SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934.
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 240.14a-12
MICRONETICS WIRELESS, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
MICRONETICS WIRELESS, INC.
(a Delaware corporation)
Notice of 2001 Annual Meeting
of Shareholders to be held
at 10:00 A.M. on September __, 2001
To the Shareholders of
MICRONETICS WIRELESS, INC.:
NOTICE IS HEREBY GIVEN that the 2001 Annual Meeting of
Shareholders (the "Meeting") of MICRONETICS WIRELESS, INC. (the
"Company") will be held on September __, 2001 at 10:00 A.M. at the
offices of Kalin & Associates, P.C., One Penn Plaza, Suite 1425,
New York, NY 10119 to consider and vote on the following matters
described under the corresponding numbers in the attached Proxy
Statement:
1. Election of three directors; and
2. Such other matters as may properly come before the
Meeting.
The Board of Directors has fixed July __, 2001 at the close of
business, as the record date for the determination of shareholders
entitled to vote at the Meeting, and only holders of shares of
Common Stock of record at the close of business on that day will be
entitled to vote. The stock transfer books of the Company will not
be closed.
A complete list of shareholders entitled to vote at the
Meeting shall be available for examination by any shareholder, for
any purpose germane to the Meeting, during ordinary business hours
from August __, 2001 until the Meeting at the offices of the
Company. The list will also be available at the Meeting.
Whether or not you expect to be present at the Meeting, please
fill in, date, sign, and return the enclosed Proxy, which is
solicited by management. The Proxy is revocable and will not
affect your vote in person in the event you attend the Meeting.
By Order of the Board of Directors
Donna Hillsgrove,
Secretary
Date: July __, 2001
Request for additional copies of proxy material and the
Company's Annual Report for its fiscal year ended March 31, 2001
should be addressed to Shareholder Relations, Micronetics Wireless,
Inc., 26 Hampshire Drive, Hudson, NH 03051. This material will be
furnished without charge to any shareholder requesting it.
MICRONETICS WIRELESS, INC.
26 Hampshire Drive
Hudson, NH 03051
Proxy Statement
The enclosed proxy is solicited by the management of
Micronetics Wireless, Inc. (the "Company") in connection with the
2001 Annual Meeting of Shareholders (the "Meeting") to be held on
September __, 2001 at 10:00 A.M. at the offices of Kalin &
Associates, P.C., One Penn Plaza, Suite 1425, New York, NY 10119
and any adjournment thereof. The Board of Directors has set July
__, 2001 as the record date for the determination of shareholders
entitled to vote at the Meeting. A shareholder executing and
returning a proxy has the power to revoke it at any time before it
is exercised by filing a later proxy with, or other communication
to, the Secretary of the Company or by attending the Meeting and
voting in person.
The proxy will be voted in accordance with your directions as
to:
(1) The election of the three persons listed herein as
directors of the Company; and
(2) Such other matters as may properly come before the
Meeting.
In the absence of direction, the proxy will be voted in favor
of management's proposals.
The entire cost of soliciting proxies will be borne by the
Company. The costs of solicitation, which represent an amount
believed to be normally expended for a solicitation relating to an
uncontested election of directors, will include the costs of
supplying necessary additional copies of the solicitation materials
and the Company's Annual Report to Shareholders for its fiscal year
ended March 31, 2001 (the "Annual Report") to beneficial owners of
shares held of record by brokers, dealers, banks, trustees, and
their nominees, including the reasonable expenses of such
recordholders for completing the mailing of such materials and
Annual Reports to such beneficial owners.
Only shareholders of record of the Company's 4,088,317 shares
of Common Stock (the "Common Stock") outstanding at the close of
business on July __, 2001 will be entitled to vote. Each share of
Common Stock is entitled to one vote. Holders of a majority of the
outstanding shares of Common Stock must be represented in person or
by proxy in order to achieve a quorum. The proxy statement, the
attached notice of meeting, the enclosed form of proxy and the
Annual Report are being mailed to shareholders on or about July __,
2001. The Company's principal executive offices are located at 26
Hampshire Drive, Hudson, NH 03051 and its telephone number at that
location is (603) 883-2900.
