Amended and Restated Charter of the Audit Committee of the Board of Directors

of

TransMontaigne Inc.

March 2004

 

Purpose

 

The management of TransMontaigne Inc. (the "Corporation") is responsible for the preparation, integrity and objectivity of the Corporation's financial statements and for establishing and maintaining a system of internal accounting and disclosure controls. It is the responsibility of the independent auditors to express an opinion as to the conformance of the Corporation's financial statements with generally accepted accounting principles based upon their audit. The Audit Committee is a standing committee of the Board of Directors (the "Board"). Its primary function is to assist the Board in fulfilling its oversight responsibilities relating to the Corporation's financial statements and other financial information; compliance with applicable laws, rules, regulations, and the Corporation's Code of Business Conduct and Ethics and Code of Ethics for Senior Financial Officers; the independence and qualifications of the Corporation's independent auditors; management's establishment of and adherence to a system of internal accounting and disclosure controls; and the performance of the Corporation's independent auditors. The Audit Committee is empowered to investigate any matter brought to its attention with full access to all books, records, facilities and personnel of the Corporation and may retain, at the Corporation's expense, outside counsel, auditors or other experts deemed necessary by the Audit Committee to assist it.

 

Membership

 

The Audit Committee shall be composed of not fewer than three, nor more than five non-management members of the Board, as determined by resolution of the Board, all of whom in the judgment of the Board meet the standards of independence and other qualifications specified in Rule 10A-3 of the Securities and Exchange Commission (the "SEC"), and any rule that succeeds or replaces Rule 10A-3 and the American Stock Exchange or such other national securities exchange upon which the Corporation's securities may at that time be listed (the "Exchange"). Members shall be elected annually by the Board for terms of one year, or until their successors shall be duly elected and qualified. All members of the Audit Committee must satisfy any financial literacy requirements of the SEC and the Exchange. In addition, at least one member of the Audit Committee shall meet the requirements of and be considered an "Audit Committee Financial Expert" as defined by the SEC and "financially sophisticated," as defined by the Exchange. No Audit Committee member may simultaneously serve on the audit committees of more than three public companies unless the Board shall determine that such simultaneous service would not impair such member's ability to serve effectively on the Corporation's Audit Committee, which determination, if made,

shall be disclosed by the Corporation in the manner required by the SEC and the Exchange.

 

Authority and Responsibilities

 

The following shall be the usual recurring activities of the Audit Committee to assist the Board in fulfilling the oversight responsibilities described above. The Audit Committee may modify these activities consistent with the requirements of the SEC and the Exchange) as particular circumstances warrant. Specifically, the Audit Committee shall:

 

Provide a direct and independent line of communication between the internal auditor, if any, the independent auditors, and the Board.

 

Report regularly to the Board regarding any issues that arise with respect to the Corporation's financial statements or other financial information, compliance with applicable laws, rules, regulations, and the Corporation's Code of Business Conduct and Ethics and Code of Ethics for Senior Financial Officers; the independence and qualifications of the Corporation's independent auditors; and the performance of the Corporation's independent auditors.

 

Be directly responsible for the appointment, compensation, retention and oversight of the Corporation's independent auditors and each other registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Corporation, in each case in a manner that is consistent with the standards of independence and other qualifications established by applicable laws, rules and regulations of the SEC and the Exchange. The Corporation's independent auditors and each such other registered public accounting firm shall report directly to the Audit Committee.

 

Pre-approve all auditing services and permitted non-audit services (including the fees and terms thereof) to be performed by the Corporation's independent auditors, subject to any de minimis or other exception permitted under applicable laws, rules and regulations of the SEC and the Exchange.

 

At least annually, obtain and review a report by the independent auditors describing: the firm's internal quality-control procedures; 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, and any steps taken to deal with any such issues.

 

Review and confirm the independence of the independent auditors by (1) obtaining written statements (as set forth in Independence Standards Board Standard No. 1) from the Corporation's independent auditors concerning any relationships between the auditors and the Corporation or any other relationships, including the provision of non-audit services, that may adversely affect the independence of the auditors; (2) actively engaging the independent auditors in a dialogue with respect to any disclosed relationships for services that may impact the objectivity and independence of the independent auditors; and (3) assessing the independence of the Corporation's independent auditors.

 

Set clear policies regarding the hiring by the Corporation of employees or former employees of the Corporation's independent auditors.

