Exhibit 99.1

 

**RETRACTABLETECHNOLOGIES, INC.**

 

**AUDITCOMMITTEE CHARTER**

 

**I.****                                        ****STATEMENT OF PURPOSE**

 

A.                                   The Audit Committee shall represent andassist the Board of Directors in discharging its responsibilities relating tothe accounting, reporting, and financial practices and legal compliance ofRetractable Technologies, Inc. (the “Company”). The Audit Committee hasgeneral responsibility for oversight of the accounting and financial reportingprocesses of the Company, including oversight of:  (1) the integrity of the Company’sfinancial statements and its financial reporting and disclosure practices, (2) theCompany’s compliance with legal and regulatory requirements, and (3) thequalification and independence of the Company’s auditors and the performance ofthe annual audit and interim reviews of the Company’s financial statements bythe independent auditors. The Audit Committee should also provide an openavenue of communication among the independent auditors, financial and seniormanagement, and the Board of Directors.

 

B.                                     While the Audit Committee has theresponsibilities and powers set forth in this Charter, it is not the duty ofthe Audit Committee to plan or conduct audits or to determine that theCompany’s financial statements are complete and accurate and are in accordancewith generally accepted accounting principles (“GAAP”).  This is the responsibility of management andthe Company’s independent auditors.

 

**II.****                                    ****AUDIT COMMITTEE MEMBERS**

 

A.                                   The Audit Committee shall consist of atleast three members appointed by the Board of Directors, one of whom shall beappointed as Chairperson. The Audit Committee shall consist entirely of“independent” members of the Board of Directors. “Independent” means a directorwho:  (i) satisfies all criteria forindependence established by the Securities and Exchange Commission (the “SEC”)with regard to members of an Audit Committee and (ii) meets the NYSE AmexLLC (the “AMEX”)definition of “independent” (including all criteria imposed with respect toservice on an audit committee). If a member of the Audit Committee ceases to beindependent, that member shall notify the Company immediately.

 

B.                                     Each member of the Audit Committee shallbe able to read and understand fundamental financial statements, including theCompany’s balance sheet, statement of operations, statement of changes instockholders’ equity, cash flow statement, and related notes to financialstatements as determined in the Board of Directors’ judgment.

 

C.                                     At least one member of the AuditCommittee shall have past employment experience in finance or accounting,requisite professional certification in accounting, or any other comparableexperience or background which results in the individual’s financialsophistication, including, but not limited to, being or having been a chiefexecutive officer, chief financial officer, or other senior officer withfinancial oversight responsibilities in compliance with criteria established bythe AMEXand, in addition, shall have such accounting or related financial management expertiseas required to be an “audit committee financial expert” in compliance with thecriteria established by the SEC, both as determined in the Board of Directors’judgment. The identity of such financial expert and whether such financialexpert meets the SEC’s “independence” criteria shall be disclosed in theCompany’s annual report as filed with the SEC and such other reports as the SECmay require.

 

D.                                    The members of the Audit Committee shallbe elected by the Board of Directors and shall serve until their successorsshall be duly elected and qualified. Unless a chair is elected by the fullBoard of Directors, the members of the Audit Committee may designate a chair bymajority vote of the full Audit Committee.

 

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**III.****                                ****POWERS, DUTIES, ANDRESPONSIBILITIES**

 

**A.****                                   ****Oversight of CompanyRelationship with Its Independent Auditors**

 

1.                                       The Audit Committee of the Company shallhave sole authority and responsibility to appoint and engage a publicaccounting firm to serve as the Company’s independent auditors and to performthe Company’s annual audit and related work. This authority shall include thesole discretion to retain and discharge such independent auditors and toapprove the terms and conditions of all audit engagements as well as allsignificant non-audit engagements with such independent auditors, including adetermination of the compensation to be paid to such independent auditors.

 

2.                                       The Audit Committee shall oversee thework performed by the Company’s independent auditors (including resolution ofdisagreements between management and the independent auditors regardingfinancial reporting). Such independent auditors shall report directly to theAudit Committee, although they shall remain accountable to the entire Board ofDirectors as well as to the Audit Committee.

