The Audit Committee (the "Committee") is appointed by the Board of Directors
(the "Board") of Bankrate, Inc. (the "Company"). The primary function of the Committee
is to assist the Board in fulfilling its oversight responsibilities, primarily through:
overseeing management's conduct of the Company's financial reporting process
and systems of internal accounting and financial controls;
monitoring the independence and performance of the Company's outside
auditors; and
providing an avenue of communication among the outside auditors, management
and the Board.
COMPOSITION
The Committee shall have at least three (3) members at all times, each of
whom must be independent of management, as well the Company and each of its
affiliates. A member of the Committee shall be considered independent if:
in the sole discretion of the Board, it is determined that he or she
has no relationship that may interfere with the exercise of his or her independent
judgment; and
he or she meets The Nasdaq Stock Market, Inc. Marketplace
Rules regarding independence of audit committee members.
If any member of the Committee develops a "conflict of interest" (as that
term is defined in The Nasdaq Stock Market, Inc. Marketplace Rules, Rule 4350 (h)),
that member shall have an affirmative obligation to promptly disclose such relationship to
the Board.
No member of the Committee shall accept any consulting, advisory or
other compensatory fee from the Company other than in connection with serving on the
Committee or as a member of the Board.
All members of the Committee shall have a practical knowledge of
finance and accounting and be able to read and understand fundamental financial
statements or be able to do so within a reasonable period of time after appointment to
the Committee.
At least one member of the Committee shall have accounting or related
financial management expertise, as the Board interprets such qualification in its
business judgment
.
Each member of the Committee shall be appointed by the Board and
shall serve until the earlier to occur of the date on which he or she shall be replaced by
the Board, resigns from the Committee, or resigns from the Board.
MEETINGS
The Committee shall meet as frequently as circumstances dictate, but no
less than four times annually. The Board shall name a chairperson of the Committee,
who shall prepare and/or approve an agenda in advance of each meeting. A majority of
the members of the Committee shall constitute a quorum. The Committee shall maintain
minutes or other records of meetings and activities of the Committee.
The Committee shall, through its chairperson, report regularly to the
Board following the meetings of the Committee, addressing such matters as the quality
of the Company's financial statements, the Company's compliance with legal or
regulatory requirements, the performance and independence of the outside auditors, the
performance of the internal audit function or other matters related to the Committee's
functions and responsibilities.
RESPONSIBILITIES AND DUTIES
The Committee's principal responsibility is one of oversight. The Company's
management is responsible for preparing the Company's financial statements and the
outside auditors are responsible for auditing and/or reviewing those financial statements.
While the Committee has the powers and responsibilities set forth in this charter,
it is not the responsibility of the Committee to plan or conduct audits or to determine that
the Company's financial statements present fairly the financial position, the results of
operations and the cash flows of the Company, in conformity with accounting principles
generally accepted in the United States of America. This is the responsibility of
management and the outside auditors. In carrying out these oversight responsibilities,
the Committee is not providing any expert or special assurance as to the Company's
financial statements or any professional certification as to the outside auditors' work.
The Committee's specific responsibilities are as follows:
General
The Committee shall have the power to conduct or authorize
investigations into any matters within the Committee's scope of responsibilities. The
Committee shall have unrestricted access to members of management and other
employees of the Company, as well as all information relevant to the carrying out of its
responsibilities.
The Committee shall, with the assistance of management, the outside
auditors and legal counsel, as the Committee deems appropriate, review and evaluate,
at least annually, the Committee's:
charter;
powers and responsibilities; and
performance.
The Committee shall report and make recommendations to the Board with respect to the
foregoing, as appropriate.
The Committee shall ensure inclusion of its then-current charter in the
proxy statement for the Company's annual meetings of shareholders, at least once every
three years in accordance with regulations of the SEC.
The Committee shall prepare annual Committee reports for inclusion in
the proxy statements for the Company's annual meetings, as required by rules
promulgated by the SEC.
