EXHIBIT 99.2
EXHIBIT A
NEWPARK RESOURCES, INC.
AUDIT COMMITTEE CHARTER
ORGANIZATION
This charter governs the operations of the Audit Committee of the Board
of Directors (the "Board") of Newpark Resources, Inc. The Audit Committee shall
consist of not less than three independent directors. Those directors serving on
the Committee shall be determined annually by the Board. As determined by the
Board, all Members of the Committee must be financially literate, and at least
one Member shall be a financial expert, as defined by SEC regulations. Company
management, independent auditors and Corporate Counsel may attend each meeting
or portions thereof as requested by the Committee. The Committee shall hold four
meetings each year on a quarterly basis and may call special meetings when
necessary.
INDEPENDENCE
All Members of the Audit Committee must be "Independent Directors," as
defined in the Corporate Governance Policy of Newpark. In addition:
o A director shall be considered independent (and eligible to serve on
the Audit Committee) only if the Board affirmatively determines that
the director has no material relationship with the Company (either
directly or as a partner, shareholder or officer of an organization
that has a material relationship with the Company).
o A director will not be considered independent until three years after
the termination of certain relationships of the director (or of a
member of the director's immediate family) with the Company, a present
or former independent auditor of the Company or an executive officer of
the Company.
o Director's fees are the only compensation a Member of the Audit
Committee may receive from the Company. This policy does not preclude
directors' receiving reimbursement for expenses related to travel to
attend Board meetings, nor does it preclude additional directors' fees
to compensate Members of the Audit Committee for additional time and
effort they expend to fulfill their duties as Audit Committee Members.
The Committee, in its discretion, shall determine the amount, if any,
of additional directors' fees to be paid to its Chairman for acting in
that capacity.
PURPOSE
The Audit Committee shall provide independent review and oversight of:
the integrity of the Company's financial statements; the financial reporting
process; the Company's systems of internal accounting and financial controls;
the performance of the Company's internal audit
function and independent auditors; the independent auditor's qualifications and
independence; and the Company's compliance with ethics policies and legal and
regulatory requirements.
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RESPONSIBILITIES
The Audit Committee's role is one of oversight. The Company's
management is responsible for preparing the Company's financial statements and
the independent auditors are responsible for auditing the Company's annual
financial statements. The Audit Committee does not provide any additional
assurance as to the Company's financial statements or certification as to the
work performed by the independent auditor.
The following functions shall be the principal responsibilities of the
Audit Committee in carrying out its oversight function.
1. Provide an open avenue of communications, including regular
periodic private sessions with management, with personnel
responsible for the internal audit function and with the
independent auditors, as the Committee may deem appropriate.
2. Establish procedures for the receipt, retention and treatment
of complaints regarding accounting, internal accounting
controls or auditing matters, including procedures for the
confidential, anonymous submission by Company employees of
concerns regarding questionable accounting or auditing
matters;
3. Receive and review reports from Company management relating to
the Company's financial reporting process, major disclosure
items and the adequacy of the Company's system of internal
controls; discuss with management policies with respect to
risk assessment and risk management.
4. Receive and review reports from Company management and Counsel
relating to legal and regulatory matters that may have a
material impact on the Company's financial statements and
Company compliance policies.
5. Discuss with management and the independent auditors the
appropriateness of accounting principles followed by the
Company, changes in accounting principles and their impact on
the financial statements.
6. Review the audit program in terms of scope of work conducted
or scheduled to be conducted related to the Company's
financial statements which would include, as part of the
audit, the Company's information technology procedures and
controls.
7. Meet regularly with the personnel responsible for the internal
audit function, who shall report to the Audit Committee, to
review the scope of the internal audit program and to receive
and review their reports concerning the Company's financial
reporting process, major disclosure items, the adequacy of the
Company's system of internal controls and other matters.
8. Discuss with management and the independent auditors: the
annual audited financial statements and quarterly financial
statements, including the Company's disclosures under
"Management's Discussion and Analysis of Financial Condition
and Results
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of Operations;" earnings press releases; and financial
information and earnings guidance provided to analysts and
rating agencies.
9. The Committee shall be ultimately responsible for the
selection, evaluation, compensation (with funds provided by
the Company) and, when necessary, replacement of the
independent auditors, and the independent auditors shall
report directly to the Committee. The Committee will:
o Recommend annually to the stockholders for
ratification the appointment of the independent auditors,
based upon an annual performance evaluation and a
determination of the auditors' independence;
o Approve, before they are rendered, any non-audit
services to be provided by the independent auditors;
o At least annually, obtain and review a report by the
independent auditors delineating: all relationships between
the independent auditors and the Company; the independent
auditors' 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.
o Discuss with the independent auditors whether any
disclosed relationship or service could impact the auditors'
objectivity and independence; and
o Take appropriate action in response to the auditors'
statements to ensure the independence of the independent
auditors.
10. Meet with independent auditors and discuss their comments
relating to the system of internal controls, published
financial statements and related disclosures, the adequacy of
the financial reporting process, the scope of the independent
audit and any audit problems or difficulties with management's
responses. The independent auditors are ultimately accountable
to the Committee on all such matters.
11. As appropriate, obtain advice and assistance from outside
legal, accounting and other advisors.
12. Set clear hiring policies for employees or former employees of
the independent auditors.
13. Report regularly to the Board of Directors.
14. Oversee compliance with the Code of Ethics maintained by the
Company.
15. Prepare a Report, for inclusion in the Company's proxy
statement, disclosing that the Committee reviewed and
discussed the audited financial statements with
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management and discussed certain other matters with the
independent auditors. Based upon these discussions, state in
the Report whether the Committee recommended to the Board that
the audited financial statements be included in the Annual
Report.
16. Annually review and assess the performance of the Audit
Committee and the adequacy of the Audit Committee's charter.
Submit to the Board for its consideration and approval any
necessary or appropriate revisions to the Audit Committee's
charter.
FUNDING
The Company shall provide appropriate funding, as determined by the
Committee, for payment of compensation to the independent auditors selected by
the Committee and to outside legal, accounting and other advisors retained by
the Committee in its discretion.
MEETINGS AND QUORUM
Meetings may be conducted on reasonable notice to the Committee
members, at a mutually agreed location or by telephone conference call, as
deemed appropriate by the Committee Chairman. Attendance by three members shall
constitute a quorum for the transaction of business at any meeting.
Adopted by the Board of Directors - June 11, 2003
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