CHARTER OF THE AUDIT COMMITTEE
PURPOSE AND POLICY
The primary purpose of the Audit Committee (the "Committee")
shall be to act on behalf of the Board of Directors (the "Board")
of BioTelemetry, Inc., a Delaware corporation (the "Company"),
in fulfilling the Board's oversight responsibilities with respect to the Company's
corporate accounting and financial reporting processes, the systems of internal
control over financial reporting, and audits of financial statements, as well
as the quality and integrity of the Company's financial statements and reports
and the qualifications, independence and performance of the firm or firms of
certified public accountants engaged as the Company's independent outside auditors
for the purpose of preparing or issuing an audit report or performing other
audit, review or attest services (the "Auditors"). The
Committee shall also provide oversight assistance in connection with the Company's
legal, regulatory and ethical compliance programs as established by management
and the Board. The operation of the Committee shall be subject to the Bylaws
of the Company as in effect from time to time and Section 141 of the Delaware
General Corporation Law.
The policy of the Committee, in discharging these obligations, shall be to maintain
and foster an open avenue of communication among the Committee, the Auditors
and the Company's financial management.
The Committee shall consist of at least three members of the Board. Each of
the members of the Committee shall satisfy the independence and financial literacy
requirements of The Nasdaq Stock Market ("Nasdaq") and
the independence requirements of the Securities and Exchange Commission applicable
to Committee members as in effect from time to time. At least one member shall
qualify as an "Audit Committee Financial Expert" as defined in Item
407(d)(5)(ii) of Regulation S-K under the Securities Act of 1933, as amended.
Members of the Committee may only receive director and committee member fees
as compensation from the Company. The members of the Committee shall be appointed
by and serve at the discretion of the Board. Vacancies occurring on the Committee
shall be filled by the Board. The Chairman of the Committee shall be appointed
by the Board.
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The Committee shall hold such regular or special meetings as its members shall
deem necessary or appropriate. The Chairman of the Committee shall report to
the Board from time to time, or whenever so requested by the Board.
The Committee shall have authority to appoint, determine compensation for, and
at the expense of the Company, retain and oversee the Auditors as set forth
in Section 10A(m)(2) of the Securities Exchange Act of 1934, as amended, and
the rules thereunder and otherwise to fulfill its responsibilities under this
charter. The Committee shall have authority to retain and determine compensation
for, at the expense of the Company, special legal, accounting or other advisors
or consultants as it deems necessary or appropriate in the performance of its
duties. The Committee shall also have authority to pay, at the expense of the
Company, ordinary administrative expenses that, as determined by the Committee,
are necessary or appropriate in carrying out its duties. The Committee shall
have full access to all books, records, facilities and personnel of the Company
as deemed necessary or appropriate by any member of the Committee to discharge
his or her responsibilities hereunder. The Committee shall have authority to
require that any of the Company's personnel, counsel, accountants (including
the Auditors) or investment bankers, or any other consultant or advisor to the
Company attend any meeting of the Committee or meet with any member of the Committee
or any of its special legal, accounting or other advisors and consultants. The
approval of this Charter by the Board shall be construed as a delegation of
authority to the Committee with respect to the responsibilities set forth herein.
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The Committee shall oversee the Company's financial reporting process on behalf
of the Board, and shall have direct responsibility for the appointment, compensation,
retention and oversight of the work of the Auditors and any other registered public
accounting firm engaged for the purpose of performing other review or attest services
for the Company. The Auditors and each such other registered public accounting
firm shall report directly and be accountable to the Committee. The Committee's
functions and procedures should remain flexible to address most effectively changing
circumstances. To implement the Committee's purpose and policy, the Committee
shall be charged with the following functions and processes with the understanding,
however, that the Committee may supplement or (except as otherwise required by
applicable laws or rules) deviate from these activities as appropriate under the
1. Evaluation and Retention of Auditors. To evaluate the performance
of the Auditors, including the lead partner, to assess their qualifications and
to determine whether to retain or to terminate the existing Auditors or to appoint
and engage new auditors for the ensuing year.
2. Approval of Audit Engagements. To determine and approve engagements
of the Auditors, prior to commencement of such engagements, to perform all proposed
audit, review and attest services, including the scope of and plans for the audit,
the adequacy of staffing, the compensation to be paid, at the Company's expense,
to the Auditors and the negotiation and execution, on behalf of the Company, of
the Auditors' engagement letters, which approval may be pursuant to preapproval
policies and procedures established by the Committee consistent with applicable
laws and rules, including the delegation of preapproval authority to one or more
Committee members so long as any such preapproval decisions are presented to the
full Committee at the next scheduled meeting.
