REALTY TRUST, INC.
AUDIT COMMITTEE CHARTER
The Audit Committee
(the "Committee") is a committee composed of members of the Board of
Directors. The Committee shall be directly responsible for the appointment,
discharge, compensation, and oversight of the work of any independent auditor
employed by the Company (including resolution of disagreements between
management and the auditor regarding financial reporting) for the purpose of
preparing or issuing an audit report or related work. The Committee shall
determine, and the Company shall provide, appropriate funding to compensate any
such independent auditor for its rendering an audit report or related work Any such independent auditor shall report directly to the
Committee. In addition, the Committee shall assist the Board in fulfilling its
oversight responsibilities by reviewing the financial information that will be
provided to the stockholders and others, the systems of internal controls that
management and the Board of Directors have established, and the audit process.
shall comply with the requirements of the Securities and Exchange Commission
and the New York Stock Exchange. The membership of the Committee shall consist
of at least three Directors, each of whom shall be independent and shall serve
at the pleasure of the Board of Directors. Other than in his or her capacity as
a Committee member or as a member of the Board of Directors or any other Board
committee, Committee members may not accept any consulting, advisory, or other
compensatory fee from the Company or be an affiliated person of the Company or
any of its subsidiaries. Committee Members and the Committee Chairperson shall
be designated by the Board of Directors.
The Committee shall
establish and maintain procedures for the receipt, retention, and treatment of
complaints received by the Company regarding accounting, internal accounting
controls, or auditing matters, and for the confidential, anonymous submission
by employees of the Company of concerns regarding questionable accounting or
The Committee shall
have the power to conduct or authorize investigations into any matters within
the Committee's scope of responsibilities. The Committee shall be empowered,
and be provided funds by the Company, as it determines appropriate, to retain
independent counsel, accountants or other advisors, as it determines necessary
to carry out its duties or to assist it in the conduct of any investigation.
The Committee as a
whole shall meet at least two times per year, or more frequently as
circumstances require. The Committee may ask members of management or others to
attend meetings and provide pertinent information as necessary. To the extent
they determine appropriate, the Committee Members may communicate outside such
meetings with one another and with members of management and the independent
In addition to those
activities set forth in this Charter, the Committee will perform such other
activities consistent with the Company's charter and bylaws and applicable law,
as the Committee or the Board deems necessary or appropriate.
In meeting its
responsibilities, the Committee is expected to:
- Pre-approve all auditing services (including
providing comfort letters in connection with securities offerings) and
permitted non-audit services (including tax services) to be performed for
the Company by its independent auditors. The authority to pre-approve such
services may be delegated by the Committee to one or more of its members.
Such delegee(s) shall present its decisions with
respect to such services to the full Committee at the Committee's
scheduled meetings. Approval of any non-audit services to be performed by
the Company's independent auditors shall be disclosed in the Company's
- Provide an open avenue of communication between
the independent auditors and the Board of Directors. The independent
auditors are ultimately accountable to the Board of Directors and the
- Review and reassess this Charter annually and
submit any proposed changes to the Board of Directors for approval.
- Review the independence of the independent
auditors, including a review of management consulting and other non-audit
services and associated fees provided by that firm and any other
relationship the auditors and its affiliates have with the Company. As a
part of such review, the Committee shall require the independent auditors
to submit on a periodic basis to the Audit Committee a formal written
statement delineating all relationships between the independent auditors
and the Company.
- Review with management and the independent auditors significant risks or exposures, whether from
significant or unusual events or transactions or ordinary course operations,
which impact financial reporting and operations, and assess the steps
management has taken, and the adequacy and effectiveness of the Company's
internal controls, to deal with such risks and exposures.
- Consider and review with the independent auditors:
- The adequacy of the Company's
- Any related significant
findings and recommendations of the independent auditors together with
management's responses thereto.
- Any other matters which the
independent auditors determine they are required under applicable
regulations to communicate to the Committee.
- Ensure that management has timely disclosed to
the Committee and the independent auditors (a) all significant
deficiencies and material weaknesses in the design or operation of internal
controls and procedures for financial reporting which could adversely
affect the Company's ability to record, process, summarize and report
financial information required to be disclosed by the Company in the
reports that it files with or submits to the Securities and Exchange
Commission, within the specified time periods, and (b) any fraud, whether
or not material, that involves management or other employees who have a
significant role in the registrant's internal controls and procedures for
- Prior to the annual audit of financial
statements for the fiscal year, review with the independent auditors the
audit plan, including the fees to be paid for the audit and related
- Review with management and the independent
auditors at the completion of the annual audit of the financial statements
for the fiscal year, and prior to the filing of such financial statements:
- The Company's annual financial
statements and related footnotes.
- The independent auditors'
audit of the financial statements and their report thereon.
- Any serious difficulties or
disputes with management encountered during the course of the audit.
- Other matters related to the
conduct of the audit which are to be
communicated to the Committee under generally accepted auditing
- Review with financial management and the
independent auditors the Company's quarterly financial statements and
results prior to filing with the SEC. The Committee Chairperson or other
designated Committee member may conduct this review on behalf of the
- Review legal and regulatory matters that may
have a material impact on the financial statements.
- Report Committee actions to the Board of
Directors with such recommendations as the Committee may deem appropriate.
- Prepare and file, or cause to be prepared and
filed any reports or other documents required to be prepared and filed by
the Committee under any applicable law or regulations of the Securities
and Exchange Commission or the New York Stock Exchange.
- Set clear hiring policies for employees or
former employees of the independent auditors.