The Committee shall, in addition to the performance of the duties
described in this charter, undertake such additional duties as from time to time may be:
delegated to it by the Board;
required by law or under The Nasdaq Stock market, Inc.
Markeplace Rules; or
deemed desirable, in the Committee's discretion, in connection
with its functions described in this charter.
The Committee shall be empowered to retain, at the Company's expense,
independent counsel, accountants or other advisors for such purposes as the
Committee, in its sole discretion, determines to be appropriate to carry out its
responsibilities. The Company will provide for appropriate funding, as determined by the
Committee, for payment of compensation to the independent auditor for the purpose of
rendering or issuing an audit report and to any advisors employed by the Committee.
Internal Controls and Risk Assessment
The Committee shall review annually, with management and the outside
auditors, if deemed appropriate by the Committee, the effectiveness of or weaknesses in
the Company's internal controls, including computerized information system controls and
security, the overall control environment and accounting and financial controls.
The Committee shall obtain from the outside auditors their
recommendations regarding internal controls and other matters relating to the
accounting procedures and the books and records of the Company.
The Committee shall, in accordance with SEC regulations, establish
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 major financial risk exposures and the
guidelines and policies which management has put in place to govern the process of
monitoring, controlling and reporting such exposures.
Outside Auditors; Their Performance and Independence
The outside auditors report directly to the Committee, are ultimately
accountable to the Board and the Committee, as the representatives of the shareholders
of the Company. The Committee shall evaluate and recommend to the Board the
selection and, where appropriate, the replacement of the outside auditors. The
Committee shall recommend to the Board the outside auditors to be proposed for
shareholder approval in any proxy statement.
The Committee shall:
confer with the outside auditors concerning the scope of their
examinations of the books and records of the Company and its subsidiaries;
review the scope, plan and procedures to be used on the annual
audit, as recommended by the outside auditors;
review the results of the annual audits and interim financial
reviews performed by the outside auditors, including:
the outside auditors' audit of the Company's annual
financial statements, accompanying footnotes and its report thereon;
any significant changes required in the outside auditors'
audit plans or scope;
any material differences or disputes with management
encountered during the course of the audit (the Committee to be responsible for
overseeing the resolution of such differences and disputes);
any material management letter comments and
management's responses to recommendations made by the outside auditors in
connection with the audit;
matters required to be discussed by Statement on Auditing
Standards No. 61, as amended (Communications with Audit Committees), relating to the
conduct of the audit;
authorize the outside auditors to perform such supplemental
reviews or audits as the Committee may deem desirable; and
obtain from the outside auditors assurance that they have
complied with Section 10A, as amended, of the Securities Exchange Act of 1934.
The Committee shall inquire into any accounting adjustments that were
noted or proposed by the outside auditors but were "passed" as immaterial or otherwise.
The Committee shall inquire as to any matters that were referred to the
outside auditors' national office relating to accounting policies and/or financial statement
disclosure within the Company's financial statements and, to the extent deemed
appropriate, request an opportunity to address such issues directly with a representative
of such national office.
Pre-approval by the Committee shall be required with respect to the fees
for all audit and other services performed by the outside auditors as negotiated by
management.
The Committee's approval of any non-audit services to be rendered by
the outside auditors must be obtained in advance of engaging the outside auditors to
render such services. The Committee shall not approve the engagement of the outside
auditors to render non-audit services prohibited by law or rules and regulations
promulgated by the SEC. The Committee shall consider whether the provision of nonaudit
services is compatible with maintaining the outside auditors' independence,
including, but not limited to, the nature and scope of the specific non-audit services to be
performed and whether the audit process would require the outside auditors to review
any advice rendered by the outside auditors in connection with the provision of non-audit
services.
