The Red Fiber Holdings LLC Management Committee (the “Management Committee”) and Fundamental Voting Shareholders shall have the sole authority for the appointment, renewal, termination or rotation of the independent auditor, including the engagement terms and related fee schedule. Approval of non-audit services to be conducted by the independent auditor greater than $500,000 may be approved by the altafiber Board of Directors. Approval of non-audit services to be conducted by the independent auditor equal to or less than $500,000 may be approved by the Chief Executive Officer or the Chief Financial Officer.
The Audit Committee (“Committee”) of the Red Fiber Holdings LLC Board of Directors (the “Board”) shall consist of a minimum of three directors, all of whom shall be non-employee directors and comply in all respects with the standards established from time to time by the Securities and Exchange Commission (“SEC”). Members of the Committee shall be appointed by the Board and may be removed by the Board in its discretion. All members of the Committee shall have sufficient financial experience and the ability to enable them to discharge their responsibilities. At least one member shall be an “audit committee financial expert” as defined by the SEC.
The purpose of the Committee shall be to assist the Management Committee and the Board in its oversight of the integrity of the financial statements of altafiber (the “Company”) and Red Fiber Holdings LLC (the “Parent”), collectively (the “Corporation”), of the Corporation’s compliance with legal and regulatory requirements, of the independence and qualifications of the independent auditor, and of the performance of the Corporation’s internal audit function and independent auditors.
The Committee shall have the following authority and responsibilities:
1. To review and approve the audited financial statements.
2. To discuss with management and the independent auditor the annual audited financial statements and quarterly financial statements, including the Corporation’s disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and any matters required to be reviewed under applicable legal and regulatory requirements.
3. To establish procedures with management and the independent auditor, as appropriate, for the dissemination of financial information.
4. To discuss with management and the independent auditor, as appropriate, any audit problems or difficulties and management’s response, the Corporation’s risk assessment and risk management policies, including the Corporation’s major financial risk exposure and steps taken by management to monitor and mitigate such exposure.
5. To approve or alter the accounting standards or reporting policies or practices applied to the Company and its subsidiaries, except where required by law.
6. To review with management and the independent auditor the Corporation’s financial reporting and accounting standards and principles, significant changes in such standards or principles or in their application, and the key accounting decisions affecting the Corporation’s financial statements, including alternatives to, and the rationale for, the decisions made.
7. To review and evaluate the performance of the internal auditing function as well as the system of internal controls and the results of internal audits. The Committee will also review and oversee the appointment, performance, compensation and replacement of the Corporation’s executive responsible for internal auditing.
8. To review and approve the internal audit charter at least annually.
9. To review and approve the risk-based annual internal audit plan, make recommendations concerning internal audit projects, and monitor performance relative to its audit plan. The Committee will also oversee the organizational structure, budget and resources necessary to achieve the audit plan.
10. To oversee policies for the hiring of employees or former employees of the Corporation’s independent auditor.
11. To establish procedures for (i) the receipt, review and treatment of accounting, internal controls or auditing complaints received by the Corporation, and (ii) the confidential anonymous submission by Corporation employees of concerns regarding questionable accounting or auditing matters.
12. To periodically: (i) review the investment performance of the Company’s pension plans; and (ii) monitor the funding requirements and liabilities of such plans.
13. To approve the appointment of tax advisors in preparation of tax returns, including the related fee schedule.
14. To review federal, state and other tax returns with senior management. Income tax returns are subject to review by the approved tax advisor and approval by senior management before execution.
The Committee shall meet separately at least quarterly with management, with the internal corporate audit staff and also with the Corporation’s independent auditors.
The Committee shall have authority to retain such outside counsel, experts and other advisors as the Committee may deem appropriate in its sole discretion. The Committee shall have sole authority to approve related fees and retention terms. The Company will provide for appropriate funding, as determined by the Committee, for the payment of compensation to the independent auditor and any advisors employed by the Committee pursuant to the first sentence of this paragraph and the ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties.
The Committee shall report regularly to the Board on its committee meetings. The Committee shall review at least annually the adequacy of this charter and recommend any proposed changes to the Board for approval. The Committee shall publicly disclose its charter and any amendments thereto on the Company’s website and/or as otherwise required by the SEC.
Approved: April 12, 2022