Exhibit 99.3
EMPIRE GLOBAL CORP.
(the "Corporation")
AUDIT COMMITTEE CHARTER
The audit committee is a committee of the board of directors to which the board
delegates its responsibilities for the oversight of the accounting and financial
reporting process and financial statement audits.
Formation
The Board of Directors of Empire Global Corp., a Delaware corporation (the
"Company"), has established the Audit Committee pursuant to Section 141(c)(2) of
the Delaware General Corporation Law and Article III, Section 10 of the
Company's Bylaws.
Composition
The Audit Committee (the "Committee") shall be comprised of not less than three
members of the Board of Directors of the Company. Subject to the foregoing, the
exact number of members of the Committee shall be fixed and may be changed from
time to time by resolution duly adopted by the Board of Directors. The Committee
members will be appointed by the Board of Directors and may be removed by the
Board in its discretion. Each member shall be independent as defined in the
listing standards of the exchange on which the Company's securities are quoted
or listed in effect from time to time (referred to below as the "Listing
Standards") and the Board of Directors shall have affirmatively determined that
the member is independent. As more clearly set forth in the Listing Standards,
members must not have any current or past relationships with the Company which
would interfere with their exercise of independent judgment or otherwise fail to
meet the independent standards set forth in the Listing Standards. In addition,
the members of the Committee also shall satisfy the following requirements:
- Each member shall be "financially literate" as determined by the Board of
Directors. A director shall be considered "financially literate" if by
reason of his or her educational, professional or business background, the
director is able to read and understand fundamental financial statements,
including a company's balance sheet, income statement and statement of cash
flows.
- At least one member of the Committee must have accounting or related
financial management expertise and, to the extent reasonably possible,
otherwise satisfy the standards of an "audit committee financial expert" as
defined in Regulation S-K Item 401(e) adopted by the Securities and
Exchange Commission (the "SEC").
- Other than in his or her capacity as a member of the Board of Directors
or of a committee thereof, no director who, directly or indirectly, accepts
any consulting, advisory, or other compensatory fee from the Company as
determined pursuant to SEC Rule 10A-3(b)(1) shall be eligible to serve as a
member of the Committee.
- No director who is an "affiliated person" of the Company as defined by
SEC Rule 10A-3(e)(i) shall be eligible to serve as a member of the
Committee.
Purpose and responsibilities
The primary purpose of the Committee shall be to: (i) assist the Board of
Directors in discharging its responsibilities to oversee the integrity of the
Company's financial statements, the Company's compliance with legal and
regulatory requirements, the independent auditors qualifications and
independence, and the performance of the Company's internal audit function and
independent auditors; (ii) have direct responsibility for the appointment,
compensation, retention and oversight of the work of any independent auditors
employed by the Company for the purpose of preparing or issuing an audit report
or performing other audit, review or attest services; and (iii) produce an audit
committee report for inclusion in the Company's proxy statement. The Committee's
responsibilities shall include the following:
A. Pre-Approval of Auditor Services
- All audit services, including the provision of comfort letters in
connection with securities offerings, and non-audit services provided to
the Company by the Company's auditors shall be approved in advance by the
Committee, except with respect to non-audit, review or attest services if:
* The aggregate amount of all such non-audit services provided to the
Company constitute less than 5% of the total amount of revenues paid
by the Company to its auditor during the fiscal year in which the
non-audit services are provided;
* The services were not recognized by the Company at the time of the
engagement to be non-audit services; and
* The services are promptly brought to the attention of the Committee
and approved prior to the completion of the audit by the Committee or
by one or more members of the Committee to whom authority to grant
such approvals has been delegated by the Committee.
If the Committee approves an audit service within the scope of engagement of the
independent auditor, the audit service shall be deemed to have been preapproved
for purposes of this Article III, A. The Committee may delegate to one or more
of its members the authority to grant pre-approvals. Any decision by a member to
whom such authority has been delegated shall be presented to the Committee at
its next meeting.
