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    Lionbridge Technologies, Inc.
    Audit Committee Charter

    As of July 28, 2011

     I. PURPOSE AND SCOPE 

    The purpose of the Audit Committee is to assist the Board of Directors’ oversight in ensuring the following:

    • integrity of the Company’s financial statements;
    • Company’s compliance with legal and regulatory requirements;
    • adequacy of the Company’s internal financial and accounting controls;
    • independence, qualifications, and compensation of the independent auditor which the Audit Committee has engaged;
    • performance of the Company’s independent auditor, internal audit function, and internal financial and accounting controls; and
    • inclusion of the audit committee report with the Company’s annual proxy statement, as required by the Securities and Exchange Commission (“SEC”) proxy rules. 

     II. STRUCTURE AND MEMBERSHIP COMPOSITION 

    1.  Number.  The Audit Committee shall consist of at least three members of, and as appointed by, the Board of Directors.
    2.  Independence.  Except as otherwise permitted by the applicable rules of NASDAQ Stock Market, Inc. (“NASDAQ”) and/or the SEC, each member of the Audit Committee shall be independent as defined by such rules.
    3.  Financial Literacy.  Each member of the Audit Committee must be able to read and understand fundamental financial statements.  At least one member of the Audit Committee must have finance or accounting, requisite professional certification in accounting, or other comparable experience or background resulting in financial sophistication, as the Company’s Board of Directors interprets such qualification in its business judgment.  Unless otherwise determined by the Board of Directors (in which case disclosure of such determination shall be made in the Company’s annual report filed with the SEC), at least one member of the Audit Committee shall be an “audit committee financial expert” as defined by the applicable SEC rules. 
    4.  Chair.  Unless a Chair is elected by the Board of Directors, the Audit Committee shall elect a Chair by majority vote.
    5.  Compensation.  The compensation of Audit Committee members shall be as determined by the Board of Directors.   However, no member of the Audit Committee may receive, directly or indirectly, any consulting, advisory or other compensatory fee from the Company or any of its subsidiaries, other than fees paid in his or her capacity as a member of the Board of Directors or any committee thereof.
    6.  Nomination and Elimination.  Members of the Audit Committee shall be elected by the Board of Directors.  If the Board of Directors determines that membership on the Audit Committee by an individual who does not meet the independence requirements is in the best interest of the Company and its shareholders, they may apply to the SEC and NASDAQ for an exemption.  If exemption is granted, the Board of Directors shall disclose this in the next following proxy statement including a description on the nature of the relationship and any reasons for the exemption.
      Members shall serve until their successors are duly elected and qualified or until their earlier resignation or removal. 
      The Board of Directors may remove members of the Audit Committee from such committee, with or without cause.

     III. AUTHORITY AND RESPONSIBILITIES 

     A. Overview  

    The Audit Committee shall discharge its responsibilities, and shall assess the information provided by the Company’s management and the independent auditor, in accordance with its business judgment.  Management is responsible for the preparation, presentation, and integrity of the Company’s financial statements and for the appropriateness of the accounting principles and reporting policies used by the Company.  The independent auditors are responsible for auditing the Company’s financial statements and for reviewing the Company’s unaudited interim financial statements.  The authority and responsibilities set forth in this Charter do not reflect or create any duty or obligation of the Audit Committee to plan or conduct any audit; to determine or certify that the Company’s financial statements are complete, accurate, fairly presented, in accordance with generally accepted accounting principles (“GAAP”) or applicable law; nor to guarantee the independent auditor’s report.

