CWEI Audit Committee Charter

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Description

Clayton Williams Energy, Inc. Audit Committee of the Board of Directors CHARTER Purpose and Principles The Board of Directors (the “Board”) of Clayton Williams Energy, Inc. (the “Company”) has established the Audit Committee of the Board (the “Committee”). The Committee shall serve as an independent and objective party to oversee the accounting and financial reporting practices of the Company, and the audits of the financial statements of the Company. To achieve these purposes, the Committee shall be guided by the following principles: 1. Management of the Company is responsible for preparing the Company’s financial statements, and the independent auditors are responsible for auditing those financial statements; 2. The Committee’s role is one of oversight in monitoring components of the audit and financial reporting processes; 3. The Committee must provide an open avenue of independent communication and flow of information between the Committee and the independent auditors; 4. The Committee must have candid discussions with management and the independent auditors regarding accounting and financial reporting issues; and 5. Members of the Committee must be diligent and knowledgeable regarding accounting and financial reporting issues in order to be effective. Composition The Committee shall consist of at least three members, all of whom are members of the Board appointed to the Committee by the Board at a regular or special ...

Informations

• Publié par: Erzo
• Nombre de lectures: 84
• Langue: English

Extrait

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Clayton Williams Energy, Inc.

Audit Committee of the Board of Directors

CHARTER

Purpose and Principles

The Board of Directors (the “

Board

”) of Clayton Williams Energy, Inc. (the

“

Company

”) has established the Audit Committee of the Board (the “

Committee

”). The

Committee shall serve as an independent and objective party to oversee the accounting

and financial reporting practices of the Company, and the audits of the financial

statements of the Company.

To achieve these purposes, the Committee shall be

guided by the following principles:

1.

Management of the Company is responsible for preparing the Company’s

financial statements, and the independent auditors are responsible for

auditing those financial statements;

2.

The Committee’s role is one of oversight in monitoring components of the

audit and financial reporting processes;

3.

The

Committee

must

provide

an

open

avenue

of

independent

communication and flow of information between the Committee and the

independent auditors;

4.

The Committee must have candid discussions with management and the

independent auditors regarding accounting and financial reporting issues;

and

5.

Members of the Committee must be diligent and knowledgeable regarding

accounting and financial reporting issues in order to be effective.

Composition

The Committee shall consist of at least three members, all of whom are members

of the Board appointed to the Committee by the Board at a regular or special meeting of

the Board or by action taken by unanimous written consent of the Board. Each member

of the Committee shall satisfy the independence requirements of the rules of the

Nasdaq Stock Market, Inc. (“

Nasdaq

”) applicable to domestic listed companies and by

applicable regulations of the Securities and Exchange Commission (the “

SEC

”). The

Committee shall appoint one of the members of the Committee to serve as the

chairperson of the Committee. The Committee may remove or replace the chairperson

and the Board may remove or replace any other member of the Committee at any time.

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Each director appointed to the Committee must be able to read and understand

financial statements, including balance sheets, income statements and statements of

cash flows, at the time of their appointment. At least one member of the Committee

shall be financially sophisticated as described in the applicable Nasdaq listing

standards.

Meetings

The Committee shall meet at least four times per year, and as many additional

times as the members deem necessary.

The Committee shall meet in executive

session to review the financial statements of the Company prior to inclusion of the

financial statements in periodic reports filed with the SEC. The Committee should meet

at least annually with management, the Company’s internal auditor, and the

independent auditors in separate executive sessions to discuss any matters that the

Committee or each of these groups believe should be discussed privately.

The

Committee may meet in person, by telephone conference call, or in any other manner in

which the Board is permitted to meet under law or the Company’s bylaws.

Authority and Responsibilities

The Committee shall have the sole authority and responsibility with respect to the

selection, engagement, compensation, oversight, evaluation and, where appropriate,

dismissal of the independent auditors and any other public accounting firm engaged by

the Company, and the independent auditors and any such other public accounting firm

shall report directly to the Committee.