- The independent auditor and any person associated with the independent
auditor (to the extent determined appropriate by the SEC) shall not provide
contemporaneously with the audit, and the Committee shall not approve, any
of the following as defined under SEC Reg. S-X, Rule 2-01(c)(4):
* Bookkeeping or other services related to the accounting records
or financial statements of the Company;
* Financial information systems design and implementation;
* Appraisal or valuation services, fairness opinions, or
contribution-in-kind reports;
* Actuarial services;
* Internal audit outsourcing services;
* Management functions or human resources;
* Broker or dealer, investment adviser, or investment banking
services;
* Legal services and expert services unrelated to the audit; and
* Any other service that the Public Company Accounting Oversight
Board determines, by regulation, is impermissible.
B. Oversight of Independent Auditing Services
- Meet with the independent auditors to review and approve the plan and
scope for each audit of the Company's financial statements and related
services, including proposed fees to be incurred with respect thereto.
- Review and recommend action with respect to the results of each
independent audit of the Company's financial statements, including problems
encountered in connection with such audit, difficulties with management's
response and recommendations of the independent auditors arising as a
result of such audit.
- Discuss with the Company's independent auditors the matters required to be
communicated pursuant to Statement on Auditing Standards No. 61 ("SAS 61"),
as may be amended or supplemented.
- At least annually, discuss with the independent auditors their
independence and receive each of the following in writing:
* Disclosure of all relationships between the auditors and their
related entities and the Company and its related entities that in the
auditors' professional judgment may reasonably be thought to bear on
independence; and
* Confirmation that, in the auditors' professional judgment, they are
independent of the Company within the meaning of the federal securities
laws.
- The independent auditor's internal quality-control procedures and 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.
- Discuss with the Company's independent auditors any relationships or
services disclosed by the independent auditors that may impact the
objectivity and independence of the independent auditors and recommend to
the Board of Directors any actions in response to the independent auditors'
disclosures to satisfy itself of the independent auditors' independence.
- Evaluate the performance of the Company's independent auditors and
present its conclusions and any recommendation to the Board of Directors
regarding the Company's independent auditors.
- Obtain and review the reports of the Public Company Accounting Oversight
Board with respect to the Company's independent auditors when such reports
are made publicly available.
C. Financial Statements
- Resolve any disagreements between management and the independent auditors
regarding financial reporting.
- Receive the report of the independent auditor that performs for the
Company any audit required by the Exchange Act with respect to each of the
following:
* All critical accounting policies and practices to be used;
* All alternative treatments of financial information within Generally
Accepted Accounting Principles that have been discussed with management
officials of the Company, the ramifications of the use of such
alternative disclosures and treatments, and the treatment preferred by
the independent auditor; and
* Other material written communications between the independent auditor
and the Company such as any management letter or schedule of unadjusted
differences.
- Review and discuss with the Company's independent auditors and management
the Company's audited financial statements, including the Company's
disclosures under "Management Discussion and Analysis of Financial
Conditions and Results of Operations".
- Based on (1) its review and discussions with management of the Company's
audited financial statements; (2) its discussion with the independent
auditors of the matters to be communicated pursuant to SAS 61; and (3) the
written disclosures from the Company's independent auditors regarding
independence, recommend to the Company's Board of Directors whether the
Company's audited financial statements should be included in the Company's
Annual Report on Form 10-K for the last fiscal year for filing with the SEC.
- Review and discuss with the Company's independent auditors and management
the Company's quarterly financial statements, including the Company's
disclosures under "Management Discussion and Analysis of Financial Condition
and Results of Operations".
- Review and discuss the Company's earnings press releases, as well as
financial information and earnings guidance provided to analysts and ratings
agencies.
D. Internal Controls
- Review with the Company's independent auditors and financial management
the adequacy and effectiveness of the Company's system of internal
accounting controls, including the adequacy of such controls to expose any
payments, transactions or procedures that might be deemed illegal or
otherwise improper.
