¨
|
Preliminary
Information Statement
|
¨
|
Confidential,
for Use of the Commission Only (as permitted by Rule
14c-5(d)(2))
|
x
|
Definitive
Information Statement
|
x
|
No
fee required
|
¨
|
Fee
computed on table below per Exchange Act Rules 14c-5(g) 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:
|
/s/ John McManus
|
John
McManus
|
Chief
Executive Officer
|
January 26,
2011
|
Name
|
Affiliation
|
Shares Beneficially Held
|
Percentage
|
|||||||
Xmark
Opportunity Fund, L.P.
|
10%
Stockholder
|
9,948,686 | 16.6 | % | ||||||
Xmark
Opportunity Fund, Ltd.
|
10%
Stockholder
|
21,378,871 | 35.8 | % | ||||||
Xmark
JV Investment Partners, LLC
|
Together
with Affiliates, 10% Stockholder
|
1,023,731 | 1.7 | % | ||||||
Xmark
Opportunity Partners, LLC
|
Together
with Affiliates, 10% Stockholder
|
1,000,000 | 1.7 | % | ||||||
Goodnow
Capital, L.L.C.
|
10%
Stockholder
|
8,107,039 | 13.5 | % | ||||||
Total
Shares Voting in Favor
|
Together
with Affiliates, 10% Stockholder
|
41,458,327 | 69.3 | % |
Name of Nominee
|
Age as of
January 25, 2011
|
Director Since
|
||
David
C. Cavalier
|
41
|
April 2004
|
||
John
M. Farah, Jr., Ph.D.
|
58
|
October 2005
|
||
Joseph
J. Krivulka
|
58
|
June 2004
|
||
Amit
Kumar, Ph.D.
|
46
|
June 2004
|
||
Michael
E. Lewis, Ph.D.
|
59
|
June 2004
|
||
Chris
A. Rallis
|
57
|
June 2004
|
||
Peter
D. Suzdak, Ph.D.
|
52
|
June 2004
|
|
·
|
each
person known by Aeolus to beneficially own more than 5% of the outstanding
shares of each class of the Company’s
stock;
|
|
·
|
each
of Aeolus’ directors;
|
|
·
|
each
of Aeolus’ Named Executive Officers (as defined under “Executive
Compensation” below); and
|
|
·
|
all
of Aeolus’ directors and executive officers as a
group.
|
Preferred Stock
|
Common Stock
|
|||||||||||||||
Identity of Owner or Group (1)(2)
|
Beneficially
Owned
|
Percentage
Owned
|
Beneficially
Owned
|
Percentage
Owned(4)
|
||||||||||||
Directors:
|
||||||||||||||||
David
C. Cavalier
|
- | - | 41,631,077 | (5) | 69.4 | % | ||||||||||
John
M. Farah, Jr., Ph.D. (6)
|
- | - | 166,279 | * | ||||||||||||
Joseph
J. Krivulka (6)
|
- | - | 172,250 | * | ||||||||||||
Amit
Kumar, Ph.D. (6)
|
- | - | 225,000 | * | ||||||||||||
Michael
E. Lewis, Ph.D. (6)
|
- | - | 170,000 | * | ||||||||||||
Chris
A. Rallis (6)
|
- | - | 225,000 | * | ||||||||||||
Peter
D. Suzdak, Ph.D. (6)
|
- | - | 179,375 | * | ||||||||||||
Named
Executive Officers:
|
||||||||||||||||
Brian
Day, Ph.D. (7)
|
- | - | 630,111 | 1.0 | % | |||||||||||
John
L. McManus (8)
|
- | - | 3,326,667 | 5.3 | % | |||||||||||
Michael
P. McManus (9)
|
- | - | 3,600 | * | ||||||||||||
All
directors and executive officers as a group (9 persons)
|
- | - | 46,729,359 | (10) | 71.9 | % | ||||||||||
Greater
than 5% Stockholders:
|
||||||||||||||||
Elan
Corporation, plc
|
475,087 | 100.0 | %(3) | 475,087 | (11) | * | ||||||||||
Lincoln
House
|
||||||||||||||||
Lincoln
Place
|
||||||||||||||||
Dublin
2, Ireland
|
||||||||||||||||
Efficacy
Biotech Master Fund Ltd
|
- | - | 16,660,000 | (12) | 25.0 | % | ||||||||||
11622
El Camino Real, Suite 100
|
||||||||||||||||
San
Diego, CA 92130
|
||||||||||||||||
Xmark
Opportunity Partners, LLC and its affiliates
|
- | - | 41,631,077 | (13) | 69.4 | % | ||||||||||
90
Grove Street
|
||||||||||||||||
Ridgefield,
CT 06877
|
Name
|
Fees Earned or
Paid in Cash
|
Option Awards(1)