The Committee, or one or more members

authorized by the Committee, must pre-approve all auditing services (including comfort

letters) provided to the Company by the independent auditors and all permitted

non-audit services provided to the Company by any public accounting firm engaged by

the Company. The Committee may form and delegate authority to subcommittees of

one or more members where appropriate, including the authority to grant pre-approvals

of audit and permitted non-audit services, provided that decisions of such subcommittee

to grant pre-approvals shall be presented to the full Committee at its next scheduled

meeting.

The Committee has the authority to retain professional advisors, including

without limitation special legal, accounting or other consultants, to advise the

Committee, which may be the same as or different from the Company’s primary legal

counsel, accounting experts and other consultants, as the Committee deems necessary

or advisable in connection with the exercise of its powers and responsibilities as set

forth in this Audit Committee Charter, all on such terms as the Committee deems

necessary or advisable. The Committee may require any officer or employee of the

Company or any subsidiary, the Company’s outside legal counsel or the Company’s

independent auditors to attend a meeting of the Committee or to meet with any

members of, or consultants to, the Committee. The Committee chairperson or other

designee of the Committee, may also meet with the Company’s investment bankers or

financial analysts who follow the Company.

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The Committee shall be responsible for the resolution of any disagreements

between the independent auditors and management regarding the Company’s financial

reporting.

The Company shall provide for appropriate funding, as determined by the

Committee, for payment of compensation to the independent auditors employed by the

Company for the purpose of rendering or issuing an audit report or performing other

audit, review or attest services for the Company, and to any professional advisors,

including special legal counsel, accounting experts or other consultants employed by

the Committee.

In carrying out the purposes, principles and responsibilities of the Committee, the

Committee shall:

1.

Receive from the independent auditors a formal written statement

describing all relationships between the independent auditors and the

Company, including non-audit services and fees and discuss with the

independent auditors any disclosed relationships or services that may

impact the objectivity and independence of the independent auditors;

2.

Determine auditor independence based upon such disclosures and

discussions;

3.

Annually select and engage the Company’s independent auditors retained

to audit the financial statements of the Company with such selection to be

submitted to the shareholders for ratification;

4.

Take or recommend that the Board take appropriate action to oversee the

independence of the independent auditor;

5.

Annually review the performance, experience and qualifications of the

independent auditors’ team and the quality control procedures of the

independent auditors and approve any proposed discharge of the

independent auditors when circumstances warrant;

6.

Resolve any disagreements between the independent auditors and

management regarding the Company’s financial reporting;

7.

Review and pre-approve the plan and scope of the independent auditor’s

auditing services (including comfort letters) and related fees;

8.

Review and pre-approve the plan and scope of the permissible non-audit

services and related fees of any public accounting firm engaged by the

Company.

The Company shall disclose any permissible non-audit

services provided by the independent auditors as approved by the

Committee in the Company’s periodic reports filed with the SEC;

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9.

Ensure that the lead audit partner and reviewing audit partner of the

Company’s independent auditors are rotated at least every five years;

10.

Instruct management to engage the independent auditors to review the

quarterly consolidated financial statements of the Company and its

subsidiaries in accordance with Statement of Auditing Standards No. 71.

The engagement letter shall require the independent auditors to (i) deliver

the quarterly review report to management of the Company prior to the

filing of the Company’s quarterly report on Form 10-Q and (ii) attempt to

discuss with the Committee, prior to such filings on Form 10-Q, any

events, transactions and changes in accounting estimates which were

considered by the independent auditors in performing the quarterly review

to have significantly affected the quality of the Company’s financial

reporting;

11.

Discuss with the independent auditors and financial management 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;

12.

Periodically obtain and review reports from the independent auditors that

include (i) all critical accounting policies and practices used; (ii) all

alternative treatments of financial information within generally accepted

accounting

principles

(“

GAAP

”)

that

have

been

discussed

with

management, their ramifications and the preferences of the independent

auditors; (iii) and other material written communications between the

independent auditors and management;

13.

Upon completion of any annual audit, meet separately with the

independent auditors and management and review the Company’s

financial statements and related notes, the results of their audit, any report

or opinion rendered in connection therewith, any significant difficulties

encountered during the course of the audit, including any restrictions on

the scope of work or access to required information, any significant

disagreements with management concerning accounting or disclosure

matters and any significant adjustment proposed by the independent

auditors;

14.

