LAUREATE EDUCATION, INC.
AUDIT COMMITTEE OF THE
BOARD OF DIRECTORS
CHARTER
1.0
Purpose
The Audit Committee (the "Committee") shall provide assistance to
the Board of Directors in fulfilling its responsibility to the shareholders,
potential shareholders, the investment community and others relating to corporate
accounting, financial reporting practices of Laureate Education, Inc., Inc. (the
"Corporation"), and the quality and integrity of the financial reports
of the Corporation. In so doing, it is the responsibility of the Committee to
maintain a free and open means of communication between the directors, the independent
auditors, the internal auditor, and the financial management of the Corporation.
Back to Top
2.0
Membership
The Board shall elect from its members an Audit Committee of at least three
members. The Board shall also appoint a Chairman of the Audit Committee. The
Audit Committee members must meet the following requirements:
| 2.1 Independence: |
| |
2.1.1. Members must not be an employee of the Corporation or any affiliate
within the past three years.
2.1.2. Members must not be an immediate family member of an executive
officer of the Corporation who currently serves in that role or did so
in any of the past three years.
2.1.3. Members may not receive compensation (including consulting, advisory
or other compensatory fees), other than compensation for board or board
committee service.
2.1.4. Members must not be a partner, controlling shareholder, or executive
officer of any for-profit business that receives payments from the Corporation.
This applies where the payments, other than solely from the investments
in the Corporation's securities, in any of the past three years exceeded
the greater of 5% of either organization's consolidated gross revenues
for the year or $200,000.
2.1.5. A member must not be an executive of another corporation that has
on its compensation committee an executive officer of the Corporation.
|
| 2.2 Qualifications: |
| |
2.2.1. Members must be able to read and understand fundamental
financial statements, including a balance sheet, income statement, and
cash flow statement. |
| |
2.2.2. The Audit Committee must contain at least one "audit
committee financial expert" as determined by the Board of Directors.
As more fully defined by applicable SEC requirements, an "audit committee
financial expert" shall have all of the following attributes: |
|
|
|
a. An understanding of generally accepted accounting principles and
financial statements;
b. The ability to assess the general application of such principles in
connection with the accounting for estimates, accruals, and reserves;
c. Experience preparing, auditing, analyzing or evaluating financial statements
that present a breadth and level of complexity of accounting issues that
are generally comparable to the breadth and complexity of issues that
can reasonably be expected to be raised by the Corporation's financial
statements, or experience actively supervising one or more persons engaged
in such activities;
d. An understanding of internal controls and procedures for financial
reporting; and
e. An understanding of audit committee functions. |
| |
2.2.3. At least one member is required to have extensive
financial knowledge, including being or having been a chief executive,
chief financial, or other senior officer with financial oversight responsibilities.
|
Back to Top
3.0
Meetings . The Committee will meet at least quarterly and as often as it
determines appropriate to carry out its responsibilities. The Committee will
also meet periodically with management, the internal auditors and the Corporation's
independent auditors in separate executive sessions. The Chair of the Committee,
in consultation with the other Committee members, will determine the frequency
and length of the meetings and will set agendas consistent with this charter.
Back to Top
4.0
Oversight of the Independent Auditor.
| 4.1 The engagement and retention of the independent auditors |
| |
4.1.1 The Committee will have sole authority to retain and terminate
the Corporation's independent auditors.
4.1.2 The independent auditors will report directly to the Committee.
4.1.3 The Committee will review the general scope and audit plan with
the independent auditor
4.1.4 The Committee will be responsible for the compensation of the work
of the independent auditors.
4.1.5 The Committee will be responsible for oversight of the work of the
independent auditors for the purpose of preparing or issuing an audit
report or related work. |
| 4.2 The qualifications, staffing and independence of the
independent auditors. The Committee will evaluate the independent auditors'
qualifications, performance and independence at appropriate intervals.
|
| |
4.2.1 The evaluation will include such matters as the Committee deems
appropriate and may include a review of matters related to the independent
auditors' internal quality-control procedures, as well as an evaluation
of the senior members of the audit team and any relationships between
the independent auditors and the Corporation. To the extent it deems appropriate,
the Committee will also review with the independent auditors the scope
and staffing of the audit, as well as any problems or difficulties encountered
during the audit, and management's response thereto.
4.2.2 The Committee may also establish policies as it deems appropriate
for the Corporation's hiring of current or former employees of the independent
auditors. |
Back to Top
5.0
Preapprovals. The Committee will adopt appropriate procedures to ensure
that all auditing services and permitted non-audit services (including the fees
and terms thereof) to be performed for the Corporation by the independent auditors
are approved by the Committee in accordance with the requirements of the NASDAQ,
SEC and any other applicable legal and regulatory requirements. Subject to the
foregoing, the Committee may form subcommittees and delegate authority hereunder
as it deems appropriate, including the authority to grant preapprovals of audit
and permitted non-audit services, provided that any decisions of any such subcommittee
to grant preapprovals must be presented to the full Committee at its next meeting.
The Committee may consult with management regarding these matters but may not
delegate this authority to management.
