Audit Committee Charter
OF THE BOARD OF DIRECTORS OF
The purpose of the Audit Committee of the Board of Directors (the "Board") of Bazaarvoice, Inc. (the "Company") shall be to:
- Provide oversight of the Company's accounting and financial reporting processes and the audit of the Company's financial statements;
- Assist the Board in oversight of (i) the integrity and quality of the Company's financial statements, (ii) the Company's compliance with legal and regulatory requirements, (iii) the independent auditor's appointment, qualifications, independence and performance, (iv) the organization and performance of the Company's internal audit function, (v) the Company's internal accounting and financial controls, (vi) the Company's overall financial posture, financial risk and capital structure, (vii) acquisitions and divestitures and (viii) significant risk exposure in the Audit Committee's areas of responsibility; and
- Provide to the Board such information and materials as it may deem necessary to make the Board aware of significant financial matters that require the attention of the Board.
In furtherance of these purposes, 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 Audit Committee's responsibility is one of oversight. The members of the Audit Committee are not employees of the Company, and they do not perform, or represent that they perform, the functions of management or the independent auditors. The Audit Committee relies on the expertise and knowledge of management, the internal auditor and the independent registered accounting firm in carrying out its oversight responsibilities. The management of the Company is responsible for preparing accurate and complete financial statements in accordance with generally accepted accounting principles and for establishing and maintaining appropriate accounting principles and financial reporting policies and satisfactory internal control over financial reporting. The independent registered accounting firm is responsible for auditing the Company's annual consolidated financial statements and the effectiveness of the Company's internal control over financial reporting and reviewing the Company's quarterly financial statements. It is not the responsibility of the Audit Committee to prepare or certify the Company's financial statements or guarantee the audits or reports of the independent auditors, nor is it the duty of the Audit Committee to certify that the independent auditor is "independent" under applicable rules. These are the fundamental responsibilities of management and the independent auditors.
The Audit Committee members shall be appointed by, and shall serve at the discretion of, the Board. The Audit Committee shall consist of at least three members of the Board. The Board may designate one member of the Audit Committee as its chair. The Audit Committee may form and delegate authority to subcommittees when appropriate. Members of the Audit Committee must meet the following criteria (as well as any criteria required by the SEC); provided, however, that the Company may avail of itself of any phase-in rules applicable to newly-listed companies in connection with an initial public offering:
- Each member will be an independent director in accordance with (i) the audit committee requirements of The Nasdaq Stock Market LLC Marketplace Rules (the "Nasdaq Rules") or the rules of the New York Stock Exchange (the "NYSE Rules"), as applicable, and (ii) the rules of the SEC;
- Each member will be able to read and understand fundamental financial statements, in accordance with the Audit Committee requirements of the Nasdaq Rules or the NYSE Rules;
- At least one member will have past employment experience in finance or accounting, requisite professional certification in accounting, or other comparable experience or background, including a current or past position as a principal financial officer or other senior officer with financial oversight responsibilities; and
- At least one member will be an "audit committee financial expert" as defined in the rules of the SEC.
A director who is serving on the audit committee of three or more other public companies shall not be appointed to the Audit Committee unless the Board determines that such simultaneous service would not impair the director's ability to serve effectively on the Audit Committee.
The responsibilities and duties of the Audit Committee shall include:
- Reviewing the reports of management, internal audit (and/or consultants assisting in the internal audit function) and the independent auditors concerning the design, implementation and maintenance of the Company's internal controls and procedures for financial reporting, including meeting periodically with such members of management, internal audit and the independent auditors to review their assessment of the adequacy of such controls and to review before release the disclosure regarding such system of internal controls required under SEC rules to be contained in the Company's periodic filings and the attestations or reports by the independent auditors relating to such disclosure;
- Reviewing and providing oversight of the external audit by (i) reviewing the independent auditors' proposed audit scope and approach; (ii) discussing with the Company's independent auditors the financial statements and audit findings, including any significant adjustments, management judgments and accounting estimates, significant new accounting policies, disagreements with management and any other required communications described in applicable accounting standards; (iii) reviewing with the independent auditors the Company's critical accounting policies and practices, alternative treatments of financial information within generally accepted accounting principles that have been discussed with management and the treatment recommended by the independent auditors, and other material written communications between the independent auditors and management; and (iv) reviewing reports submitted to the audit committee by the independent auditors in accordance with applicable SEC requirements;
- Reviewing and approving annual internal audit project plans and any proposed changes and reviewing periodic reports summarizing results of the internal audit projects;
- Reviewing and discussing with management and the independent auditors the annual audited financial statements and quarterly unaudited financial statements, including the Company's disclosures 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;