PROPOSAL 1
ELECTION OF DIRECTORS
Three directors are to be elected by a majority of the votes
cast at the Meeting, each to hold office until the next Annual
Meeting of Shareholders and until his or her respective successor
is elected and qualifies. The persons named in the accompanying
proxy have advised management that it is their intention to vote
for the election of the following nominees as directors unless
authority is withheld:
. Richard S. Kalin
. Barbara Meirisch
. David Siegel
Management has no reason to believe that any nominee will be
unable to serve. In the event that any nominee becomes
unavailable, the proxies may be voted for the election of such
person or persons who may be designated by the Board of Directors.
The following table sets forth certain information as to the
persons nominated for election as directors of the Company at the
Meeting:
Position with Director
Name Age the Company Since
Richard S. Kalin 46 Chief Executive Officer, April 1987
Chairman, President,
and Director
Barbara Meirisch 59 Director September 1996
David Siegel 73 Director April 1987
Mr. Richard S. Kalin was appointed Chief Executive Officer in
January 1992 and Chairman of the Board in June 1989. Prior thereto
he had been Secretary and a director of the Company since April
1987. Mr. Kalin was also Secretary and a director of Pentech
International Inc., a manufacturer and distributor of stationery
products prior to its acquisition by JAKKS Pacific, Inc. in July
2000. He has also been engaged in the private practice of law
since 1978, and currently is a partner of Kalin & Associates, P.C.,
counsel to the Company.
Ms. Barbara Meirisch has been a director of the Company since
September 1996. Her most recent assignment for Lucent
Technologies, Inc. was from January 1990 to January 1996 as a
Director of Public Relations in Advertising for the Network
Wireless Systems Business Unit, where she had responsibility for
developing wireless communication strategies for domestic and
international operations and media relations. Presently, she is a
strategic marketing consultant for communication companies.
Mr. David Siegel has been a director of the Company since
April 1987. Mr. Siegel is also Chairman of the Board of Directors
of Superus, Inc., a distributor of passive electronic components,
and a director of Kent Electronics, Inc., a distributor of
electronic components.
Directors serve until the next annual meeting of stockholders
and until their respective successors are elected and qualify.
During the fiscal year ended March 31, 2001 ("Fiscal 2001"),
the Board of Directors held one meeting and acted five times by
unanimous consent. Ms. Meirish and Mr. Siegel comprise the Audit
and Compensation Committee which met in June 2001 to review the
financial statements of the Company for Fiscal 2001.
OTHER EXECUTIVE OFFICERS
Mr. David Robbins, 37, was appointed Senior Vice
President/Components and Subassemblies of the Company, in March
1999. He has been employed by the Company in various capacities
since February 1992.
Mr. Ralph Marrone, 42, was appointed Vice President of
Micronetics/Test Solutions in August 1999. Prior thereto, he was
Director of Strategic Marketing at Alpha Electronics, Inc. from
April 1998 to April 1999. Prior to that he held multiple positions
including sales and business development roles at Hewlett Packard
from May 1980 to June 1996.
Ms. Donna Hillsgrove, 52, was appointed Secretary and
Treasurer of the Company in January 1994. Prior to that time she
was Controller of the Company. She has been employed by the
Company since April 1992.
Mr. Stuart Bernstein, 43, was appointed Vice President of
Micronetics/VCO Products in April 2000. Prior to that time, he was
Vice President of Delean, Inc.'s VCO Products Group. Since 1990
until September 1999, he was employed by the Company in various
capacities.
Mr. Floyd Parin, 58, has been President of Microwave and Video
Systems Inc. ("MVS"), a wholly-owned subsidiary of the Company,
since January 1999. Mr. Parin has been President of MVS for the
past five years.
Mr. Mark Goldman, 59, has been Vice President of MVS for more
than the past five years.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF
1934
Section 16(a) of Securities Exchange Act of 1934 requires the
Company's executive officers and directors, and persons who own
more than ten percent of a registered class of the Company's equity
securities to file reports of ownership and changes in ownership
with the Securities and Exchange Commission. Based solely on its
review of the copies of such forms received by it, the Company
believes that during Fiscal 2001 all executive officers, directors
and owners of ten percent of the outstanding shares of Common Stock
of the Company complied with all applicable filing requirements.
