HYSTER-YALE MATERIALS HANDLING, INC.
AUDIT REVIEW COMMITTEE CHARTER
The purposes of the Hyster Yale Materials Handling, Inc. Audit Review Committee are to (a)
assist the Hyster-Yale Materials Handling, Inc.’s (the “Company”) Board of Directors in fulfilling its
oversight responsibilities with respect to (i) the integrity of the Company’s financial statements, (ii) the
Company and its subsidiaries’ compliance with legal and regulatory requirements, (iii) the qualifications
and independence of any firm designated by the Company as the independent auditor of the consolidated
financial statements of the Company and its subsidiaries (the “independent auditor”) and (iv) the
performance of the independent auditors and the Company’s internal audit function; (b) oversee the
Company’s Corporate Compliance Program and (c) prepare the Committee’s report, made pursuant to the
Securities Exchange Act of 1934 (the “Exchange Act”), to be included in the Company’s annual proxy
statement (the “Audit Review Committee Report”).
Composition of the Committee
Number. The Committee shall consist of no fewer than three members.
Qualifications. Each Committee member shall have all of the following qualifications:
- Each Committee member shall meet the independence criteria of (a) the listing
standards of the New York Stock Exchange, Inc. (“NYSE”), as such requirements are
interpreted by the Board of Directors in its business judgment and as set forth in the
Company’s Corporate Governance Guidelines, and (b) Section 301 of the Sarbanes-
Oxley Act of 2002 (the “Sarbanes-Oxley Act”) and the rules and listing requirements
promulgated thereunder by the Securities and Exchange Commission (“SEC”),
including Rule 10A-3 of the Exchange Act, and the NYSE.
- Each Committee member shall be financially literate or shall become financially
literate within a reasonable period of time after his or her appointment to the
Committee. Additionally, at least one member of the Committee shall have
accounting or related financial management expertise sufficient to meet the criteria of
a financial expert within the meaning of Section 407 of the Sarbanes-Oxley Act and
any rules promulgated thereunder by the SEC. The Board of Directors shall
determine, in its business judgment, whether a member is financially literate and
whether at least one member has the requisite accounting or financial management
expertise. The Board of Directors will also determine whether one or more members
of the Committee meets the financial expert criteria of Section 407 of the Sarbanes-
Oxley Act and any rules promulgated thereunder by the SEC and if so, identify at least
one of such members. The designation or identification of a person as an audit
committee financial expert shall not (a) impose on such person any duties, obligations
or liability that are greater than the duties, obligations and liability imposed on such
person as a member of the Committee and Board of Directors in the absence of such
designation or identification, or (b) affect the duties, obligations or liability of any
other member of the Committee or Board of Directors.
- Each Committee member shall receive as compensation from the Company only those
forms of compensation that are not prohibited by Section 301 of the Sarbanes-Oxley
Act and the rules and listing requirements promulgated thereunder by the SEC and the
NYSE. Permitted compensation includes directors’ fees (which includes all forms of
compensation paid to directors of the Company for service as a director or member of
a Board Committee).
- If a Committee member simultaneously serves on the audit committee of more than
three public companies (including the Company), the Board of Directors must
determine that such simultaneous service would not impair the ability of such member
to effectively serve on the Committee. The Company shall disclose any such
determination in its annual proxy statement.
Appointment. The Board of Directors will appoint the members and the Chairman of the
Committee. Committee members shall serve at the pleasure of the Board of Directors and for such term
or terms as the Board of Directors may determine.
Duties and Responsibilities of the Committee
The Committee is responsible for overseeing the Company’s financial reporting process on behalf
of the Board of Directors. Management is responsible for the preparation, presentation and integrity of
the Company’s financial statements and for the appropriateness of the accounting and reporting policies
that are used by the Company. The independent auditors are responsible for auditing the Company’s
financial statements and for reviewing the Company’s interim financial statements.
The Committee is directly responsible for the appointment, compensation, retention and oversight
of the work of the Company’s independent auditors (including resolution of disagreements between
management and the independent auditors regarding financial reporting) for the purpose of preparing or
issuing an audit report or performing other audit, review or attest services for the Company.
