Exhibit 99.1
AMENDED AND RESTATED AUDIT COMMITTEE CHARTER OF
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
AND
ALASKA COMMUNICATIONS SYSTEMS HOLDINGS, INC.
PURPOSE
The purpose of the Audit Committee (the "Committee") is to
provide assistance to the Board of Directors (the "Board") of Alaska
Communications Systems Group, Inc. (the "Company") in fulfilling the Board's
oversight of the Company's accounting and system of internal controls, the
quality and integrity of the Company's financial reports and the independence
and performance of the Company's independent auditor.
In the exercise of its oversight, it is not the duty of the
Committee to plan or conduct audits or to determine that the Company's financial
statements fairly present the Company's financial position and results of
operation and are in accordance with generally accepted accounting principles.
Instead, such duties are the responsibility of management and the independent
auditor. Nothing contained in this charter is intended to alter or impair the
operation of the "business judgment rule" as interpreted by the courts under the
Delaware General Corporation Law (the "DGCL"). Further, nothing contained in
this charter is intended to alter or impair the right of the members of the
Committee under the DGCL to rely, in discharging their oversight role, on the
records of the Company and on other information (and, absent actual knowledge to
the contrary, on the accuracy of such records and information) presented to the
Committee, Board or Company by its officers or employees or by outside experts
such at the independent auditor. It is acknowledged that all of the areas of
oversight listed below may not be relevant to all of the matters and tasks that
the Committee may consider and act upon from time to time, and that the members
of the Committee in their judgment may determine the relevance thereof and the
attention such items will receive in any particular context.
Further, auditing literature, particularly Statement of
Accounting Standards No. 71, defines the term "review" to include a particular
set of required procedures to be undertaken by independent auditors. The members
of the Committee are not independent auditors, and the term "review" as used in
this Charter is not intended to have that meaning and should not be interpreted
to suggest that the Committee members can or should follow the procedures
required of auditors performing reviews of financial statements.
MEMBERSHIP
The Committee shall consist of four members of the Board,
including such "independent directors" as defined in the rules of The Nasdaq
Stock Market ("Nasdaq"). Each Committee member must be able to read and
understand fundamental financial statements, including a company's balance
sheet, income statement and cash flow statement. Except as provided above, each
Committee member shall satisfy the independence and experience requirements of
The Nasdaq Stock Market, including any exceptions thereto. At least one member
of the Committee shall be an "audit committee financial expert" within the
definition adopted by the Securities and Exchange Commission (the "SEC"). In
addition, each Committee member shall satisfy the independence requirements of
the Nasdaq and Rule 10A-3(b)(1) under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The
members shall be appointed by action of the Board and shall serve at the
discretion of the Board.
COMMITTEE ORGANIZATION AND PROCEDURES
1. The members of the Committee shall appoint a
Chair of the Committee by majority vote. The Chair (or in his or her absence, a
member designated by the Chair) shall preside at all meetings of the Committee.
2. The Committee shall have the authority to
establish its own rules and procedures consistent with the bylaws of the Company
for notice and conduct of its meetings, should the Committee, in its discretion,
deem it desirable to do so.
3. The Committee shall meet at least four times
in each fiscal year, and more frequently as the Committee in its discretion
deems desirable.
4. The Committee may include in its meetings
members of the Company's financial management, representatives of the
independent auditor, the senior internal audit manager and other financial
personnel employed or retained by the Company. The Committee may meet with the
independent auditor or the senior internal audit manager in separate executive
sessions to discuss any matters that the Committee believes should be addressed
privately, without management's presence. The Committee may also meet privately
with management, as it deems appropriate.
5. The Committee may, in its discretion, retain
outside legal counsel, experts or advisors (accounting, financial or otherwise)
if it determines that such counsel is necessary or appropriate under the
circumstances. The Committee may retain any independent counsel, experts or
advisors (accounting, financial or otherwise) that the Committee believes to be
necessary or appropriate. The Committee may also utilize the services of the
Company's regular legal counsel or other advisors to the Company. The Company
shall provide for appropriate funding, as determined by the Committee, for
payment of compensation to the independent auditor for the purpose of rendering
or issuing an audit report and to any advisors employed by the Committee.