|
All Other
Compensation
|
Total
|
||||||||||||
David
C. Cavalier
|
— | $ | — | — | $ | — | ||||||||||
John
M. Farah, Jr., Ph.D.
|
— | 33,750 | — | 33,750 | ||||||||||||
Joseph
J. Krivulka
|
— | 33,750 | — | 33,750 | ||||||||||||
Amit
Kumar, Ph.D.
|
— | 48,750 | — | 48,750 | ||||||||||||
Michael
E. Lewis, Ph.D.
|
— | 22,500 | — | 22,500 | ||||||||||||
Chris
A. Rallis
|
— | 48,750 | — | 48,750 | ||||||||||||
Peter
D. Suzdak, Ph.D.
|
— | 22,500 | — | 22,500 |
|
·
|
Each
non-executive Board member shall be eligible to receive nonqualified stock
options for up to an aggregate of 45,000 shares per year based upon the
number of meetings attended by the non-executive Board member during the
year. The option exercise prices shall be equal to the closing price of
the Common Stock on the grant date. The options shall have 10-year terms
and vest, as long as the director remains on the Board, on a monthly basis
over a 12-month period beginning on the date of grant. Unvested options
expire upon resignation or termination from the
Board.
|
|
·
|
In
addition, each Audit Committee member shall be eligible to receive a
nonqualified stock option for up to an aggregate of 15,000 shares per year
based the number of Audit Committee meetings attended by the Audit
Committee member during the year. The option exercise prices shall be
equal to the closing price of the Common Stock on the grant date. The
options shall have 10-year terms and vest, as long as the director remains
on the Board, on a monthly basis over a 12-month period beginning on the
date of grant. Unvested options expire upon resignation or termination
from the Board.
|
Name
|
Number of
Securities
Underlying
Unexercised Options
Exercisable
|
Number of
Securities
Underlying
Unexercised
Options
Unexercisable
|
Equity Incentive
Plan Awards:
Number of
Securities Underlying
Unexercised Unearned
Options Option Awards
|
|||||||||
David
C. Cavalier
|
172,750 | — | — | |||||||||
John
M. Farah, Jr., Ph.D.
|
149,404 | 15,938 | — | |||||||||
Joseph
J. Krivulka
|
152,563 | 15,938 | — | |||||||||
Amit
Kumar, Ph.D.
|
199,375 | 23,125 | — | |||||||||
Michael
E. Lewis, Ph.D.
|
152,188 | 14,163 | — | |||||||||
Chris
A. Rallis
|
199,375 | 23,125 | — | |||||||||
Peter
D. Suzdak, Ph.D.
|
167,188 | 10,313 | — |
Plan category
|
(a)Number of securities to
be issued upon exercise of
outstanding options,
warrants and rights
|
(b)Weighted-average
exercise price of
outstanding options,
warrants and rights
|
(c)Number of securities
remaining available for
future issuance under
equity compensation plans
(excluding securities
reflected in column (a))
|
|||||||||
Equity
compensation plans approved by our stockholders:
|
||||||||||||
2004
Stock Option Plan
|
6,035,441 | $ | 0.47 | 3,964,659 | ||||||||
1994
Stock Option Plan
|
1,927,124 | $ | 3.89 | 0 | ||||||||
Equity
compensation plans and securities not approved by our
stockholders:
|
||||||||||||
Warrant
to Purchase Common Stock Issued to National Securities
|
50,000 | $ | 0.38 |
Not
applicable
|
||||||||
Warrants
to Purchase Common Stock Issued to Dan Delmonico
|
50,000 | $ | 0.49 |
Not
applicable
|
||||||||
Warrants
to Purchase Common Stock Issued to Brookstreet Securities
Corporation
|
250,000 | $ | 1.50 |
Not
applicable
|
||||||||
Total
– Common Stock
|
8,132,465 | 3,964,659 | ||||||||||
Convertible
Promissory Note convertible into shares of Series B Preferred Stock Issued
to Elan Pharma International Limited (as of September 30,
2010)(1)(2)
|
73,659 | $ | 9.00 | 2,940 | ||||||||
Total
– Series B Preferred Stock
|
73,659 | 2,940 |
Annual Compensation
|
All Other
|
|||||||||||||||||||||
Name and Principal
|
Fiscal
|
Option
|
Compensation
|
|||||||||||||||||||
Position(s)
|
Year
|
Salary ($)
|
Bonus ($)
|
Awards ($) (1)
|
($)
|
Total ($)
|
||||||||||||||||
John L.