 

Review, in consultation with the Corporation's independent auditors, the scope and plan of the external audit and the scope and plan of the work to be done with respect to internal financial procedures and controls.

 

Discuss with management and the independent auditors the effect of regulatory and accounting initiatives.

 

Receive periodic reports from the Chief Financial Officer or the Controller on accounting developments and issues, particularly those for which there is a proposal for significant change.

 

Discuss earnings press releases (including the use of non-GAAP financial measures) prior to their release.

 

Review with management and the Corporation's independent auditors:

 

The Corporation's annual and quarterly financial statements and related footnotes and the independent auditors' report thereon, including the effect of off-balance sheet structures on the Corporation's financial statements and disclosures under "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Corporation's annual and quarterly reports to be filed with the SEC.

 

Any significant difficulties or disputes with management encountered by the independent auditors during the course of the audit or interim reviews and any instances of second opinions sought by management.

 

Any significant findings and recommendations made by the independent auditors with respect to the Corporation's financial policies, procedures and internal accounting controls, together with management's responses thereto;

 

The form of opinion the independent auditors propose to render to the Board and the Audit Committee and stockholders;

 

The critical accounting policies and estimates used in preparing the financial statements of the Corporation.

 

Other material written communications between the Corporation's independent auditors and management, such as any management letter or schedule of unadjusted differences.

 

All alternative treatments of financial information within generally accepted accounting principles that have been discussed with management, ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the Corporation's independent auditors.

 

Any certification by the Corporation's senior executive and financial officers regarding the financial statements and other financial information of the Corporation to be filed with the SEC.

 

Any fraud, whether or not material, that involves management or other employees who have a significant role in the Corporation's internal accounting and disclosure controls.

 

Other matters related to the conduct of the external audit, which are required to be communicated to the Audit Committee under Statement on Auditing Standards (SAS) No. 61 and SAS No. 100, as the same may be amended in the future.

 

Other matters related to the Corporation's interim financial results to be included in the quarterly reports to be filed with the SEC and the matters to be communicated under SAS No. 100, as the same may be amended in the future.

 

Consider and review with management and the independent auditors, the effectiveness of the Corporation's system of internal controls over financial reporting, disclosure controls and procedures, and the safeguarding of assets, including any significant deficiencies which could adversely affect the Corporation's ability to record, process, summarize and report financial data.

 

Review in private discussion with the independent auditors whether there have been (and, if so, the nature of) any audit problems or difficulties and any related responses by management. This review shall include:

 

Confirmation that management is not placing any restrictions on the scope of the independent auditors' work or their access to information;

 

Inquiry as to any accounting adjustments noted or proposed by the independent auditors but "passed" (as immaterial or otherwise) and any communications between the audit team and the audit firm's national office regarding auditing or accounting issues raised in connection with the Corporation's audit; and

 

Discussion of any "management" or "internal control" letters issued or proposed to be issued by the independent auditors to the Corporation, as well as any other material written communications between the independent auditors and management that the independent auditors or management bring to the Audit Committee's attention.

 

Establish procedures for processing complaints regarding accounting, internal controls, or auditing matters, and the confidential, anonymous submissions by employees of concerns regarding questionable accounting or auditing matters or discrimination or harassment alleged to result from employees' complaints regarding such matters.

 

Inquire of management, the Corporation's independent auditors and the General Counsel about the Corporation's risk assessment and risk management policies, including the Corporation's major financial risk exposure and the steps management has taken to monitor and mitigate such risks, as they relate to the Corporation's refined petroleum products trading and hedging strategy and activities relating to the management of all transactions involving refined petroleum products, including forward purchases and sales of wholesale and retail physical product, exchange traded futures and options, over the counter options and swaps.

 

Review and investigate any matters pertaining to the integrity of management, conflicts of interest, or adherence to standards of business conduct as required by the Corporation's policies.

 

Obtain advice and assistance from the Corporation's General Counsel and outside legal, accounting and other advisors regarding compliance with laws, regulations and internal procedures, and contingent liabilities that may be material to the Corporation. The Audit Committee shall have the authority to engage independent counsel and other advisors, as it determines necessary to carry out its duties. The Corporation shall provide the Audit Committee with appropriate funding, as determined by the Audit Committee in its capacity as a committee of the Corporation's Board for payment of (1) compensation to any registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Corporation, (2) compensation to any independent counsel or other advisors engaged by the Audit Committee, and (3) ordinary administrative expenses of the Audit Committee that are necessary or appropriate in carrying out its duties.

