Audit Committee of the Board of
Directors — Charter
Committee is appointed by the Board of Directors to assist the Board in
1. the integrity of
the Corporation's financial statements;
Corporation's compliance with legal and regulatory requirements;
3. the independent
auditor's qualifications and independence; and
4. the performance of
the Corporation's internal audit function and independent auditor.
1. Number. The
Committee shall be comprised of three or more directors as determined by the
2. Independence and Experience.
Each member of the Committee shall meet the independence and experience
requirements of the New York Stock Exchange.
Expert. At least one member of the Committee must be an audit committee
financial expert as defined by the Securities and Exchange Commission.
Service on Other Audit Committees. Committee members shall not simultaneously
serve on the audit committees of more than two other public companies unless
the Board of Directors determines that such simultaneous service would not
impair the ability of the member to serve effectively on the Corporation's
The Committee shall meet at least four times annually, or
more frequently as it determines or circumstances dictate to discharge fully
its responsibilities and duties outlined in this Charter. The Committee will
meet separately, periodically, with management, the director of internal audit,
the director of business ethics and conduct, and the independent auditor in
executive sessions. The Committee may request any officer or employee of the
Corporation or the Corporation'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.
IV. RESPONSIBILITIES AND DUTIES
In meeting its responsibilities, the Committee shall:
Statements and Disclosure Matters
- Meet to
review and discuss with management and the independent auditor the
- annual audited
financial statements, including the specific disclosures under the
"Management's Discussion and Analysis of Financial Condition and
Results of Operations," and recommend to the Board whether the
audited financial statements should be included in the Corporation's Form
- quarterly financial statements
prior to the filing of the Corporation's Form 10-Q, including the
specific disclosures under the "Management's Discussion and Analysis
of Financial Condition and Results of Operations."
2. Discuss with
management and, as appropriate, the independent auditor, the Corporation's earnings
press releases prior to their release to the public, as well as financial
information and earnings guidance provided to analysts and rating agencies.
3. Review and
discuss reports from the independent auditors on
all critical accounting policies and practices to be used;
all alternative treatments of financial information within
generally accepted accounting principles that have been discussed with
management, ramifications of the use of such alternative disclosures and
treatments, and the treatment preferred by the independent auditor; and
written communications between the independent auditor and management, such as
any management letter or schedule of unadjusted differences, and management's
4. Discuss with
management and the independent auditor the effect of regulatory and accounting
initiatives as well as off-balance sheet structures on the Corporation's
5. Prepare the
Audit Committee Report that the Securities and Exchange Commission rules require
be included in the Corporation's annual proxy statement.
disclosures made to the Committee by the Corporation's Chief Executive Officer
and Chief Financial Officer during their certification process for each Form
10-K and Form 10-Q regarding any significant deficiencies or material
weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the Corporation's
ability to record, process, summarize and report financial information and any
fraud involving management or other employees who have a significant role in
the Corporation's internal control over financial reporting.
7. Discuss with
management the Corporation's major financial risk exposures and the steps
management has taken to monitor and control such exposures, including the
Corporation's policies with respect to risk assessment and risk management.
Oversight of the Corporation's Relationship with
- Have the
sole authority to appoint, terminate, or replace the independent auditor,
subject, if applicable, to stockholder ratification. The Committee shall
be directly responsible for the compensation and oversight of the work of
the independent auditor, including resolution of disagreements between
management and the independent auditor regarding financial reporting, for
the purpose of preparing or issuing an audit report or related work. The
independent auditor shall report directly to the Committee.
- Meet with the
independent auditor prior to the audit to discuss the planning and
staffing of the audit. The Committee shall approve, in advance, the
planned scope of the examination of the Corporation’s financial statements
by the independent auditor.
