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REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
No portion of this audit committee report shall be deemed to be incorporated by reference into any filing
under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, through
any general statement incorporating by reference in its entirety the proxy statement in which this report
appears, except to the extent that the Company specifically incorporates this report or a portion of it by
reference. In addition, this report shall not be deemed filed under either the Securities Act or the Exchange Act.
This report is submitted by the audit committee of the board of directors. The audit committee currently
consists of Messrs. Geisser (chairman), McNamee and Meekin. None of the members of the audit committee
is an officer or employee of the Company, and the board of directors has determined that each member of the
audit committee meets the independence requirements promulgated by NASDAQ and the Securities and
Exchange Commission, including Rule 10A-3(b)(1) under the Exchange Act. Mr. Geisser is an “audit
committee financial expert” as is currently defined under SEC rules. The audit committee operates under a
written charter adopted by the board of directors.
The audit committee oversees the Company’s accounting and financial reporting processes on behalf of the
board of directors. The Company’s management has the primary responsibility for the financial statements, for
maintaining effective internal control over financial reporting, and for assessing the effectiveness of internal control
over financial reporting. In fulfilling its oversight responsibilities, the audit committee has reviewed and discussed
with management the Company’s consolidated financial statements for the fiscal year ended January 1, 2011,
including a discussion of, among other things, the quality of the Company’s accounting principles, the reasonable-
ness of significant estimates and judgments, and the clarity of disclosures in the Company’s financial statements.
The audit committee also reviewed with PricewaterhouseCoopers LLP, the Company’s independent
registered public accounting firm, the results of their audit and discussed matters required to be discussed by the
Statement on Auditing Standards No. 61 as amended (AICPA, Professional Standards, Vol. 1, AU section 380),
other standards of the Public Company Accounting Oversight Board, rules of the Securities and Exchange
Commission and other applicable regulations. The audit committee has reviewed permitted services under rules
of the Securities and Exchange Commission as currently in effect and discussed with PricewaterhouseCoopers
LLP their independence from management and the Company, including the matters in the written disclosures and
the letter from the independent registered public accounting firm required by applicable requirements of the
Public Company Accounting Oversight Board regarding the independent accountant’s communications with the
audit committee concerning independence, and has considered and discussed the compatibility of non-audit
services provided by PricewaterhouseCoopers LLP with that firm’s independence.
The audit committee meets with the independent registered public accounting firm, with and without
management present, to discuss the results of their examinations; their evaluations of the Company’s internal
control, including internal control over financial reporting; and the overall quality of the Company’s financial
reporting.
Based on its review of the financial statements and the aforementioned discussions, the audit committee
concluded that it would be reasonable to recommend, and on that basis did recommend, to the board of
directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for
the year ended January 1, 2011.
The audit committee has also evaluated the performance of PricewaterhouseCoopers LLP, including, among
other things, the amount of fees paid to PricewaterhouseCoopers LLP for audit and non-audit services in 2010.
Information about PricewaterhouseCoopers LLP’s fees for 2010 is discussed below in this proxy statement under
“Proposal 3 — Ratification of Appointment of Independent Registered Public Accountants.” Based on its
evaluation, the audit committee has recommended that the Company retain PricewaterhouseCoopers LLP to serve
as the Company’s independent registered public accounting firm for the 2011 fiscal year.
Respectfully submitted by the Audit Committee,
Andrea Geisser (chairman)
George C. McNamee
Peter T. Meekin
17
Proxy Statement