     B. Oversight of Independent Auditors  

    1.  Selection.  The Audit Committee shall be directly responsible and have the sole authority for appointing, compensating, overseeing and evaluating, retaining, and, when warranted, terminating the engagement of the independent auditor.
    2.  Independence.  On an annual basis the Audit Committee will receive from the independent auditor a formal written statement identifying all relationships between the independent auditor and the Company, consistent with Public Company Accounting Oversight Board (“PCAOB”) Rule 3526, Communication with Audit Committees Concerning Independence, the Audit Committee’s responsibility to actively engage in a dialogue with the independent auditor regarding any disclosed relationships or services that may impact the objectivity and independence of the auditor and for taking, or recommending that the full Board of Directors take, appropriate action to oversee the independence of the outside auditor.
    3.  Compensation.  The Audit Committee shall be directly responsible for setting the compensation of the independent auditor and is empowered, without further action by the Board of Directors, to cause the Company to pay the compensation of the independent auditor established by the Audit Committee.
    4.  Services Preapproval.  The Audit Committee shall preapprove all audit services, as well as all other services (review, attest, and non-audit) to be provided to the Company by the independent auditor; provided, however, that de minimis non-audit services may instead be approved in accordance with applicable NASDAQ and SEC rules.  To the extent permitted by these rules, and consistent with their requirements, the Audit Committee may delegate to one or more members of the Audit Committee the authority to grant approvals of permitted non-audit services; provided, however, that any approvals granted under such delegation of authority be disclosed to the Audit Committee at the next regularly scheduled meeting thereof. 
    5.  Oversight.  The independent auditor shall report directly to the Audit Committee, and the Audit Committee shall be directly responsible for the oversight of the independent auditor’s work, including resolution of disagreements between Company management and the independent auditor regarding financial reporting, for the purpose of preparing or issuing an audit report or performing other audit, review, or attestation services for the Company.  In this role the Audit Committee shall, as appropriate, perform the following: 

    • Receive and consider reports required to be made by the independent auditor regarding:
      • critical accounting policies and practices;
      • alternative treatments within GAAP for policies and practices related to material items that have been discussed with Company management, including ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the independent auditor; and
      • other material written communications between the independent auditor and Company management.
    • Review with the independent auditor:
      • significant matters regarding internal controls over financial reporting that have come to the attention of:
        • the independent auditor during the course of its audit, review, or attestation services and any particular audit steps adopted in light thereof and
        •  the Audit Committee pertaining to the adequacy said internal controls;
      • analyses prepared by management and/or the independent auditor which sets forth significant financial reporting issues and/or judgments made in connection with the financial statements’ preparation, including analyses of the effects of alternative GAAP methods on said financial statements;
      • the effect of regulatory and/or accounting initiatives, as well as off-balance sheet structures, on the financial statements; and
      • any accounting adjustments that were noted or proposed by the auditor but were passed on as immaterial or otherwise. 

     C. Audited Financial Statements and Reviewed Interim Financial Statements  

    1.  Independent Auditor Review of Interim Financial Statements.  The Audit Committee shall direct the independent auditor to use its best efforts to perform all reviews of interim financial information prior to disclosure by the Company of such information and to discuss promptly with the Audit Committee and CFO any matters identified in connection with the auditor’s review of interim financial information, which are required to be discussed by applicable auditing standards.  The Audit Committee shall direct management to advise the Audit Committee in the event that the Company proposes to disclose interim financial information.
    2.  Review and Discussion.  The Audit Committee shall review and discuss with the Company’s management and independent auditor the Company's audited financial statements, including reviewing the Company’s specific disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, and matters required to be discussed as per Statement on Auditing Standards No. 61 (Codification of Statements on Auditing Standards, AU §380) prior to their filing as part of the Annual Report on Form 10-K.  The Audit Committee shall also perform the same for the Company’s quarterly financial statements prior to their filing as part of the SEC filing on Form 10-Q.
    3.  Recommendation to Board of Directors.  The Audit Committee shall consider whether it will recommend to the Board of Directors that the Company’s audited financial statements be included in the Company’s annual report on Form 10-K.
    4.  Audit Committee Report.  The Audit Committee shall prepare, in accordance with the rules of the SEC, a written audit committee report for inclusion in the Company’s annual proxy statement for its annual meeting of stockholders.

