Sample Business Contracts

Audit Committee Charter - Cubist Pharmaceuticals Inc.

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                          CUBIST PHARMACEUTICALS, INC.

                             AUDIT COMMITTEE CHARTER


There shall be a committee of the board of directors to be known as the audit
committee (the "Audit Committee"). The Audit Committee shall be composed of
directors who are not officers or employees of the corporation or its
subsidiaries and are free of any relationship that, in the opinion of the
board of directors, would interfere with their exercise of independent
judgment as a committee member. At least three members of the Audit Committee
shall be conversant with the terms and terminology of finance, of which at
least one member shall have accounting or related financial management


The Audit Committee shall provide assistance to the corporate directors in
fulfilling their responsibility to the stockholders, potential stockholders,
and investment community relating to corporate accounting, reporting
practices of the corporation, and the quality and integrity of the financial
reports of the corporation. In so doing, it is the responsibility of the
Audit Committee to maintain free and open means of communication between the
directors, the independent auditors, and the financial management of the
corporation. Independent auditors of the corporation shall be primarily
accountable to the Audit Committee.


The Audit Committee shall meet at least two times annually. The Audit
Committee shall meet periodically with management and the independent
accountants, either in separate executive sessions, to discuss any matters
that the Audit Committee or either of these groups believes should be
discussed privately. The Audit Committee may meet by telephone and may
delegate specific functions to one or more of its members.


In carrying out its responsibilities, the Audit Committee believes its
policies and procedures should remain flexible, in order to best react to
changing conditions and to ensure to the directors and stockholders that the
corporate accounting and reporting practices of the corporation are in
accordance with all requirements and are of the highest quality.


In carrying out these responsibilities, the Audit Committee will:

1.   Review and recommend to the directors the independent auditors, after
     considering their independence and effectiveness, to be selected to
     audit the financial statements of the corporation and its divisions and
     subsidiaries and receive from any potential auditor a written statement
     of all relationships of the auditor to the corporation.

2.   Meet with the independent auditors, with and separately from financial
     management of the corporation to review the scope of the proposed audit
     for the current year and the audit procedures to be utilized, and at the
     conclusion thereof review such audit, including any comments or
     recommendations of the independent auditors.

3.   Obtain satisfaction that the audit fee is appropriate and that the
     corporation will receive a complete and comprehensive audit for such fee.

4.   Review with independent auditors and the corporation's financial and
     accounting personnel the adequacy and effectiveness of the accounting
     and financial controls of the corporation, and elicit any
     recommendations for the improvement of such internal control procedures
     or particular areas where new or more detailed controls or procedures
     are desirable. Particular emphasis should be given to the adequacy of
     such internal controls to expose any payments, transactions, or
     procedures that might be deemed illegal or otherwise improper.

5.   Review the financial statements contained in the annual report to
     stockholders and quarterly reports on Form 10-Q, prior to their
     issuance, with management and the independent auditors to determine that
     the independent auditors are satisfied with the disclosure and content
     of the financial statements to be presented to the stockholders. Any
     changes in accounting principles should be reviewed.

6.   Review separately with each of management and the independent auditors
     any significant disputes between management and the independent auditors
     that arose in connection with the preparation of the financial

7.   Provide sufficient opportunity for the independent auditors to meet with
     the members of the Audit Committee without members of management
     present. Among the items to be discussed in these meetings are the
     independent auditors' evaluation of the corporation's financial,
     accounting, and auditing personnel, and the cooperation that the
     independent auditors received during the course of the audit.

8.   Review the corporation's compliance with law and significant corporate
     policies, including its code of conduct.


9.   Review accounting and financial human resources and succession planning
     within the corporation.

10.  Investigate any matter brought to its attention within the scope of its
     duties, with the power to retain outside counsel for this purpose if, in
     its judgment, that is appropriate.

11.  Review and update this Charter periodically, at least annually, as
     conditions dictate.

12.  Prepare a committee report to the stockholders.