RADIO ONE, INC.
Charter of the Audit Committee
I. Purpose.
The Audit Committee of Radio One, Inc., a Delaware corporation (the “Company”),
shall provide assistance to the Board of Directors of the Company (the “Board”)
in fulfilling the Board’s responsibility for the oversight of (i) the quality
and integrity of the Company’s accounting and reporting processes and systems
of internal control over financial reporting, (ii) the qualifications and independence
of the public accounting firm engaged to prepare or issue an audit report on
the financial statements of the Company (the “independent auditor”),
(iii) the performance of the Company’s internal audit function and (iv)
such other duties as directed by the Board. In so doing, it is the responsibility
of the Audit Committee to maintain free and open communication among the Audit
Committee, the independent auditor, the internal audit function and management.
II. Structure and Membership.
1. Selection. The Audit Committee shall consist of at least three
members of the Board, each of whom shall be “independent” (as
defined by the applicable rules of The Nasdaq Stock Market and the Securities
and Exchange Commission. Members of the Audit Committee shall be appointed
by the Board for one-year terms at the annual meeting of the Board. The Board
may remove members of the Audit Committee from such committee, with or without
cause. Unless the Board elects a Chair of the Audit Committee, the Audit
Committee shall elect a Chair by majority vote. Any vacancy in the Audit
Committee shall be filled by Board at the first Board meeting following the
creation of the vacancy or as soon as possible thereafter.
2. Financial Literacy. Each member of the Audit Committee shall be
able to read and understand fundamental financial statements, including the
Company’s balance sheet, income statement and cash flow statement, at
the time of his or her appointment to the Audit Committee. At least one member
of the Audit Committee shall be a “financial expert” (as defined
by applicable rules of The Nasdaq Stock Market and the Securities and Exchange
Commission).
3. Compensation. The Board shall determine the compensation of members
of the Audit Committee. No member of the Audit Committee may receive any compensation
from the Company other than fees paid in his or her capacity as a member of
the Board or a committee of the Board.
III. Authority and Responsibilities.
The Audit Committee shall discharge its responsibilities, and shall assess
the information provided by the Company’s management and the independent
auditor, in accordance with its business judgment. Management is responsible
for the preparation, presentation and integrity of the Company’s financial
statements and for the appropriateness of the accounting principles and reporting
policies that are used by the Company. The independent auditor is responsible
for auditing the Company’s financial statements and for reviewing the
Company’s unaudited interim financial statements. The authority and
responsibilities set forth in this charter do not reflect or create any duty
or obligation of the Audit Committee to plan or conduct any audit, to determine
or certify that the Company’s financial statements are complete, accurate,
fairly presented, or in accordance with generally accepted accounting principles
or applicable law, or to guarantee the independent auditor’s report.
Oversight of Independent Auditor
1. Selection. The Audit Committee shall be solely and directly responsible
for appointing, evaluating and, when necessary, terminating the independent
auditor. The Audit Committee may, in its discretion, seek Board and/or stockholder
ratification of the independent auditor it appoints.
2. Independence. The Audit Committee shall take, or recommend that
the full Board take, appropriate action to oversee the independence of the
independent auditor. In connection with this responsibility, the Audit Committee
shall obtain and review a formal written statement from the independent auditor
describing all relationships between the independent auditor and the Company,
including the disclosures required by Independence Standards Board Standard
No. 1. The Audit Committee shall actively engage in dialogue with the independent
auditor concerning any disclosed relationships or services that might impact
the objectivity and independence of the auditor.
3. Compensation. The Audit Committee shall have sole and direct responsibility
for setting the compensation of the independent auditor. The Audit Committee
is empowered, without further action by the Board, to cause the Company to
pay the compensation of the independent auditor established by the Audit Committee.
4. Preapproval of Services. The Audit Committee shall preapprove
all audit services and non-audit services (other than de minimis non-audit
services as defined by the Sarbanes-Oxley Act of 2002 (and the applicable rules
thereunder)) to be provided to the Company by the independent auditor. The
Audit Committee shall cause the Company to disclose in its periodic reports
to the Securities and Exchange Commission the approval by the Audit Committee
of any non-audit services to be performed by the independent auditor.
5. Oversight. The independent auditor shall report directly to the
Audit Committee and the Audit Committee shall have sole and direct responsibility
for overseeing the independent auditor, including resolution of disagreements
between Company management and the independent auditor regarding financial
reporting. In connection with its oversight role, the Audit Committee shall,
from time to time as appropriate and at least annually, obtain and review the
reports required to be made by the independent auditor pursuant to paragraph
(k) of Section 10A of the Securities Exchange Act of 1934 regarding:
- critical accounting policies and practices;
- alternative treatments of financial information within generally accepted
accounting principles that have been discussed with Company management,
ramifications of the use of such alternative disclosures and treatments,
and the treatment preferred by the independent auditor; and
- other material written communications between the independent auditor
and Company management.
6. Quality-Control Report. At least annually, the Audit Committee
shall obtain and review a report by the independent auditor describing (i)
the firm’s internal quality control procedures and (ii) any material
issues raised by the most recent internal quality-control review, or peer review,
of the firm, or by any inquiry or investigation by governmental or professional
authorities, within the preceding five years, respecting one or more independent
audits carried out by the firm, and any steps taken to deal with any such issues.
7. Audit Report and Management Response. The Audit Committee shall
review with the independent auditor any audit problems or difficulties the
independent auditor encountered in the course of the audit work and management’s
response, including any restrictions on the scope of the independent auditor’s
activities or on access to requested information and any significant disagreements
with management.
