AMENDED AND RESTATED
CHARTER OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
OF STAR BUFFET, INC.
I. AUDIT COMMITTEE PURPOSE
The Audit Committee of Star Buffet, Inc. (the "Company") is appointed by the Board of Directors (the "Board") to assist the Board in fulfilling its oversight responsibilities. The Audit Committee's primary duties and responsibilities are to:
•
Oversee the accounting and financial reporting
processes of the Company and the audits of the financial statements of the
Company.
•
Monitor (1) the integrity of the Company's
financial reporting process and systems of internal controls regarding finance,
accounting, and legal compliance, (2) the independence, performance and
qualifications of the Company's independent auditors, and (3) the
Company's compliance with legal and regulatory requirements.
•
Provide to the Board the results of its
monitoring and make recommendations to the Board based on those results.
•
Provide an avenue of communication among the
independent auditors, management and the Board.
•
Prepare the report of the Audit Committee
required to be included in the Company's annual proxy statement under the rules
of the SEC.
• Provide to the Board such additional information and materials as it may deem necessary to make the Board aware of significant financial matters that require the attention of the Board.
The Audit Committee has the authority to conduct any investigation appropriate to fulfilling its responsibilities and it has direct access to the independent auditors as well as anyone in the Company. The Audit Committee has the ability to retain and determine funding for, at the Company's expense, special legal, accounting, or other consultants or experts it deems necessary in the performance of its duties.
While the Audit Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Audit 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 duty of management and the independent auditors.
II. AUDIT COMMITTEE COMPOSITION AND MEETINGS
The Audit Committee shall be comprised of three or more directors as determined by the Board, each of whom shall be an "independent" director, as required by the independence standards set forth in the Rules of the National Association of Securities Dealers, Inc. (the "NASD") governing companies listed on The Nasdaq Stock Market, as amended from time to time, and the independence requirements set forth in the rules and regulations promulgated by the SEC, as amended from time to time.
Financial Expertise
All members of the Audit Committee shall be able to read and understand fundamental financial statements in accordance with the audit committee requirements set forth in the Rules of the NASD,
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as amended from time to time, and at least one member of the Audit Committee shall be an "Audit Committee Financial Expert" as defined in the rules and regulations promulgated by the SEC, as amended from time to time.
Appointment
The Board shall appoint all Audit Committee members. If an Audit Committee Chair is not designated or present, the members of the Audit Committee may designate a Chair by majority vote of the Audit Committee membership.
Meetings
The Audit Committee shall meet at least four times annually, or more frequently as circumstances dictate. The Audit Committee Chair shall prepare and/or approve an agenda in advance of each meeting. The Audit Committee should meet privately in executive session at least annually with management, the independent auditors and as a committee to discuss any matters that the Audit Committee or any of these groups believe should be discussed. In addition, the Audit Committee, or at least its Chair, should communicate with management and the independent auditors quarterly to review the Company's financial statements and significant findings based upon the auditors limited review procedures.
III. AUDIT COMMITTEE DUTIES AND RESPONSIBILITIES
The Audit Committee's other duties and responsibilities are to:
Review Procedures
1. Review and reassess the adequacy of this Charter at
least annually. Submit the charter to the Board for approval and have the
document published at least every three years in accordance with rules and
regulations promulgated by the SEC, as amended from time to time.
2. Review the Company's annual audited financial
statements prior to filing or distribution. Review should include discussion
with management and independent auditors of significant issues regarding
accounting principles, practices and judgments.
3. In consultation with the management and the internal
auditors, consider the integrity of the Company's financial reporting processes
and controls. Discuss significant financial risk exposures and the steps
management has taken to monitor, control and report such exposures. Review
significant findings prepared by the independent auditors together with
management's responses, including the status of previous recommendations.
4. Review with financial management and the independent
auditors the company's quarterly financial results prior to the release of
earnings and/or the company's quarterly financial statements prior to filing or
distribution. Discuss any significant changes to the Company's accounting
principles and any items required to be communicated by the independent
auditors in accordance with SAS 61 (see item 9). The Audit Committee Chair may
represent the entire Audit Committee for purposes of this review.
5. Discuss with management the effect of regulatory and accounting initiatives as well as off balance sheet structures on the Company's financial statements.
Independent Auditors
6. Appoint, determine the compensation of and, when appropriate, replace the independent auditors for the purpose of preparing or issuing an audit report or related work, and ensuring independent
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auditor partner
rotation as required by the rules and regulations promulgated by the SEC, as
amended from time to time.
7. Approve
the provision of permitted non-audit services by the independent auditors.
8. Approve
the fees and other compensation to be paid to the independent auditors.
9. On an annual basis, review and discuss with the
independent auditors all relationships they have with the Company or any other
party that could impair the auditors' independence and obtain a statement from
the independent auditors regarding such relationships.
10. Discuss with the independent auditors the audit scope
and plan, including staffing, locations, reliance upon management and general
audit approach.
11. Prior to releasing the year-end earnings, discuss the
results of the audit with the independent auditors. Discuss certain matters
required to be communicated to audit committees in accordance with AICPA SAS
61, as amended from time to time.
12. Inquire as to the independent auditors' qualitative
judgments about the appropriateness of the accounting principles (including as
applied to financial reporting) and the clarity of the financial disclosure
practices used or proposed to be used by the Company.
13. Inquire as to the independent auditor's views about
whether management's choices of accounting principles are conservative,
moderate or aggressive from the perspective of income, asset and liability
recognition, and whether those principles are common practices or minority
practices.
14. Determine, as regards new transactions or events, the independent auditors' reasoning for the appropriateness of the accounting principles and disclosure practices adopted by management.
Other Audit Committee Responsibilities
15. Discuss with management its compliance with applicable
laws and regulations, and any inquiries received from regulators or
governmental agencies.
16. Discuss with management and the independent auditors
the adequacy of the Company's system of internal controls including internal
accounting controls and control over financial reporting.
17. Establish procedures for the receipt, retention and
treatment of complaints received by the Company regarding accounting, internal
accounting controls, or auditing matters and procedures for the confidential,
anonymous submission by employees of the Company of concerns regarding
questionable accounting or auditing matters.
18. Review and
approve in advance any proposed related party transactions.
19. Perform its obligations set forth in the Company's
code of ethics, and review and reassess the adequacy of the code of ethics
annually.
20. Report at least semi-annually, or as deemed necessary,
to the full Board, and cause to be distributed to the Board summarized minutes
of the Audit Committee meetings.
21. Review
financial and audit personnel succession planning within the Company.
22. Annually review policies and procedures as well as
audit results associated with directors' and officers expense accounts and
perquisites.
23. Periodically
perform self-assessment of Audit Committee performance.
24. Establish procedures for receiving any complaints or reports by outside legal counsel regarding evidence of material violations of securities laws or breaches of fiduciary duties as required by rules and regulations promulgated by the SEC, as amended from time to time.
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25.
Perform
any other activities consistent with this Charter, the Company's By-laws and
governing law, as the Audit Committee or the Board deems necessary or
appropriate.
26. Maintain minutes of meetings and periodically report to the Board on significant results of the foregoing activities.
IV. AUDIT COMMITTEE COMPENSATION
Members of the Audit Committee shall receive such fees, if any, for their service as Audit Committee members as may be determined by the Board in its sole discretion. Such fees may include retainers and/or per meeting fees. Fees may be paid in such form of consideration as is determined by the Board.
Members of the Audit Committee may not accept any compensation, either directly or indirectly, including fees for professional services, from the Company except the fees that they receive for service as a member of the Board and any committee thereof and reasonable expense reimbursements.
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