, taking into account the opinions of management and the internal auditors. The Committee shall present its conclusions with respect to the independent auditor to the Board.
(a) Restrictions on or changes in the scope of its audit
activities or access to required information.
(b) Resolution of all problems, disagreements or difficulties, if any, between management and the independent auditor.
(a) The receipt, retention and treatment of complaints
received by the Company regarding accounting, internal accounting controls, or
( b) The confidential, anonymous submission by employees of the Company and its subsidiaries of concerns regarding questionable accounting or auditing matters.
The Audit Committee may establish sub-committees of one or more of its members for the purpose of implementing its responsibilities. Any such sub-committees shall provide reports to the full Committee.
While the Audit Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Audit Committee to plan or conduct audits. It is management's responsibility for the preparation, presentation, completeness and integrity of the financial statements and for the appropriate use of accounting principles and reporting policies. The independent auditor is responsible for auditing the financial statements, expressing an opinion thereon in accordance with GAAP, and complying with all applicable law.