2003 Audit Charter: MOLX MOLEX INCORPORATED
AUDIT COMMITTEE CHARTER
The Audit Committee (the "Committee") is appointed by the board of directors
(the "Board") for the following purposes:
1. overseeing the quality and integrity of the financial statements,
internal controls and other accounting, auditing and reporting practices
and processes of the Corporation;
2. overseeing the audits of the Corporation's financial statements,
3. ensuring the compliance by the Corporation with legal and regulatory
4. such other duties as directed by the Board.
The Committee shall consist of no fewer than three members proposed by the
Nominating Committee, endorsed by the Chairman of the Board and appointed by
the Board annually. The Board shall have the power at any time to change the
membership of the Committee and to fill vacancies in it, subject to the new
members satisfying the criteria set forth below. Members of the Committee
shall serve until their successors are appointed and qualify.
The members of the Committee shall satisfy the following criteria:
1. Meet the independence and other requirements of the National Association
of Securities Dealers, Inc.'s Marketplace Rules and any other applicable
laws, rules and regulations.
2. Be able to read and understand fundamental financial statements including
the Corporation's balance sheet, income statement, and cash flow
3. At least one member of the Committee shall have accounting or related
financial management expertise.
A. In General
The Committee is expected to maintain free and open communication (including
private executive sessions at least annually) with the independent auditors and
management of the Corporation.
The Committee shall meet at least four times each fiscal year or more often
as it deems appropriate. The chairman of the Committee shall at the beginning
of each year establish a schedule of meetings with additional meetings to be
scheduled as required.
The secretary (or a duly designated person) shall prepare minutes for all
meetings of the Committee to document the Committee's discharge of its
responsibilities. The draft minutes shall be approved at a subsequent meeting
of the Committee and shall be retained as part of the Corporation's corporate
IV. Powers and Authority
The Committee may request any officer or employee of the Corporation or its
outside counsel or independent auditors to attend a meeting of the Committee or
to meet with any members of, or consultants to, the Committee. The Committee
is empowered to investigate any matter it deems appropriate, with full power
to retain outside counsel or other advisors and full access to all books,
records, facilities and personnel of the Corporation. The Committee has the
ultimate authority and responsibility to select, evaluate, and, where
appropriate, replace the independent auditors. The Committee also has the
sole authority to approve the fees and other significant compensation to be
paid to the independent auditors.
A. Roles of the Committee, Management and Independent Auditors
The Committee's responsibility is one of oversight. In furtherance of this
mission, the Committee will review reports prepared by the independent auditors
and the Corporation that are to be furnished to the Committee in a timely
fashion. The Committee will provide to the independent auditors full access to
the Committee (and the Board) to report on any and all matters appropriate.
The responsibility for the completeness and accuracy of the financial
statements rests with the Corporation's management and the Committee.
The Corporation's independent auditors are responsible for planning and
conducting an audit of the Corporation's annual consolidated financial
statements and reviewing the Corporation's quarterly financial statements.
The auditors are ultimately accountable to the Committee.
B. Committee's Primary Responsibilities
The Committee's primary responsibilities include:
1. Select and Monitor the Independent Auditors
a. Selection and Retention. The Committee will have the sole and
ultimate authority for the selection and retention of the
independent auditors who audit the financial statements of the
b. Independence and Conflicts. In order to ensure the independent
auditors' independence without conflicts of interest, the
Committee will do the following:
i. discuss and consider the auditors' written statement
delineating all relationships between the auditors and the
Corporation (consistent with Independence Standards Board
Standard and other applicable standard setting organizations
or committees) and its affirmation that the auditors are in
ii. establish guidelines regarding when and under what
circumstances the Corporation may use the independent
auditors for non-audit services including a review of the
non-audit services provided to the Corporation by the
independent auditors and the fees for such services;
iii. ensuring partner rotation on the part of the independent
iv. establish guidelines restricting the hiring of certain
persons previously employed by the Corporation's independent
v. take such other action as the Committee deems appropriate to
verify the auditors' independence.
c. Evaluation. The Committee will review and evaluate the
effectiveness of the auditors' performance.
2. Approve the Audit Process
The Committee will discuss the nature, scope, and rigor of the audit
process, including the plan for the annual audit, including areas of risk
exposure and the adequacy of staffing.
3. Review the Financial Statements
The Committee will review the audited financial statements with
management and the independent auditors. It is anticipated that these
discussions will include quality of earnings, discussions of significant items
subject to estimate, consideration of the suitability of accounting principles,
review of highly judgmental areas, audit adjustments whether or not recorded
and such other inquiries as may be appropriate and as may be required under
Statement on Auditing Standards No. 61. Upon completion of their review, the
Committee shall make a recommendation to the Board as to whether the financial
statements should be included in the Corporation's Annual Report on Form 10-K
to be filed with the Securities and Exchange Commission (the "SEC").
The Committee will also review with management and the independent
auditors the quarterly financial information prior to the Corporation's filing
of Quarterly Reports on Form 10-Q with the SEC.
4. Monitor Internal Controls and Disclosure Controls
The Committee will discuss with management and the auditors the
quality and adequacy of the Corporation's internal controls and disclosure
controls including periodic updates of recommendations made by the independent
auditors and others to strengthen controls and management's corrective actions.
5. Monitor Complaints Concerning Matters Within the Committee's
The Committee will establish procedures concerning (a) the submission,
receipt, retention and treatment of complaints and concerns regarding internal
accounting controls, accounting matters, and audit matters and (b) the
confidential anonymous submission by employees of concerns regarding
questionable accounting or auditing matters.
6. Review Legal Compliance and Exposure
The Committee will discuss with the Corporation's General Counsel the
Corporation's legal compliance policies, legal matters that may have a material
impact on the financial statements, any material reports or inquiries received
from regulators or governmental agencies, and other areas of oversight relating
to legal compliance and significant financial exposure matters as may be
appropriate. In addition, the Committee will obtain from the independent
auditors assurance that Section 10A of the Private Securities Litigation
Reform Act of 1995 has not been implicated.
7. Review and Approve Related Party Transactions
The Committee will review and approve all "related party transactions."
8. Report to the Stockholders
The Committee will prepare a report of the Committee in accordance with
SEC rules suitable for inclusion in the Corporation's annual proxy statement
delivered to the Corporation's shareholders.
9. Report to the Board
The Committee will periodically report on Committee activities to the
full Board and, as needed, issue an annual summary report (including
appropriate oversight conclusions).
C. Other Responsibilities
The Committee will perform any other activities consistent with this
charter, the Corporation's by-laws, and applicable law, as the Committee or
the Board deems necessary or appropriate.
VI. Review and Amendment of Charter
This charter shall be reviewed annually and amended, when deemed