McManus
|
2010
|
$
|
250,200
|
—
|
$
|
359,969
|
—
|
$
|
610,169
|
|||||||||||||
President
and
|
2009
|
$
|
250,200
|
—
|
$
|
142,759
|
—
|
$
|
392,959
|
|||||||||||||
Chief
Executive Officer
|
2008
|
250,200
|
—
|
150,313
|
—
|
400,513
|
||||||||||||||||
Brian
Day, Ph.D. (2)
|
2010
|
—
|
—
|
62,770
|
$
|
138,000
|
200,770
|
|||||||||||||||
Chief
Scientific Officer
|
2009
|
—
|
—
|
38,056
|
$
|
132,000
|
170,056
|
|||||||||||||||
2008
|
—
|
—
|
31,899
|
132,000
|
163,899
|
|||||||||||||||||
Michael
P. McManus (3)
|
2010
|
—
|
—
|
0
|
—
|
0
|
||||||||||||||||
Former
Chief Financial Officer,
|
2009
|
—
|
—
|
31,423
|
—
|
31,423
|
||||||||||||||||
Treasurer
and Secretary
|
2008
|
—
|
—
|
77,110
|
—
|
77,110
|
Name
|
Grant Date
|
All Other Option Awards:
Number of Securities
Underlying Options (#)(1)
|
Exercise or
Base Price
of Option
Awards
|
Grant Date
Fair Value of
Option
Awards
(2)
|
||||||||||
John L. McManus
|
7/29/10
|
1,500,000
|
$
|
0.40
|
$
|
527,100
|
||||||||
7/14/10
|
250,000
|
$
|
0.40
|
87,925
|
||||||||||
Brian
Day, Ph.D.
|
7/29/2010
|
200,000
|
$
|
0.40
|
$
|
70,280
|
||||||||
10/1/2009
|
50,000
|
$
|
0.30
|
$
|
13,310
|
|||||||||
Michael
P. McManus (3)
|
—
|
—
|
$
|
—
|
$
|
—
|
Name
|
Number of
Securities
Underlying
Unexercised
Options
Exercisable
|
Number of
Securities
Underlying
Unexercised
Options
Unexercisable
|
Option Awards
Equity Incentive Plan
Awards: Number of
Securities Underlying
Unexercised Unearned
Options
|
Option
Exercise
Price
|
Option
Expiration
Date
|
||||||||||||
John
L. McManus
|
10,000 | — | — | $ | 0.97 |
7/29/2015
|
|||||||||||
10,000 | — | — | $ | 0.91 |
8/31/2015
|
||||||||||||
10,000 | — | — | $ | 1.12 |
9/30/2015
|
||||||||||||
10,000 | — | — | $ | 1.15 |
10/31/2015
|
||||||||||||
10,000 | — | — | $ | 1.03 |
11/30/2015
|
||||||||||||
10,000 | — | — | $ | 0.95 |
12/30/2015
|
Name
|
Number of
Securities
Underlying
Unexercised
Options
Exercisable
|
Number of
Securities
Underlying
Unexercised
Options
Unexercisable
|
Option Awards
Equity Incentive Plan
Awards: Number of
Securities Underlying
Unexercised Unearned
Options
|
Option
Exercise
Price
|
Option
Expiration
Date
|
||||||||||||
10,000 | — | — | $ | 0.89 |
1/31/2016
|
||||||||||||
10,000 | — | — | $ | 0.90 |
2/28/2016
|
||||||||||||
10,000 | — | — | $ | 0.80 |
3/31/2016
|
||||||||||||
10,000 | — | — | $ | 0.75 |
4/28/2016
|
||||||||||||
10,000 | — | — | $ | 0.60 |
5/31/2016
|
||||||||||||
10,000 | — | — | $ | 0.81 |
6/30/2016
|
||||||||||||
250,000 | — | — | $ | 0.75 |
7/14/2016
|
||||||||||||
250,000 | — | — | $ | 0.90 |
7/13/2017
|
||||||||||||
250,000 | — | — | $ | 0.32 |
7/14/2018
|
||||||||||||
1,000,000 | — | — | $ | 0.30 |
5/6/2019
|
||||||||||||
250,000 | — | — | $ | 0.39 |
7/30/2019
|
||||||||||||
62,500 | 187,500 | (1) | — | $ | 0.40 |
7/14/2020
|
|||||||||||
375,000 | 1,125,000 | (2) | — | $ | 0.40 |
7/29/2020
|
|||||||||||
Brian
Day, Ph.D.
