EXHIBIT 99.2
AUDIT COMMITTEE CHARTER
OF
REMINGTON OIL AND GAS CORPORATION
PURPOSE AND RESPONSIBILITIES
The Audit Committee is a standing committee of the Board of Directors. Its
purpose is to oversee the accounting and financial reporting processes of the
Company and the audits of the financial statements of the Company, including
assisting the Board of Directors oversight of (1) the integrity of the Company's
financial statements, (2) the Company's compliance with legal and regulatory
requirements, (3) the Company's Registered Public Accounting Firm's
qualifications and independence, and (4) the performance of the Company's
internal audit function and the Company's Registered Public Accounting Firm, and
preparing the Audit Committee Report that the Securities and Exchange Commission
rules require be included in the Company's annual proxy statement.
In carrying forth this purpose, the Audit Committee, as a committee of the Board
of Directors shall be directly responsible for the appointment, compensation,
and oversight of the work of the Company's Registered Public Accounting Firm
retained for the purpose of preparing or issuing an audit report and related
work. The Company's Registered Public Accounting Firm shall report directly to
the Audit Committee. The Audit Committee shall have the sole authority to retain
and terminate the Company's Registered Public Accounting Firm, and to approve
all audit engagement fees and terms and all significant non-audit engagements
with a Registered Public Accounting Firm. The Audit Committee may, but is not
required to, seek the input of the Company's management as to such matters,
provided that the Audit Committee's responsibilities are not delegated to
management. No engagement by the Company of a Registered Public Accounting Firm
in connection with an audit, quarterly reviews or other material non-audit
related work shall be valid unless the engagement letter relating to such work
has been executed by the Chairperson of the Audit Committee. As used throughout
this Audit Committee Charter, the term "Registered Public Accounting Firm" shall
have the meaning set forth in the Sarbanes-Oxley Act of 2002 (the
"Sarbanes-Oxley Act"), and shall also mean independent public accountants until
such time as independent public accountants used by the Company become
Registered Public Accounting Firms as required under the Sarbanes-Oxley Act.
Unless the context otherwise requires, as used in this Audit Committee Charter,
the term "Registered Public Accounting Firm" shall refer to the Registered
Public Accounting Firm retained for the purpose of preparing or issuing an audit
opinion on the consolidated financial statements of the Company.
The Audit Committee shall have the ultimate power of determination regarding
issues of the qualifications, performance and independence of the Company's
Registered Public Accounting Firm and shall prepare the Audit Committee Report
required by the Securities and Exchange Commission to be included in the
Company's annual proxy statement.
The Audit Committee shall establish a P.O. Box or address independent of the
company in order to receive communications addressed to the Audit Committee.
This address shall be published in the Company's Proxy Statement and posted on
its website.
ORGANIZATION
- Appointment and Term. The members of the Audit Committee shall
be appointed annually by the vote of the majority of the Board
of Directors. The Board of Directors, by majority vote, may
remove any member of the Audit Committee. Except for the prior
resignation or removal, each member of the Audit Committee
shall serve on the Audit Committee until his or her term of
office as a director of the Company expires.
- Composition. The audit committee shall be composed of three
Independent Directors.
- Eligibility. Only Independent Directors who receive only
director fees and expense reimbursement from the company as
compensation may be members of the Audit Committee and only
members of the Audit Committee may vote on matters before the
Audit Committee. Decisions of the Audit Committee shall
require the affirmative vote of a majority of members of the
Audit Committee.