The Committee shall receive from the outside auditors on a periodic basis
a formal written statement delineating all relationships between the outside auditors and
the Company, consistent with the Independence Standards Board, Standard No. 1,
regarding relationships and services, which may impact the objectivity and
independence of the outside auditors, and other applicable standards. The statement
shall include a description of all services provided by the outside auditors and the related
fees. The Committee shall actively engage in a dialogue with the outside auditors
regarding any disclosed relationships or services that may impact the objectivity and
independence of the outside auditors and shall evaluate, after gathering information from
management, and other Board members, the performance of the outside auditors and
recommend that the Board take action to satisfy itself of the independence of the outside
auditors.
The Committee shall establish written hiring policies for current and
former employees of the outside auditors.
The Committee shall consider whether it is appropriate to adopt a policy
of insisting upon the rotation of the outside auditors' lead audit partner or rotating the
outside auditors on a periodic basis. Based upon its evaluation, the Committee shall
take, or recommend that the Board take, appropriate action to monitor the independent
status of the outside auditors.
Financial Reporting
The Committee shall review and discuss with the outside auditors and
management the Company's audited annual financial statements that are to be included
in the Company's annual report on Form 10-K and the outside auditors' opinion with
respect to such financial statements, including reviewing the nature and extent of any
significant changes in accounting principles or the application of such accounting
principles; and determine whether to recommend to the Board that the financial
statements be included in the Company's annual report on Form 10-K for filing with the
SEC.
The Committee shall review and discuss with the outside auditors and
management, and require the outside auditors to review, the Company's interim financial
statements to be included in the Company's quarterly reports on Form 10-Q prior to filing
such reports with the SEC.
The Committee shall review and discuss:
the existence of significant estimates and judgments underlying
the financial statements, including the rationale behind those estimates as well as the
details on material accruals and reserves and the Company's accounting principles;
all critical accounting policies identified to the Committee by the
outside auditors;
major changes to the Company's accounting principles and
practices, including those required by professional or regulatory pronouncements and
actions, as brought to its attention by management and/or the outside auditors; and
material questions of choice with respect to the appropriate
accounting principles and practices to be used in the preparation of the Company's
financial statements, as brought to its attention by management and/or the outside
auditors.
The Committee shall review and discuss the Company's disclosure under
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" included in any annual or quarterly report, or other report or filing filed with
the SEC.
The Committee shall discuss generally with management earnings press
releases of the Company, as well as financial information and earnings guidance
provided by the Company to analysts and rating agencies.
The Committee shall review and discuss with outside auditors any related
party transactions and relationships that could enable the negotiation of terms on other
than an independent, arms-length basis.
The Committee shall discuss with the outside auditors any item not
reported as a contingent liability or loss in the Company's financial statements as a
result of a determination that such item does not satisfy a materiality threshold. The
Committee shall review with the outside auditors the quantitative and qualitative analysis
applied in connection with such assessment of materiality, including, without limitation,
the consistency of such assessment with the requirements of SEC Staff Accounting
Bulletin No. 99.
The Committee shall review and consider other matters in relation to the
financial affairs of the Company and its accounts, and in relation to the internal and
external audit of the Company as the Committee may, in its discretion, determine to be
advisable.
The Committee shall meet at least annually with management, and the
outside auditors in separate executive sessions to discuss any matters that the
Committee or each of these groups believes should be discussed privately.
Compliance with Laws, Regulations and Policies
The Committee shall review with management actions taken to ensure
compliance with any code or standards of conduct for the Company which may be
established by the Board.
The Committee shall review with the Company's legal counsel any legal
compliance matters, including securities trading practices and any other legal matters
that could have a significant, adverse impact on the Company's financial statements.
The Committee shall review with the Company's counsel and others any
federal, tax or regulatory matters that may have a material impact on the Company's
operations and the financial statements, related Company compliance programs and
policies, and programs and reports received from regulators, and shall monitor the
results of the Company's compliance efforts.
The Committee shall periodically review the rules promulgated by the
SEC and the The Nasdaq Stock Market, Inc. relating to the qualifications, activities,
responsibilities and duties of audit committees and shall take, appropriate action to comply with such rules.
Shareholder
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