- Review and provide
prior written consent for all auditing services and permitted non-audit
services, including the fees and terms thereof, to be performed for the
Corporation by its independent auditor. The Committee may delegate one or
more designated members of the Committee the authority to grant
pre-approvals required by this Paragraph. The decision of any member to
whom authority is delegated under this Paragraph to pre-approve an
activity shall be presented to the full Committee at its next scheduled
- At least annually,
obtain and review any reports received by the independent auditor
describing the firm's internal quality-control procedures; 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. Also, in order to assess the auditor's
independence, the Committee shall review at least annually all
relationships between the independent auditor and the Corporation.
- Evaluate the
qualifications, performance and independence of the independent auditor,
including considering whether the auditor’s quality controls are adequate
and the provision of permitted non-audit services is compatible with
maintaining the auditor’s independence, and taking into account the
opinions of management and internal auditors. Review and evaluate the lead
partner of the independent auditor team. Assure the regular rotation of
the lead audit partner having primary responsibility for the audit and the
audit partner responsible for reviewing the audit as required by law. The
Committee shall present its conclusions with respect to its evaluation of
the independent auditor to the Board.
- Discuss with the
independent auditor the matters required to be discussed by Statement on
Auditing Standards No. 61, as amended by Statement on Auditing Standards
No. 90, relating to the conduct of the audit, including any problems or
difficulties encountered in the course of the audit work, any restrictions
on the scope of the activities or access to requested information, and any
significant disagreements with management.
- Set clear hiring
policies for employees or former employees of the independent auditor.
- Review and
discuss with the independent auditor and management the responsibilities,
budget, plan, changes in plan, staffing, activities, organizational
structure, and qualifications of the internal audit department, as needed.
- Review the appointment,
performance, and replacement of the director of internal audit.
- Review the regular
reports to the Committee prepared by the internal audit department.
Ethical and Legal Compliance
- the receipt,
retention, and treatment of complaints received by the Corporation
regarding accounting, internal accounting controls or auditing matters
- the confidential,
anonymous submission by employees of the Corporation of concerns
regarding questionable accounting or auditing matters;
and review any
complaints regarding accounting, internal accounting controls or auditing
matters received pursuant to such procedures.
19. Review the
Corporation’s policies and practices related to compliance with the law, code
of business ethics and conduct, and conflicts of interest, to be satisfied that
such policies are adequate and adhered to by the Corporation. Monitor the
status of such compliance through the review of reports from management, legal
counsel and third parties as determined by the Committee.
20. Review, with the
Corporation's General Counsel, any legal matter that could have a significant
impact on the Corporation's financial statements or compliance policies.
Other Responsibilities and Duties
- Conduct an
annual performance evaluation of the Committee and report the results to
- Review and reassess the
adequacy of its charter periodically (at least annually) and recommend any
proposed changes to the Board for approval.
- Report regularly to the
V. OPERATIONS OF THE COMMITTEE
Secretary of the Corporation, or such other person as may be designated by
the Chair of the Committee, shall act as secretary and keep the minutes of
all meetings of the Committee.
- The Committee shall
promptly inform the Board of all actions taken or issues discussed between
Board meetings. This will generally take place at the Board meeting
following a Committee meeting.
- The Committee shall
have the authority, to the extent it deems necessary or appropriate, to
obtain the advice and assistance of independent legal, accounting or other
- The Corporation shall
provide for appropriate funding, as determined by the Committee, for
- compensation to the
independent auditor for the purpose of preparing and issuing an audit
report and performing other audit, review or attestation services for the
- compensation to any
advisors employed by the Committee; and
- ordinary administrative
expenses of the Committee that are necessary or appropriate in carrying
out its duties.
LIMIT ON AUDIT COMMITTEE'S ROLE
While the Committee has the responsibilities and
powers set forth in this Charter, it is not the duty or responsibility of the
Committee to plan or conduct audits or to determine that the Corporation's
financial statements are complete and accurate and are in accordance with
generally accepted accounting principles. These are the responsibility of the
Corporation's management and the independent auditor.
January 31, 2006