Oshkosh Truck Corporation
2003 Committee Charter : OSK
Board Of Directors
Audit Committee Charter
Effective November 19, 2002
The Audit Committee shall provide assistance to the Company's Board of Directors in fulfilling those responsibilities to the Company's shareholders which relate to the quality and integrity of the corporate accounting and financial reporting practices of the Company and compliance with legal and regulatory requirements. In so doing, it is the responsibility of the Audit Committee to maintain free and open communication between and among the directors, the independent auditors, the internal auditors, the independent outside counsel and the financial and operating management of the Company. The Audit Committee shall meet at least quarterly and otherwise as the members of the Audit Committee deem appropriate.
The Audit Committee of the Board of Directors shall consist of not less than three members, including the chair, who meet the independence and experience requirements of the Securities and Exchange Commission (the "SEC") and the New York Stock Exchange (the "NYSE") as and when necessary.
The members and chair of the Audit Committee will be appointed by the Board of Directors at the Board meeting following each Annual Shareholders' Meeting.
In carrying out its responsibilities, the Audit Committee believes its policies and procedures should be flexible enough to react to changing conditions and to be able to assure the Board of Directors and the shareholders of the Company that the accounting and financial reporting practices of the Company are in accordance with all applicable legal and accounting requirements and that they are consistently maintained at the highest quality standards.
In carrying out its responsibilities, the Audit Committee will:
1. Obtain the Board of Directors' approval of this Charter, reassess this Charter as conditions dictate (at least annually) and seek the Board of Directors' approval of all amendments to this Charter.
The independent auditors shall have ultimate accountability to the Audit Committee, the Board of Directors and the shareholders of the Company. The Audit Committee shall be directly responsible for resolving any disagreements between the independent auditors and management.
3. Approve in advance the types and the extent of non-audit services that management plans to engage the independent auditors to perform and approve in advance all compensation paid to the independent auditors. All engagements for allowed non-audit services shall be disclosed by the Audit Committee as required by law. The Audit Committee shall not permit or approve the independent auditors to perform prohibited services as defined in SEC regulations.
4. Obtain from the independent auditors, on an annual basis, a written statement delineating all relationships between the independent auditors and the Company, consistent with Independence Standards Board Standard 1 and other applicable rules and regulations. The Audit Committee shall actively engage in a dialogue with the independent auditors with respect to any disclosed relationships or services that may impact the objectivity and independence of the independent auditors and shall take, or recommend that the Board of Directors take, appropriate action to correct or oversee the independence of the independent auditors.
5. Meet with the independent auditors and financial management to review the scope of the proposed annual audit and the audit procedures to be utilized and the scope of timely quarterly reviews for the current year.
6. Conduct a meeting in person or by conference call with the Company's Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer, together with representative(s) of the Company's independent auditors, in advance of the quarterly earnings conference call with shareholders, analysts, rating agencies and debt investors. Review and discuss the quarterly financial results, material quarterly adjustments and earnings guidance to be announced just prior to the earnings conference call. Make inquiries whether there have been any material changes in the Company's financial condition or results of operations which would require Form 8-K disclosure. The Audit Committee may discuss this information generally, including the types of information to be disclosed and the type of presentation to be made. These discussions need not be carried out in advance of each instance in which the Company provides routine financial information or earnings guidance.
7. Review periodically with the independent auditors, internal auditors and financial and accounting personnel, the adequacy and effectiveness of the disclosure controls and procedures and the accounting, financial and operating controls of the Company. Particular emphasis should be given to the adequacy of such internal controls to expose any payments, transactions or procedures that might be deemed illegal, misleading or otherwise improper.
8. Review with the internal auditors and financial and operating management, the adequacy and effectiveness of internal controls that assure compliance with all laws and regulations of the United States Department of Defense and other federal government authorities with respect to the performance under federal contracts.
9. Review with management, the internal auditors and the independent auditors, the status of litigation, compliance with environmental laws and regulations and other material contingencies of the Company. Particular emphasis should be given to the adequacy of internal controls to prevent material losses to the Company from litigation, non-compliance with environmental laws and regulations or other matters, as well as the adequacy of the accounting for, and disclosure of, such contingencies in the Company's financial statements and regulatory reporting.
10. Discuss the Company's guidelines and policies with respect to risk assessment and risk management, although the Company's management, and not the Audit Committee, shall be responsible for assessing and managing the Company's exposure to risk. The Audit Committee should discuss the Company's major financial risk exposures and the adequacy of the steps that the Company has taken to monitor and control such exposures.