- Recommending to the Board, if deemed appropriate, that the audited financial statements be included in the Company's Annual Report on Form 10-K, in accordance with the rules and regulations of the SEC;
- Directing the Company's independent auditors to review before filing with the SEC the Company's interim financial statements included in Quarterly Reports on Form 10-Q, using professional standards and procedures for conducting such reviews;
- Conducting a post-audit review of the financial statements and audit findings, including any suggestions for improvements provided to management by internal audit or the independent auditors, and management's response to such suggestions;
- Reviewing, prior to announcement, Company press releases and other disclosures containing financial information, including for the purpose of ensuring that such press releases and other disclosures properly disclose financial information presented in accordance with GAAP and, to the extent non-GAAP information is included, disclose how such non-GAAP information differs from the comparable GAAP information in accordance with applicable rules and regulations;
- Providing oversight and review at least annually of the Company's risk assessment and risk management policies, including its investment policies;
- Reviewing and approving in advance any proposed related party transactions;
- Reviewing, in conjunction with counsel, any legal matters that could have a significant impact on the Company's financial statements;
- Reviewing its own charter and processes on an annual basis; and
- Annually assessing its own performance;
- Having sole authority over appointing, compensating and overseeing the work of the independent auditors (including resolving disagreements between management and the independent auditors regarding financial reporting) for the purpose of preparing or issuing an audit report or related work;
- Reviewing the independence of the outside auditors, including (i) obtaining on a periodic basis a written statement from the independent auditors regarding relationships and services with the Company that may impact independence, as defined by applicable standards and SEC requirements, and discussing with the independent auditors their independence, (ii) presenting this statement to the Board, and (iii) to the extent there are relationships, monitoring and investigating them;
- Receiving and reviewing annually a report by the independent auditor describing the firm's internal quality-control procedures, any material issues raised by the most recent internal quality-control review, peer review, or PCAOB review, of the independent auditing 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; and any other required reports from the independent registered public accounting firm;
- Pre-approving audit and permissible non-audit services provided to the Company by the independent auditors, except where pre-approval is not required because such non-audit services are de minimis under the rules of the SEC, in which case subsequent approval may be obtained. The Audit Committee may delegate to one or more designated members of the Audit Committee the authority to pre-approve audit and permissible non-audit services, provided such pre-approval decision is presented to the full Audit Committee at its scheduled meetings;
- Periodically reviewing with the independent auditors any audit problems or difficulties encountered in the course of the independent auditor's work and management's response;
- Ensuring that the independent auditor has established a procedure for the rotation, at least every five years, of the lead (or coordinating) audit partner and of the audit partner responsible for reviewing the audit;
- Periodically considering the rotation of the independent auditor; and
- Reviewing the hiring of employees, or former employees, if any, of the Company's independent auditors to ensure compliance with the applicable Nasdaq Rules and the rules of the SEC.
The Audit Committee shall assist management in determining when to establish an internal audit function, following the initial public offering, and when established shall be responsible for:
- Reviewing and approving the selection of the Company's top internal auditor and/or key consultants assisting the Company in its internal audit function;
- Reviewing the activities, organizational structure and qualifications of the internal audit function;
- Reviewing and approving changes to the internal audit charter; and
- Reviewing periodically with the Company's internal auditor any issues encountered in the course of the internal audit function's work;
Regulatory Compliance and Other Matters
- Overseeing compliance with the requirements of the SEC for disclosure of auditor's services and audit committee members, member qualifications and activities;
- Reviewing management's monitoring of compliance with the Foreign Corrupt Practices Act;
- Providing a report for inclusion in the Company's proxy statement in accordance with the rules and regulations of the SEC; and
- Establishing procedures for receiving, retaining and treating complaints received by the Company regarding accounting, internal accounting controls or auditing matters and procedures for the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.
Oversight of Financial Policies, Strategies and Capital Structure
- Periodically review the Company's cash position, financial and foreign currency policies, cash investment policies, insurance coverage, and tax planning and compliance, and take such action and make such reports and recommendations to the Board as it deems advisable.
- To the extent that it deems appropriate, review the terms and conditions of material financing plans, including the issuance of securities, corporate borrowings, securities repurchases and dividend policy, and make recommendations to the Board on such financing plans.
Delegation of Authority
- The Committee may delegate to one or more designated members of the Committee the authority to pre-approve audit and permissible non-audit services, provided such pre-approval decision is presented to the full Committee at its scheduled meetings.
- The Committee may form and delegate its authority to subcommittees or to the Chairman of the Committee when it deems appropriate and in the best interests of the Company, provided that such delegation is not in violation of applicable law or the rules and regulations applicable to companies with securities quoted on the NASDAQ Global Select Market.