AUDIT AND COMPENSATION COMMITTEE
During Fiscal 2001, the Audit and Compensation Committee (the
"Audit Committee") consisting of Mr. Siegel and Ms. Meirisch met
one time.
AUDIT COMMITTEE REPORT
The Audit Committee consists of a majority of independent
directors all of whom meet the independence and experience
requirements of Nasdaq Marketplace Rule 4200(a)(14). The Audit
Committee's responsibilities are as described in a written charter
adopted by the Board, which is attached as Appendix A to this Proxy
Statement.
The Audit Committee has reviewed and discussed the Company's
audited financial statements for Fiscal 2001 with management and
with the Company's independent auditors, Trochiano & Daszkowski
LLP. The Audit Committee has discussed with Trochiano & Daszkowski
LLP the matters required to be discussed by the Statement on
Auditing Standards No. 61 relating to the conduct of the audit.
The Audit Committee has received the written disclosures and the
letter from Trochiano & Daszkowski LLP required by Independence
Standards Board Standard No. 1, Independence Discussions with Audit
Committees, and has discussed with Trochiano & Daszkowski LLP its
independence. Based on the Audit Committee's review of the audited
financial statements and the review and discussions described in
the foregoing paragraph, the Audit Committee recommended to the
Board that the audited financial statements for Fiscal 2001 be
included in the Company's Annual Report on Form 10-KSB for Fiscal
2001 for filing with the Securities and Exchange Commission.
Submitted by the members of the Audit Committee:
David Siegel
Barbara Meirisch
AUDIT FEES; FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION
FEES; ALL OTHER FEES
Audit fees billed to the Company by Trochiano & Daszkowski LLP
during Fiscal 2001 for review of the Company's annual financial
statements and those financial statements included in the Company's
quarterly reports on Form 10-QSB totaled $24,417. The Company did
not engage Trochiano & Daszkowski LLP to provide advice to the
Company regarding financial information systems design and
implementation during Fiscal 2001. The Company did not engage
Trochiano & Daszkowski LLP during Fiscal 2001 for any other non-audit services.
EXECUTIVE COMPENSATION
The following table sets forth information relating to the
cash compensation received by the Company's Officers for the past
three fiscal years of more than $100,000 per year. No executive
officer received benefits in excess of ten percent of their cash
compensation.
SUMMARY COMPENSATION TABLE
Long
Other Term
Annual Annual Compen-
Name and Com- Compen- sation/ Other
Principal Fiscal pensation sation Option Compen-
Position Year Salary ($) Bonus ($) Grants sation
Richard 2001 98,612(1) 40,000 50,000 5,895(3)
S. Kalin, 2000 103,092(1) 11,048 50,000(2) 6,736(3)
Chairman 1999 83,668(1) 18,114 55,000 6,456(3)
and
President
Ralph Marrone 2001 111,011.26 3,750 - 6,000(4)
2000 70,673.05 - 85,000 4,000(4)
1999 - - - -
<FN> <F1>
(1) Includes $42,000 in legal fees to Kalin & Associates, P.C., of
which Mr. Kalin is a principal in Fiscal 2001, $42,000 of
such fees in Fiscal 2000 and $32,084 of such fees in Fiscal
1999. Does not include $27,500 and $30,000 in fees paid to
Makenzie Communications, an advertising agency owned by Mr.
Kalin's wife, during Fiscal 2000 and Fiscal 1999,
respectively.
</FN> <FN> <F2>
(2) Includes 7,500 of option grants in Fiscal 1998 to Mr. Kalin's
wife, as to which Mr. Kalin disclaims beneficial ownership.
</FN> <FN> <F3>
(3) Includes expenses relating to furnishing Mr. Kalin an
automobile.
</FN> <FN> <F4>
(4) Includes expenses relating to furnishing Mr. Marrone an
automobile.
</FN>
EMPLOYMENT AGREEMENTS
In April 2001, Mr. Kalin entered into an employment agreement
(the "Agreement") with the Company which terminates March 31, 2006,
unless terminated earlier. The base salary commences at $150,000
per annum. As additional compensation, Mr. Kalin receives three
percent of the Company's pre-tax profits up to the levels reported
in the prior fiscal year and five percent of any such profits in
excess of such amount. The Agreement also provides for a monthly
$500 automobile allowance.
