EXHIBIT A
PHAZAR CORP
Audit Committee Charter
June 13, 2000
Revised August 21, 2001
The audit committee of the Board of Directors ("the Board") of PHAZAR CORP ("the
Company") will have the oversight responsibility, authority and specific duties
as described below. The charter is to be published as an appendix to the proxy
statement.
COMPOSITION
The audit committee will be comprised of three or more directors as determined
by the Board. The members of the audit committee will meet the requirements of
the Nasdaq independent director and audit committee requirements. The members of
the audit committee will be elected annually at the organizational meeting of
the full Board held in October and will be listed in the annual report to
shareholders. One of the members of the audit committee will be elected
committee chair by the Board.
RESPONSIBILITY
The audit committee is a part of the Board. It's primary function is to assist
the Board in fulfilling its oversight responsibilities with respect to (i) the
annual financial information to be provided to shareholders and the Securities
and Exchange Commission (SEC); (ii) the system of internal controls that
management has established; and (iii) the external audit process. In addition,
the audit committee provides an avenue for communication between the independent
accountants, financial management and the Board. The audit committee should have
a clear understanding with the independent accountants that they must maintain
an open and transparent relationship with the audit committee, and that the
ultimate accountability of the independent accountants is to the Board and the
audit committee. The audit committee will make regular reports to the Board
concerning its activities.
While the audit committee has the responsibilities and powers set forth in this
charter, it is not the duty of the audit committee to plan or conduct audits or
to determine that the Company's financial statements are complete and accurate
and are in accordance with generally accepted accounting principles. This is the
responsibility of management and the independent auditor. Nor is it the duty of
the audit committee to conduct investigations, to resolve disagreements, if any,
between management and the independent auditor or to assure compliance with laws
and regulations and the Company's business conduct guidelines.
AUTHORITY
Subject to the prior approval of the Board, the audit committee is granted the
authority to investigate any matter or activity involving financial accounting
and financial reporting, as well as the internal controls of the Company. In
that regard, the audit committee will have the authority to approve the
retention of external professionals to render advice and counsel in such
matters. All employees will be directed to cooperate with respect thereto as
requested by members of the audit committee.
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Audit Committee Charter
June 13, 2000
Revised August 21, 2001
MEETINGS
The audit committee is to meet at least once each year and as many additional
times as the audit committee deems necessary. Content of the agenda for each
meeting should be cleared by the audit committee chair. The audit committee is
to meet in separate executive sessions with the chief financial officer and the
independent accountants at least once each year and at other times when
considered appropriate.
ATTENDANCE
Audit committee members will strive to be present at all meetings. As necessary
or desirable, the audit committee chair may request that members of management
and representatives of the independent accountants be present at audit committee
meetings.
SPECIFIC DUTIES
In carrying out its oversight responsibilities, the audit committee will:
1. Review and reassess the adequacy of this charter annually and recommend any
proposed changes to the Board for approval. This should be done in
compliance with all applicable NASDAQ Audit Committee Requirements.
2. Review with the Company's management and independent accountants the
Company's accounting and financial reporting controls. Obtain annually in
writing from the independent accountants their letter as to the adequacy of
such controls.
3. Review with the Company's management and independent accountant's
significant accounting and reporting principles, practices and procedures
applied by the Company in preparing its financial statements. Discuss with
the independent accountants their judgments about the quality, not just the
acceptability, of the Company's accounting principles used in financial
reporting.
4. Review the scope and general extent of the independent accountants' annual
audit. The audit committee's review should include an explanation from the
independent accountants of the factors considered by the accountants in
determining the audit scope, including the major risk factors. The
independent accountants should confirm to the audit committee that no
limitations have been placed on the scope or nature of their audit
procedures. The audit committee will review annually with management the fee
arrangement with the independent accountants.
5. Inquire as to the independence of the independent accountants and obtain
from the independent accountants, at least annually, a formal written
statement delineating all relationships between the independent accountants
and the Company as contemplated by Independence Standards Board Standard
No. 1, Independence Discussions with Audit Committees.
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Audit Committee Charter
June 13, 2000
Revised August 21, 2001
6. Have a predetermined arrangement with the independent accountants that they
will advise the audit committee through its chair and management of the
Company of any matters identified through procedures followed for interim
quarterly financial statements, and that such notification as required under
standards for communication with audit committees is to be made prior to the
related press release and prior to filing Forms 10-Q.
7. At the completion of the annual audit, review with management and the
independent accountants the following:
- The annual financial statements and related footnotes and financial
information to be included in the Company's annual report to shareholders
and on form 10-K.
- Results of the audit of the financial statements and the related report
thereon and, if applicable, a report on changes during the year in
accounting principles and their application
- Significant changes to the audit plan, if any, and any serious disputes or
difficulties with management encountered during the audit. Inquire about
the cooperation received by the independent accountants during their
audit, including access to all requested records, data and information.
Inquire of the independent accountants whether there have been any
disagreements with management, which, if not satisfactorily resolved,
would have caused them to issue a nonstandard report on the Company's
financial statements.
- Other communications as required to be communicated by the independent
accountants by Statement of Auditing Standards(SAS)61 as amended by SAS 90
relating to the conduct of the audit. Further, receive a written
communication provided by the independent accountants concerning their
judgment about the quality of the Company's accounting principles, as
outlined in SAS 61 as amended by SAS 90, and that they concur with
management's representation concerning audit adjustments.
8. Discuss with the independent accountants the quality of the Company's
financial and accounting personnel. Also, elicit the comments of management
regarding the responsiveness of the independent accountants to the Company's
needs.
9. Meet with management and the independent accountants to discuss any relevant
significant recommendations that the independent accountants may have,
particularly those characterized as `material' or `serious'. Typically,
such recommendations will be presented by the independent accountants in the
form of a Letter of Comments and Recommendations to the audit committee.
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Audit Committee Charter
June 13, 2000
Revised August 21, 2001
The audit committee should review responses of management to the Letter of
Comments and Recommendations from the independent accounts and receive
follow-up reports on action taken concerning the aforementioned
recommendations.
10. Recommend to the Board the selection, retention or termination of the
Company's independent accountants.
11. Review with management and the independent accountants the methods used to
establish and monitor the Company's policies with respect to unethical or
illegal activities by Company employees that may have a material impact on
the financial statements.
12. Generally as part of the review of the annual financial statements, receive
an oral report(s), at least annually, from the Company's general counsel
concerning legal and regulatory matters that may have a material impact on
the financial statements.
13. As the audit committee may deem appropriate, obtain, weigh and consider
expert advice as to the audit committee related rules of Nasdaq, Statements
on Auditing Standards and other accounting, legal and regulatory provisions.
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