EXHIBIT 10.95
CHARTER OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS OF
EZCORP, INC.
I. INTRODUCTION AND PURPOSE
The Board of Directors ("Board") of EZCORP, Inc. (the "Company") has formed a
special purpose committee known as the Audit Committee (the "Committee"). The
primary purpose of the Committee is to assist the Board of Directors in
fulfilling its oversight responsibilities by reviewing and advising the Board
concerning:
- financial reports and other financial information provided by the
Company to any governmental body or the public;
- systems of internal control implemented by the Company; and
- the Company's auditing, accounting and financial reporting processes
generally.
The Committee's primary duties and responsibilities are to:
- provide independent monitoring of the Company's financial reporting
and internal controls;
- evaluate the audit efforts of the Company's independent accountants
and internal auditing department; and
- encourage open communication between the independent accountants,
Company management, the internal auditing department, and the Board
of Directors.
The Committee will primarily fulfill these responsibilities by carrying out the
activities enumerated in Section V of this Charter.
II. COMPOSITION
The Committee shall be comprised of three or more members of the Board, each of
whom is determined by the Board to be "independent" pursuant to:
- Section 10A(m)(3) and Rule 10A-3(b)(1) of the Securities Exchange
Act of 1934 (the "Exchange Act") (subject to exceptions provided in
Rule 10A-3(c) of the Exchange Act and the cure period provided in
Rule 4350(d)(4) of the rules of the NASDAQ stock market (the "NASDAQ
Rules")); and
- Rule 4200(a)(15) (subject to the exception provided in Rule
4350(d)(2)(B) and the cure period provided in Rule 4350(d)(4)) of
the NASDAQ Rules.
No member of the Committee shall have participated in the preparation of the
financial statements of the Company or any current subsidiary of the Company at
any time during the past three years.
All members of the Committee shall have sufficient background and experience to
be able to read and understand fundamental financial statements, including the
Company's balance sheet, income statement and statement of cash flows.
Additionally, at least one member of the Committee shall have past employment
experience in finance or accounting, a professional certification in accounting
or any other comparable experience or background which results in the
individual's financial sophistication, including being or having been a chief
executive officer, chief financial officer or other senior officer with
financial oversight responsibilities.
The members of the Committee shall be elected by the Board of Directors at the
annual meeting and shall serve until their successors shall be duly elected and
qualified. The Committee shall elect a Chairperson.
III. AUTHORITY
The Committee shall have the authority to retain and consult with special legal,
accounting or other consultants to advise the Committee as circumstances may
dictate. In addition, the Committee shall be directly responsible, in its
capacity as a committee of the Board, for the appointment, compensation,
retention and oversight of the independent accountants. The Committee shall
determine the appropriate funding needed by the Committee and have sole
authority to approve: (i) compensation to the independent audit firm engaged for
the purpose of preparing or issuing an audit report or performing other audit,
review, or attest services for the Company; (ii) compensation to any advisers
employed by the Committee; and (iii) ordinary administrative expenses of the
Committee that are necessary or appropriate in carrying out its duties.
IV. MEETINGS
The Committee shall meet quarterly, or more frequently as circumstances dictate.
As part of its function of fostering open communication, the Committee should
meet regularly with management, the director of the internal audit and the
independent accountants. The Committee will periodically meet separately with
each of these groups to allow for matters which any member of such groups
believes should be discussed privately. Such meetings will include quarterly
consultation with the independent accountants and management to review the
Company's financials consistent with item V.2 below.
V. RESPONSIBILITIES AND DUTIES
To fulfill its responsibilities and duties, the Committee shall have the
responsibilities and authority necessary to comply with Rule 10A-3(b)(2), (3),
(4) and (5) under the Exchange Act, including, without limitation, the
responsibility and duty to take the following actions:
Document/Report Review
1. Review and update this Charter at least annually or more frequently
should conditions dictate.
2. Conduct a pre-issuance review of the Company's annual and quarterly
financial statements and any other reports or other financial
information submitted to any governmental body or the public,
including without limitation a review of the MD&A disclosures made
in the Company's periodic reports filed with the Securities and
Exchange Commission (the "SEC").
3. As considered necessary, discuss with management and the independent
accountants any reports or financial information prepared under V.
2.
4. Meet with the Director of Internal Audit and review reports and
management's response as considered necessary.