|
2,000 | — | — | $ | 0.90 |
2/28/2015
|
|||||||||||
2,000 | — | — | $ | 0.70 |
3/31/2015
|
||||||||||||
2,000 | — | — | $ | 0.55 |
4/29/2015
|
||||||||||||
2,000 | — | — | $ | 0.71 |
5/31/2015
|
||||||||||||
2,000 | — | — | $ | 0.73 |
6/30/2015
|
||||||||||||
2,000 | — | — | $ | 0.97 |
7/29/2015
|
||||||||||||
2,000 | — | — | $ | 0.91 |
8/31/2015
|
||||||||||||
2,000 | — | — | $ | 1.12 |
9/30/2015
|
||||||||||||
2,000 | — | — | $ | 1.15 |
10/31/2015
|
||||||||||||
2,000 | — | — | $ | 1.03 |
11/30/2015
|
||||||||||||
2,000 | — | — | $ | 0.95 |
12/31/2015
|
||||||||||||
2,000 | — | — | $ | 0.89 |
1/31/2016
|
||||||||||||
2,000 | — | — | $ | 0.90 |
2/28/2016
|
||||||||||||
2,000 | — | — | $ | 0.80 |
3/31/2016
|
||||||||||||
2,000 | — | — | $ | 0.75 |
4/28/2016
|
||||||||||||
2,000 | — | — | $ | 0.60 |
5/31/2016
|
||||||||||||
25,000 | — | — | $ | 0.85 |
6/5/2016
|
||||||||||||
2,000 | — | — | $ | 0.81 |
6/30/2016
|
||||||||||||
2,000 | — | — | $ | 0.69 |
7/31/2016
|
||||||||||||
2,000 | — | — | $ | 0.80 |
8/31/2016
|
||||||||||||
2,000 | — | — | $ | 0.80 |
9/29/2016
|
||||||||||||
50,000 | — | — | $ | 0.68 |
10/2/2016
|
||||||||||||
50,000 | — | — | $ | 0.45 |
10/1/2017
|
||||||||||||
25,000 | — | — | $ | 0.40 |
1/11/2018
|
||||||||||||
50,000 | — | — | $ | 0.44 |
10/1/2018
|
||||||||||||
200,000 | — | — | $ | 0.30 |
5/6/2019
|
||||||||||||
50,000 | — | — | $ | 0.30 |
10/1/2019
|
Name
|
Number of
Securities
Underlying
Unexercised
Options
Exercisable
|
Number of
Securities
Underlying
Unexercised
Options
Unexercisable
|
Option Awards
Equity Incentive Plan
Awards: Number of
Securities Underlying
Unexercised Unearned
Options
|
Option
Exercise
Price
|
Option
Expiration
Date
|
||||||||||||
50,000 | 150,000 | (3) | — | $ | 0.40 |
7/29/2020
|
|||||||||||
Michael
P. McManus
|
— | — | — | $ | — |
—
|
Termination without Cause
|
Voluntary
Resignation
|
|||||||||||||||
Value of Options
|
||||||||||||||||
Cash
|
Value of
|
with Accelerated
|
Cash
|
|||||||||||||
Name
|
Payments(1)
|
Benefits(2)
|
Vesting
|
Payments
|
||||||||||||
John L. McManus
|
$ | 187,650 | $ | 17,307 | $ | 210,000 | (3) | — | ||||||||
Brian
Day, Ph.D.