 

3.                                       The Audit Committee shall review with theindependent auditors the scope of the audit, pre-approve the audit services(which may entail providing comfort letters in connection with securities underwritings)to be performed by the independent auditors, review the results of the annualaudit examination, review the interim results, and review any other reports ofthe independent auditors with respect to the Company’s financial statements orpolicies.

 

4.                                       The Audit Committee shall pre-approve allnon-audit services provided to the Company by the independent auditors.  Pre-approval shall be either:  (i) specifically granted by the AuditCommittee or (ii) granted pursuant to pre-approval policies and proceduresestablished by the Audit Committee, provided the Audit Committee is informed ofeach non-audit service. In no event shall approval be granted for any non-auditservice that the SEC, AMEX, or other applicable regulatory authority determinesis impermissible. As may be required by the SEC, the Audit Committee shalldisclose the approval of non-audit services and/or any pre-approval policiesand procedures in periodic reports filed by the Company with the SEC.

 

5.                                  The Audit Committee shall periodicallyassess the independence of the Company’s auditors as defined by the rules,regulations, and standards of the SEC, the AMEX, and other applicableauthorities. The Audit Committee shall, at least annually, obtain and review aformal written statement by the Company’s independent auditors delineating allrelationships between the independent auditors and the Company as required byapplicable requirements of the Public Company Accounting Oversight Board.Furthermore, the Audit Committee shall actively engage in a dialogue with theindependent auditors regarding any disclosed relationships or services that mayimpact the objectivity and independence of the independent auditors.  The Audit Committee is responsible for recommendingthat the Board take appropriate action to oversee the independence of theindependent auditors.

 

**B.****                                   ****Audit Practices andFinancial Reporting Matters**

 

1.                                       The Audit Committee shall obtain andreview all reports and other information that the independent auditors arerequired by law, rule, or regulation to submit to the Audit Committee,including periodic reports on:  (1) allcritical accounting policies and practices to be used by the Company, (2) allalternative treatments of financial information within GAAP in effect from timeto time that have been discussed with management, the ramification of the useof such alternative disclosures and treatment, and the treatment preferred bythe independent auditors, and (3) other material written communicationsbetween the independent auditors and management of the Company, such as anymanagement letter or schedule of unadjusted differences.

 

2.                                       The Audit Committee shall discuss withthe independent auditors the matters required to be discussed by Statement onAuditing Standards No. 61, as amended (AICPA Professional Standards, Vol.1, AU section 380), as adopted by the Public Company Accounting Oversight Boardin Rule 3200T,  relating to theconduct of the audit and certain information related to the auditors’ judgmentsabout the quality, not just the acceptability, of the Company’s accountingprinciples.

 

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3.                                       The Audit Committee shall review anddiscuss with management and the independent auditors the Company’s annualaudited financial statements and quarterly financial statements, including adiscussion of the Company’s disclosures under “Management’s Discussion andAnalysis of Financial Condition and Results of Operation” and a discussion withthe independent auditors of their judgments as to the quality of the Company’saccounting principles.

 

4.                                       The Audit Committee shall review withmanagement and the independent auditors the results of any significant mattersidentified as a result of the independent auditors’ interim review proceduresprior to the filing of each quarterly report.

 

5.                                       The Audit Committee shall review changesin the accounting policies of the Company and accounting and financialreporting proposals that may have a significant impact on the Company’sfinancial reports, and make reports on the foregoing to the Board of Directors.

 

6.                                       The Audit Committee shall review asnecessary and appropriate with the independent auditors any audit problems ordifficulties and management’s response, including any restrictions on the scopeof the independent auditors’ activities or access to information and anysignificant disagreements with management.

 

**C.****                                   ****Company GovernancePolicies and Compliance**

 

1.                                       The Audit Committee shall prepare thereport that SEC rules require to be included in the Company’s annual proxystatement.

 

2.                                       The Audit Committee shall review anddiscuss with management financial risk exposures and measures management hastaken to monitor and control such exposures.

