The Audit Committee (the “Committee”) of the Company is appointed by the Board of Directors (the “Board”) of
Safeguard Scientifics, Inc. (the “Company”). The Board has determined to establish the governing principles of the
Committee through the adoption of this Charter.
Although the Committee has the powers and responsibilities set forth in this Charter, the role of the Committee is
oversight. The members of the Committee are not full-time employees of the Company and may or may not be accountants
or auditors by profession or experts in the fields of accounting or auditing. Consequently, it is not the duty of
the Committee to determine that the Company’s financial statements are complete and accurate, are prepared in
accordance with generally accepted accounting principles (“GAAP”), or fairly present the financial condition,
results of operations, and cash flows of the Company in accordance with GAAP. These are the responsibilities of
management, and the independent registered public accounting firm is responsible for planning and carrying out
proper audits and reviews of the Company’s financial statements. The Committee’s considerations and discussions with
management and the independent registered public accounting firm do not ensure that the Company’s financial
statements are presented in accordance with GAAP, that the audit of the Company’s financial statements has been
carried out in accordance with applicable auditing standards, or that the Company’s independent registered public
accountants are in fact “independent.”
- Evaluations
The Committee shall review and assess the performance of the Committee annually and deliver a report to the
Board setting forth the results of its evaluation. In conducting this review, the Committee shall address
matters that it considers relevant to its performance, including at a minimum, the adequacy, appropriateness
and quality of the information and recommendations presented to the Board, the manner in which they were
discussed or debated, and whether the number and length of meetings of the Committee were adequate for the
Committee to complete its work in a thorough and thoughtful manner.
- Investigations; Retention of Professional and Other Advisors
- The Committee shall have the power to conduct or authorize investigations into any
matters within the Committee’s scope of responsibilities. The Executive Chairman,
Chief Restructuring Officer, President, Chief Financial Officer, General Counsel or
Secretary of the Company, as applicable from time to time, shall provide or arrange
to provide such other information, data and services as the Committee may request.
The Committee shall conduct such interviews or discussions as it deems appropriate
with personnel of the Company and/or others whose views would be considered
helpful to the Committee.
- The Committee shall have the authority to obtain advice, counsel and assistance from internal and
external legal, accounting and other advisors for any reason, including but not limited to in connection
with any investigations deemed necessary by the Committee.
- The Company shall provide appropriate funding, as determined by the Committee, for the Committee to
retain such advisors and to provide for ordinary administrative expenses of the Committee that are
necessary or appropriate in carrying out its duties, in each case without requiring the Committee to
seek Board approval.
- Oversight of the Company with Regard to External Financial Reporting
The Committee shall review, at least annually, with management, that the Company’s reporting lines,
competencies, capacity, vulnerabilities to turnover, and selection of outside service providers and experts
is appropriate to ensure the issuance of accurate and timely external financial statements in accordance
with GAAP and SEC regulations.
- Delegation of Authority
The Committee shall oversee, and review at least annually, the Company’s policy regarding appropriate
delegation of authority at different levels of the Company to enable transactions to be executed in
accordance the management’s specific authority and intent.
- Whistleblowing Procedures
The 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 Company employees of concerns regarding questionable accounting or
auditing matters.
- Fraud Risk Management Program
The Committee shall oversee, and review at least annually, the Company’s Fraud Risk Management Program
including the results of the Company’s fraud risk assessment.
- Related Party Transactions
The Committee shall review and approve any “related party/person” transaction as defined in Accounting
Standards Codification Topic 850 and Item 404 of Regulation S-K, promulgated by the SEC, in accordance with
the Company’s policies and procedures, as may be in effect from time to time.
- Revision of Charter
The Committee shall review and reassess the adequacy of this Charter annually and recommend any proposed
changes to the Board for its approval.
- Reports
The Committee shall make regular reports to the Board on its activities, including describing matters
discussed and all actions taken by the Committee at each meeting of the Committee, reviewing any issues that
arise respecting the quality and integrity of the Company’s public reporting, the Company’s compliance with
legal and regulatory requirements, the performance and independence of the Company’s independent registered
public accounting firm, the performance of the Company’s internal audit function and the effectiveness of
the Company’s disclosure controls and procedures. The Committee shall make such recommendations to the Board
as it deems appropriate.
- Miscellaneous
The Committee shall perform any other activities consistent with this Charter, the Company’s Articles of
Incorporation, Bylaws and governing law, as the Committee deems necessary or appropriate.