11. Review management's oversight of officer and employee understanding and compliance with Company policies and practices with regard to proper business conduct and ethics. Among other investigations, the Audit Committee will:
12. Obtain, on a quarterly basis, reports from the Company regarding its compliance with and evaluation of the Company's disclosure controls and procedures and its internal controls.
13. Obtain, on an annual basis, the independent auditors' attestation to the Company's internal control assessments, as required by law.
14. Review and discuss with management and the independent auditors the audited financial statements to be included in the annual report to shareholders and the Annual Report on Form 10-K, including the Company's disclosures under "Management's Discussion and Analysis of Financial Condition and Results of Operations." Review and discuss with management and the independent auditors the unaudited financial statements to be included in Quarterly Reports on Form 10-Q, including the Company's disclosures under "Management's Discussion and Analysis of Financial Condition and Results of Operations."
15. Discuss with the independent auditors the matters required to be discussed by Statement on Accounting Standards No. 61.
16. Review with the CEO and CFO the contents of the periodic CEO and CFO certification statements required by the SEC and NYSE in advance of their filing. Make inquiries of the CEO, CFO and other managers to assess the quality of the due diligence performed by management in advance of such certifications.
17. Establish and maintain procedures for handling complaints received by the Company regarding accounting, internal control, auditing and legal issues. Establish and maintain procedures to assure open access to the Audit Committee and to review submissions by employees of the Company regarding questionable accounting, internal control, auditing or legal issues.
18. Oversee the internal audit function of the Company including its independence, responsibilities, competence, the proposed audit plans for the coming year, the coordination of such plans with the independent auditors, the quality and timeliness of internal audit activities and the budget and staffing of the internal audit function.
19. Receive and review prior to each meeting, a summary of findings from completed internal audits and a status report on the annual internal audit plan, with explanations for any deviations from the original plan. At its discretion, the Audit Committee may seek copies of particular internal audits. All deviations from the original internal audit plan shall be approved in advance by the Audit Committee.
20. Review annually the adequacy and competency of the outside professional firm engaged to perform the Company's internal audit function and, as necessary, make appropriate recommendations to the Board of Directors to replace the outside firm. The outside internal audit firm shall have ultimate accountability to the Audit Committee and the Board of Directors.
21. Provide a regular and sufficient opportunity for the internal and independent auditors to meet separately with the Audit Committee without members of management present. Among the items to be discussed in these meetings are the internal and independent auditors' evaluation of the performance and capabilities of the Company's financial, accounting, information systems and legal personnel; the cooperation that the internal and independent auditors received during the course of their audits; any audit problems or difficulties, including any restrictions on the scope of the independent auditors' activities or access to requested information, any significant disagreements with management and management's response to all such difficulties; whether the independent auditors were satisfied with the quality and integrity of the financial statements, whether any officers or directors attempted to take or took action to coerce, manipulate, mislead or fraudulently influence them in the conduct of their audit engagement and such other matters as the Audit Committee may choose.
22. Review with the Chief Financial Officer, at least annually, the capabilities and performance of key members of the corporate finance and accounting organization, as well as at the principal business units of the Company.
23. Review, at least annually, summaries of the expense reimbursements made to executive officers of the Company as defined under the Securities Exchange Act, for compliance with the Company's written policies and practices.
24. Make available to the Board of Directors the minutes of all meetings of the Audit Committee and review the matters discussed at each Audit Committee meeting with the Board of Directors.
25. Investigate any matter brought to its attention which falls within its duties and as needed, retain outside resources, including independent counsel and accounting and other advisors. The retention of such independent counsel and other advisors will be promptly reported to the full Board of Directors and paid by the Company.
26. Prepare annually a report of the Audit Committee for inclusion in the Company's annual proxy statement. The report shall include any and all information required by the SEC.
27. Include a copy of the then current Audit Committee Charter as an appendix to the Company's annual proxy statement at least once every three years, or more frequently if substantive changes are made to the Charter.
28. Establish clear hiring restrictions and policies for current or former employees of the independent auditors.
29. Conduct annually a self-assessment of its performance during the previous year. In addition, from time to time, the Board of Directors may conduct a similar assessment of the Audit Committee. The purpose of these assessments is to increase the effectiveness of the Audit Committee and its members. Compliance with the responsibilities listed in this Charter shall form the principal criteria for such assessments, as well as such other factors and circumstances as are determined appropriate by the Audit Committee or the Board of Directors.
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 or to determine that the Company's financial statements are complete and accurate and are in accordance with generally accepted accounting principles. These are the responsibility of management and the independent auditors. Nor is it the duty of the Audit Committee to assure compliance with laws and regulations.