 

3.                                       The Audit Committee shall annually reviewand assess the adequacy of this Charter and make recommendations to the Boardof Directors necessary to provide for the continued adequacy of the Charter toachieve its stated purpose.

 

4.                                       The Audit Committee shall review withmanagement and the independent auditors any correspondence with regulators orgovernmental agencies and any employee complaints or published reports, whichraise material issues regarding the Company’s financial statements oraccounting policies.

 

5.                                       Any complaints regarding accounting,internal accounting controls, or auditing matters shall be submitted orally orin writing to the Company’s Audit Committee Financial Expert.  The Company encourages its employees tosubmit such concerns or complaints when and if they arise, and will acceptanonymous submissions.  The source of anysuch concerns or complaints shall be kept confidential, if requested.  All such complaints shall be retained by theAudit Committee for five years and shall be referred to management or the Boardof Directors at the discretion of the Audit Committee.

 

6.                                       The Audit Committee shall review and, ifappropriate, approve any related party transactions.

 

7.                                       The Audit Committee shall overseemanagement’s internal control over financial reporting as part of its oversightresponsibilities for the Company’s financial reporting.  The Audit Committee shall obtain a reportfrom management as to all material weaknesses and significant deficiencies ininternal controls based upon management’s evaluation.  The Audit Committee shall be reasonably knowledgeableand informed about the evaluation process and management’s assessment.

 

**D.****                                   ****General Powers**

 

1.                                       The Audit Committee shall have theability (but not the obligation) to conduct or authorize, if it considersappropriate, investigations into any matters within the scope of itsresponsibilities.

 

2.                                       The Audit Committee shall have theauthority (without separate approval from the Board of Directors) to obtainadvice, services, and assistance from independent counsel, and accounting orother advisors, as 

 

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the Audit Committee deemsnecessary to assist it in carrying out its responsibilities, and to determinethe compensation for any such advisors.

 

3.                                       The Audit Committee shall perform suchactivities consistent with this Charter, the Company’s Third Amended andRestated Bylaws, as they may be amended, and applicable law as the Board ofDirectors or the Audit Committee deems necessary or appropriate.

 

4.                                       The Audit Committee may otherwise makeregular reports and recommendations to the Board of Directors within the scopeof its functions.

 

5.                                       The Company shall provide for appropriatefunding, as determined by the Audit Committee, in its capacity as a committeefor: 1) payment of compensation to the independent auditors employed for thepurpose of preparing or issuing an audit report or review or attestation, 2)payment to any advisors employed by the Audit Committee and 3) payment ofordinary administrative expenses that are necessary or appropriate in carrying outits duties.

 

**IV.****                               ****AUDIT COMMITTEE MEETINGS**

 

A.                                   The Audit Committee shall meet as oftenas it determines, but not less frequently than quarterly. The meetings may beeither in person or in any other manner permitted by law and at such times andplaces as the Board of Directors or the Audit Committee determines. The AuditCommittee may request any officer or employee of the Company or the Company’soutside counsel or independent auditors to attend a meeting of the AuditCommittee or to meet with any members of, or consultants to, the AuditCommittee.

 

B.                                     The majority of the members of the AuditCommittee shall constitute a quorum for Audit Committee meetings and, unlessotherwise required by this Charter or the Company’s Third Amended and RestatedBylaws, as they may be amended, action may be taken by majority vote of themembers present at such meetings. Minutes shall be maintained of each meeting.

 

C.                                     At the next meeting of the Board ofDirectors following any meeting of the Audit Committee, a report of the AuditCommittee findings and actions shall be rendered by the Chairman of the AuditCommittee.

 

Theabove constitutes the complete Audit Committee Charter of RetractableTechnologies, Inc. effective as of December 20, 2009.

 
|                       |                  |
|----------------------------|-----------------------|
|                       | s/ Thomas J. Shaw     |   |
|                       | THOMAS J. SHAW        |
|                       | Chairman of the Board |
|                       |                  |
| ATTEST:                    |                  |
|                       |                  |
| s/ Michele Larios          |                  |   |
| MICHELE LARIOS,  Secretary |                  |
|                            |                       |  |  |

 

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