ICU MEDICAL, INC.
AS AMENDED AND RESTATED
BY THE BOARD OF DIRECTORS ON JULY 16, 2013
The Committee shall conduct its business and meetings in accordance with this Charter, the Company's bylaws and any direction set forth by the Board. The chairperson of the Committee shall be designated by the Board or, in the absence of such a designation, by a majority of the Members. The designated chairperson shall preside at each meeting of the Committee and, in consultation with the other Members, shall set the frequency and length of each meeting and the agenda of items to be addressed at each meeting. In the absence of the designated chairperson at any meeting of the Committee, the Members present at such meeting shall designate a chairperson pro tem to serve in that capacity for the purposes of such meeting (not to include any adjournment thereof) by majority vote. The chairperson (other than a chairperson pro tem) shall ensure that the agenda for each meeting is distributed to each Member in advance of the applicable meeting.
The Committee shall meet as often as it determines to be necessary and appropriate, but not less than quarterly each year. The Committee may establish its own schedule, provided that it shall provide such schedule to the Board in advance. The chairperson of the Committee or a majority of the Members may call special meetings of the Committee upon notice as is required for special meetings of the Board in accordance with the Company's bylaws. A majority of the appointed Members, but not less than two (2) Members, shall constitute a quorum for the transaction of business. Members may participate in a meeting through use of conference telephone or similar communications equipment, so long as all Members participating in such meeting can hear one another, and such participation shall constitute presence in person at such meeting.
The Committee may meet with any person or entity in executive session as desired by the Committee. The Committee shall meet with the Company's independent auditor, at such times as the Committee deems appropriate, to review the independent auditor's examination and management report.
Unless the Committee by resolution determines otherwise, any action required or permitted to be taken by the Committee may be taken without a meeting if all Members consent thereto in writing and the same is filed with the minutes of the proceedings of the Committee. The Committee may form and delegate authority to subcommittees when appropriate.
The responsibilities of the Audit Committee are to:
Engagement and oversight of independent auditor
- Appoint and provide for the compensation and retention of a "registered public accounting firm" (as that term is defined in Section 2(a) of the Sarbanes-Oxley Act of 2002) to serve as the Company's independent auditor, oversee the work of the independent auditor (including resolution of any disagreements between management and the independent auditor regarding financial reporting), evaluate the performance of the independent auditor and, if so determined by the Committee, replace the independent auditor.
- Ensure the receipt of, and evaluate the written disclosures and the letter that the independent auditor submits to the Committee as required by the applicable requirements of the Public Company Accounting Oversight Board regarding the independent auditor' communications with the audit committee concerning independence, discuss such reports with the independent auditor, oversee the independence of the independent auditor and, if so determined by the Committee in response to such reports, take appropriate action to address issues raised by such evaluation.
- Review and address any concerns regarding potentially illegal action raised by the independent auditor pursuant to Section 10A(b) of the Exchange Act.
Conduct of the audit
- Discuss with the independent auditor the matters required to be discussed by the PCAOB's Auditing Standard No. 16, as it may be modified or supplemented.
- Meet with the independent auditors and financial management of the Company 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 the results of such audit, including any comments or recommendations of the independent auditors.
- Instruct the independent auditor to advise the Committee if there are any subjects that require special attention.
- Instruct the independent auditor to report to the Committee on all critical accounting policies of the Company, all alternative treatments of financial information within generally accepted accounting principles that have been discussed with management, ramifications of the use of such alternative disclosures and treatments and the treatment preferred by the auditors, and other material written communication between the auditors and management.
- Review and approve, after discussion with management and the independent auditors, the initial selection of and any changes in accounting principles or policies that effect the Company's external financial statements, and the accounting for and disclosure of any significant unusual transaction.
- Meet with management and the independent auditor to discuss the audited financial statements and the report of the independent auditor on those financial statements and the Company's internal controls, and to discuss significant issues encountered in the course of the audit work, including: restrictions on the scope of activities; access to required information; the adequacy of internal financial controls; the adequacy of the disclosure of off-balance sheet transactions, arrangements, obligations and relationships in reports filed with the Commission; and the appropriateness of the presentation of any non-GAAP pro forma financial measures (as defined in the Regulations) included in any report filed with the Commission or in any public disclosure or release.