- Qualifications. All members of the Audit Committee must be
financially literate, and the Chairperson of the Audit
Committee shall have a background in financial reporting,
accounting, auditing, or finance
- Audit Committee Financial Expert. The Audit Committee shall
have an "Audit Committee Financial Expert" on the Committee
and the Company shall disclose in its Annual Report on Form
10-K and its Proxy Statement for the Annual Meeting that there
is an "Audit Committee Financial Expert" on the Audit
Committee. The term "Audit Committee Financial Expert" shall
have such meaning as promulgated under the regulations in
accordance with the Sarbanes-Oxley Act. The "Audit Committee
Financial Expert" must understand financial statements and
GAAP; have the ability to assess the general application of
such principles in connection with accounting for estimates,
accruals and reserves; have experience preparing, auditing,
analyzing or evaluating financial statements generally
comparable to the Company's financial statements, or has
experience supervising one or more persons engaged in such
activities; understand internal controls and procedures for
financial reporting; and understand audit committee functions.
- Independence. All members of the Audit Committee must be
Independent (as defined in the Company's By-Laws).
- Appointment of a Chairperson. The Audit Committee shall
recommend a Chairperson from among its members to the Board of
Directors for approval. It is the responsibility of the
Chairperson to schedule all meetings of the Audit Committee
and provide the Audit Committee, other members of the Board,
and the Company's Secretary with a written notice and written
agenda for all meetings.
- Meetings. The Audit Committee shall meet at least four times
per year or more frequently as circumstances require. The
Audit Committee may ask members of management or others to
attend the meetings and provide pertinent information as
necessary.
- Reporting and Minutes. The Audit Committee shall report to the
entire Board of Directors and shall provide all notices and
minutes of meetings of the Audit Committee
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to the Board of Directors. All notices, agendas, and minutes
of meetings shall be provided to the Company's management in
order for payment of any applicable meeting fees and expenses
to be made.
- Power to retain Advisors. The Audit Committee is authorized
and empowered to retain such independent advisors, including
counsel that the Audit Committee may deem necessary in order
to carry out its responsibilities. No engagement shall be a
valid act of the committee and no compensation for the
services of such advisors shall be paid by the Company unless,
prior to such engagement, the Company Secretary was advised of
the decision to engage the advisor, a preliminary budget for
the engagement of the advisor was submitted to the Company
Secretary, the identity of the advisor was made known to the
Company Secretary so that conflicts could be checked and
independence verified, and the Company Secretary was provided
an undertaking by the committee chairperson that any and all
letters, reports, and studies prepared by the advisor will be
made known and made available to the Company's Board of
Directors as a whole.
- Procedures. The Audit 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 confidential, anonymous submission by Company
employees of concerns regarding questionable
accounting or auditing matters.
- the receipt, retention, and treatment of submissions
by attorneys regarding possible violations of
securities laws.
- Review of Charter. The Audit Committee shall at least on an
annual basis review and update its charter and recommend any
changes to the Board of Directors for approval.
- Annual Performance Review. The Audit Committee shall perform
an annual performance evaluation of the Audit Committee in
accordance with the Company's By-Laws.
- OUTSIDE AUDITORS
- At least annually, the Audit Committee shall obtain a report
by the Company's Registered Public Accounting Firm responsible
for the Company's audit and audit related work which
describes:
- the Registered Public Accounting Firm's internal
quality control procedures,
- any material issues raised by the most recent
internal quality control review of the Registered
Public Accounting Firm,
- any material issues raised by any inquiries or
investigations by any governmental or
quasi-governmental, professional authorities or the
Public Company Accounting Oversight Board established
pursuant to the Sarbanes-Oxley Act within the
preceding five years, respecting one or more of the
independent audits carried out by the Registered
Public Accounting Firm, and any steps taken to deal
with such issues, and
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- all relationships between the Registered Public
Accounting Firm and the Company, so that the Audit
Committee may assess the Registered Public Accounting
Firm's independence.
- This report from the Registered Public Accounting Firm shall
be in addition to an on-going duty of the Registered Public
Accounting Firm and the Audit Committee to engage in a
continuing dialog regarding any matters, relationships or
services that may affect the objectivity of the Registered
Public Accounting Firm. In this regard the Audit Committee may
require a statement from the Registered Public Accounting Firm
on a basis more frequent than annually regarding all
relationships between the Registered Public Accounting Firm
and the Company. The Audit Committee shall take such action as
is appropriate in response to the Registered Public Accounting
Firm's report to satisfy itself as to the Firm's independence.