6. A majority vote of the members of the
Committee shall be required for any action of the Committee. If a vote of the
members of the Committee does not result in a majority, the issue shall be
resolved by a majority of the independent members of the Committee.
OVERSIGHT
Independent Auditor
7. The Committee shall be directly responsible
and have sole authority for the appointment, compensation, retention and
oversight of the work of the independent auditor (including resolution of any
disagreements between Company management and the independent auditor regarding
financial reporting) for the purpose of preparing or issuing an audit report or
related work or performing other audit, review or attest services for the
Company, and the independent auditor shall report directly to the Committee. The
Committee shall be responsible for reviewing the appointment of the independent
auditor and, where applicable, recommending that the Board replace the
independent auditor and recommending to
the Board the nomination of the independent auditor for stockholder approval at
any meeting of stockholders. The Committee shall be responsible for approving
the fees to be paid to the independent auditor and any other terms of the
engagement of the independent auditor.
8. Before the independent auditor is engaged by
the Company or its subsidiaries to render audit or non-audit services, the
Committee shall pre-approve the engagement. Committee pre-approval of audit and
non-audit services will not be required if the engagement for the services is
entered into pursuant to pre-approval policies and procedures established by the
Committee regarding the Company's engagement of the independent auditor,
provided the policies and procedures are detailed as to the particular service,
the Committee is informed of each service provided and such policies and
procedures do not include delegation of the Committee's responsibilities under
the Exchange Act to the Company's management. The Committee may delegate to one
or more designated members of the Committee the authority to grant
pre-approvals, provided such approvals are presented to the Committee at a
subsequent meeting. If the Committee elects to establish pre-approval policies
and procedures regarding non-audit services, the Committee must be informed of
each non-audit service provided by the independent auditor. Committee
pre-approval of non-audit services (other than review and attest services) also
will not be required if such services fall within available exceptions
established by the SEC.
9. The Committee shall receive from the
independent auditor, at least annually, a written statement delineating all
relationships between the independent auditor and the Company, consistent with
Independence Standards Board Standard 1. The Committee shall actively engage in
a dialogue with the independent auditor regarding any disclosed relationships or
services that, in the view of the Committee, may impact the objectivity and
independence of the independent auditor. If the Committee determines that
further inquiry is advisable, the Committee shall recommend that the Board take
any appropriate action in response to the independent auditor's independence.
The Committee shall confirm with the independent auditor that the independent
auditor is in compliance with the partner rotation requirements established by
the SEC. The Committee shall consider whether the Company should adopt a
rotation of the annual audit among independent auditing firms. The Committee
shall, if applicable, consider whether the independent auditor's provision of
any permitted information technology services or other non-audit services to the
Company is compatible with maintaining the independence of the independent
auditor.
Annual Audit
10. The Committee shall meet with the
independent auditor and management (and to the extent applicable, the internal
auditor) in connection with each annual audit to discuss the scope of the audit
and the procedures to be followed.
11. The Committee shall meet with the
independent auditor and management prior to the public release of the financial
results of operations for the year under audit and discuss with the independent
auditor (a) any material off-balance sheet transactions, arrangements,
obligations (including contingent obligations) and other relationships of the
Company with unconsolidated entities of which the Committee is made aware that
do not appear on the financial statements of the Company and that may have a
material current or future effect on the Company's financial condition, results
of operations, liquidity, capital expenditures, capital resources or significant
components of revenues or expenses, (b) any matters within the scope of the
pending audit that have not yet been completed, and (c) any other issues,
analyses or initiatives the Committee deems appropriate for discussion.
12. The Committee shall review and discuss the
annual audited financial statements with management and the independent auditor,
including matters required to be discussed by Statement on Auditing Standards
No. 61 relating to the conduct of the annual audit.
13. The Committee shall, based on the review and
discussions in paragraphs 9 and 10 above, and based on the disclosures received
from the independent auditor regarding its independence and discussions with the
auditor regarding such independence in paragraph 7 above, recommend to the Board
whether the audited financial statements should be included in the Company's
Annual Report on Form 10-K for the fiscal year subject to the audit.