 

Review, prior to submission, all certification letters and other documents required to be submitted by the Corporation to the Exchange concerning the composition of the Audit Committee, the Charter of the Audit Committee, or related matters.

 

Review the Audit Committee Charter periodically to ensure that it meets all applicable legal and Exchange requirements, and recommend any necessary or desirable revisions to the Board.

 

Prepare the report of the Audit Committee required by the rules of the SEC to be included in the Corporation's annual Proxy Statement.

 

Conduct a self-evaluation of the Audit Committee's performance at least annually.

 

Oversee compliance with the Corporation's policies, the Code of Business Conduct and Ethics and the Code of Ethics for Senior Financial Officers including:

 

Confirmation that the Corporation's policies, the Code of Business Conduct and Ethics and the Code of Ethics for Senior Financial Officers are formalized in writing and that procedures are in place to communicate such policies and codes to appropriate management, supervisory and other key employees.

 

Periodic review of the Corporation's policies, the Code of Business Conduct and Ethics and the Code of Ethics for Senior Financial Officers, with particular focus on related party transactions and conflicts of interest involving, directly or indirectly, any director or executive officer, and consider whether any changes are needed.

 

Review of the program for monitoring compliance with the Corporation's policies, the Code of Business Conduct and Ethics and the Code of Ethics for Senior Financial Officers, and obtaining periodic updates from management regarding compliance.

 

Evaluation, approval, and monitoring on an ongoing basis of any related party transactions covered by the Corporation's policies, the Code of Business Conduct and Ethics and the Code of Ethics for Senior Financial Officers.

 

Determination of whether to grant any waivers of or approve any other deviations from the Corporation's policies, the Code of Business Conduct and Ethics and the Code of Ethics for Senior Financial Officers, and documenting and monitoring any such approval or waiver.

 

Evaluate annually whether the Corporation should change its independent auditors or the partner in charge of performing or reviewing the Corporation's audit or other audit team personnel. Such evaluation shall be based on all relevant circumstances known to the Audit Committee, including qualifications of and quality of services performed by the independent auditing firm and the primary audit partner, opinions of the Corporation's management regarding the independent auditors, length of tenure, factors having the potential to impact objectivity, the SEC requirement to rotate at least every five years the primary audit partner in charge of performing (or overseeing the performance of) the Corporation's audit and the primary audit partner in charge of reviewing the Corporation's audit, the possible desirability of regular rotation of the independent auditing firm, any reported issues regarding the independent auditing firm's internal controls or audits of other companies, and the independent auditing firm's efficiencies and relevant expertise regarding the Corporation. The Audit Committee shall present to the Board a summary of the Audit Committee's evaluation and conclusions.

 

Meetings

 

The Audit Committee shall convene on at least a quarterly basis with and without management present. Such quarterly meetings, in any event, shall be held following the end of each fiscal quarter of the Corporation prior to the release of quarterly or annual earnings to review the financial results of the Corporation for the preceding fiscal quarter, or preceding fiscal year, as applicable. Quarterly and other meetings of the Audit Committee may be called by the Chairman of the Audit Committee, the Chairman of the Board, the Chief Executive Officer, or the Chief Financial Officer of the Corporation. All meetings and other actions of the Audit Committee shall be held and taken pursuant to the bylaws of the Corporation, including those governing notice of meetings and waiver thereof, and the number of Audit Committee members required to take action at meetings and by written consent and other related matters. On a regular basis, the Audit Committee shall convene with the Corporation's independent auditors without management present. The Audit Committee may request any officer, employee or advisor of the Corporation to participate in an Audit Committee meeting or to meet with any members of, or advisors to, the Audit Committee.

 

If a Chairman of the Audit Committee is not designated or present, the members of the Audit Committee present at the meeting may designate a Chairman by majority vote. A majority of the members present at a meeting shall constitute a quorum to properly convene a meeting. The Audit Committee Chairman, in consultation with the Corporation's Chief Financial Officer, other Audit Committee members and the Corporation's independent auditors, shall prepare and circulate among the members an agenda in advance of each quarterly meeting.

 

Reporting

 

Formal meeting minutes shall be maintained, distributed to Committee members, and filed with the Corporation's Secretary. In addition, the Chairman of the Audit Committee shall provide regular reports to the Board.