- Prior to the Company's filing of any Quarterly Report on Form 10-Q or
Annual Report on Form 10-K, receive the following disclosures from the
Company's principal executive officer and principal financial officer with
respect to the following:
* All significant deficiencies in the design or operation of internal
controls which could adversely affect the Company's ability to record,
process, summarize and report financial data;
* All material weaknesses in internal controls identified by such
officers to the Company's independent auditors; and
* Any fraud, whether material or not material, that involves management
of the Company or other employees who have a significant role in the
Company's internal controls.
- Obtain the attestation and report of the Company's independent auditors on
the assessment made by the Company's management in the Company's Annual
Report on Form 10-K of the effectiveness of the Company's internal control
structure and procedures for financial reporting.
- Review the scope and results of the Company's internal auditing procedures
and practices and oversee the effectiveness thereof.
E. Management Conduct Policies
- Establish procedures for:
* The receipt, retention and treatment of complaints received by the
Company regarding accounting, internal accounting controls, or auditing
matters; and
* The confidential, anonymous submission by employees of the Company of
concerns regarding questionable accounting or auditing matters.
- Review from time to time the code of ethics for senior financial officers
of the Company which includes those standards that the Committee has
determined to be reasonably necessary to promote:
* Honest and ethical conduct, including the ethical handling of actual
or apparent conflicts of interest between personal and professional
relationships;
* Full, fair, accurate, timely, and understandable disclosure in the
periodic reports required to be filed by the Company under the Exchange
Act; and
* Compliance with applicable governmental rules and regulations.
- Make interpretations from time to time as to the scope and application of
the Company's senior financial officer conduct policies.
- Review and approve or disapprove proposed transactions between the Company
and its employees (other than employment related transactions) or directors.
- Receive any report required to be made by the Company's attorneys pursuant
to the standards adopted by the SEC for professional conduct of attorneys
appearing and practicing before the SEC.
F. Other Duties
- Meet separately, periodically, with management, with internal auditors and
with independent auditors.
- Discuss policies with respect to risk assessment and risk management.
- Produce an annual report for inclusion in the proxy statement as the Audit
Committee Report.
- Set clear hiring policies for employees or former employees of the
Company's independent auditors.
- Make regular reports to the Board and propose any necessary action to the
Board.
- Evaluate its performance as the Audit Committee on an annual basis.
- At least annually, review the adequacy of this Charter and recommend to
the Company's Board of Directors any changes to this Charter that the
Committee deems necessary or desirable.
- Perform such other specific functions as the Company's Board of Directors
may from time to time direct, and make such investigations and reviews of
the Company and its operations as the Chief Executive Officer or the Board
of Directors may from time to time request.
Authority and procedures
The Committee shall meet at least four times a year and shall keep regular
minutes of its meetings. The Committee, as it may determine to be appropriate,
may meet in separate executive sessions with other directors, the CEO and other
Company employees, agents or representatives invited by the Committee. The
Committee's Chairman shall be designated by the full Board or, if it does not do
so, the Committee members shall elect a Chairman by vote of a majority of the
full Committee. The Chairman of the Committee will preside at each meeting of
the Committee and, in consultation with the other members of the Committee,
shall set the frequency and length of each meeting and the agenda of items to be
addressed at each meeting. The Committee is at all times authorized to have
direct, independent access to the Company's other directors and management. The
Committee shall have the power to hire independent legal, financial or other
advisors, as it deems necessary, without consulting or obtaining the approval of
any officer of the Company in advance. Such power shall include, but not be
limited to, authorizing such expenditures by the Company as it shall determine
necessary for payment to (1) the independent auditor employed by the Company for
purposes of rendering or issuing an audit report, and (2) any advisors employed
by the Committee. The Company's independent auditors shall report directly to
the Committee. The Committee shall have the authority to delegate any of its
responsibilities to subcommittees as the Committee may deem appropriate,
provided the subcommittee is composed entirely of independent directors and has
a published committee charter.