In January 1999, Mr. Parin entered into a employment agreement
with MVS providing for annual compensation at the rate of $85,000
per year plus a bonus based on meeting certain metrics. In January
2000, this Agreement was amended to reduce the compensation rate to
$76,000 per year until June 30, 2000 and effective July 1, 2000
until December 31, 2001, it was further amended to become a
consulting agreement providing for annual compensation of $35,000
per year.
STOCK OPTION PLANS
On April 14, 1994, the Company adopted a 1994 Stock Option
Plan (the "1994 Plan") and readopted it on July 18, 1995 pursuant
to which options to purchase up to 300,000 shares of Common Stock
may be granted to employees, consultants, advisors and/or
directors. On January 18, 1996, the Company adopted a 1996 Stock
Option Plan (the "1996 Plan") pursuant to which options to purchase
up to 300,000 shares of Common Stock may be granted to employees,
consultants, advisors and/or directors. In December 1999 and June
2000, the Board of Directors authorized amendments to the 1996 Plan
(subject to shareholder approval) to increase the number of shares
of Common Stock that may be granted under the 1996 Plan to 900,000
shares. Options granted pursuant to the 1994 Plan and 1996 Plan
may be incentive options or non-qualified options as such terms are
defined in the Internal Revenue Code of 1986, as amended (The 1994
Plan and the 1996 Plan are referred to collectively as the
"Plans").
The Plans are administered by the Board of Directors or a
Committee of the Board of Directors (the "Compensation Committee")
which has the authority to determine the persons to whom the
options may be granted, the number of shares of Common Stock to be
covered by each option, the time or times at which the options may
be granted or exercised and for the most part, the terms and
provisions of the options. The exercise price of options granted
under the Plans may not be less than the fair market value of the
shares of Common Stock on the date of grant (110% of such price if
granted to a person owning in excess of ten percent of the
Company's securities). Options granted under the Plans may not be
granted more than ten years from the date of adoption of each
respective Plan, nor may options be exercised more than ten years
from the date of grant.
The following table sets forth certain information with
respect to the named executive officers of the Company who have
been granted options to purchase the Common Stock (except as
otherwise set forth) during Fiscal 2001:
OPTION GRANTS IN FISCAL 2001
Percent of
Total Options
Options Granted in Exercise Expiration
Name Granted Fiscal Year Price ($)(2) Date
Richard S. Kalin 50,000 32.18% 8.625 9/22/05
Stuart Bernstein(1) 25,000 16.09% 5.50 5/31/05
5,000 3.22% 4.625 10/30/05
David Robbins(1) 10,000 6.44% 4.625 10/30/05
(1) Pursuant to First Amended and Restated 1996 Stock Option Plan
(2) Options were granted at an exercise price equal to the fair market
value of the Common Stock on the date of grant.
AGGREGATED OPTION EXERCISES IN LAST FISCAL
YEAR AND FISCAL YEAR-END (FYE) OPTION VALUES
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Shares Options Options
Acquired At FYE (#) At FYE ($)
On Value Exercisable/ Exercisable/
Name Exercise Realized($)(1) Unexercisable Unexercisable(2)
Richard
S. Kalin 50,000 $346,000 125,000/50,000 $296,063/$0
Stuart
Bernstein 2,500 $21,163 7,125/36,375 $3,595/$25,606
David
Robbins 45,000 $561,875 25,000/30,000 $67,500/$55,625
Ralph
Marrone 33,000 $275,220 0/50,000 $0/$148,250
Donna
Hillsgrove 1,250 $4,763 11,875/16,875 $66,978/$16,328
(1) Represents fair market value of the Common Stock at the
exercise date minus the exercise price.
(2) Represents fair market value of the Common Stock at March 31,
2001 of $4.375 as reported by Nasdaq, less the exercise price.