In performing its responsibilities, the Committee shall:
- Retain the Independent Auditors. The Committee has the sole authority to
(a) retain and terminate the Company’s independent auditors, (b) approve all audit
engagement fees, terms and services, and (c) approve any non-audit services with the
Company’s independent auditors, subject to the following. The Committee will
exercise this authority in a manner consistent with Sections 201, 202 and 301 of the
Sarbanes-Oxley Act and the rules and listing standards promulgated thereunder by the
SEC and the NYSE. The Committee may delegate the authority to grant any preapprovals
required by such sections to one or more members of the Committee that it
designates, subject to the delegated member or members reporting any such preapprovals
to the Committee at its next scheduled meeting.
- Review and Discuss the Independent Auditors’ Quality-Control. At least
annually, the Committee will obtain and review a report by the independent auditors
describing (a) the audit firm’s internal quality-control procedures and (b) any material
issues raised by the most recent internal quality-control review, or peer review, of the
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.
- Review and Discuss the Independence of the Independent Auditors. In connection
with the retention of the Company’s independent auditors, at least annually the
Committee will review and discuss the information provided by management and the
independent auditors relating to the independence of the audit firm, including, among other things, information related to the non-audit services provided and expected to be
provided by the independent auditors. The Committee is responsible for (a) ensuring
that the independent auditors submit at least annually to the Committee a formal
written statement delineating all relationships between the independent auditors and
the Company consistent with applicable independence standards, (b) actively engaging
in a dialogue with the independent auditors with respect to any disclosed relationship
or services that may impact the objectivity and independence of the independent
auditors and (c) taking appropriate action in response to the independent auditors’
report to satisfy itself of the independent auditors’ independence. In connection with
the Committee’s evaluation of the independent auditors’ independence, the Committee
shall also take such steps as may be required by law with respect to the identification
and regular rotation of the audit partners serving on the Company’s audit engagement
- Evaluation of Independent Auditor. At least annually, the Committee will evaluate
the independent auditor’s qualifications, performance and independence. This
evaluation should include the review and evaluation of the lead partner of the
independent auditor and the audit team in general.
- Set Hiring Policies. The Committee will set hiring policies for employees or former
employees of the independent auditors, which include the restrictions set forth in
Section 206 of the Sarbanes-Oxley Act and any rules promulgated thereunder by the
- Review and Discuss the Audit Plan. The Committee will review and discuss with
the independent auditors the plans for, and the scope of, the annual audit and other
- Review and Discuss Conduct of the Audit. The Committee will review and discuss
with the independent auditors the matters required to be discussed by applicable auditing standards and SEC requirements relating to the conduct of the audit, as well as any audit
problems or difficulties and management’s response, including (a) any restriction on
audit scope or on access to requested information, (b) any disagreements with
management, and (c) significant issues discussed with the independent auditors’
national office. The Committee will decide all unresolved disagreements between
management and the independent auditors regarding financial reporting.
- Review and Discuss Financial Statements and Disclosures. The Committee will
review and discuss with appropriate officers of the Company and the independent
auditors the annual audited and quarterly financial statements of the Company,
including (a) the Company’s disclosures under “Management’s Discussion and
Analysis of Financial Condition and Results of Operations,” and (b) the disclosures
regarding internal controls and other matters required by Sections 302 and 404 of the
Sarbanes-Oxley Act and any rules promulgated thereunder by the SEC
- Discuss Financial Information. The Committee will discuss in general from time to
time the types of information to be disclosed and the types of presentations to be made
with respect to the Company’s earnings releases and other financial news releases as
well as other financial information and earnings guidance, if any, to be disclosed by
the Company. In addition, the Committee will review and discuss earnings news
releases prior to distribution.
- Review and Discuss Internal Audit Plans. The Committee will review and discuss
with the Director of Internal Audit the plans for and the scope of the ongoing audit
activities of the internal audit department.
- Review and Discuss Internal Audit Reports. The Committee will review and
discuss with the Director of Internal Audit the annual report of audit activities,
examinations and the results thereof of the internal audit department.