     D. Controls and Procedures  

    1.  Oversight.  The Audit Committee shall coordinate the Board of Directors’ oversight of the Company’s internal controls over financial reporting, the Company’s disclosure controls and procedures, and the Company’s code of business conduct and ethics.  The Audit Committee shall receive and review disclosures by the Company’s CEO and CFO, as required by the Sarbanes-Oxley Act §302 (and applicable rules there under) and Rules 13a-14 of the Securities Exchange Act, about any significant deficiencies or material weaknesses in the design or operation of internal controls over financial reporting and any fraud involving management or other employees having a significant role in the Company’s internal controls.
    2.  Internal Audit Function.  The Audit Committee shall coordinate the Board of Directors’ oversight of the Company’s internal audit function by discussing with the independent auditor and management (i) the internal audit function’s performance, charter, staffing, budget, and annual audit plan (and any significant modifications, thereof) and (ii) management’s assessments to the adequacy of the Company’s system of internal procedures and controls over financial reporting.
    3.  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, and/or auditing matters, including confidential, anonymous submissions by employees regarding questionable accounting or auditing matters.  The Audit Committee Chair shall be responsible for retaining and reviewing all such complaints and, where appropriate, convene a meeting of the full Audit Committee to investigate and act on a complaint. 

     E. Related Party Transactions  

    The Audit Committee shall review and approve policies and procedures between the Company and its officers, directors, affiliates of officers and directors or other related parties termed as a “Related Person Transaction” which requires disclosure in the Company's filings with the SEC pursuant to Item 404 of Regulation S-K (a “Related Person Transaction”).  The Audit Committee shall consider the facts and circumstances regarding such transactions, including, but not limited to, amounts involved (and whether the transaction amount exceeds $120,000), the relationship of the related person (and those persons identified in the instructions to Item 404(a) of Regulation S-K) with the Company, and terms that would be available in a similar transaction with an unaffiliated third-party.  The Audit Committee shall also consider its fiduciary duties, the Company's obligations under applicable securities law (including disclosure obligations and director independence rules), and any other applicable law in evaluating a Related Person Transaction.  The Audit Committee shall then report its determination regarding such transactions to the full Board of Directors at its next regularly scheduled meeting.

     IV. ADMINISTRATION 

    1.  Meetings.  The Audit Committee shall meet as often as it deems necessary, with no fewer than four times per annum, in order to perform its responsibilities.  The Audit Committee may also act by unanimous written consent in lieu of a meeting.
    2.  Charter.  Annually, the Audit Committee shall review and reassess the adequacy of this Charter and update it where necessary.
    3.  Subcommittees.  The Audit Committee may form and delegate authority to one or more subcommittees (which may consist of a single member), as it deems appropriate and warranted under the circumstances in compliance with applicable SEC rules.  Any decision of a subcommittee to pre-approve audit, review, attestation, or non-audit services shall be presented to the full Audit Committee at its next scheduled meeting.
    4.  Independent Advisors.  The Audit Committee is authorized, without further action by the Board of Directors, to engage independent legal, accounting, and/or other advisors, as it deems necessary or appropriate to carry out its responsibilities.  Such independent advisors may be the regular advisors to the Company.  Where the Audit Committee has engaged in communications with legal counsel in the course of obtaining legal advice, such communications will be considered privileged communications of the Company, and the Audit Committee will take all necessary steps to preserve the privileged nature of those communications.
    5.  Interaction with Independent Auditors and Executive Sessions.  The Audit Committee shall meet with the independent auditor prior to the audit in order to review planning and staffing of the audit.  Additionally, the Audit Committee will meet separately in executive session with the independent auditor (at which time the Audit Committee may also request the presence of representatives of the Company’s management) to discuss matters that the Audit Committee believes should be discussed privately with said parties.  The Audit Committee may also hold executive session solely with representatives of the Company’s management.
    6.  Access and Investigations.  The Audit Committee shall have access to the Company’s books, records, facilities, and personnel and the authority to conduct or authorize investigations into any matters within the scope of its responsibilities as it deems appropriate.  This authority includes the right to request any officer, employee, or advisor of the Company to meet with the Audit Committee or any advisors they have directly engaged.  The Audit Committee may have other such duties as so delegated by the Board of Directors.
    7.  Funding.  The Audit Committee is empowered, without further action by the Board of Directors, to cause the Company to pay the ordinary administrative expenses of the Audit Committee that are necessary or appropriate in carrying out its duties and to pay the compensation of any independent advisors established by the Audit Committee.