|
— | — | 24,000 | — |
Immediately upon a Change of
Control
|
Termination without Cause in Connection
with a Change of Control
|
||||||||||||||||
Name
|
Cash
Payments(5)
|
Value of
Options
with
Accelerated
Vesting
|
Cash
Payments(8)
|
Value of
Benefits(9)
|
Value of
Options with
Accelerated
Vesting (6)
|
||||||||||||
John
L. McManus
|
$ | 150,000 | $ | 210,000 | (6) | $ | 287,650 | $ | 17,307 | $ | 210,000 | (6) | |||||
Brian
Day, Ph.D. (10)
|
30,000 | 24,000 | (7) | — | — | 24,000 | (7) |
·
|
the
date on which shares of common stock are first purchased pursuant to a
tender offer or exchange
offer;
|
·
|
the
date the Company acquires knowledge that any person or group has become
the beneficial owner of securities of the Company entitling the person or
group to 30% or more of all votes to which all stockholders of the Company
would be entitled in the election of the Board of Directors were an
election held on such date;
|
·
|
the
date, during any period of two consecutive years, when individuals who at
the beginning of such period constitute the Board of Directors of the
Company cease for any reason to constitute at least a majority thereof;
and
|
·
|
the
date on which our stockholders approve an agreement for a merger or sale
of substantially all of our assets.
|
Total
|
||||
Fiscal
Year 2010
|
||||
Audit
Fees (1)
|
$
|
66,350
|
||
Audit-Related
Fees (2)
|
14,250
|
|||
Tax
Fees
|
—
|
|||
All
Other Fees
|
—
|
|||
Total
Fiscal Year 2010
|
$
|
80,600
|
||
Fiscal
Year 2009
|
||||
Audit
Fees (1)
|
$
|
67,090
|
||
Audit-Related
Fees (2)
|
1,500
|
|||
Tax
Fees
|
—
|
|||
All
Other Fees
|
—
|
|||
Total
Fiscal Year 2009
|
$
|
68,590
|
|
·
|
reviewed
and discussed our audited financial statements with management and
Haskell & White LLP, the independent registered public accounting
firm;
|
|
·
|
discussed
with Haskell & White LLP the matters required to be discussed by
Statement on Auditing Standards No. 114 (AICPA, Professional
Standards, Vol. 1, AU Section 380), Communications with Audit
Committees, as may be modified or supplemented;
and
|
|
·
|
received
from Haskell & White LLP the written disclosures and the letter
regarding their communications with the Audit Committee concerning
independence as required by the Public Company Accounting Oversight Board
and discussed the auditors’ independence with
them.
|
Submitted
by:
|
The
Audit Committee
|
|
David
C. Cavalier, Chairman
|
||
Amit
Kumar, Ph.D.
|
||
Chris
A. Rallis
|
Name of Stockholder
|
Authorized
Signature Name
|
Number of Shares
Common Stock held as
at January 25, 2011
|
Signature
|
||||
Xmark
Opportunity Fund, L.P.
By:
Xmark Opportunity GP, LLC, its General Partner
By:
Xmark Opportunity Partners, LLC, its Sole Member
By:
Xmark Capital Partners, LLC, its Managing Member
|
Mitchell
D. Kaye
Co-Managing
Member
|
9,948,686
|
/s/
Mitchell D. Kaye
|
||||
Xmark
Opportunity Fund, Ltd.
By:
Xmark Opportunity Manager, LLC, its Investment Manager
By:
Xmark Opportunity Partners, LLC, its Sole Member
By:
Xmark Capital Partners, LLC, its Managing Member
|
Mitchell
D. Kaye
Co-Managing
Member
|
21,378,871
|
/s/
Mitchell D. Kaye
|
||||
Xmark
JV Investment Partners, LLC
By:
Xmark Opportunity Partners, LLC, its Investment Manager
By:
Xmark Capital Partners, LLC, its Managing Member
|
Mitchell
D. Kaye
Co-Managing
Member
|
1,023,731
|
/s/
Mitchell D. Kaye
|
||||
Xmark
Opportunity Partners, LLC
By:
Xmark Capital Partners, LLC, its Managing Member
|
Mitchell
D. Kaye
Co-Managing
Member
|
1,000,000
|
*
|
/s/
Mitchell D. Kaye
|
|||
Goodnow
Capital, L.L.C.