COMPENSATION OF DIRECTORS
Directors not employed by the Company have been compensated as
consultants for the time spent on Company matters, including
attendance at directors' and other meetings. During Fiscal 2001,
each non-employee director received $500 as consultant fees.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of July the number of shares
of Common Stock held of record or beneficially (i) by each person
who held of record, or was known by the Company to own
beneficially, more than five percent of the outstanding shares of
the Common Stock, (ii) by each director and (iii) by all officers
and directors as a group:
Number of Percent of
Names and Address Shares Owned Outstanding Shares
Richard S. Kalin 1,124,160(1) 27.19%
One Oak Forest Lane
Mendham, NJ 07945
David Siegel 120,770(2) 3.0%
2488 Horace Court
Bellmore, NY 11710
Barbara Meirisch 30,000(3) (5)
17 Woods End Road
West Orange, NJ 07052
All Officers and 1,525,730 36.19%
Directors as a group (1)(2)(3)(4)
(nine persons)
(1) Includes 136,132 shares of Common Stock held in his retirement
accounts and options to purchase an aggregate of 125,000
shares of Common Stock at exercise prices ranging from $1.625
to $2.3125 per share. Also includes 438,475 shares of Common
Stock and options to purchase an aggregate of 1,250 shares of
Common Stock owned by his wife. Also includes 10,000 shares
of Common Stock owned by his minor son.
(2) Includes 33,050 shares of Common Stock owned of record by RJW
Trading Corp., a personal holding company 100% owned by Mr.
Siegel and members of his family, 14,970 shares of Common
Stock held in his retirement account and options to purchase
an aggregate of 17,500 shares of Common Stock exercisable at
prices ranging from $1.50 to $1.875 per share.
(3) Includes options to purchase an aggregate of 15,000 shares of
Common Stock at exercise prices ranging from $1.50 to $2.00
per share.
(4) Includes options to purchase 207,125 shares of Common Stock
that are issuable upon exercise within sixty days at an
average exercise price of approximately $2.50 per share.
(5) Less than 1%.
OTHER MATTERS
The Board of Directors has no knowledge of any other matters
which may come before the Meeting and does not intend to present
any other matters. However, if any other matters shall properly
come before the Meeting or any adjournment thereof, the persons
named as proxies will have discretionary authority to vote the
shares of Common Stock represented by the accompanying proxy in
accordance with their best judgment.
INDEPENDENT CERTIFIED PUBLIC AUDITORS
The Board of Directors has selected Trochiano & Daszkowski LLP
("T & D"), independent certified public accountants, auditors of
the Company's financial statements for FY2001, as the auditors of
the financial statements of the Company for its current fiscal year
ending March 31, 2002. A representative of T & D has been invited
to attend the Meeting, but it is uncertain whether he will attend.
If he does, he will be given the opportunity to make a statement
and to answer questions any shareholder may have.
SHAREHOLDER'S PROPOSALS
Any shareholder of the Company who wishes to present a
proposal to be considered at the next annual meeting of
shareholders of the Company and who wishes to have such proposal
presented in the Company's Proxy Statement for such meeting must
deliver such proposal in writing to the Company at 26 Hampshire
Drive, Hudson, NH 03051 on or before March 30, 2002.
By Order of the Board of Directors
Donna M. Hillsgrove,
Secretary
Dated: July __, 2001
APPENDIX A
PROXY
MICRONETICS WIRELESS, INC.
26 Hampshire Drive
Hudson, NH 03051
The undersigned, revoking all proxies, hereby appoints Richard
S. Kalin and David Siegel and each of them, proxies with power of
substitution to each, for and in the name of the undersigned to
vote all shares of Common Stock of Micronetics Wireless, Inc. (the
"Company") which the undersigned would be entitled to vote if
present at the Annual Meeting of Shareholders of the Company to be
held on September __, 2001, at 10:00 A.M. at the offices of Kalin
& Associates, P.C., One Penn Plaza, Suite 1425, New York, NY 10119
and any adjournments thereof, upon the matters set forth in the
Notice of Annual Meeting.
The undersigned acknowledges receipt of the Notice of Annual
Meeting, Proxy Statement and the Company's 2001 Annual Report.
1. ELECTION OF DIRECTORS
FOR all nominees listed WITHHOLD Authority
below (except as marked vote for all nominees
to the contrary below) listed below
(INSTRUCTION: To withhold authority to vote for an individual
nominee, strike a line through such nominee's name in the list
below).
