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Audit Committee Charter

CHARTER FOR THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS OF RUDOLPH TECHNOLOGIES, INC.

 


(Amended and Restated effective as of February 1, 2007)


PURPOSE:
The purpose of the Audit Committee of the Board of Directors (the "Board" or "Board of Directors") of Rudolph Technologies, Inc. (the "Company") shall be to:

 

  • Oversee the accounting and financial reporting processes of the Company and audits of thefinancial statements of the Company;
  • Assist the Board in oversight and monitoring of (i) the integrity of the Company's financialstatements, (ii) the Company's accounting policies and procedures, (iii) the Company'scompliance with legal and regulatory requirements, (iv) the independent auditor's qualifications,independence and performance, (v) the Company's disclosure controls and procedures and (vi) the Company's internal controls;
  • Prepare the report that the rules of the Securities and Exchange Commission (the "SEC") require be included in the Company's annual proxy statement;
  • Provide the Board with the results of the Audit Committee's monitoring and recommendationsderived therefrom;
  • Provide to the Board such additional information and materials as it may deem necessary tomake the Board aware of significant financial matters that require the attention of the Board; and
  • Serve as the Qualified Legal Compliance Committee ("QLCC") for (i) the receipt, review andconsideration of reports of material violations, as defined under SEC rules and regulations, and(ii) the investigation and determination of an appropria te response to any such materialviolations, as appropriate.

 

In addition, the Audit Committee will undertake those specific duties and responsibilities listed below
and such other duties as the Board may from time to time prescribe.


The purpose of the Aud it Committee is to represent and assist the Board of Directors in its generaloversight of the Company's accounting and financial reporting processes, audits of the financialstatements, and internal control and audit functions. Notwithstanding the responsibilities and powers ofthe Audit Committee set forth in this Charter, the Audit Committee does not have the responsibility toplan or conduct audits or determine whether or not the Company's financial statements are complete,accurate and in accordance with generally accepted accounting principles ("GAAP"). Management isresponsible for (i) the preparation, presentation and integrity of the Company's financial statements; (ii)accounting and financial reporting principles; and (iii) the Company's interna l controls and proceduresdesigned to promote compliance with accounting standards and applicable laws and regulations. TheCompany's independent auditor is responsible for performing an independent audit of the consolidatedfinancial statements in accordance with generally accepted auditing standards. Nothing in this charter isintended to preclude or impair the protection provided in Section 141(e) of the Delaware GeneralCorporation Law for good faith reliance by members of the Audit Committee on reports or otherinformation provided by others.


The Board and management shall ensure that the Audit Committee has adequate funding and otherresources and authority to discharge its responsibilities as determined by the Audit Committee.


MEMBERSHIP:
Upon the recommendation of the Nominating & Governance Committee, the Audit Committee members will be appointed by, and will serve at the discretion of, the Board. The Audit Committee will consist of at least three members of the Board. Members of the Audit Committee must meet the following criteria:

 

  • Each member shall be independent pursuant and subject to the applicable listing standards of the NASDAQ Stock Market, Inc. ("Nasdaq") and applicable federal law, as in effect from time to time;
  • Each member will be able to read and understand fundamental financial statements, inaccordance with the Nasdaq requirements; at least one member shall be an audit committeefinancial expert in accordance with the rules and regulations of the SEC and at least one member (who may also serve as the audit committee financial expert) shall have past employment experience in accounting or finance, requisite professional certification in accounting, or any other comparable experience or background which results in financial sophistication in accordance with the listing standards of the Nasdaq;
  • No member shall have participated in the preparation of the financial statements of theCompany at any time during the three years prior to his or her joining the Audit Committee; and
  • Each member shall satisfy any additional requirements mandated by rules and regulations of theSEC or the listing standards of the Nasdaq.


RESPONSIBILITIES:
The responsibilities of the Audit Committee shall include:

 

