Unassociated Document





Exhibit
10.45

DOV
PHARMACEUTICAL, INC. 

AUDIT
COMMITTEE CHARTER




I.
General Statement of Purpose




The audit
committee is created and its members appointed by the board of directors to
assist in the oversight of the integrity of the company’s systems of internal
control,
financial statements and the qualifications, independence and performance of the
company’s independent auditors. To this end, the audit committee’s primary
function is to The
primary function of the audit committee is to assist the board of directors in
fulfilling its oversight responsibilities by reviewing the qualifications and
performance of the company’s independent accountants and the financial reports
and other financial information provided by the company to governmental bodies
or the public, and to review
and monitor the company’s system of internal controls and review
the
company’s auditing, accounting and financial reporting processes.   In
carrying out its primary function the audit committee shall also
provide
an open avenue of communication among the independent auditors, financial and
senior management and the board of directors. The audit committee shall fulfill
these responsibilities by carrying out the activities enumerated in section V of
this charter. 




II.
Composition




The audit
committee shall consist of at least three members of the board, each of whom
must be independent according to both NASD rules for
listed companies and the
Sarbanes-Oxley Act of 2002, or SOX,
and
moreover not own or control 20% or more of the company's voting securities, or
such lesser amount as may be established by the SEC. 




As an
exception to the above independence criteria, a director who is not an employee
or family member and meets all the above qualifications except those of the NASD
can be an audit committee member. For this to occur, the board, under
exceptional and limited circumstances, must determine that the director's
membership is required in the best interests of the company and its
stockholders. The company must then disclose, in the next following annual proxy
statement, its reasons for that determination. A member appointed and whose
appointment continues under this exception may not serve on the audit committee
for more than two years and may not chair the committee. 




Each
member of the audit committee must be able to understand financial
statements and at
least one member must be financially sophisticated as contemplated by NASD
rules.
Moreover, it is
contemplated but not required that at least
one member of the audit committee must
be
an “audit
committee "financial
expert”" under
SEC rules. Those rules require among other things that, in addition to
understanding financial statements, the financial expert have an understanding
of generally accepted accounting principles and their application as well as
experience with internal controls for financial reporting. 




Members
of the audit committee shall be appointed annually by the board and may be
replaced or removed by the board with or without cause. Resignation or removal
of a director, for whatever reason, shall if a member mean automatic resignation
or removal from the audit committee. Any vacancy on the audit committee may be
filled only by the board. The board shall designate one member of the audit
committee to be the chair. 


 




















 

III.
Compensation




A member
may not, other than in his or her capacity as a member of the audit committee,
the board or any other board committee, receive any compensation from the
company. A member may receive additional director fees to compensate for the
significant time and effort required to serve on the audit committee.





IV.
Meetings




The audit
committee shall meet not less frequently than quarterly to review each quarterly
earnings release and quarterly report, and at least
on
one
further
occasions as
required to
review internal controls, audit progress and the annual report. Apart from these
required meetings, the committee may have additional meetings as often as it
determines. A majority of the members of the audit committee shall constitute a
quorum for purposes of holding a meeting and the committee may act by a vote of
a majority of the members present at the meeting. In lieu of a meeting, where
warranted in special circumstances the audit committee may act by unanimous
written consent. 




V.
Responsibilities and Authority




Matters
Relating to Selection, Performance and Independence of
Auditors





	·  	
      Sole
      authority to appoint (subject to stockholder ratification), terminate and
      determine funding
      compensation
      for
      auditors 








	·  	
      Instruct
      auditors to report directly to audit committee









	·  	
      Exercise
      oversight of auditors' work including resolution of disagreements between
      management and auditors 








	·  	
      Pre-approval
      of all audit, audit-related, tax and other services not prohibited by
      SOX,
      SEC
      or Public Company Accounting Oversight Board









	·  	
      Pre-approval
      of audit-related and non-audit services may be delegated to one or more
      members of audit committee,
      who shall promptly report such approved services at a full committee
      meeting  








	·  	
      Review
      and approve scope and staffing of auditors' overall audit plan
      








	·  	
      Require
      auditors to provide audit committee with written disclosures and letter
      required by Independence Standards Board Standard No. 1, and to
      submit to audit committee on a periodic basis a formal written statement
      delineating all relationships between auditors and company
  




 


 







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	·  	
      Discuss
      with auditors any disclosed relationships or services that may impact
      objectivity and independence, and take appropriate action to satisfy audit
      committee of auditors' independence 








 

	·  	
      Discuss
      with company and auditors whether
      services of auditors
      required to be
      reported in annual report or proxy statement are compatible with
      maintaining auditors' independence 



 





Audited
Financial Statements





	·  	
      Review
      overall audit plan with auditors and management responsible for preparing
      company's financial statements 








	·  	
      Review
      and discuss with management and auditors as appropriate:
  








	·  	
      Company's
      annual audited financial statements including all critical accounting
      policies and practices used or to be used by company and any significant
      financial reporting issues that have arisen in connection with preparation
      of audited financial statements, prior to filing company's annual report
      








	·  	
      Any
      analysis prepared by management or auditors setting forth significant
      financial reporting issues and judgments made in connection with
      preparation of financial statements including analyses of effect of
      alternative GAAP methods on financial statements









