Document:

Unassociated Document

Exhibit 10.1

 

QUALITY RESOURCE TECHNOLOGIES, INC.

CHARTER OF THE AUDIT COMMITTEE

 

Purpose

 

The purpose of the Audit Committee is to assist the Board of Directors (the “Board”) in fulfilling its oversight responsibilities relating to the Company’s (1) financial statements and auditing, accounting and related reporting processes, and (2) systems of internal controls regarding finance, accounting, financial reporting, and business practices and conduct established by management and the Board.

 

Membership and Procedures

 

· Membership and Appointment.  The Committee shall consist of at least three members of the Board, with the exact number being determined by the Board.  The members of the Committee shall be appointed and replaced from time to time by the Board.

 

· Independence and Qualifications.  Each member of the Committee shall meet the independence and experience requirements of the applicable provisions of federal law and the rules and regulations promulgated thereunder and the applicable rules of The Nasdaq Stock Market, the New York Stock Exchange, or any other exchange where the shares of the Company may be listed or quoted for sale.

 

· Resources.  The Committee shall have the authority to retain, at the Company’s expense, special legal, accounting or other consultants to advise the Committee and to authorize or conduct investigations into any matters within the scope of its responsibilities.  The Committee shall have sole authority to approve related fees and retention terms.  The Committee may request any officer or employee of the Company or the Company’s outside counsel or independent auditors to attend a meeting of the Committee or to meet with any members of, or consultants to, the Committee, and shall have full access to all books, records, facilities and personnel of the Company in connection with the discharge of its responsibilities.

 

· Evaluation.  The Committee shall review and reassess the adequacy of this Charter annually and recommend any proposed changes to the Board.

 

Duties and Responsibilities

 

Described below are the common recurring activities and responsibilities of the Committee in carrying out its oversight functions.  These activities and responsibilities are set forth below as a guide to the Committee with the understanding that the Committee may alter or supplement them as appropriate under the circumstances to the extent permitted by applicable law, regulation or listing standard.

 

Documents/Reports Review

 

· Review and discuss the Company’s annual audited financial statements and quarterly financial statements with management and the independent auditors, including the Company’s disclosures under the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s reports filed with the Securities and Exchange Commission and, with respect to the annual financial statements, the appropriateness and quality of accounting and auditing principles and practices as well as the adequacy of internal controls that could significantly affect the Company’s financial statements.

 

· Review and discuss with management and the independent auditors the Company’s earnings press releases before they are issued, and discuss generally with management the nature of any additional financial information or earnings guidance to be provided publicly and/or to ratings agencies.

 

· Review and discuss with management and the independent auditors the matters required to be discussed by Statement on Auditing Standards Nos. 61 and 90 (Communications with Audit Committees), as they may be modified or supplemented, relating to the conduct of the audit, other significant financial reporting issues and judgments made in connection with the preparation of the Company’s financial statements, and any other matters communicated to the Committee by the independent auditors.

  

  

  

· Review with management and such outside professionals as the Committee considers appropriate important trends and developments in financial reporting practices and requirements and their effect on the Company’s financial statements.

 

· Based on its review and discussions with management and the independent auditors, recommend to the Board whether the Company’s audited financial statements should be included in the Company’s Annual Report on Form 10-K.

 

· Prepare the report of the Audit Committee required by the rules of the Securities and Exchange Commission to be included in the Company’s annual proxy statement.

 

Accounting and Financial Controls Framework

 

· Review major changes to the Company’s auditing and accounting principles and practices as suggested by the independent auditors or management.

 

· Review and discuss with management and the independent auditors the adequacy and effectiveness of the Company’s internal controls (including any significant deficiencies, material weaknesses and significant changes in internal controls reported to the Committee by management and any fraud involving management or other employees who have a significant role in the Company’s internal controls) and the effectiveness of the Company’s disclosure controls and procedures.

 

· Review with the independent auditors any management letter provided by the independent auditors and the Company’s responses to that letter.

 

· Review and discuss with management and the independent auditors (i) any material financial or non-financial arrangements that do not appear on the Company’s financial statements, (ii) any transactions or courses of dealing with parties related to the Company that are significant in size or involve terms or other aspects that differ from those that would likely be negotiated with independent parties, and that are relevant to an understanding of the Company’s financial statements, and (iii) material financial risks that are designated as such by management or the independent auditors.

 

· Establish procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submission by the Company’s employees of concerns regarding accounting or auditing matters.

 

Independent Auditors

 

· Be directly responsible for the appointment, removal, compensation and oversight of the work of the independent auditors (including the resolution of disagreements between the Company’s management and the independent auditors regarding financial reporting) for the purpose of preparing or issuing an audit report or related work with the independent auditors reporting directly to the Committee.