- Review and Discuss the Systems of Internal Accounting Controls. The Committee
will review and discuss with the independent auditors, the Director of Internal Audit
and other appropriate officers of the Company the adequacy of the Company’s internal
accounting controls, the Company’s financial, auditing and accounting organizations
and personnel, and the Company’s policies and compliance procedures with respect to
business practices which shall include (a) the disclosures regarding internal controls
and matters required by Sections 302 and 404 of the Sarbanes-Oxley Act and any rules
promulgated thereunder by the SEC, and (b) a review with the independent auditors of
their opinion on the effectiveness of management’s assessment of internal controls
over financial reporting and the independent auditor’s analysis of matters requiring
modification to management’s certifications pursuant to Section 302 of the Sarbanes-
- Review and Discuss the Recommendations of Independent Auditors. The
Committee will review and discuss with the Director of Internal Audit
recommendations made by the independent auditors and the Director of Internal
Audit, as well as such other matters, if any, as such persons or other officers of the
Company may bring to the attention of the Committee.
- Review and Discuss the Audit Results. The Committee will review and discuss with
the independent auditors (a) the report of their annual audit, or proposed report of their
annual audit, (b) the accompanying management letter, if any, (c) the reports of their
reviews of the Company’s interim financial statements conducted in accordance with
applicable auditing standards and (d) the reports of the results of such other
examinations outside of the course of the independent auditors’ normal audit
procedures that the independent auditors may from time to time undertake. The
foregoing shall include the reports required by Section 204 of the Sarbanes-Oxley Act
and any rules promulgated thereunder by the SEC and, as appropriate, a review of
(a) major issues regarding (i) accounting principles and financial statement
presentations, including any significant changes in the Company’s selection or
application of accounting principles, and (ii) the adequacy of the Company’s internal
controls and any special audit steps adopted in light of material control deficiencies;
(b) analyses prepared by management and/or the independent auditors setting forth
significant financial reporting issues and judgments made in connection with the
preparation of the financial statements, including analyses of the effects of alternative
GAAP methods on the financial statements; and (c) the effect of regulatory and
accounting initiatives, as well as off-balance sheet structures, on the financial
statements of the Company.
- Obtain Assurances under Section 10A(b) of the Exchange Act. The Committee
will obtain assurance from the independent auditors that in the course of conducting
the audit, there have been no acts detected or that have otherwise come to the attention
of the audit firm that require disclosure to the Committee under Section 10A(b) of the
- Discuss Risk Management Policies. The Committee will discuss guidelines and
policies with respect to financial risk assessment and financial risk management to
assess and manage the Company’s financial risk exposures.
- Obtain Reports Regarding Conformity With Legal Requirements and the
Company’s Code of Corporate Conduct. The Committee will periodically obtain
reports from management and the Director of Internal Audit that the Company and its
subsidiary/foreign affiliated entities are in conformity with applicable legal
requirements and the Company’s Code of Corporate Conduct. The Committee will
charge the independent auditor to report to the Committee regarding any failure by the
Company and its subsidiary/foreign affiliated entities to be in conformity with
applicable legal requirements and the Company’s Code of Corporate Conduct. The
Committee should advise the Board of Directors with respect to the Company’s
policies and procedures regarding compliance with applicable laws and regulations
and with the Company’s Code of Corporate Conduct.
- Review Possible Dualities of Interest and Conflicts of Interest. The Committee
will consider possible dualities of interest and conflicts of interest of directors and
management and make recommendations to address any such duality of interest or
conflict of interest. The Board of Directors will cause the Company to disclose any
waiver of the Company’s conflict of interest policy for a director or executive officer
to the extent required by law and the Company’s Code of Corporate Conduct.
- Related Person Transactions. The Committee will review all relationships and
transactions in which the Company and its directors and executive officers or their
immediate family members are participants to determine whether such persons have a
direct or indirect material interest. The Company’s legal department is primarily
responsible for the development and implementation of processes and controls to
obtain information from the directors and executive officers with respect to related
person transactions in order to enable the Committee to determine, based on the facts
and circumstances, whether the Company or a related person has a direct or indirect
material interest in the transaction. In the course of its review of a potentially material
related person transaction, the Committee will consider:
- the nature of the related person’s interest in the transaction;
- the material terms of the transaction, including, without limitation, the amount and
type of transaction;
- the importance of the transaction to the related person;
- the importance of the transaction to the Company;
- whether the transaction would impair the judgment of a director or executive
officer to act in the best interest of the Company; and
- any other matters the Committee deems appropriate.
Based on this review, the Committee will determine whether to approve or ratify any
transaction which is directly or indirectly material to the Company or a related person.