RICHARD S. KALIN, BARBARA MEIRISCH AND DAVID SIEGEL
2. IN THEIR DISCRETION, ON SUCH OTHER MATTERS AS MAY
PROPERLY COME BEFORE THE MEETING.
PLEASE SIGN ON THE REVERSE SIDE AND RETURN THIS PROXY PROMPTLY
IN THE ENCLOSED ENVELOPE.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
and when properly executed will be voted as directed herein. If no
direction is given, this Proxy will be voted FOR Proposals 1 and 2.
Date: , 2001
(Signature)
(Signature, if held jointly)
Where stock is registered in the names
of two or more persons ALL should sign.
Signature(s) should correspond exactly
with the name(s) as shown above. Please
sign, date and return promptly in the
enclosed envelope. No postage need be
affixed if mailed in the United States.
Requests for copies of proxy materials, the Company's Annual
Report for its fiscal year ended March 31, 2000 on Form 10-KSB
should be addressed to Shareholder Relations, Micronetics Wireless,
Inc., 26 Hampshire Drive, Hudson, NH 03051. This material will be
furnished without charge to any shareholder requesting it.
812:
APPENDIX B
MICRONETICS WIRELESS, INC.
AUDIT COMMITTEE CHARTER
Organization
There shall be a committee of the board of directors to be known as
the audit committee. The audit committee shall be composed of a
majority of directors who are independent of the management of
Micronetics Wireless, Inc. (the "Corporation") and are free of any
relationship that, in the opinion of the board of directors, would
interfere with their exercise of independent judgment as a
committee member.
Statement of Policy
The audit committee shall provide assistance to the corporate
directors in fulfilling their responsibility to the shareholders,
potential shareholders, and investment community relating to
corporate accounting, reporting practices of the Corporation, and
the quality and integrity of the financial reports of the
Corporation. In so doing, it is the responsibility of the audit
committee to maintain free and open means of communication between
the directors, the independent auditors, the internal auditors, and
the financial management of the Corporation.
Responsibilities
In carrying out its responsibilities, the audit committee believes
its policies and procedures should remain flexible, in order to
best react to changing conditions and to ensure to the directors
and shareholders that the corporate accounting and reporting
practices of the Corporation are in accordance with all
requirements and are of the highest quality.
In carrying out these responsibilities, the audit committee will:
Review and recommend to the directors the independent
auditors to be selected to audit the financial statements
of the Corporation and its divisions and subsidiaries.
Meet with the independent auditors and financial
management of the Corporation to review the scope of the
proposed audit for the current year and the audit
procedures to be utilized, and at the conclusion thereof
review such audit, including any comments or
recommendations of the independent auditors.
Review with the independent auditors, the company's
internal auditor; and financial and accounting personnel,
the adequacy and effectiveness of the accounting and
financial controls of the Corporation, and elicit any
recommendations for the improvement of such internal
control procedures or particular areas where new or more
detailed controls or procedures are desirable.
Particular emphasis should be given to the adequacy of
such internal controls to expose any payments,
transactions, or procedures that might be deemed illegal
or otherwise improper. Further, the committee
periodically should review company policy statements to
determine their adherence to the code of conduct.
Review the internal audit function of the Corporation
including the independence and authority of its reporting
obligations, the proposed audit plans for the coming
year; and the coordination of such plans with the
independent auditors.
Receive prior to each meeting, a summary of findings from
completed internal audits and a progress report on the
proposed internal audit plan with explanations for any
deviations from the original plan.
Review the financial statements contained in the annual
report to shareholders with management and the
independent auditors to determine that the independent
auditors are satisfied with the disclosure and content of
the financial statements to be presented to the
shareholders. Any changes in accounting principles
should be reviewed.
Provide sufficient opportunity for the internal and
independent auditors to meet with the members of the
audit committee without the members of management
present. Among the items to be discussed in these
meetings are the independent auditors' evaluation of the
Corporation's financial, accounting and auditing
personnel, and the cooperation that the independent
auditors received during the course of the audit.
Review accounting and financial human resources and
succession planning within the company.
Submit the minutes of all meetings of the audit committee
to, or discuss the matters discussed at each committee
meeting with, the board of directors.
Investigate any matter brought to its attention within
the scope of its duties, with the power to retain outside
counsel for this purpose if, in its judgment, that is
appropriate.