Attached files
| file | filename |
|---|---|
| 8-K - SMITHTOWN BANCORP INC | v164470_8k.htm |
| EX-99.2 - SMITHTOWN BANCORP INC | v164470_ex99-2.htm |
EXHIBIT
1
Amended
through October 29, 2009
CHARTER
for
the
Audit
Committee
of the
Board of Directors
of Bank of
Smithtown
Section
1. Membership. The
Audit Committee shall consist of at least four Directors, including the Chairman
of the Board if there be one who is not an officer of the Bank. At
least three members of the Committee shall be present at a meeting to constitute
a quorum. All members of the Committee shall be “independent
directors” and “independent of management”, and at least one member of the
Committee shall be an “audit committee financial expert” as such terms are
defined by the pertinent legal and/or regulatory standards applicable at the
time. The determination of whether a Committee member is an “independent
director”, an “audit committee financial expert” and “independent of management”
shall be made annually by the Board of Directors based upon the determinations
and recommendations of the Governance and Nominating Committee.
Section
2. Meetings. The
Committee shall meet at least once each quarter at such times and places as it
may choose. The Committee may meet more frequently as it deems
advisable. Written agendas shall be prepared for each meeting, and
minutes of the meetings shall be maintained.
Section
3. Internal
Auditor. The Committee shall be directly responsible for the
appointment, compensation and oversight of the work of the Bank’s Internal
Auditor. The Committee may hire one or more employees to perform this
function or may retain an accounting firm for this purpose. In the
event one or more employees perform the internal audit function, the employee(s)
shall report to the Committee regarding audit matters and to the Chief Executive
Officer of the Bank regarding administrative matters. In the event one or more
employees perform the internal audit function, the Bank’s officers may make
recommendations to the Committee with respect to the hiring, firing, discipline,
performance reviews, promotion and compensation of such employees, but the full
authority with respect to all of these matters rests with the
Committee. In the event that the Committee retains an accounting firm
to perform the internal audit function, it shall be a different firm than the
firm selected by the Committee to perform the independent audit
function. The Committee may adopt a policy that defines the purpose
of the internal audit activity and the authority and responsibilities of the
persons performing the internal audit work. The Committee shall meet
with the Internal Auditor at least once each quarter to monitor progress with
the internal audit program and schedule, to review the Internal Auditor’s
written reports and management’s responses thereto, and to discuss any other
relevant matters pertaining to the internal audit program.
Section
4. Independent
Auditor. The Committee shall be directly responsible for the
appointment, compensation and oversight of the work of the Bank’s Independent
Auditor. The accounting firm selected to perform the independent
audit function shall report directly to the Committee. The Committee
is charged with resolving any disagreements between management and the
Independent Auditor regarding financial reporting or any other
matters. The accounting firm that is retained by the Committee to
perform the independent audit function may not, at the same time, perform any of
the following non-audit services for the Bank or its holding company or any
other subsidiary owned by the Bank or its holding company:
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·
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Bookkeeping
or other services related to the accounting records
or financial statements of the
Bank.
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·
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Financial
information systems design and
implementation.
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·
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Appraisal
or valuation services, fairness opinions or contribution-in-kind
reports.
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Actuarial
services.
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·
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Internal
audit services.
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Management
functions or human resources.
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Broker
or dealer, investment advisor or investment banking services.
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Legal
services and expert services unrelated to the
audit.
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Any
other service determined by regulation to be
impermissible.
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Other
non-audit services, such as tax services, can be performed by the Independent
Auditor, but only with the prior approval of the Committee and disclosure to
investors. Each year the Committee shall receive from the Independent
Auditor a formal written statement delineating all relationships between the
Independent Auditor and the Bank consistent with Independence Standards Board
Standard 1.
The Committee shall monitor the
progress of the work of the Independent Auditor and shall meet with the
Independent Auditor at least once each year to discuss the firm’s
findings. The Independent Auditor must make timely reports to the
Committee during the audit process concerning: (1) critical
accounting policies and practices to be used in the audit; (2) all alternative
treatments of financial information within generally accepted accounting
principles (GAAP) discussed with management, including the ramifications of such
treatment and the treatment preferred by the Independent Auditor; and (3) all
other material written communications between the Independent Auditor and
management, such as any management letter or schedule of unadjusted
differences.
Section
5. Outside
Advisors. The Committee may retain independent counsel and
outside advisors.
Section
6. Committee
Funding. The Bank shall provide for appropriate funding, as
determined by the Audit Committee, for payment of compensation to the Bank’s
auditors and to any advisors retained by the Committee.
Section
7. Treatment of
Complaints. Any complaints received by management regarding
accounting, internal accounting controls or auditing matters shall be referred
to the Audit Committee. Employees shall be informed in the Employee
Handbook of how they can communicate directly with the Audit Committee, in a
confidential and/or anonymous manner if they so choose, regarding questionable
accounting, internal accounting controls or auditing matters. The
Committee may take such steps to evaluate, investigate and/or respond to such
complaints as it deems appropriate under the circumstances.