3. Approval of Non-Audit Services. To determine and approve engagements
of the Auditors, prior to commencement of such engagements (unless in compliance
with exceptions available under applicable laws and rules related to immaterial
aggregate amounts of services), to perform any proposed permissible non-audit
services, including the scope of the service and the compensation to be paid therefor,
which approval may be pursuant to preapproval policies and procedures established
by the Committee consistent with applicable laws and rules, including the delegation
of preapproval authority to one or more Committee members so long as any such
preapproval decisions are presented to the full Committee at the next scheduled
4. Audit Partner Rotation. To monitor the rotation of the partners
of the Auditors on the Company's audit engagement team as required by applicable
laws and rules and to consider periodically and, if deemed appropriate, adopt
a policy regarding rotation of auditing firms.
5. Auditor Conflicts. At least annually, to receive and review written
statements from the Auditors delineating all relationships between the Auditors
and the Company, consistent with Independence Standards Board Standard No. 1,
to consider and discuss with the Auditors any disclosed relationships and any
compensation or services that could affect the Auditors' objectivity and independence.
On an ongoing basis, to assess and otherwise take appropriate action to oversee
the independence of the Auditors.
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6. Former Employees of Auditor. To consider and, if deemed appropriate,
adopt a policy regarding Committee preapproval of employment by the Company of
individuals employed or formerly employed by the Auditors and engaged on the Company's
7. Audited Financial Statement Review. To review, upon completion
of the audit, the financial statements proposed to be included in the Company's
Registration Statements and Annual Report on Form 10-K to be filed with the Securities
and Exchange Commission and to recommend whether or not such financial statements
should be so included.
8. Annual Audit Results. To review and discuss with management and
the Auditors the results of the annual audit, including the Auditors' assessment
of the quality, not just acceptability, of accounting principles, the reasonableness
of significant judgments and estimates (including material changes in estimates),
any material audit adjustments proposed by the Auditors and any adjustments proposed
but not recorded, the adequacy of the disclosures in the financial statements
and any other matters required to be communicated to the Committee by the Auditors
under generally accepted auditing standards, including the standards of the Public
Company Accounting Oversight Board (United States), as appropriate.
9. Quarterly Results. To review and discuss with management and
the Auditors, as appropriate, the results of the Auditors' review of the Company's
quarterly financial statements, prior to public disclosure of quarterly financial
information, if practicable, or filing with the Securities and Exchange Commission
of the Company's Quarterly Report on Form 10 Q, and any other matters required
to be communicated to the Committee by the Auditors under generally accepted auditing
standards, including standards of the Public Company Accounting Oversight Board
(United States), as appropriate.
10. Management's Discussion and Analysis. To review and discuss
with management and the Auditors, as appropriate, the Company's disclosures contained
under the caption "Management's Discussion and Analysis of Financial Condition
and Results of Operations" in its periodic reports to be filed with the Securities
and Exchange Commission.
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11. Press Releases. To review and discuss with management and the
Auditors, as appropriate, earnings press releases, and press releases containing
information relating to material developments as well as the substance of financial
information, information relating to material developments and earnings guidance
provided to analysts and ratings agencies, which discussions may be general discussions
of the type of information to be disclosed or the type of presentation to be made.
The Chair of the Committee may represent the entire Committee for purposes of
12. Accounting Principles and Policies. To review and discuss with
management and the Auditors, as appropriate, significant issues that arise regarding
accounting principles and financial statement presentation, including critical
accounting policies and practices, alternative accounting policies available under
generally accepted accounting principles ("GAAP") related to material
items discussed with management and any other significant reporting issues and
13. Risk Assessment and Management. To review and discuss with management
and the Auditors, as appropriate, the Company's guidelines and policies with respect
to risk assessment and risk management, including the Company's major financial
risk exposures and the steps taken by management to monitor and control these
exposures; and to review and discuss with management insurance programs, including
director and officer insurance, product liability insurance and general liability
insurance (but excluding compensation and benefits-related insurance).
14. Management Cooperation with Audit. To evaluate the cooperation
received by the Auditors during their audit examination, including a review with
the Auditors of any significant difficulties with the audit or any restrictions
on the scope of their activities or access to required records, data and information,
significant disagreements with management and management's response, if any.
15. Management Letters. To review and discuss with the Auditors
and, if appropriate, management, any management or internal control letter issued
or, to the extent practicable, proposed to be issued by the Auditors and management's
response, if any, to such letter, as well as any additional material written communications
between the Auditors and management.