The Audit Committee shall meet at least once each fiscal quarter. The Audit Committee may meet either in person or telephonically, and at such times and places as the Audit Committee determines. The Audit Committee may establish its own meeting schedule, which it shall provide to the Board. The Audit Committee may invite to its meetings other Board members, Company management and such other persons as the Audit Committee deems appropriate in order to carry out its responsibilities.
The Audit Committee shall meet separately with the Chief Executive Officer and separately with the Chief Financial Officer of the Company at such times as it deems appropriate to review the financial affairs of the Company. The Audit Committee will meet separately with the independent auditors of the Company and separately with the head of internal audit, at such times as it deems appropriate, but not less than quarterly.
The Audit Committee will maintain written minutes of its meetings, which minutes will be filed with the minutes of the meetings of the Board.
The Audit Committee shall make regular reports to the full Board on the actions and recommendations of the Audit Committee.
Members of the Audit Committee shall receive such fees, if any, for their service as Audit Committee members as may be determined by the Board in its sole discretion.
Members of the Audit Committee may not receive any compensation from the Company except the fees that they receive for service as a member of the Board or any committee thereof.
The independent auditors shall report directly to the Audit Committee. In addition, the Audit Committee may retain, as appropriate and at the Company's expense, outside legal, accounting or other advisors to advise or assist the Audit Committee in the performance of any of the responsibilities and duties set forth above.
The Audit Committee will have sole authority to approve related fees and retention terms for the auditors and any advisors retained by the Audit Committee. The Company will provide the Audit Committee with appropriate funding, as the Committee determines, for the payment of compensation to the Company's independent auditor, outside counsel and other advisors as it deems appropriate, and administrative expenses of the Committee that are necessary or appropriate in carrying out its duties.
Sydney L. Carey has served as a member of our board of directors since April 2012. Ms. Carey has served as chief financial officers of Apttus Corporation, a provider of software solutions, since June 2016. Previously, Ms. Carey was the chief financial officer of Zscaler from February 2015 until May 2016. She served as the chief financial officer of MongoDB, Inc. from April 2014 to February 2015. From January 2009 to April 2013, Ms. Carey served as executive vice president and chief financial officer of TIBCO Software, Inc. Ms. Carey served in various capacities with TIBCO from January 2004 to January 2009. She holds a B.A. in economics from Stanford University and was the winner of the Bay Area CFO of the Year in 2012 and the 2010 Stevie Award for Women in Business, Best Executive.
Jeffrey Hawn has served as a member of our board of directors since April 2015. Mr. Hawn has served as chief executive officer of Quest Software, Inc. since November 2016. Mr. Hawn was previously chairman and chief executive officer of Vertafore, a provider of software and solutions to the insurance industry from April 2015 to October 2016. Prior to joining Vertafore, Mr. Hawn served as Chairman and CEO of The Attachmate Group, a software holding company, from May 2005 to November 2014. Prior to that, he was an Operating Partner of JMI-Inc., a private equity firm, a role he assumed in April 2004. Previously, he served as Senior Vice President of Operations for BMC Software, Inc., a leading provider of enterprise management solutions, from July 2000 to March 2004 and as a partner with McKinsey & Company, a leading management consulting firm, from July 1990 to July 2000. Mr. Hawn received a B.S. in Mechanical Engineering from Southern Methodist University and an M.B.A. from the University of Texas at Austin. Mr. Hawn served on the board of Pervasive Software Inc. from February 2003 until April 2013, the board of Vignette Corporation from November 2001 until July 2009 and numerous private company boards.
Thomas J. Meredith has served as a member of our board of directors since August 2010. Since 2004, Mr. Meredith has served as a general partner of Meritage Capital, L.P., an investment management firm he co-founded that specializes in multi-manager hedge funds. Mr. Meredith is also the Chief Executive Officer of private investment firm MFI Capital LLC, a position he has held since 2002. From March 2007 to April 2008, Mr. Meredith served as Acting Chief Financial Officer and Executive Vice President of Motorola, Inc., a provider of mobile communications products. Mr. Meredith served in a variety of senior executive positions at Dell Inc. between 1992 and 2001, including Chief Financial Officer, Managing Director of Dell Ventures and Senior Vice President of Business Development and Strategy. Prior to joining Dell, Mr. Meredith served as Vice President and Treasurer at Sun Microsystems, Inc. Mr. Meredith currently serves on the boards of directors of Rallyhood and IPX, Inc. In the past five years, Mr. Meredith has also served on the boards of directors of Macheen, Inc., Motorola, Inc. and Motive, Inc. Mr. Meredith holds a B.A. in political science from St. Francis University, a J.D. from Duquesne University and an L.L.M. in taxation from Georgetown University.