By:
Xmark Opportunity Partners, LLC, its Manager
By:
Xmark Capital Partners, LLC, its Managing Member
|
Mitchell
D. Kaye
Co-Managing
Member
|
8,107,039
|
/s/
Mitchell D. Kaye
|
||||
Total
Shares Voting in Favor:
|
41,458,327
|
of
59,784,050 shares of common stock issued and outstanding as at
January 25, 2011, the effective date of these
resolutions
|
|||||
Percentage
of Common Stock
Voting
in Favor of Resolutions:
|
69.3
|
%
|
I.
|
PURPOSE
|
1.
|
The
primary function of the Audit Committee (“Committee”) of Aeolus
Pharmaceuticals, Inc. (the “Company”) is to assist the Board of Directors
(“Board”) in fulfilling its oversight responsibilities related to
corporate accounting, financial reporting practices, quality and integrity
of financial reports as well as legal compliance and business ethics
matters. It shall be the policy of the Committee to maintain free and open
communication between the Board, the independent auditors and the
management of the Company.
|
2.
|
Although
the Committee has the responsibilities and powers set forth in this
charter, it is not the duty 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 generally accepted accounting
principles. This is the responsibility of management and the independent
auditors. Nor is it the duty of the Committee to conduct investigations,
to resolve disagreements, if any, between management and the independent
auditors or to assure compliance with laws and regulations and the
Company’s policies.
|
II.
|
ORGANIZATION
|
1.
|
Members - The Committee
shall be composed of directors who are independent of the management of
the Company and are free of any relationship that, in the opinion of the
Board, would interfere with their exercise of independent judgment as a
Committee member. Committee members shall be appointed by the Board, and
(after June 13, 2001) the Committee shall be composed of not less
than three independent Directors who are financially literate. At least
one member of the Committee shall have accounting or related financial
management expertise.
|
2.
|
Meetings - The Committee
should meet on a regular basis and special meetings should be called as
circumstances require. The Committee shall meet privately from time to
time with representatives of the Company’s independent public accountants
and management. Written minutes should be kept for all meetings and the
Committee will report to the Board after each Committee
meeting.
|
3.
|
Charter - The Board and
the Committee shall review the adequacy of the Audit Committee Charter on
an annual basis.
|
III.
|
FUNCTIONS
|
1.
|
Independent Accountants
- Recommend to the Board annually, the firm to be employed by the
Company as its independent accountants. Instruct the independent
accountants that they are ultimately responsible to the Board and the
Committee. Receive from the independent accountants a formal written
statement delineating all relationships between the independent
accountants and the Company, to ensure objectivity and
independence.
|
2.
|
Audit Plans & Results
- Review the plans, scope, fees and results for the annual audit
with the independent auditors. Meet with management and the independent
auditors together and separately to discuss the financial statements and
the results of the audit. Inquire of management and the independent
auditor if any significant financial reporting issues arose during the
current audit and, if so, how they were resolved. Evaluate and recommend
to the Board whether or not the annual audited financial statements should
be filed with the SEC on Form 10-K. Discuss any significant issues, if
any, raised by the independent auditors in their letter of recommendations
to management regarding internal control weaknesses and process
improvements. Also review the extent of any services and fees outside the
audit area performed for the Company by its independent
accountants.
|
3.
|
Accounting Principles and
Disclosures - Review significant developments in accounting rules
and recommended changes in the Company’s methods of accounting or
financial statements. The Committee also shall review with the independent
accountants the quality and acceptability of the application of the
Company’s accounting principles to the Company’s financial reporting,
including any significant proposed changes in accounting principles and
financial statements.
|
4.
|
Internal Accounting
Controls - Consult with the independent accountants regarding the
adequacy of internal accounting controls. Inquire as to the adequacy of
the Company’s accounting, financial and auditing personnel resources. As
appropriate, consultation with the independent accountants regarding
internal controls should be conducted out of management’s
presence.
|
5.
|
Internal Control Systems
- Review with management and the Company’s internal control systems
intended to ensure the reliability of financial reporting and compliance
with applicable codes of conduct, laws and regulations. Special
presentations may be requested of Company personnel responsible for such
areas as legal, human resources, information technology, environmental,
risk management, tax compliance and others as considered
appropriate.
|
6.
|
Interim Financial
Statements - Review how management develops and summarizes
quarterly financial information. Require the independent auditors review
the quarterly financial information to be included in the Company’s Form
10-Q.
|