Circuit City 2002 Annual Report Download - page 45

Committee Membership
The Committee shall consist of at least three members of the Board, each of whom is, in the business judgment of the
Board, “independent” under Section 10A(m)(3) of the Securities Exchange Act of 1934, the rules of the New York
Stock Exchange and any other securities exchange on which the Company’s securities are listed. Each member of the
Committee shall be financially literate (or shall become so within a reasonable period of time after appointment to the
Committee), and at least one member of the Committee shall have “accounting or related financial management
expertise” as such qualifications are interpreted by the Board in its business judgment, and qualify as a “financial
expert” as defined by the U.S. Securities and Exchange Commission. No Committee member may serve on the audit
committees of more than two other public companies, unless the Company’s Board has determined that such service
will not impair the effectiveness of the member’s service on the Committee.
The members of the Committee shall be appointed by the Board, and shall serve at the pleasure of the Board for such
term or terms as the Board may determine.
The compensation to be paid by the Company to any Committee member must consist solely of director’s fees;
provided, however, that pension or other deferred compensation that is not contingent on future service to the Company
will not be deemed to violate this requirement.
Committee Structure and Operations
A majority of the Committee shall constitute a quorum. The Board shall designate a member of the Committee as its
chairperson. The Committee may act by a majority of the members present at a meeting of the Committee. In the event
of a tie vote on any issue, the chairperson’s vote shall decide the issue. The Committee shall meet in person or
telephonically at least four times a year at a time and place determined by the Committee chairperson, with further
meetings to occur when deemed necessary or desirable by the Committee or its chairperson. The Committee may
delegate some or all of its duties to a subcommittee comprising one or more members of the Committee. The
Committee may ask members of management or others whose advice and counsel are relevant to the issues then being
considered by the Committee to attend any meetings and to provide such pertinent information as the Committee may
request.
Performance Evaluation
The Committee shall review the adequacy of this charter and evaluate its performance hereunder at least annually and
present such report to the full Board. Such report shall include any recommended changes to this charter. The Board
shall also review and approve this charter at least annually.
While the fundamental responsibility for the Company’s financial statements and disclosures rests with management
and the independent auditor, the Committee shall review: (i) major issues regarding accounting principles, and financial
statement presentations, including any significant changes in the Company
’
s selection or application of accounting
independent auditor's activities or on access to requested information, and any significant
disagreements with management. The review should also include discussion of the responsibilities,
budget and staffing of the Company's internal audit function.
9. Set clear hiring policies for the hiring by the Company of employees or former employees of the
independent auditors.
10. Establish procedures for (i) the receipt, retention and treatment of complaints received by the
Company, regarding accounting, internal accounting controls, or auditing matters and (ii) the
confidential, anonymous submission by employees of the Company of concerns regarding
questionable accounting or auditing matters.
11. Report regularly to the Board. The Committee should review with the full Board any issues that arise
with respect to the quality or integrity of the Company's financial statements, the Company's
compliance with legal or regulatory requirements, the performance and independence of the
Company's independent auditors, or the performance of the internal audit function.