  • Reviewing on a continuing basis the adequacy and effectiveness of the Company's system of (i) internal controls (including any material weaknesses, significant deficiencies and significantchanges in internal controls reported to the Audit Committee), including meeting periodicallywith the Company's management and the independent auditor to review its assessment ofadequacy of such controls and to review, before its release, the disclosure regarding such system of internal financial and accounting controls required under SEC rules to be contained in the Company's periodic filings and the attestations or reports by the independent auditor relating to such disclosure and (ii) disclosure controls and procedures, and management reports thereon;
  • Exercising direct responsibility for appointing, compensating (including all audit engagementfees and terms), retaining and overseeing the work of the independent auditor (includingresolving disagreements between management and the independent auditor regarding financialreporting) for the purpose of preparing or issuing an audit report or related work and preapproving audit and non-audit services provided to the Company by the independent auditor (or subsequently approving non-audit services in those circumstances where a subsequent approval is necessary and permissible) in accordance with the applicable requirements of the SEC and the Public Company Accounting Oversight Board (the "Oversight Board"); in this regard the Audit Committee shall have the authority to appoint a subcommittee of one or more members of the Audit Committee and/or to pre-approve non-audit services by establishing detailed pre-approval policies as to the particular service, provided that the Audit Committee is informed of each service pre-approved (no less frequently than at each meeting of the Audit Committee) and that no pre-approval shall be delegated to management of the Company except as permitted by applicable law and regulation. In considering whether to pre-approve any non-audit services, the Audit Committee or its delegees shall consider whether the provision of such services is compatible with maintaining the independence of the Company's independent auditor;
  • Reviewing and taking appropriate action to oversee the independence of the outside auditor,including (i) obtaining on a periodic basis a formal written statement from the independentauditor regarding relationships and services with the Company that may impact independence, as defined by applicable standards and SEC requirements, (ii) to the extent there are relationships, monitoring and investigating them, including actively engaging in a dialogue with the independent auditor with respect to any disclosed relationships or services that may impact the objectivity and independence of the independent auditor, and (iii) presenting such information to the Board. The outside auditor shall report directly to the Audit Committee.
  • Reviewing and providing guidance with respect to the external audit by (i) reviewing theindependent auditor's proposed audit scope and approach; (ii) discussing with the Company'sindependent auditor the financial statements and audit findings, including any significantadjustments, management judgments and accounting estimates, significant new accountingpolicies and disagreements with management and any other matters described in SAS No. 61, as may be modified or supplemented; and (iii) reviewing reports submitted to the audit committee by the independent auditor in accordance with the applicable SEC requirements;
  • Reviewing and discussing reports from the independent auditor on (i) all critical accountingpolicies and practices used by the Company; (ii) alternative accounting treatments within GAAP related to material items that have been discussed with management, including the ramifications of the use of the alternative treatments and the treatment preferred by the independent auditor; and (iii) other material written communications between the independent auditor and management.
  • Reviewing and discussing with management and the independent auditor the annual auditedfinancial statements and quarterly unaudited financial statements, including the Company'sdisclosures under "Management's Discussion and Analysis of Financial Condition and Results of Operations," prior to filing the Company's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, respectively, with the SEC (which for purposes of the annual report shall include a recommendation as to whether the audited financial statements should be included in the Company's Annual Report on Form 10-K);
  • Directing the Company's independent auditor to review, before filing with the SEC, theCompany's interim financial statements included in Quarterly Reports on Form 10-Q, usingprofessional standards and procedures for conducting such reviews;
  • Conducting a post-audit review of the financial statements and audit findings, including anysignificant suggestions for improvements provided to management by the independent auditor;
  • Reviewing before release the unaudited quarterly operating results in the Company's quarterlyearnings release;
  • Reviewing any reports by management regarding the effectiveness of, or any deficiencies in, thedesign or operation of internal controls and any fraud, whether or not material, that involvesmanagement or other employees who have a significant role in the Company's internal controlsand reviewing before release the disclosure regarding the Company's system of internal controls required under SEC rules and rules of the Oversight Board to be contained in the Company's periodic filings and the attestations or reports by the independent auditor relating to such disclosure;
  • Overseeing compliance with the requirements of the SEC for disclosure of the auditor's services and Audit Committee members, member qualifications and activities;
  • Reviewing, approving and monitoring the Company's code of ethics for its senior financialofficers;
  • Reviewing management's monitoring of compliance with the Company's standards of businessconduct and with the Foreign Corrupt Practices Act;
  • Reviewing, in conj unction with counsel, any legal matters that could have a significant impact on the Company's financial statements;
  • Providing oversight and review at least annually of the Company's risk management policies,including its investment policies;
  • Reviewing the preparation of Company's financial statements covering Company's employeebenefit plans;
  • Overseeing and reviewing the Company's policies regarding information technology andmanagement information systems;
  • If necessary, instituting special investigations with full access to all books, records, facilities andpersonnel of the Company;
  • As appropriate, obtaining advice and assistance from outside legal, accounting or other advisors;
  • Determining funding for outside legal, accounting or other advisors and for its own ordinaryadministrative expenses, as and when the Audit Committee determines appropriate or necessary for the conduct of its duties;
  • Reviewing and approving in advance any proposed related party transactions, including, without limitation, reviewing transactions required to be disclosed pursuant to SEC Regulation S-K, Item 404, unless otherwise the responsibility of another Board committee of the Company (e.g.CD&A);
  • Reviewing and reassessing on an annual basis the adequacy of its own charter;
  • Reviewing its structure, processes and membership requirements from time to time;
  • Providing a report in the Company's proxy statement in accordance with the rules andregulations of the SEC;
  • Establishing procedures for receiving, retaining and treating complaints received by theCompany regarding accounting, internal accounting controls or auditing matters and proceduresfor the confidential, anonymous submission by employees of concerns regarding questionableaccounting or auditing matters, and
  • Serving as the QLCC to (i) receive and consider confidential reports of material violations, asdefined under SEC rules and regulations, (ii) determine whether investigations of reports ofmaterial violations are necessary, and initiate any such investigations, (iii) determine appropriateresponses to reports of material violations, and (iv) establish written procedures related to theforegoing.

MEETINGS:
The Audit Committee will meet at least four times each year. The Audit Committee may establish itsown schedule, which it will provide to the Board in advance.


The Audit Committee will meet separately with the Chief Executive Officer and separately with theChief Financial Officer of the Company at such times as are appropriate to review the financial affairs ofthe Company. The Audit Committee will meet separately with the independent auditor of the Company,at such times as it deems appropriate, to fulfill the responsibilities of the Audit Committee under thischarter.


MINUTES:
The Audit Committee will maintain written minutes of its meetings, which minutes will be filed with theminutes of the meetings of the Board.


REPORTS:
In addition to preparing the report in the Company's proxy statement in accordance with the rules andregulations of the SEC, the Audit Committee will summarize its examinations and recommendations tothe Board as may be appropriate, consistent with the Committee's charter, and otherwise make regularreports to the Board.


COMPENSATION:
Members of the Audit Committee shall receive such fees, if any, for their service as Audit Committeemembers as may be determined by the Board in its sole discretion. Such fees may include retainers orper meeting fees. Fees may be paid in such form of consideration as is determined by the Board.


Members of the Audit Committee may not receive any compensation from the Company except thefees that they receive for service as a member of the Board or any committee thereof in accordancewith the Nasdaq requirements and federal law.


DELEGATION OF AUTHORITY:
The Audit Committee may delegate to one or more designated members of the Audit Committee theauthority to pre-approve audit and permissible non-audit services, provided such pre-approval decisionis presented to the full Audit Committee at its scheduled meetings.