- The Audit Committee shall at least on an annual basis review
and evaluate the performance of the Registered Public
Accounting Firm's lead partner responsible for the Company's
audit and see that such partner is rotated off the Company's
audit at least as frequently (5 years) as required by the
Sarbanes-Oxley Act. The Company's management and the personnel
responsible for the Company's internal audit function should
be consulted in relation to this review. The Audit Committee
should also consider whether there should be a rotation on a
regular basis of the Registered Public Accounting Firm
responsible for the Company's audit.
- The Audit Committee should present its conclusions regarding
the independence of the Registered Public Accounting Firm to
the Board of Directors.
OVERSIGHT RESPONSIBILITIES
- The Audit Committee shall discuss the Company's annual audited
financial statements and quarterly financial statements with
management and the Registered Public Accounting Firm including
the Company's disclosures under "Management's Discussion and
Analysis of Financial Condition and Results of Operations."
The Audit Committee should also review and discuss Company
earnings press releases (paying particular attention to any
use of "pro forma," or "adjusted" non-GAAP information), as
well as financial information and earnings guidance provided
to analysts and rating agencies.
- The Audit Committee shall discuss policies with respect to
risk assessment and risk management, and should review and
evaluate the effectiveness of the Company's process for
assessing significant risks or exposures and the steps
management has taken to minimize such risks to the company.
- The Audit Committee should consider and review with management
and the Registered Public Accounting Firm:
- the effectiveness of or weaknesses in the Company's
internal controls including the Company's internal
audit function, computerized information system
controls and security, the overall control
environment, and accounting and financial controls.
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- any related significant findings and recommendations
of the Registered Public Accounting Firm together
with management's responses thereto, including the
timetable for implementation of recommendations to
correct weaknesses in internal controls.
- The Audit Committee shall review with the Registered Public
Accounting Firm the coordination of audit efforts to assure
completeness of coverage of key business controls and risk
areas, reduction of redundant efforts, and the effective use
of audit resources.
- The Audit Committee shall discuss with management and the
Company's Registered Public Accounting Firm the status and
adequacy of management information systems and other
information technology, including the significant risks
related thereto and major controls over such activities.
- The Audit Committee shall set clear hiring guidelines for
employees or former employees of the Company's Registered
Public Accounting Firm.
- The Audit Committee shall report regularly to the Board of
Directors. In doing so, the Audit Committee should review with
the full Board of Directors 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 Registered Public Accounting Firm and the
performance of the Company's internal audit function.
Financial Reporting
- Although it is not the responsibility of the Audit Committee
to prepare the Company's financial statements and disclosures,
the Audit Committee must review:
- major issues regarding accounting principles and
financial statement presentations, including any
significant changes in the Company's selection or
application of accounting principles, and major
issues as to the adequacy of the Company's internal
controls and any special audit steps adopted in light
of material control deficiencies;
- analyses prepared by the Company's management and or
the Registered Public Accounting Firm setting forth
significant financial reporting issues and judgments
made in connection with the preparation of the
Company's financial statements, including analyses of
the effects of alternative GAAP methods on financial
statements; and
- the effect of regulatory accounting initiatives, as
well as any off-balance sheet structures, on the
Company's financial statements.
- The Audit Committee shall regularly review with the Company's
Registered Public Accounting Firm any audit problems or
difficulties encountered in the course of the audit work and
the response of the Company's management to such problems or
difficulties. Such regular review shall include any
restrictions on the scope of the Registered Public Accounting
Firm's activities or requested information, and any
significant disagreement with management. To that end, the
Audit Committee should review and discuss the following items
with the Registered Public Accounting Firm:
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- any accounting adjustments that were noted or
proposed by the Registered Public Accounting Firm but
were "passed" (as immaterial or otherwise);
- any communications between the Registered Public
Accounting Firm's audit team and the Registered
Public Accounting Firm's national office respecting
auditing or accounting issues presented by the
engagement;
- any "management" or "internal control" letter issued,
or proposed to be issued, by the Registered Public
Accounting Firm to the Company; and
- the responsibilities, budget and staffing of the
Company's internal audit function.