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16. National Office Communications. To review and discuss with the
Auditors, as appropriate, communications between the audit team and the firm's
national office with respect to accounting or auditing issues presented by the
17. Disagreements Between Auditors and Management. To review with
management and the Auditors or any other registered public accounting firm engaged
to perform review or attest services any material conflicts or disagreements between
management and the Auditors or such other accounting firm regarding financial
reporting, accounting practices or policies and attempt to resolve any conflicts
or disagreements regarding financial reporting.
18. Internal Control Over Financial Reporting. To confer with management
and the Auditors, as appropriate, regarding the scope, adequacy and effectiveness
of internal control over financial reporting including significant deficiencies
or material weaknesses identified by the Company's Auditors. To review with the
management and the Auditors any fraud, whether or not material, that includes
management or other employees who have any significant role in the Company's internal
control over financial reporting and any significant changes in internal controls
or other factors that could significantly affect internal controls, including
any corrective actions in regard to significant deficiencies or material weaknesses.
19. Separate Sessions. Periodically, to meet in separate sessions
with the Auditors, as appropriate, and management to discuss any matters that
the Committee, the Auditors or management believe should be discussed privately
with the Committee.
20. Correspondence with Regulators. To consider and review with
management, the Auditors, outside counsel, as appropriate, and, in the judgment
of the Committee, such special counsel, separate accounting firm and other consultants
and advisors as the Committee deems appropriate, any correspondence with regulators
or governmental agencies and any published reports that raise material issues
regarding the Company's financial statements or accounting policies.
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21. Complaint Procedures. To establish procedures, when and as required
by applicable laws and rules, for the receipt, retention and treatment of complaints
received by the Company regarding accounting, internal accounting controls or
auditing matters and the confidential and anonymous submission by employees of
concerns regarding questionable accounting or auditing matters, and to establish
such procedures as the Committee may deem appropriate for the receipt, retention
and treatment of complaints received by the Company with respect to any other
matters that may be directed to the Committee for review and assessment.
22. Ethical Compliance; Compliance with Legal and Regulatory Requirements.
To review the results of management's efforts to monitor compliance with the Company's
programs and policies designed to ensure adherence to applicable laws and rules,
as well as to its Code of Business Conduct and Ethics, as amended from time to
time, and regarding legal matters and compliance with legal and regulatory requirements
that may have a material effect on the Company's business, financial statements
or compliance policies, including any material reports or inquiries from regulatory
or governmental agencies.
23. Regulatory and Accounting Initiatives. To review with counsel,
the Auditors, and/or management, as appropriate, any significant regulatory or
other legal or accounting initiatives or matters that may have a material impact
on the Company's financial statements, or compliance programs and policies if,
in the judgment of the Committee, such review is necessary or appropriate.
24. Engagement of Registered Public Accounting Firms. To determine
and approve engagements of any registered public accounting firm (in addition
to the Auditors) to perform any other review or attest service, including the
compensation to be paid to such firm and the negotiation and execution, on behalf
of the Company, of such firm's engagement letter, which approval may be pursuant
to preapproval policies and procedures, including the delegation of preapproval
authority to one or more Committee members, so long as any such preapproval decisions
are made, and presented to the full Committee, in accordance with such policies
25. Related-Person Transactions. To review and provide oversight
of related-person transactions in accordance with the Company's Related-Person
26. Investment Policy. To review, on a periodic basis, as appropriate,
the Company's investment policy and recommend to the Board any changes to the
27. Investigations. To investigate any matter brought to the attention
of the Committee within the scope of its duties if, in the judgment of the Committee,
such investigation is necessary or appropriate.
28. Proxy Report. To prepare the report required by the rules of
the Securities and Exchange Commission to be included in the Company's annual
29. Annual Charter Review. To review and assess the adequacy of
this charter annually and recommend any proposed changes to the Board for approval.
30. Report to Board. To report to the Board with respect to material
issues that arise regarding the quality or integrity of the Company's financial
statements, the Company's compliance with legal or regulatory requirements, the
performance or independence of the Auditors or such other matters as the Committee
deems appropriate from time to time or whenever it shall be called upon to do
31. Annual Committee Evaluation. To conduct an annual evaluation
of the performance of the Committee.
32. General Authority. To perform such other functions and to have
such powers as may be necessary or appropriate in the efficient and lawful discharge
of the foregoing.
It shall be the responsibility of management to prepare the Company's financial
statements and periodic reports and the responsibility of the Auditors to audit
those financial statements. These functions shall not be the responsibility of
the Committee, nor shall it be the Committee's responsibility to ensure that the
financial statements or periodic reports are complete and accurate, conform to
GAAP or otherwise comply with applicable laws.
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|Robert J. Rubin, M.D.|
|Anthony J. Conti|