AUDIT COMMITTEE CHARTER
(Revised as of March 31,
Audit Committee (the "Committee") of the Board of Directors (the
"Board") of Register.com, Inc. (the "Company") shall be
comprised of at least three directors, each of whom shall meet the independence
and financial literacy requirements specified in the rules of the Nasdaq Stock Market, Inc. ("Nasdaq")
and under applicable federal law. At least one member of the Committee must be
financially sophisticated as required by the SEC and Nasdaq rules. Members of the Committee shall be
appointed by the Board and the Board may remove any member from the Committee,
with or without cause.
primary function of the Committee is to assist the Board in fulfilling its
oversight responsibilities with respect to the Company's accounting and
financial reporting processes, internal control over financial reporting and
the audits of the Company's financial statements. The Committee shall also
assist the Board in monitoring the independence, performance and qualifications
of the Company's independent auditors. While the Committee has the duties,
responsibilities and powers set forth in this Charter, it is not the duty or
responsibility of the Committee to plan or conduct audits or to determine
whether the Company's financial statements are complete and accurate and are in
accordance with generally accepted accounting principles.
Committee shall meet in person or telephonically at least quarterly or as more
often as it deems necessary or appropriate. The quarterly meetings shall
include separate executive sessions without management present. The Committee
shall report its activities to the Board on a regular basis and shall make
recommendations to the Board as it deems appropriate.
Duties and Responsibilities
Committee shall have the following duties and responsibilities and such
additional duties and responsibilities as may be delegated from time to time by
- Appoint, compensate, retain and
oversee the work of the independent auditor engaged for the purpose of
preparing or issuing an audit report or performing other audit, review or
attest services for the Company (including resolution of disagreements
between management and the independent auditor regarding financial
reporting). The independent auditor (and the internal auditor if and at
such time as an internal audit function is established) shall report
directly to the Committee. If deemed appropriate, the Committee may
recommend that the Board seek stockholder ratification of the appointment
of the independent auditor.
- Review and discuss with the independent auditor
(i) the overall scope and plans for its audits,
(ii) the results of the annual audit examination and accompanying
management letters and (iii) the results of the independent auditor's
procedures with respect to interim periods.
- Pre-approve all audit services and permitted
non-audit services provided by the independent auditor and all related
fees and terms of engagement required by SEC rules, provided that the
Committee may establish policies and procedures for such pre-approvals as
permitted under applicable SEC rules.
- Review with management and the independent
auditor the Company's interim and annual financial statements, the
Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K, including
the Company's disclosures under "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and the related
earnings press releases (including the use of non-GAAP information) prior
to their release or filing.
- Determine annually whether the Company's
independent auditor is independent in accordance with applicable legal
requirements, including rules and regulations established by the SEC and Nasdaq and the Committee and, as part of such process,
receive and review a letter annually from the independent auditor
describing all relationships between the independent auditor and the
Company as required to be disclosed by the Independence Standards Board
Standard No. 1.
- Review and, if appropriate, approve any
related-party transactions that are required to be disclosed under Item
404 of Regulation S-K of the SEC rules.
- Prepare its report to be included in the
Company's annual proxy statement, as required by SEC rules and, if deemed
appropriate, recommend to the Board that the audited annual financial
statements be included in the Company's Annual Report on Form 10-K.
- Review with the independent auditor its
judgments as to the preferability, not just the
acceptability, of the Company's critical accounting policies and
practices, and the ramifications of the alternative accounting policies
and practices that have been discussed with management, and review any
other matters as are required to be discussed with the independent auditor
under generally accepted auditing standards.
- Discuss with management, the independent
auditor and the internal auditor (at such time as the Company has an internal
audit function) (i) the adequacy, effectiveness
and any significant deficiencies and material weaknesses in the design or
operation of the Company's internal control over financial reporting which
are reasonably likely to adversely affect the Company's ability to record,
process, summarize and report financial information, (ii) the Company's
financial reporting and auditing processes, both internal and external,
(iii) the Company's system of internal control over financial reporting,
(iv) the Company's disclosure controls and procedures; and (v) the
disclosure regarding internal control over financial reporting and
disclosure controls and procedures contained in the Company's periodic
reports filed with the SEC based on the evaluations of the Company's Chief
Executive and Chief Financial Officers and the attestation thereof by the
- Discuss with management any finding of fraud,
whether or not material, that involves a member of management or other
employee who has a significant role in the Company's internal control over
- Review and discuss with the independent auditor
any problems or difficulties encountered by the independent auditor in the
course of any audit work, including any restrictions on the scope of their
activities or on access to requested information, any significant
disagreements with management, any accounting adjustments that were noted
or proposed by the independent auditor but were rejected by management,
any "management letter" or "internal control
recommendations letter" issued by the independent auditor and
management's response to any such issues or letters.
- Review and discuss with management and the
independent auditor any other topics or events that may have a significant
financial impact on the Company or that are the subject of discussions
between management and the independent auditor, including the
reasonableness of significant judgments, accounting or financial reporting
matters which management or the independent auditor believes requires
additional attention by the Committee, any significant changes in the
Company's selection or application of accounting principles, any major
financial risk exposure for the Company and the steps management has taken
to monitor and control such exposure and any significant accounting or
financial reporting developments or proposals by regulatory authorities.
- Review with management the Company's compliance
with applicable tax laws and regulations.
- Review periodically with management, legal
counsel and other experts, as appropriate, any legal and regulatory
matters that may have a material impact on the Company's financial
- Obtain and review annually a report by the
independent auditor describing (i) the
independent auditor's internal quality control procedures and (ii) any
material issues raised by the most recent internal quality control review
or peer review, of the independent auditor, or by any inquiry or
investigation by governmental or professional authorities, within the
preceding five years, respecting one or more outside audits carried out by
such firm, and any steps taken to address any such issues.
- Establish procedures for the hiring by the
Company of current or former employees of the independent auditor.
- Review, on a quarterly basis, the expenses
reimbursed to or incurred on behalf of the Company's Chief Executive
Officer and the Chairman.
- Establish procedures for (i)
the receipt, retention and treatment of complaints received by the Company
regarding accounting, internal accounting controls or auditing matters and
(ii) the confidential, anonymous submission by employees of the Company of
concerns regarding questionable accounting or auditing matters.
- Engage independent counsel and other advisers
as the Committee determines necessary or advisable in the discharge of its
duties and responsibilities hereunder, approve the fees and other
retention terms of such advisors, and require the Company to provide the