Astronics Corp. in East Aurora has been notified that its audit committee fails to meet Nasdaq standards for independence, the company said Friday.
The breach could trigger a delisting of Astronics shares later this week, but an appeal will be filed that automatically stays the delisting, the company said.
"As a result of an internal review, we became aware that one of our (independent) board members . . . did not meet the requirements for independence for the audit committee," chairman Kevin T. Keane said in a statement.
Under corporate governance rules enacted since the Enron scandal, companies must have fully independent directors on their audit committee, which appoints and oversees corporate financial watchdogs.
Director John B. Drenning, a partner in the law firm Hodgson Russ, doesn't meet the standard for audit committee membership because his firm does legal work for Astronics, corporate secretary David C. Burney said.
The company looks to add a new board member later this year or early in 2005 who does meet the requirement, he said.
Besides Drenning, the audit committee is made up of Robert T. Brady, president of Moog Inc., and Robert J. McKenna, president of Wenger Corp., according to filings with the U.S. Securities and Exchange Commission.
Notification of the possible delisting by Nasdaq came Nov. 2, after an internal review uncovered the problem, Burney said.
On Monday, the first day of trading after the announcement, the shares fell 2 cents to $5 per share. Astronics makes aircraft lighting and electronics for military and business jets as well as for commercial transport aircraft.