- The Audit Committee shall review the Company's filings with
the Securities and Exchange Commission and other agencies and
other published documents containing the company's financial
statements, including annual and interim reports, press
releases and statutory filings, and consider whether the
information contained in these documents is consistent with
the information contained in the Company's financial
statements.
- The Audit Committee shall review with management and the
Company's Registered Public Accounting Firm at the completion
of the annual examination:
- the Company's annual financial statements and related
footnotes.
- the Registered Public Accounting Firm's audit of the
financial statements and their report thereon.
- any significant changes required in the Registered
Public Accounting Firm's audit plan.
- any serious difficulties or disputes with management
encountered during the course of the audit.
- the existence of significant estimates and judgments
underlying the financial statements, including the
rationale behind those estimates as well as the
details on material accruals and reserves.
- other matters related to the conduct of the audit
which are to be communicated to the Audit Committee
under generally accepted auditing standards or
applicable standards established by the Public
Company Accounting Oversight Board.
- review and approve the Company's accounting
principles.
- The Audit Committee shall review with management and the
Registered Public Accounting Firm at the completion of the
quarterly review and the annual audit prior to the filing of
the Forms 10-Q and 10-K, respectively, the matters set forth
above and other matters contained within Statement of Auditing
Standards 61, including, but not limited to, significant
adjustments, management judgments and accountant estimates,
significant new accounting policies and disagreements with
management and as such standards as may be promulgated by the
Public Company Accounting Oversight Board.
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AUDIT COMMITTEE REPORT
- In connection with the annual audit of the Company's financial
statements and the Audit Committee's discussions with the
Company's Registered Public Accounting Firm and the Company's
management, the Audit Committee shall provide a report in the
Company's proxy statement, no less frequently than required by
the rules and regulations of the Securities and Exchange
Commission, stating whether the Audit Committee has reviewed
and discussed the audited financial statements with
management, whether the Audit Committee has discussed with the
Registered Public Accounting Firm the matters required to be
discussed pursuant to Statement of Auditing Standards 61 and
any other applicable standards and whether the Audit Committee
has received the written disclosures and the letter from the
Registered Public Accounting Firm required by Independence
Standards Board Standard No. 1 and has discussed with the
Registered Public Accounting Firm its independence.
COMPLIANCE WITH LAWS AND REGULATIONS
- The Audit Committee shall ascertain whether the Company has an
effective process for determining risks and exposures from
asserted and unasserted litigation and claims and from
noncompliance with laws and regulations.
- The Audit Committee shall review with the Company's general
counsel and others any legal, tax, or regulatory matters that
may have a material impact on Company operations and the
financial statements, related Company compliance policies, and
programs and reports received from regulators.
COMPLIANCE WITH CODES OF ETHICAL CONDUCT
- The Audit Committee shall review and assess the Company's
processes for administering those sections of the Company's
Corporate Governance Guidelines and the Company's Code of
Business Conduct and Ethics which relate to matters within the
purview of the Audit Committee Charter.
- The Audit Committee shall review with the Registered Public
Accounting Firm the results of the Registered Public
Accounting Firm's review of the Company's monitoring of
compliance with the Company's Corporate Governance Guidelines
and the Company's Code of Business Conduct and Ethics,
including compliance with the Foreign Corrupt Practices Act.
- The Audit Committee shall review policies and procedures with
respect to officers' expense accounts and perquisites,
including their use of corporate assets, and consider the
results of any review of these areas by the Registered Public
Accounting Firm.
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