Review with the independent auditors and financial and accounting

personnel, the adequacy and effectiveness of the accounting and financial

controls of the Company, 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;

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15.

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;

16.

Discuss with the independent auditors all items required to be

communicated to the Committee in accordance with Statement of Auditing

Standards No. 61, including the auditors’ judgment about the quality, not

just the acceptability, of the Company’s accounting principles;

17.

Based on the foregoing review, make a recommendation to the Board as

to the inclusion of the Company’s audited consolidated financial

statements in the annual report on Form 10-K prior to its filing;

18.

Provide sufficient opportunity for the independent auditors to meet with

members of the Committee without members of management present.

Among the items to be discussed in these meetings are the independent

auditors’ evaluation of the Company’s financial, accounting, and auditing

personnel, and the cooperation that the independent auditors received

during the course of the audit;

19.

Regularly review with the Company’s independent auditors any audit

problems or difficulties and management’s response;

20.

Review and discuss with management and the independent auditors the

disclosures made in management’s discussion and analysis of financial

condition and results of operations in any of the Company’s reports on

Form 10-Q or Form 10-K;

21.

Establish procedures for the receipt, retention and treatment of complaints

received regarding accounting, internal accounting controls or auditing

matters and the confidential, anonymous submissions by employees of

concerns regarding questionable accounting or auditing matters;

22.

Review any disclosures provided by the Chief Executive Officer or the

Chief

Financial

Officer

to

the

Committee

regarding

(i) 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; and (ii) any fraud, including that which involves

management or other employees who have a significant role in the

Company’s internal controls;

23.

Review for potential conflict of interest situations and approve all related

party transactions as required by applicable Nasdaq listing standards

(“Related Party Transactions”);

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24.

Review on an annual basis all Related Party Transactions for potential

conflict of interest situations;

25.

Investigate at its discretion any matter brought to its attention by, without

limitation by enumeration, reviewing the books, records and facilities of the

Company and interviewing Company officers or employees;

26.

Submit the minutes of all meetings of the Committee to, or discuss the

matters discussed at each committee meeting with, the Board. 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;

27.

Prepare a report to be included in the Company’s annual proxy statement

stating the Committee’s findings that result from its financial reporting

oversight responsibilities;

28.

Authorize an officer of the Company to certify to the applicable stock

exchange that (i) the Committee has adopted a formal written Charter and

has reviewed and reassessed the adequacy of the Charter on an annual

basis, and (ii) the Committee has met and will continue to meet the

membership requirements set forth in this Charter; and

29.

Perform any other activities consistent with this Audit Committee Charter,

the Company’s Certificate of Incorporation and Bylaws, the rules of

Nasdaq applicable to its listed companies, and governing law as the

Committee or the Board deems necessary or appropriate.

Limitations

While the Committee has the responsibilities and powers set forth above in this

Audit Committee Charter and management and the independent auditors for the

Company are accountable to the Committee, it is not the duty or responsibility of the

Committee to plan or conduct audits or to determine that the Company’s financial

statements are complete and accurate and are in accordance with GAAP. This is the

responsibility of management and the independent auditors.

Procedures

1.

Quorum and Approval. A majority of the members of the Committee shall

constitute a quorum. The Committee shall act on the affirmative vote of a

majority of members present at a meeting at which a quorum is present.

The Committee may also act by unanimous written consent in lieu of a

meeting.

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2.

Rules. The Committee may determine additional rules and procedures,

including designation of a chairperson pro tempore in the absence of the

chairperson, at any meeting thereof.

3.

Reports. The Committee shall make regular reports to the Board, directly

or through the chairperson.

4.

Review of Charter. Each year the Committee shall review the need for

changes in this Charter and recommend any proposed changes to the

Board for approval.

5.

Performance Review. Each year the Committee shall review and evaluate

its own performance and shall submit itself to the review and evaluation of

the Board.

6.

Fees. Each member of the Committee shall be paid the fee set by the

Board for his or her services as a member of, or chairperson of, the

Committee.

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