Audit Committee Charter

 

 

PERRIGO COMPANY PLC

AUDIT COMMITTEE CHARTER

Purpose

The primary purpose of the Audit Committee is to assist the Board of Directors of Perrigo Company plc (the "Company") in fulfilling its responsibility of monitoring:

• the Company’s accounting and financial reporting principles and policies;

• the integrity of the Company's financial statements and the independent audit thereof;

• the Company’s compliance with legal and regulatory requirements;

• the qualifications, independence and performance of the Company’s independent registered public accounting firm;

• the qualifications and performance of the Company’s internal audit function, including any such services that are outsourced; and

• the Company’s internal control over financial reporting.

In addition, the Audit Committee shall review and approve a report each year for inclusion in the Company’s proxy statement.

Composition of the Audit Committee

The Audit Committee shall be comprised of at least three directors, each of whom shall meet the independence and experience requirements of the New York Stock Exchange, Section 10A(m)(3) and Rule 10A-3 of the Securities Exchange Act of 1934 (the "Exchange Act") and the rules and regulations of the Securities and Exchange Commission ("SEC").

Accordingly, all of the members of the Audit Committee shall be directors who are able to read and understand fundamental financial statements. In addition, at least one member of the Audit Committee shall have past employment experience in finance or accounting, requisite professional certification in accounting, or any other comparable experience or background that results in financial sophistication. The Board shall determine whether at least one member of the Audit Committee qualifies as an "audit committee financial expert" as defined by the SEC.

Audit Committee members shall not simultaneously serve on the audit committees of more than two other public companies.

Meetings of the Audit Committee

The Audit Committee shall:

1. meet with management four times annually (more frequently if circumstances dictate) to discuss the annual audited financial statements and quarterly financial results;

2. meet separately with management, the internal auditors and the independent registered public accounting firm to discuss any matters that the Audit Committee or any of these persons believe should be discussed privately (at least annually);

3. be permitted to request that any officer or employee of the Company, the Company’s outside counsel or independent registered public accounting firm attend a meeting of the Audit Committee or meet with any members of, or consultants to, the Audit Committee; and

4. be permitted to conduct its meetings by means of a conference call or similar communications equipment in which all persons participating in the meeting can hear each other.

Audit Committee Authority and Responsibilities

Generally

1. The Audit Committee shall have the sole authority to appoint or replace the Company’s independent registered public accounting firm. The Audit Committee shall be directly responsible for the compensation and oversight of the work of the independent registered public accounting firm for the purpose of preparing or issuing an audit report or related work, including the resolution of any disagreements between management and the independent registered public accounting firm regarding financial reporting. The independent registered public accounting firm is ultimately accountable to, and shall report directly to, the Audit Committee. The Company shall provide appropriate funding, as determined by the Audit Committee, for payment of compensation to the independent registered public accounting firm for the purpose of rendering or issuing an audit report and for ordinary administrative expenses of the Audit Committee that are necessary or appropriate in carrying out its duties.

2. The Audit Committee shall maintain a policy pursuant to which it reviews and preapproves audit and permitted non-audit services (including the fees and terms thereof) to be provided to the Company by the independent registered public accounting firm, subject to the de minimis exceptions for non-audit services described in Section 10A(i)(1)(B) of the Exchange Act that are approved by the Audit Committee prior to the completion of the audit. The Chair of the Audit Committee, or any other member or members designated by the Audit Committee, shall be authorized to pre-approve audit and permitted non-audit services, provided

that any pre-approval shall be reported to the full Audit Committee at its next scheduled meeting.

3. The Audit Committee shall review and approve the report of the Audit Committee required by the SEC to be included in the Company’s annual proxy statement.

4. The Audit Committee shall have sole authority over all aspects of the Company’s internal audit function.

5. The Audit Committee shall review its performance and this Charter at least annually and recommend any changes to the full Board of Directors.

6. The Audit Committee shall have the authority to review and approve decisions by the Company to enter into swap transactions, including but not limited to, swaps that are exempt from Sections 2(h)(1) (Clearing Requirement) and 2(h)(8) (Trade Execution) of the Commodity Exchange Act ("exempt swaps"); and shall report periodically, but not less than annually, to the Board of Directors regarding its policies and procedures with respect to the review and approval of the Company's decisions to enter into swap transactions, including exempt swaps.

7. The Audit Committee shall report its activities to the full Board of Directors on a regular basis and make such recommendations with respect to the matters addressed in this Charter and other matters as the Audit Committee may deem necessary or appropriate.

8. The Audit Committee shall perform such other functions as assigned by law, the Company’s Articles of Association, or the Board.

9. Subject to the provisions of the Companies Acts 1963-2012 (the "Acts") relating to the fixing of the compensation of the independent auditor, the Committee shall exercise sole authority to appoint, terminate and compensate the independent auditor, which shall report directly to the Committee.