Review of Audited Financial Statements
1. Discussion of Audited Financial Statements. The Audit Committee
shall review and discuss with the Company’s management and independent
auditor the Company’s audited financial statements, including the matters
about which Statement on Auditing Standards No. 61 (Codification of Statements
on Auditing Standards, AU §380) requires discussion.
2. Recommendation to Board Regarding Financial Statements. The Audit
Committee shall consider whether it will recommend to the Board that the Company’s
audited financial statements as prepared by management be included in the Company’s
Annual Report on Form 10-K.
3. Audit Committee Report. The Audit Committee shall prepare for
inclusion where necessary in a proxy or information statement of the Company
relating to an annual meeting of security holders at which directors are to
be elected (or special meeting or written consents in lieu of such meeting),
the report described in Item 306 of Regulation S-K.
Review of Other Financial Disclosures
1. Independent Auditor Review of Interim Financial Statements. The
Audit Committee shall direct the independent auditor to use its best efforts
to perform all reviews of interim financial information prior to disclosure
by the Company of such information and to discuss promptly with the Audit Committee
and the Chief Financial Officer any matters identified in connection with the
auditor’s review of interim financial information which are required
to be discussed by Statement on Auditing Standards Nos. 61, 71 and 90. The
Audit Committee shall direct management to advise the Audit Committee in the
event that the Company proposes to disclose interim financial information prior
to completion of the independent auditor’s review of interim financial
information.
2. Earnings Release and Other Financial Information. The Audit Committee
shall review and discuss the Company’s earnings press releases (including
any use of non-GAAP information), as well as financial information and earnings
guidance provided to analysts, rating agencies and others.
3. Quarterly Financial Statements. The Audit Committee shall discuss
with the Company’s management and independent auditor the Company’s
quarterly financial statements, including the Company’s disclosures under “Management’s
Discussion and Analysis of Financial Condition and Results of Operations.”
Controls and Procedures
1. Oversight. The Audit Committee shall coordinate the Board’s
oversight of the Company’s internal accounting controls and the Company’s
disclosure controls and procedures. The Audit Committee shall receive and review
(i) the reports of the CEO and CFO required by Section 302 of the Sarbanes-Oxley
Act of 2002 (and the applicable rules thereunder) and Rule 13a-14 of the Exchange
Act and (ii) management’s report on internal control over financial reporting
and the corresponding attestation report by the independent auditors required
by Section 404 of the Sarbanes-Oxley Act of 2002 (and the applicable rules
thereunder) and Rule 13a-15 of the Exchange Act. The Audit Committee shall
hold discussions with management and the independent auditors regarding the
effectiveness of the Company’s internal control over financial reporting
in accordance with the requirements of Section 404 of the Sarbanes-Oxley Act
of 2002.
2. Internal Audit Function. The Audit Committee shall coordinate
the Board’s oversight of the performance of the Company’s internal
audit function.
3. Procedures for Complaints. The Audit Committee shall 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.
4. Related-Party Transactions. The Audit Committee shall review
all related party transactions on an ongoing basis, and all related party transactions
that would be required to be disclosed pursuant to item 404 of Regulation S-K
must be approved by the Audit Committee.
5. Risk Management. The Audit Committee shall discuss the Company’s
policies with respect to risk assessment and risk management, including guidelines
and policies to govern the process by which the Company’s exposure to
risk is handled.
6. Hiring Policies. The Audit Committee shall instruct management
to advise the Audit Committee if consideration is being given to hiring employees
or former employees of the Company’s independent auditors.
7. Additional Powers. The Audit Committee shall have such other duties
as may be delegated from time to time by the Board.
IV. Procedures and Administration.
1. Meetings. The Audit Committee shall meet as often as it deems
necessary in order to perform its responsibilities. At least quarterly, the
Audit Committee shall meet with each of the following: (i) the independent
auditor; (ii) the Company’s management; and (iii) the Company’s
internal audit function. The Audit Committee shall keep such records of its
meetings as it shall deem appropriate.
2. Subcommittees. The Audit Committee may form and delegate authority
to one or more subcommittees (including a subcommittee consisting of a single
member), as it deems appropriate from time to time under the circumstances.
Any decision of a subcommittee to preapprove audit or non-audit services shall
be presented to the full Audit Committee at its next scheduled meeting.
3. Reports to Board. The Audit Committee shall report regularly to
the Board.
4. Charter. At least annually, the Audit Committee shall review and
reassess the adequacy of this charter and recommend any proposed changes to
the Board for approval.
5. Independent Advisors. The Audit Committee shall have the authority
to engage and determine funding for such independent legal, accounting and
other advisors as it deems necessary or appropriate to carry out its responsibilities.
Such independent advisors may be the regular advisors to the Company. The Audit
Committee is empowered, without further action by the Board, to cause the Company
to pay the compensation of such advisors as established by the Audit Committee.
6. Investigations. The Audit Committee shall have the authority to
conduct or authorize investigations into any matters within the scope of its
responsibilities as it shall deem appropriate, including the authority to request
any officer, employee or advisor of the Company to meet with the Audit Committee
or any advisors engaged by the Audit Committee.
7. Legal Compliance. On at least an annual basis, the Audit Committee
shall review with the Company’s legal counsel any legal matters that
could have a significant impact on the Company’s financial statements,
the Company’s compliance with applicable laws and regulations and inquiries
received from regulators or governmental agencies.
Revised as of May 24, 2005
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