Back to Top
6.0
Communications with Auditors. Prior to filing a report of the independent
auditors with the Commission, the Committee will also discuss with the independent
auditors:
6.0.1 all critical accounting policies and practices;
6.0.2 all material alternative treatments of financial information within
generally accepted accounting principals that have been discussed with
management, ramifications of the use of such alternative treatments, and
the treatment preferred by the independent auditors;
6.0.3 other material written communications between the independent auditors
and management;
6.0.4 all matters required to be discussed with the Committee by the independent
auditors pursuant to Statement on Auditing Standards No. 61;
6.0.5 review the management letter and the responses of management to
it;
6.0.6 such other matters as the Committee deems appropriate. |
Back to Top
7.0
Closed Session with independent auditors: The Committee shall meet not fewer
than twice each year with the independent auditors without management present.
The Committee's agenda will include but not be limited to a discussion of:
7.0.1 The competence of the Company's financial and accounting personnel
7.0.2 Any significant issues with respect to accounting, financial reporting
or judgments
7.0.3 Cooperation of the accounting and financial personnel with the independent
auditors. |
Back to Top
8.0
Internal Auditors. The Committee will take such actions as it deems advisable
in connection with the evaluation of the performance, responsibilities, budget
and staffing of the Corporation's internal audit function, as well as the internal
audit plan. The Committee will review such matters with the independent auditors
and will also review any significant reports to management prepared by the internal
auditing department, as well as management's responses thereto. Not less frequently
than twice each year, the Audit Committee will meet with the internal auditors,
without management present.
Back to Top
9.0
Internal Controls. The Committee will consider the integrity of the accounting
and financial reporting processes and controls of the Company. This consideration
shall encompass
9.0.1 Meeting periodically with the independent auditors, the internal
auditors, and financial and accounting personnel to discuss significant
financial risk exposures and the steps management has taken to monitor,
control and report such exposures; and
9.0.2 Reviewing significant findings prepared by the independent auditors
and the internal auditors, together with management's responses. |
The Committee will review and may take appropriate action with respect to any
disclosures made to the Committee by the Corporation's CEO and CFO during their
certification process for the Form 10-K and Form 10-Q with respect to any significant
deficiencies in the design or operation of internal controls or material weaknesses
therein, and any irregularities involving management or other employees with
a significant role in such controls and procedures.
Back to Top
10.0
Financial Statements, Disclosure and other Compliance Matters. The Committee
will review and discuss the Corporation's financial statements with management
and the independent auditors, and as the Committee otherwise deems appropriate
or necessary. Such review will comply with all applicable requirements of the
NASDAQ, SEC and any other applicable legal or regulatory requirement, and may
include matters relating to the financial statements including the Corporation's
practices regarding earnings press releases, the effect of regulatory and accounting
initiatives and any off-balance sheet structures of the Corporation.
10.0.1 Based on such reviews and discussions, the Committee will recommend to
the Board whether the audited financial statements should be included in the
Corporation's Form 10-K.
Back to Top
11.0
Receipt of Complaints. The Committee will establish such procedures as it
deems appropriate or as are required pursuant to the rules and regulations of
the Commission or otherwise regarding the receipt, retention and treatment of
complaints received by the Corporation regarding accounting, internal accounting
controls or auditing matters, as well as processing the confidential, anonymous
submission by employees of the Corporation of concerns regarding questionable
accounting or auditing matters.
The Committee shall establish a procedure for monitoring compliance with the Company's
Code of Conduct and Ethics and establish an anonymous employee complaint "hotline"
in accordance with any applicable rules.
Back to Top
12.0
Proxy Report. The Committee will prepare and approve the audit committee
report included in the Corporation's annual proxy statement.
Back to Top
13.0
Self-Evaluation. The Committee will conduct such self-evaluations as it
deems appropriate, including to satisfy any applicable requirements of the NASD,
NASDAQ and any other legal or regulatory requirements.
Back to Top
14.0
Reporting to the Board. The Committee will report to the Board as it deems
appropriate, and as the Board may request.
Back to Top
15.0
Retention of Advisors. The Committee will obtain advice and assistance from
such internal and external advisors as it deems appropriate in connection with
the discharge of its duties. The Committee will have sole authority to determine
and approve related fees and retention terms for any such advisors, who will
be compensated by the Corporation.
Back to Top
16.0
Corporation Policies. The Committee will monitor management's implementation
of the policies, practices and programs of the Corporation in the following
areas:
|
16.0.1 the Corporation's Standards of Business Ethics and Conduct Program;
and
16.0.2 The Committee will review all related party transactions;
|
Back to Top
17.0
Other Activities. The Committee will perform such other activities consistent
with this charter, the Corporation's By-Laws, governing law, the rules and regulations
of the, NASDAQ, the SEC and such other requirements applicable to the Corporation
as the Committee or the Board deem necessary or appropriate.
Back to Top
18.0
Limitation of Audit Committee's Role. It is not the duty of the Committee
to plan or conduct audits or to determine that the Corporation's financial statements
are complete and accurate and are in accordance with generally accepted accounting
principals. This is the responsibility of management and the independent auditors
of the Corporation. Members of the Committee should not be assumed to be accounting
experts, and are not deemed to have accepted a duty of care greater than other
members of the Board.
Back to Top
19.0
Committee Charter. The Committee will periodically review this charter and
will recommend any changes to the Board as the Committee deems appropriate, including
to satisfy any applicable requirements of the NASDAQ, the SEC and any other legal
or regulatory requirements. A copy of this charter will be made available on the
Corporation's website at www.laureate-inc.com.
Back to Top
AMENDED AND ADOPTED ON APRIL 3, 2004
|
| |