	·  	
      Ramifications
      of use of such alternative disclosures and treatments on financial
      statements and treatment preferred by auditors, and consider other
      material written communications between auditors and management including
      any management letter or schedule of unadjusted differences
    








 

	·  	
      Major
      issues relating to adequacy
      of company's internal controls and procedures for financial reporting and
      risk management policies 



 






	·  	
      Major
      changes in and other issues regarding accounting and auditing principles
      and procedures including any significant changes in company's selection or
      application of accounting principles and








	·  	
      Effect
      on financial statements of regulatory and accounting initiatives as well
      as off-balance sheet transactions and structures









	·  	
      Review
      and discuss outside presence of management any audit problems or
      difficulties and management's response thereto including any difficulties
      encountered by auditors in the course of their work, including any
      restrictions on scope of their activities or access to information,
      responsibilities, budget and staffing of company's internal audit function
      if any or financial reporting function and any significant accounting
      issues raised with management 




 

 







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	·  	
      Review
      and discuss matters brought to attention of audit committee by auditors
      pursuant to Statement on Auditing Standards No. 61 and No. 90
      (SAS
      61
      and SAS 90) including any 








	·  	
      Restriction
      on scope of auditors' activities or access to requested information
      








	·  	
      Accounting
      adjustments proposed by auditors but not made by management
    








	·  	
      Communication
      between auditors and its national office regarding significant auditing or
      accounting issues presented by management 








	·  	
      Management
      or internal control letter issued, or proposed to be issued, by auditors
      and 








	·  	
      Significant
      disagreement between company and auditors 








	·  	
      Review
      and discuss with auditors their report pursuant to Securities Exchange Act
      on their non-audit services if any 








 

	·  	
      If
      brought to audit committee's attention, discuss
      with CEO, CFO and general counsel (a)
      significant
      deficiencies and material weaknesses brought
      to audit committee's attention in
      design or operation of internal controls and procedures for financial
      reporting that could adversely affect company's ability to record,
      process, summarize and report financial information or (b)
      reveal
      any
      fraud involving management or other employees who have a significant role
      in company's internal controls and procedures for financial reporting
      






	·  	
      Based
      on its
      review of its
      (a)
      reports
      from independent auditors on company’s system of internal controls and its
      review of auditing, accounting and financial reporting process
      and
      (b)
      discussions
      with management including review of matters required to be discussed by
      SAS 61 and SAS 90, recommend to board whether company's audited financial
      statements should be included in 10-K 




 





	·  	
      Prepare
      audit committee report required by Item 306 of Regulation S-K to be
      included in company's annual proxy statement






 







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Unaudited
Quarterly Financial Statements





	·  	
      Discuss
      with management and review any financial information including press
      releases and Form 10-Q submitted to a governmental body or the public
      including any certification, report, opinion or review by the independent
      auditors. 







Procedures
for Addressing Complaints and Concerns





	·  	
      Establish
      and require company to publish or file procedures for receipt, retention
      and treatment of complaints received by company regarding accounting,
      internal accounting controls or auditing matters and confidential,
      anonymous submission to audit committee by employees of concerns regarding
      questionable accounting or auditing matters or disclosure controls
      







Regular
Reports to Board





	·  	
      Regularly
      report to board
      on and
      review with board any issues that arise with respect to quality or
      integrity of company's financial statements, compliance with legal or
      regulatory requirements, performance and independence of auditors,
      performance of internal audit function if any and any other matters that
      audit committee considers appropriate or is requested by board to review
      







Review
of Charter





	·  	
      Review
      at least annually and more often as appropriate adequacy of charter and
      recommend amendments if any to board 







Engagement
of Advisors





	·  	
      Engage
      and determine compensation for independent counsel to audit committee and
      such other advisors necessary or appropriate to carry out its
      responsibilities and powers 










Legal
and Regulatory Compliance





	·  	
      Discuss
      with management legal and regulatory requirements applicable to company
      and its subsidiaries and company's compliance, and make recommendations to
      board regarding compliance 








	·  	
      Discuss
      with CEO, CFO and general counsel legal matters (including pending or
      threatened litigation) that may have a material effect on company's
      financial statements or its legal and regulatory compliance policies and
      procedures 
















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General





	·  	
      Form
      and delegate authority to subcommittees consisting of one or more of its
      members to carry out its responsibilities and exercise its powers
      








	·  	
      Require
      that any officer or employee of company, company's outside legal counsel,
      auditors or any other professional retained by company attend a meeting of
      audit committee or meet with any member of or advisor to committee
      







* *
*




Notwithstanding
the responsibilities and powers of the audit committee set forth in this
charter, it is not intended to carry responsibility for planning or conducting
audits of the company's financial statements or determining whether the
company's financial statements are complete, accurate and prepared in accordance
with GAAP. Such responsibilities are the duty of management and, to the extent
of their audit responsibilities, the auditors. In addition, it is not the duty
of the audit committee to conduct investigations or to assure compliance with
laws and regulations. The audit committee shall be entitled to rely upon advice
and information it receives if it believes to be reliable or has reason to draft
in its discussions and communications with management, auditors and such
experts, advisors and professionals it may consult. 




 

(Adopted
by the
board
of directors on
March
14,
2005,
further amending charter adopted March 21, 2003 
and amended March 11, 2004)

 

 







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