Audit Committee Charters
Charter of the Audit Committee (As Adopted on February 28, 2005)
This Charter sets forth, among other things, the purpose, membership and duties and responsibilities of the Audit Committee (the “Committee”) of the Board of Directors (the “Board”) of ALH Holding Inc., a Delaware corporation ( “Holding”).
The purposes of the Committee are: (a) to assist the Board in overseeing (i) the quality and integrity of the financial statements of Alliance Laundry Holdings LLC and its subsidiaries (collectively, the "Company"), (ii) to certify the qualifications and independence of the Company's independent auditor, and (iii) to oversee the performance of the Company's independent auditor; and (b) to prepare the report of the Cmmittee required to be included in the Company's annual report on Form 10-K under the rules of the U.S. Securities and Exchange Commission (the "SEC"), and (c) to perform such other duties as may be required of it by the Board from time to time.
The Committee shall consist of at least two members. The members of the Committee shall be appointed by the Board on the recommendation of the Board, which shall recommend for Committee membership such directors as it believes are qualified. Members of the Committee shall serve at the pleasure of the Board and for such term or terms as the Board may determine. The Board may also appoint additional members of the Committee, including a member who is qualified as an independent director and “audit committee financial expert” as defined under the rules of the SEC and as such qualification is interpreted by the Board in its business judgment.
Each member of the Committee shall be financially literate, as such qualification is interpreted by the Board in its business judgment, or must become financially literate within a reasonable period of time after appointment to the Committee.
3. Structure and Operations
The Board shall designate one member of the Committee as its chairperson. The affirmative vote of a majority of the members of the Committee is necessary for the adoption of any resolution. The Committee may create one or more subcommittees and may delegate, in its discretion, all or a portion of its duties and responsibilities to such subcommittee. The Committee may delegate to one or more designated members of the Committee the authority to grant pre-approvals of audit and non-audit services pursuant to Section 10A(i)(3) of the Exchange Act and any related rules promulgated thereunder by the SEC, which pre-approvals shall be presented to the full Committee at the next scheduled meeting.
The Committee shall have a regularly scheduled meeting at least once every fiscal quarter, at such times and places as shall be determined by the Committee chairperson, and may have such additional meetings as the Committee chairperson or a majority of the Committee’s members deem necessary or desirable. The Committee may request (a) any officer or employee of the Company, (b) the Company’s outside counsel or (c) the Company’s independent auditor to attend any meeting (or portions thereof) of the Committee, or to meet with any members of or consultants to the Committee, and to provide such information as the Committee deems necessary or desirable.
The Committee periodically shall meet separately with management and with the independent auditor.
Members of the Committee may participate in a meeting of the Committee by means of conference call or similar communications arrangements by means of which all persons participating in the meeting can hear each other. An agenda and minutes for the meetings may be prepared to document the Committee’s discharge of its responsibilities.
4. Duties and Responsibilities
The Committee’s duties and responsibilities shall include each of the items enumerated in this Section 4 and such other matters as may from time to time be delegated to the Committee by the Board.
Reports to Board; Review of Committee Performance and Charter
- The Committee shall report regularly to the Board and review with the Board any issues that arise with respect to:
- the quality or integrity of the Company’s financial statements;
- the performance and independence of the Company’s independent auditor; and
- the Company’s compliance with legal and regulatory requirements.
- The Committee shall review and re-assess annually the adequacy of this Charter and recommend any proposed changes to the Board for approval.
The Company’s Relationship with the Independent Auditor
- The Committee shall have the sole and direct responsibility and authority for the appointment, compensation, retention and oversight of the work of each independent auditor engaged by the Company for the purpose of preparing or issuing an audit report or related work or performing other audit, review or attest services for the Company, and each such independent auditor shall report directly to the Committee. The Committee shall be responsible for resolving disagreements between management and each such independent auditor regarding financial reporting. The Committee shall have the responsibility and authority to approve, in advance of the provision thereof, all audit services and, subject to the deminimis exception of Section 10A(i) of the Exchange Act and the SEC rules promulgated thereunder, all permitted non-audit services to be provided to the Company by any such independent auditor. The Committee shall have the sole authority to approve any compensation payable by the Company for any approved audit or non-audit services to any such independent auditor, including the fees, terms and conditions for the performance of such services.