5. Advise the Board concerning the results of the Committee's review
procedures.
6. Review the adequacy of and assist in the preparation of disclosure
in the Company's Form 10-K of the required disclosures concerning
the Committee and its function.
Independent Accountants
7. Approve in advance all audit, review or attest engagements required
under the securities laws to be provided by the independent
accountants, including fees and terms, and assure that the
independent accounting firm reports directly to the Committee.
8. Not less than annually, confirm with management and the independent
accountant that the engagement of the independent accountants to
provide permissible non-audit services requires pre-approval by the
Committee (other than with respect to de minimis exceptions
described in Section 10A(i)(1)(B) of the Exchange Act that are
approved by the Committee prior to the completion of the audit).
9. Not less than annually, assure receipt from the independent
accountants of the written disclosure and letter required by ISB
Standard No. 1 and actively engage in a dialogue with the
independent accountants regarding any relationships the independent
accountants have with the Company that might appear to impact the
independent accountants' objectivity and independence.
10. Review and evaluate the lead partner of the independent accountants;
assure compliance with the audit partner rotation requirements of
Section 10A(j) of the Exchange Act; and
present to the Board of Directors the Committee's conclusions with
respect to the qualifications and performance of the independent
accountants.
11. Consider, at least annually, the independence of the independent
accountants, including whether the independent accountants'
performance of permissible non-audit services is compatible with the
accountant's independence; obtain and review the report by the
independent accountants describing any relationships between the
independent accountants and the Company that may adversely affect
the independence of the accountants; discuss with the independent
accountants any disclosed relationship or services that may impact
their objectivity and independence; and present to the Board the
Committee's conclusions with respect to the independence of the
independent accountants.
12. Periodically communicate with the independent accountants, in
meetings separate from management, concerning their evaluation of
internal controls, the propriety of the Company's financial
statements, the quality of the system of internal accounting control
and any other matters deemed necessary to fulfill the Committee's
responsibilities.
Financial Reporting Processes
13. Review and evaluate the propriety of the Company's disclosure
controls and internal and external financial reporting processes, in
consultation with management and the independent accountants.
14. Review disclosures made to the Committee by the Company's Chief
Executive Officer and Chief Financial Officer during their
certification process for the Form 10-K and 10-Q about any
significant deficiencies in the design or operation of internal
controls or material weaknesses therein and any fraud involving
management or other employees who have a significant role in the
Company's internal controls.
15. Consult with the independent accountants and management concerning
the quality and appropriateness of accounting principles applied in
financial reporting.
16. Consider and approve, if appropriate, major changes to the Company's
accounting principles and practices as suggested by any governmental
body, the independent accountants, management, or the internal
auditing department.
Process Improvement
17. Discuss the basis and appropriateness of significant judgments
necessary to the preparation of financial statements with management
and the independent accountants.
18. Subsequent to completion of the annual audit, review with the
independent accountants any significant difficulties encountered
during the course of the audit and any restrictions on the scope of
work or access to required information.
19. Determine if there has been any significant disagreement between
management and the independent accountants concerning accounting
principles, significant judgments or other
matters. Work with management and the independent accountants to
resolve any disagreements.
20. Review with the independent accountants their recommendations
concerning changes to, or improvements in, internal control and
financial reporting practices and assess management's responses to
such recommendations.
21. Perform an evaluation of the Committees performance at least
annually to determine whether it is functioning effectively.
Ethical and Legal Compliance
22. Review annually and provide recommendations to the Board of
Directors concerning the Company's code of ethical conduct and
assure that management has established systems to enforce and
monitor compliance.
23. Review annually the internal audit plan, organizational structure,
and qualifications of the internal audit department with the
Director of Internal Audit.
24. Review, with the Company's counsel, any legal matter that could have
a significant impact on the Company's financial statements.
25. Establish and maintain procedures for the receipt, retention and
treatment of complaints received by the Company regarding
accounting, internal accounting controls, or auditing matters, and
for the confidential, anonymous submission by employees of the
Company of concerns regarding questionable accounting or auditing
matters.
26. Perform any other activities consistent with this Charter, the
Company's Bylaws and governing law, as the Committee or the Board of
Directors deems necessary or appropriate.
This Charter was adopted by the Company's Board of Directors on November 8,
2005.