Financial Statement and Disclosure Matters

The Audit Committee, to the extent it deems necessary or appropriate, shall:

1. review the annual audited financial statements and quarterly financial statements with the independent registered public accounting firm and with Company management, including reviewing disclosures under "Management’s Discussion and Analysis of Financial Condition and Results of Operations";

2. review earnings releases, as well as financial information and earnings guidance provided to analysts and rating agencies;

3. advise management and the independent registered public accounting firm that they are expected to provide to the Audit Committee a timely analysis of significant financial reporting issues and practices;

4. review with the independent registered public accounting firm the matters required under current auditing standards relating to the conduct of the audit;

5. review with the independent registered public accounting firm any audit problems or difficulties and management’s responses;

6. consider any reports or communications (and management’s responses thereto) submitted to the Audit Committee by the independent registered public accounting firm;

7. review any disclosures made to the Audit Committee by the Company's CEO and CFO during the certification process for Forms 10-K and 10-Q about any significant deficiencies in the design or operation of internal controls or material weaknesses therein and any corrective actions taken, and any fraud involving management or other employees who have a significant role in the Company’s internal controls;

8. recommend to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K;

9. review the form of opinion the independent registered public accounting firm proposes to render to the Board of Directors and shareholders;

10. inquire of management and the independent registered public accounting firm regarding significant risks or exposures and assess the steps management has taken to minimize such risks to the Company, and discuss policies with respect to risk assessment and risk management;

11. review significant changes to the Company’s auditing and accounting principles, policies, controls, procedures and practices proposed or contemplated by the independent registered public accounting firm or management;

12. obtain from the independent registered public accounting firm assurance that the audit was conducted in a manner consistent with Section 10A(b) of the Exchange Act, which sets forth certain procedures to be followed in any audit of financial statements required under the Exchange Act;

13. review and discuss with the independent registered public accounting firm

 

PCAOB Auditing Standards No. 16, Communicating with Audit Committee: and

14. review with the Company's General Counsel any significant legal or regulatory matters and compliance policies that may have a material effect on the financial statements, including material notices to or inquiries received from governmental agencies.

The Company's Relationship with its Independent Registered Public Accounting Firm

The Audit Committee, to the extent it deems necessary or appropriate, shall:

1. require that the independent registered public accounting firm annually prepare and deliver a Statement (consistent with PCAOB Ethics and Independence Rule 3526) as to their independence and take appropriate action if the independence of the outside auditor is in question;

2. at least annually, receive and review a report by the independent registered public accounting firm describing the firm’s internal quality-control procedures and any material issues raised by the most recent internal quality-control review, peer review or PCAOB review, of the independent auditing firm, 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 firm, and any steps taken to deal with any such issues;

3. at least annually, evaluate and report to the Board regarding the Audit Committee’s assessment of the independent registered public accounting firm’s qualifications, performance (including the lead partner) and independence, taking into account the opinions of management and the internal auditors and considering whether the auditor’s quality controls are adequate and the provision of permitted non-audit services is compatible with maintaining the auditor's independence;

4. monitor the regular rotation of the audit partners as required by law; and

5. set clear policies compliant with applicable laws or regulations for hiring employees or former employees of the independent registered public accounting firm.

Internal Audit Function

The Audit Committee, to the extent it deems necessary or appropriate, shall:

1. review the budget and internal audit plan of the Company’s internal audit function; and

2. review the progress and results of the internal audit projects.

Internal Control Over Financial Reporting

Annually, the Audit Committee shall review the report prepared by management assessing the effectiveness of the Company’s internal control over financial reporting and stating managements’ responsibility for establishing and maintaining adequate internal control over financial reporting prior to its inclusion in the Company’s annual report.

Procedures for Complaints

The Audit Committee shall 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 questionable accounting or auditing matters.

Resources and Authority of the Audit Committee

The Audit Committee shall have the resources and authority appropriate to discharge its responsibilities, including the authority to engage independent auditors for special audits, reviews and other procedures and to retain independent counsel and other advisors. The Company shall provide appropriate funding, as determined by the Audit Committee, for payment of compensation to any advisors employed by the Audit Committee.

Limitation of the Role of the Audit Committee

The Audit Committee has the authority and responsibilities described in this Charter. Management is responsible for the preparation, presentation and integrity of the Company’s financial statements; maintenance of appropriate accounting and financial reporting principles and policies; and maintenance of internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. The independent auditor is responsible for planning and carrying out proper audits and reviews. Each member of the Audit Committee shall be entitled to rely on (i) the integrity of those persons and organizations within the Company and outside the Company that it receives information from and (ii) the accuracy of information provided to the Audit Committee by such persons or organizations (absent actual knowledge to the contrary).

This Charter was adopted October 21, 2013 and amended through April 29, 2014.