ASPEN TECHNOLOGY, INC.AUDIT COMMITTEE CHARTER
(Revised April 12, 2005)
A. Purpose
The purpose of the Audit Committee is to assist the Board of
Directors' oversight of:
- the integrity of the Company's financial statements;
- the Company's compliance with legal and regulatory
requirements;
- the independent auditor's qualifications and independence;
and
- the performance of the Company's internal audit function and
independent auditors.
B. Structure and Membership
- Number. The Audit Committee shall consist of at least three
members of the Board of Directors.
- Independence. Except as otherwise permitted by the applicable
rules of The Nasdaq Stock Market and Section 301 of the
Sarbanes-Oxley Act of 2002 (and the applicable rules thereunder),
each member of the Audit Committee shall be "independent" as
defined by such rules and Act.
- 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. In selecting members of the Audit Committee,
consideration shall be given as to whether at least one member is
an "audit committee financial expert" (as defined by applicable SEC
rules).
- Chair. Unless the Board of Directors elects a Chair of the
Audit Committee, the Audit Committee shall elect a Chair by
majority vote.
- Compensation. The compensation of Audit Committee members shall
be as determined by the Board of Directors. No member of the Audit
Committee may receive any consulting, advisory or other
compensatory fee from the Company other than fees paid in his or
her capacity as a member of the Board of Directors or a committee
of the Board.
- Selection and Removal. Members of the Audit Committee shall be
appointed by the Board of Directors, upon the recommendation of the
Nominating and Corporate Governance Committee. The Board of
Directors may remove members of the Audit Committee from such
committee, with or without cause.
C. Authority and Responsibilities
General
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
auditors are 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 Auditors
1. | Selection. The Audit Committee shall be solely and directly
responsible for appointing, evaluating and, when necessary,
terminating the engagement of the independent auditor. The Audit
Committee may, in its discretion, seek stockholder ratification of
the independent auditor it appoints.
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2. | Independence. The Audit Committee shall take, or recommend that
the full Board of Directors 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.
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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 of Directors, to cause the Company to pay the
compensation of the independent auditor established by the Audit
Committee.
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4. | 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 of Directors, to cause the Company to pay the
compensation of the independent auditor established by the Audit
Committee.
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5. | Preapproval of Services. The Audit Committee shall preapprove
all services (audit and non-audit) to be provided to the Company by
the independent auditor; provided, however, that de minimis
non-audit services may instead be approved in accordance with
applicable SEC rules.
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6. | 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, receive and consider the reports required to
be made by the independent auditor regarding: critical accounting policies and practices; alternative treatments within generally accepted accounting
principles for policies and practices related to material items
that have been discussed with Company management, including
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.
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Review of Audited Financial
Statements
| 6. | 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.
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| 7. | Recommendation to Board Regarding Financial
Statements. The Audit Committee shall consider whether it will
recommend to the Board of Directors that the Company's audited
financial statements be included in the Company's Annual Report on
Form 10-K.
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| 8. | Audit Committee Report. The Audit Committee shall
prepare an annual committee report for inclusion where necessary in
the proxy statement of the Company relating to its annual meeting
of security holders.
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Review of Other Financial
Disclosures
| 9. | 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.
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Oversight of the Internal Audit
Function
| 10. | Responsibilities, Budget, and Staffing. Review
with management and the independent auditor the responsibilities,
budget, and staffing of the internal audit function. Ensure there
are no unjustified restrictions or limitations placed on the
function.
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| 11. | Internal Audit Director. Review and concur in the
appointment, replacement, or dismissal of the Internal Audit
Director.
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| 12. | Internal Audit Plan. Review the annual internal
audit plan in terms of the scope of the audits conducted or
scheduled to be conducted, and recommend any changes in the scope,
as necessary.
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| 13. | Internal Audit Reports. Review the significant
reports to management prepared by the internal audit function and
management's responses to their recommendations.
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| 14. | Separate Meetings. On a regular basis, meet
separately with the Internal Audit Director to discuss any matters
that the Committee or internal audit believes should be discussed
without management's attendance.
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| 15. | Effectiveness. Review the effectiveness of the
internal audit function.
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Controls and Procedures
| 16. | Oversight. The Audit Committee shall coordinate
the Board of Directors' oversight of the Company's internal
accounting controls for financial reporting, the Company's
disclosure controls and procedures and the Company's code of
conduct. The Audit Committee shall receive and review 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.
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| 17. | 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.
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| 18. | Related-Party Transactions. The Audit Committee
shall review all related party transactions on an ongoing basis,
and all such transactions must be approved by the Audit
Committee.
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| 19. | Additional Powers. The Audit Committee shall have
such other duties as may be delegated from time to time by the
Board of Directors.
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D. Procedures and Administration
- Meetings. The Audit Committee shall meet as often as it deems
necessary in order to perform its responsibilities. The Audit
Committee may also act by unanimous written consent in lieu of a
meeting. The Audit Committee shall periodically meet separately
with the internal auditor and the independent auditor. The Audit
Committee shall keep such records of its meetings as it shall deem
appropriate.
- 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.
- Reports to Board. The Audit Committee shall report regularly to
the Board of Directors.
- Charter. At least annually, the Audit Committee shall review
and reassess the adequacy of this Charter and recommend any
proposed changes to the Board of Directors for approval.
- Independent Advisors. The Audit Committee shall have the
authority, without further action by the Board of Directors, 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 of Directors, to cause the
Company to pay the compensation of such advisors as established by
the Audit Committee.
- 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.