- The Committee shall, at least annually:
- obtain a written report by the independent auditor describing, to the extent permitted under applicable auditing standards:
- the independent auditor’s internal quality-control procedures;
- any material issues raised by the most recent quality-control review, or peer review, of the independent auditor, 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 independent auditor, and any steps taken to deal with any such issues; and
- all relationships between the independent auditor and the Company; and
- review the foregoing report and the independent auditor’s work throughout the year and evaluate the independent auditor’s qualifications, performance and independence, including a review and evaluation of the lead partner on the independent auditor’s engagement with the Company, and present its conclusions to the Board and, if so determined by the Committee, recommend that the Board take additional action to satisfy itself of the qualifications, performance and independence of the independent auditor.
- obtain a written report by the independent auditor describing, to the extent permitted under applicable auditing standards:
- The Committee shall, at least annually, discuss with the independent auditor, out of the presence of management if deemed appropriate:
- the matters required to be discussed by Statement on Auditing Standards 61, as it may be modified or supplemented, relating to the conduct of the audit;
- the audit process, including, without limitation, any problems or difficulties encountered in the course of the performance of the audit, including any restrictions on the independent auditor’s activities or access to requested information imposed by management, and management’s response thereto, and any significant disagreements with management; and
- the Company’s internal controls.
- The Committee shall establish policies for the Company’s hiring of employees or former employees of the independent auditor.
- The Committee shall review, and discuss as appropriate with management and the independent auditor, the report of the independent auditor required by Section 10A(k) of the Exchange Act.
Financial Reporting and Disclosure Matters
- The Committee shall review and discuss with management and the independent auditor:
- prior to the annual audit, the scope, planning and staffing of the annual audit;
- the Company’s annual audited financial statements and quarterly financial statements, including the Company’s disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the results of the independent auditor’s reviews of the quarterly financial statements;
- significant issues regarding accounting and auditing principles and practices and financial statement presentations, including all critical accounting policies and estimates, any significant changes in the Company’s selection or application of accounting principles and any significant issues as to the adequacy of the Company’s internal controls and any special audit steps adopted in light of material control deficiencies;
- analyses prepared by management and/or the independent auditor setting forth significant financial reporting issues and judgments made in connection with the preparation of the financial statements, including analyses of the effects of alternative GAAP methods on the financial statements;
- the effect of regulatory and accounting initiatives, as well as off-balance sheet structures, on the financial statements;
- any significant changes to the Company’s auditing and accounting principles and practices suggested by the independent auditor or management; and
- management’s internal control report prepared in accordance with rules promulgated by the SEC pursuant to Section 404 of the Sarbanes-Oxley Act.
- The Committee shall recommend to the Board whether the annual audited financial statements should be included in the Company’s Form 10-K.
- The Committee shall review and discuss with the CEO and CFO the procedures undertaken in connection with the CEO and CFO certifications for Form 10‑Ks and Form 10-Qs, including their evaluation of the Company’s disclosure controls and procedures and internal controls.
- The Committee shall annually obtain from the independent auditor assurance that the audit was conducted in a manner consistent with Section 10A of the Exchange Act.
Compliance Matters and Other
- The Committee shall establish and maintain 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.
- The Committee shall review with management and the independent auditor any correspondence with regulators or governmental agencies and any employee complaints or published reports that raise material issues regarding the Company’s financial statements or accounting policies.
- The Committee shall review with the Company’s Chief Legal Officer any legal matters that may have a material impact on the financial statements or the compliance policies of the Company and its subsidiaries, and any material reports or inquiries received by the Company or any of its subsidiaries from regulators or governmental agencies.
- The Committee shall exercise such other powers and perform such other duties and responsibilities as are incidental to the purposes, duties and responsibilities specified herein and as may from time to time be delegated to the Committee by the Board.
5. Authority and Resources
The Committee may, without further approval by the Board, obtain such advice and assistance, including, without limitation, the performance of special audits, reviews and other procedures, from outside accounting, legal or other advisors as the Committee determines to be necessary or advisable in connection with the discharge of its duties and responsibilities hereunder. Any accounting, legal or other advisor retained by the Committee may, but need not, be in the case of an outside accountant, the same accounting firm employed by the Company for the purpose of rendering or issuing an audit report on the Company’s annual financial statements, or in the case of an outside legal or other advisor, otherwise engaged by the Company for any other purpose.
The Company shall pay to any independent auditor employed by the Company for the purpose of rendering or issuing an audit report or performing other audit, review or attest services and to any outside accounting, legal or other advisor retained by the Committee pursuant to the preceding paragraph such compensation, including, without limitation, usual and customary expenses and charges, as shall be determined by the Committee. The Company shall pay ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties.
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