 

· Have the sole authority to review in advance, and grant any appropriate pre-approvals of all auditing services to be provided by the independent auditors and all permitted non-audit services (including the fees and other terms of engagement), and, if desired, establish policies and procedures for review and pre-approval by the Committee of such services.

 

· Obtain, review and discuss with the independent auditors at least annually a report by the independent auditors describing (i) the independent auditors’ internal quality-control procedures, and (ii) any material issues raised by the most recent internal quality control review or peer review of the independent auditors, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the independent auditors, and the steps taken to deal with those issues.

  

  

  

· Review the report by the independent auditors, which is required by Section 10A of the Securities Exchange Act of 1934, concerning: (i) all critical accounting policies and practices to be used; (ii) alternative treatments of financial information within GAAP that have been discussed with management officials, ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the independent auditors; and (iii) any other material written communications between the independent auditors and the Company’s management.

 

· Review and discuss with the independent auditors, on an annual basis, all relationships the independent auditors have with the Company in order to evaluate the independent auditors’ continued independence, and receive from the independent auditors on an annual basis a written statement (consistent with Independence Standards Board Standard No. 1) regarding the auditors’ independence.

 

· Meet with the independent auditors prior to the audit for each fiscal year to review the planning, staffing and scope of the audit.

 

· Establish guidelines for the hiring of employees and former employees of the independent auditors.

 

Clarification of Audit Committee’s Role

 

While the Committee has the responsibilities and powers set forth in this Charter, the Committee’s role is one of oversight.  It is not the duty of the Committee to plan or conduct audits or to determine that the Company’s financial statements and disclosures are complete and accurate and are in accordance with generally accepted accounting principles and applicable rules and regulations.  These are the responsibilities of management and the independent auditors.Unassociated Document

Exhibit 10.2

QUALITY RESOURCE TECHNOLOGIES, INC.

CHARTER OF THE COMPENSATION COMMITTEE

 

Purpose

 

The purpose of the Compensation Committee of the Board of Directors of QUALITY RESOURCE TECHNOLOGIES, Inc. is to assist the Board in meeting its responsibilities with regard to oversight and determination of executive compensation and to review and make recommendations to the Board with respect to major compensation plans, policies and programs of the Company.

 

Membership and Procedures

 

Membership and Appointment.  The Committee shall consist of not fewer than two members of the Board, with the exact number being determined by the Board.  Members of the Committee shall be appointed from time to time to serve in such capacity by the Board.

 

Independence.  Each member shall meet the independence and outside director requirements of applicable tax and securities laws and regulations and stock market rules.

 

Authority to Retain Advisors.  In the course of its duties, the Committee shall have the sole authority, at the Company’s expense, to retain and terminate compensation consultants and other advisors as the Committee may deem appropriate, including the sole authority to approve any such advisor’s fees and other retention terms.

 

Evaluation.  The Committee shall annually review and reassess the adequacy of this Charter and recommend any proposed changes to the Board.

 

Duties and Responsibilities

 

The Compensation Committee shall:

 

1. Review, and make recommendations for approval by the independent members of the Board regarding, corporate goals and objectives relevant to the compensation of the Company’s executive officers.

 

2. Review, and make recommendations for approval by the independent members of the Board regarding, the compensation for the Chief Executive Officer and other executive officers of the Company, including, as applicable, (a) base salary, (b) bonus, (c) long-term incentive and equity compensation, and (d) any other compensation, perquisites, and special or supplemental benefits.

 

3. Establish and modify the terms and conditions of employment of the Chief Executive Officer and other executive officers of the Company, by contract or otherwise.

 

4. Make recommendations to the full Board regarding the fees and other compensation to be paid to members of the Board for their service as directors and as members of committees of the Board.

 

5. Administer the stock plans of the Company (other than with respect to stock option grants to members of the Board of Directors, which shall be considered by the entire Board) in accordance with the terms of such plans and to grant and issue, or recommend the grant and issuance of, awards thereunder, including stock options, stock units, restricted stock and stock appreciation rights, to executive officers of the Company.

 

6. Review the Company’s incentive compensation and other benefit plans and practices and recommend changes in such plans and practices to the Board.

 

7. Administer the other compensation plans that may be adopted from time to time as authorized by the Board, including the Company’s Employee Stock Purchase Plan and 401(k) Plan(s).

 

8. Prepare or cause to be prepared the Compensation Committee report on executive compensation as required by SEC rules for inclusion in the Company’s annual proxy statement or Annual Report on Form 10-K filed with the SEC and any other reports or disclosure required with respect to such Committee by any applicable proxy or other rules of the SEC.

 

9. Perform such other activities and functions related to executive compensation as may be assigned from time to time by the Board.

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