Quarterly Review
14. The independent auditor shall review the
interim financial statements to be included in any Form 10-Q of the Company
using professional standards and procedures for conducting such reviews, as
established by generally accepted auditing standards as modified or supplemented
by the Securities and Exchange Commission and in accordance with Statement on
Auditing Standards 71, prior to the filing of the Form 10-Q. The Committee shall
discuss with management and the independent auditor the results of the quarterly
review including such matters as significant adjustments, management judgments,
accounting estimates, significant new accounting policies and disagreements with
management. The Chair may represent the entire Committee for purposes of this
discussion.
SEPARATE DISCUSSIONS WITH THE INDEPENDENT AUDITOR
15. The Committee shall discuss with the
independent auditor and the senior internal audit manager, at least annually,
(A) any problems or difficulties the independent auditor may have encountered
during the course of the audit work, including any restrictions on the scope of
activities or access to required information or any significant disagreements
with management and management's responses to such matters, (B) the adequacy and
effectiveness of the accounting and financial controls of the Company (and
consider any recommendations for improvement of such internal control
procedures), (C) any material written communications between the independent
auditor and management of the Company, such as management letters, management
representation letters, reports on observations and recommendations on internal
controls, independent auditor's engagement letters, independent auditor's
independence letters, schedules of unadjusted audit differences, listings of
adjustments and reclassifications not recorded, or any other significant matters
brought to the attention of the Committee by the independent auditor as a result
of its annual audit, (D) the accounting policies and practices to be used that
the independent auditor identifies as critical, and (E) all alternative
treatments within GAAP for policies and practices related to material items that
have been discussed among management and the independent auditor, including the
ramifications of the use of such alternative disclosures and treatments, and the
treatment preferred by the independent auditor.
16. The Committee shall, based on the review and
discussions with the independent auditor and the disclosures received from the
independent auditor regarding its independence and disclosed relationships
(including but not limited to the requirements of Independence Standards Board
Standard 1 and the Statement on Auditing Standards No. 61, "Communication with
Audit Committees"), determine whether to recommend to the Board that the audited
financial statements be included in the Company's Annual Report on Form 10-K for
the fiscal year subject to the audit.
17. The Committee shall obtain from the
independent auditor assurances that Section 10A(b) of the Exchange Act has not
been implicated.
Internal Audit
18. The Chief Executive Officer shall be
responsible for the hiring, funding and replacing of the Company's internal
audit manager. The Committee, or the Chair of the Committee, as periodically
warranted, but no less than annually, shall provide the Chief Executive Officer
with an evaluation of the performance of the internal auditor.
19. The senior internal audit manager shall
furnish to the Committee a copy of each audit report prepared by the internal
auditors.
20. The Committee shall discuss with the senior
internal audit manager the activities and organizational structure of the
Company's internal audit function, the qualifications of the primary personnel
performing such function, and any reports prepared by him or her or any other
matters brought to the attention of the Committee by the senior internal auditor
manager
Miscellaneous
21. The Committee shall review and reassess the
Committee's charter at least annually and submit any recommended changes to the
Board for its consideration.
22. The Committee shall review legal and
regulatory matters that may have a material impact on the financial statements
and related compliance policies and programs.
23. The Committee shall provide the report for
inclusion in the Company's Annual Proxy Statement required by Item 306 of
Regulation S-K of the Securities and Exchange Commission.
24. The Committee shall review all related party
transactions on an ongoing basis and all such transactions must be approved by
the Committee.
25. The Committee shall establish procedures for
the receipt, retention and treatment of complaints received by the Company
regarding accounting, internal accounting controls or auditing matters. The
Committee shall also establish procedures for the confidential and anonymous
submission by employees regarding questionable accounting or auditing matters.
26. The Committee shall provide the Company with
the report of the Committee with respect to the audited financial statements
required by Item 306 of Reg. S-K, for inclusion in each of the Company's annual
proxy statements.
27. The Committee, through its Chair, shall
report periodically, as deemed necessary or desirable by the Committee, but at
least annually, to the full Board regarding the Committee's actions,
recommendations, and any issues that arise with respect to the quality or
integrity of the Company's financial statements, the Company's compliance with
legal or regulatory requirements, the performance and independence of the
Company's independent auditor, the performance of the Company's internal audit
function or any other matter the Committee determines is necessary or advisable
to report to the Board.