( As amended through March
9, 2005 )
The purpose of the Audit
Committee is to represent and assist the Board of Directors in its oversight of
(1) the integrity of the financial reporting of the Company, (2) the
independence, qualifications and performance of the Company's external auditor
and the performance of the internal auditors and (3) the Company's
compliance with legal and regulatory requirements. The Audit Committee also
prepares the report required by the rules of the Securities and Exchange
Commission to be included in the Company's annual proxy statement.
The Audit Committee
shall consist of at least three members of the Board, and all Audit Committee
members shall satisfy the independence requirements for directors and audit
committee members under the rules of the New York Stock Exchange, as such
requirements are interpreted by the Board in its business judgment. The Board
shall designate one member as Chairman or delegate authority to designate a
Chairman to the Audit Committee. Each member of the Audit Committee shall be financially
literate and at least one member of the Audit Committee shall be an “audit
committee financial expert” as defined by the Securities and Exchange
The Audit Committee
shall have the authority to retain such outside legal, accounting or other
consultants or advisors as it determines appropriate to assist it in the
performance of its functions, or to advise or inform the Committee. The
Committee may also meet with investment bankers and financial analysts. The
Audit Committee may request any officer or employee of the Company or the
Company’s outside counsel or independent auditor to attend a meeting of the
Committee or to meet with any members of, or consultants to, the Committee. The
Company shall provide for appropriate funding, as determined by the Audit
Committee, for payment of compensation to the independent auditor and to any
advisors retained by the Audit Committee.
On behalf of the Board,
the Audit Committee shall, among its duties and responsibilities:
- Review the annual audited
financial statements with management and the independent auditor,
including the Company's disclosures under Management's Discussion and
Analysis of Financial Condition and Results of Operations, significant issues
and judgments regarding accounting and auditing principles and practices,
and the effect of regulatory and accounting initiatives on the Company's
financial statements, and recommend to the Board whether the financial
statements should be included in the Form 10-K. The review of the annual
audited financial statements also includes a review of any transactions as
to which management obtained a letter pursuant to Statement on Auditing
Standards No. 50.
- Review and discuss with
management and the independent auditor the Company's quarterly financial
statements prior to filing the Form 10-Q, including the results of
the independent auditor's review of them and the Company's disclosures
under Management's Discussion and Analysis of Financial Condition and
Results of Operations.
- Review major changes to the
Company's auditing and accounting principles and practices as suggested by
the independent auditor, internal auditors or management.
- Meet periodically with
management to review the Company's major financial and business risk
exposures and the steps management has taken to monitor and control such
- The Audit Committee shall be
directly responsible, in its capacity as a committee of the Board, for the
appointment, compensation, retention and oversight of the work of the
independent auditor. In this regard, the Audit Committee shall appoint and
retain, subject to approval by the Company's shareholders, compensate,
evaluate, and terminate when appropriate, the independent auditor, which
shall report directly to the Audit Committee.
- Preapprove all auditing services and
permitted non-audit services (including the fees and terms thereof) to be
performed for the Company by its independent auditor and establish
policies and procedures for the engagement of the independent auditor to
provide auditing and permitted non-audit services.
- Obtain and review, at least
annually, a report by the independent auditor describing the independent
auditor's internal quality-control procedures, and any material issues
raised by the most recent internal quality-control review, or peer review,
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 independent auditor, and any steps
taken to deal with any such issues.
- Consider at least annually the
independence of the independent auditor, and receive from and discuss with
the independent auditor the auditor's report regarding its independence.
- Meet with the independent
auditor prior to the audit to review the scope and planning of the audit.
- Review with the independent
auditor the results of the annual audit examination, and any issues the
auditor may have encountered in the course of its audit work and
management's response. This review should include, among other things, any
management letter, any restrictions on the scope of activities or access
to required information, and changes required in the planned scope of the
- Discuss with management the
Company’s earnings press releases and corporate policies with respect to
earnings releases and financial information and earnings guidance provided
to analysts and rating agencies.
- Receive reports from the
independent auditor and management regarding, and review the adequacy and
effectiveness of, the Company's internal controls, including any
significant deficiencies in internal controls and significant changes in
such controls reported to the Audit Committee by the independent auditor,
the internal auditor or management. Receive reports from managements
regarding, and review the adequacy and effectiveness of, the Company's
disclosure controls and procedures.
- Review with the independent
auditor and the internal auditor the scope and results of the internal
audit program, including responsibilities and staffing, and review the
appointment and replacement of the vice president of the internal audit
- Review candidates for the
positions of chief financial officer and controller of the Company.
- 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 employees of concerns
regarding questionable accounting or auditing matters.
- Establish policies for hiring
employees and former employees of the independent auditor.
- Advise the Board with respect
to the Company's policies and procedures regarding compliance with applicable
laws and regulations and with the Company's Code of Conduct.
- Review with the Company's
General Counsel and independent auditor (1) legal matters that may
have a material impact on the financial statements, (2) any fraud
involving management or other employees who have a significant role in the
Company's internal controls, (3) compliance policies, and (4) any
material reports or inquiries received from regulators, governmental
agencies or employees that raise material issues regarding the Company's
financial statements and accounting or compliance policies.
- Review this Charter annually
and recommend any changes to the Board for approval.
- Review the Audit Committee’s own performance
The Audit Committee
shall meet at least four times per year, either in person or telephonically,
and at such times and places as the Audit Committee shall determine. The Audit
Committee shall meet with the chief financial officer, the controller, the vice
president of the internal audit department and the independent auditor in
separate executive sessions periodically. The Audit Committeeshall
report its activities to the Board regularly.