Any member of the Committee who is a related person with respect to a transaction
under review may not participate in the deliberations or vote respecting approval or
ratification of the transaction; however, such director may be counted in determining
the presence of a quorum at a meeting of the Committee that considers the transaction.
- Establish Procedures for Complaints Regarding Financial Statements or
Accounting Policies. The Committee will establish procedures for (a) the receipt,
retention, and treatment of complaints received by the Company regarding accounting,
internal accounting controls, or auditing matters; and (b) the confidential, anonymous
submission by employees of the Company and its subsidiaries of concerns regarding questionable accounting or auditing matters as required by Section 301 of the
Sarbanes-Oxley Act and the rules and listing requirements promulgated thereunder by
the SEC and the NYSE.
- Discuss With General Counsel Matters Regarding Financial Statements or
Compliance Policies. The Committee should discuss with the Company’s General
Counsel legal matters that may have a material impact on the financial statements or
the Company’s compliance policies.
- Review and Discuss Other Matters. The Committee should review and discuss such
other matters that relate to the accounting, auditing and financial reporting practices
and procedures of the Company as the Committee may, in its own discretion, deem
desirable in connection with the review functions described above.
- Make Board Reports. The Committee should report its activities regularly to the
Board of Directors in such manner and at such times as the Committee and the Board
of Directors deem appropriate, but in no event less than once a year. Such report
should include a review of any issues that arise with respect to the quality or integrity
of the Company's financial statements, the Company’s compliance with legal or
regulatory requirements, the performance and independence of the Company’s
independent auditors and the performance of the internal audit function.
- Adapt to Changing Conditions and Circumstances. The Committee, in carrying
out its responsibilities, policies and procedures should continually review its activities
to ensure that it adapts to changing conditions and circumstances.
Meetings of the Committee
The Committee shall meet in person or telephonically at least four times annually, or more
frequently as it may determine necessary, to comply with its responsibilities as set forth herein. The
Chairman of the Committee shall, in consultation with the other members of the Committee, the
Company’s independent auditors and the appropriate officers of the Company, be responsible for calling
meetings of the Committee, establishing agenda therefor and supervising the conduct thereof. The
Committee may also take any action permitted hereunder by unanimous written consent.
The Committee may request any officer or employee of the Company or the Company’s outside
legal counsel or independent auditors to attend a meeting of the Committee or to meet with any members
of, or consultants to, the Committee. The Committee shall meet with the Company’s management, the
internal auditors and the independent auditors periodically in separate private sessions to discuss any
matter that the Committee, management, the independent auditors or such other persons believe should be
Consistent with applicable laws, rules and regulations, the Committee may, in its discretion,
delegate all or a portion of its duties and responsibilities to one or more subcommittees of the Committee.
Resources and Authority of the Committee
The Committee shall have the resources and authority appropriate to discharge its responsibilities
as required by law, including the authority to engage independent counsel and other advisors as the
Committee deems necessary to carry out its duties.
The Company will provide for appropriate funding, as determined by the Committee, for payment
of (a) compensation to the Company’s independent auditors engaged for the purpose of rendering or issuing an audit report or related work or performing other audit, review or attest services for the
Company, (b) compensation to independent counsel or any other advisors employed by the Committee,
and (c) ordinary administrative expenses of the Committee that are necessary or appropriate in carrying
out its duties.
Audit Review Committee Report
The Committee will prepare, with the assistance of management, the independent auditors and
outside legal counsel, the Audit Review Committee Report.
Annual Performance Evaluation
The Committee will conduct and review with the Board of Directors annually an evaluation of the
Committee’s performance with respect to the requirements of this Charter. This evaluation should also
set forth the goals and objectives of the Committee for the upcoming year. The Committee may conduct
this performance evaluation in such manner as the Committee, in its business judgment, deems
Annual Review of Charter
The Committee will conduct and review with the Board of Directors annually an evaluation of
this Charter and recommend any changes to the Board of Directors. The Committee may conduct this
Charter evaluation in such manner as the Committee, in its business judgment, deems appropriate.
Disclosure of Charter
Consistent with the listing standards of the New York Stock Exchange, this Charter is included on
the Company’s website and is available upon request in writing sent to the Secretary of the Company.
The Company’s annual report to stockholders states that this Charter is available on the Company’s
website and is available upon request in writing sent to the Secretary of the Company.