- Discuss with management and the independent auditors any consultation by management with other accountants about significant accounting and auditing matters, including the independent auditor's views about such matters.
- Review with the independent auditors and financial management, among other things, sensitive accounting estimates by management that have a material effect on the financial statements and the basis for the independent auditor's conclusions regarding the reasonableness of those estimates, significant audit adjustments, the independent auditor's responsibility for information other than the financial statements that is contained in the annual report including any procedures the independent auditors performed and the results of those procedures, and the accounting for and disclosure of any significant unusual transaction.
- Discuss with the independent auditor any disagreements with management concerning matters such as application of accounting policies, management's judgments about accounting estimates, disclosures in the financial statements, audit scope or the wording of the audit report.
- Discuss with management and the independent auditor the independent auditor's judgments about the quality of the company's accounting principles as applied in its financial reporting.
- Review the management letter delivered by the independent auditor in connection with the audit.
- Following such review and discussions, if so determined by the Committee, recommend to the Board that the audited financial statements be included in the Company's annual report.
- Meet quarterly with management and the independent auditor to discuss the quarterly financial statements prior to the filing of the Form 10-Q; provided that this responsibility may be delegated to the chairman of the Committee.
- Meet at least once each year in separate executive sessions with management, the internal auditor (if any) and the independent auditor to discuss matters that any of them or the Committee believes could significantly affect the financial statements and should be discussed privately.
Internal Audit (Nothing herein is to imply that the Company should have an internal auditor)
- Review the scope and results of internal audits, if any.
- Evaluate the performance of the internal auditor, if any, and, if so determined by the Committee, recommend replacement of the internal auditor.
Other Governance Responsibilities
- Establish clear policies regarding the hiring of employees and former employees of the independent auditor.
- Review accounting and finance personnel resources and succession planning and make the Committee's recommendations, if any, to the Board.
- Conduct or authorize such inquiries into matters within the Committee's scope of responsibility as the Committee deems appropriate.
- Provide minutes of Committee meetings to the Board, and report to the Board on any significant matters arising from the Committee's work.
- At least annually, evaluate the performance of the Committee, review and reassess this Charter and, if appropriate, recommend changes to the Board.
- Prepare the Committee report required by the Regulations to be included in the Company's annual proxy statement.
- Establish a procedure for receipt, retention and treatment of any complaints received by the Company about its accounting, internal accounting controls or auditing matters and for the confidential and anonymous submission by employees of concerns regarding questionable accounting or auditing matters.
- Review and approve certifications concerning the Committee that are required by the Regulations or the NASDAQ Marketplace Rules.
- Approve, in accordance with sections 10A(h) and (i) of the Exchange Act and the Regulations of their performance, all professional services to be provided to the Company by its independent auditor, provided that the Committee shall not approve any non-audit services proscribed by Section 10A(g) of the Exchange Act in the absence of an applicable exemption. The Committee may adopt policies and procedures for the approval of such services which may include delegation of authority to a designated member or members of the Committee the authority to approve such services so long as any such approvals are disclosed to the full Committee at its next scheduled meeting.
- Review any non-audit services not recognized in advance by the Company to be such. Fees for these non-audit services should aggregate not more than 5% of the total fees to the auditor.
- Review and approve all related party transactions (if such transactions are not approved by another independent body of the Board) for potential conflicts of interest and review all such transactions on an ongoing basis.
- Take any other actions that the Committee deems necessary or proper to fulfill the purposes and intent of the Charter.
- Perform each of the responsibilities of the Committee described above.
- Appoint a chair of the Committee, unless a chair is designated by the Board.
- Engage independent counsel and other advisors as the Committee determines necessary to carry out its responsibilities.
- Cause the officers of the Company to provide such funding as the Committee shall determine to be appropriate for payment of compensation to the Company's independent auditor and any legal counsel or other advisors engaged by this Committee, and payment of ordinary administration expenses of the audit committee that are necessary or appropriate in carrying out its duties.
- Financial Expert
- Independent Director