Charter of the Audit Committee of the Board of Directors
2003 Committee Charter : ATO
Adopted April 1, 2003
It is the purpose of the Audit Committee to (a) satisfy itself and the Board of Directors
(i) of the integrity of the Company's financial statements, (ii) that the Company
complies with all legal and regulatory requirements, (iii) that the independent auditors
are qualified and are independent from the Company and (iv) that the Company's
internal audit function and independent auditors are performing satisfactorily; and (b)
prepare the report that rules of the Securities and Exchange Commission (the "SEC")
require be included in the Company's annual proxy statement.
Powers and Duties
A. The Audit Committee shall have the power to perform the following duties, as well as
performing any additional duties as may be directed by the Board of Directors from
time to time:
1. Independent auditors and internal audit function:
independent auditors, the internal audit function and the Board of
auditors of the Company and to have the sole authority to review in
advance, and grant any appropriate pre-approvals of all audit services to be
provided by the independent auditors, all non-audit services to be
provided by the independent auditors that are permitted by applicable law,
and in connection therewith, to approve all fees and other terms of
engagement for both audit and non-audit services.
auditors, including without limitation, the resolution of any disagreements
between management of the Company and the independent auditors
regarding financial reporting and other matters.
Company's quarterly report on Form 10-Q or the annual report on Form
10-K, to receive a report from the independent auditors concerning (i) the
critical accounting policies and practices used by the Company, (ii)
alternative treatments of financial information within generally accepted
accounting principles that have been discussed with management of the
Company, the ramifications of the use of such treatments in the Company's
financial statements and the treatments preferred by the independent
auditors, (iii) a review of all other material communications between the
Company and the independent auditors, and (iv) a review of the
Company's disclosures under "Management's Discussion and Analysis of
Financial Condition and Results of Operations."
written statement delineating all relationships between the independent
auditors and the Company and to investigate any disclosed relationships or
services that could possibly impact the objectivity and independence of the
independent auditors, including, if necessary, recommending to the Board
of Directors that it take appropriate action to satisfy itself of the
independence of the independent auditors.
written statement 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 actions taken by the firm to address such issues.
annual basis that the lead, coordinating or concurring audit partner of the
independent auditors, who has primary responsibility for the audit or who
is responsible for reviewing the audit, has not performed audit services for
the Company during time periods that are prohibited under current SEC
rules and regulations and NYSE listing standards.
auditors and the firm performing the internal audit function to discuss, in
addition to any matters deemed appropriate by the Audit Committee, (i)
any disagreement that may have arisen in connection with the preparation
of the Company's financial statements, or related disclosures therein, (ii)
with respect to the independent auditors, any difficulties encountered
during the course of the annual audit or quarterly reviews, including any
restrictions placed by management on the scope of the independent
auditors' activities, access to requested information or disagreements with
management, and (iii) with respect to the internal audit function, the
responsibilities, budget and staffing as well as any difficulties encountered
during the course of any internal audit project, including any restrictions
placed by management on the scope of the internal auditors' activities,
access to requested information or disagreements with management.
with respect to the reports of the independent auditors, internal audit
function and management as the Audit Committee deems necessary or
appropriate, including without limitation, the discussion of any disclosures
in the Company's financial statements, the Company's compliance with
legal and regulatory requirements or the performance of the independent
auditors or the internal audit function.
independent auditors that are consistent with applicable law, the rules and
regulations of the SEC and the listing standards of the New York Stock
2. Other Activities
or annual report on Form 10-K with the SEC, a report from the Chief
Executive Officer and the Chief Financial Officer of the Company
concerning (i) any significant deficiencies in the design or operation of
internal controls that could adversely impact the Company's ability to
process and report financial data, (ii) any material weaknesses in the
Company's internal controls that they have identified for the independent
auditors, and (iii) any fraud, whether or not material, that involves
management or other employees who have a significant role in the
Company's internal controls.
are required to be included in any reports to be filed under the Securities
Exchange Act of 1934.
of the internal audit function and to evaluate the quality of performance of
the internal audit function.
Company's procedures and guidelines for releasing financial information
to the public through earnings releases as well as providing earnings
guidance and other financial information to analysts, rating agencies and
other third parties.
risk exposures and the actions that management has taken to monitor and
control such exposures, including discussion of guidelines and policies that
govern such actions and assessment of the insurance coverage associated
with such risk exposures.
Company employees of concerns or complaints regarding questionable
accounting, internal controls or auditing matters and the treatment and
retention of such concerns or complaints.
legal advisors, that the Audit Committee determines is necessary to carry
out its duties, as well as review and approve the fees and expenses charged
to the Company by such advisors.
Company to the Audit Committee, at least annually, in connection with the
Audit Committee's payment of compensation to the independent auditors
and other advisors engaged by the Audit Committee.
B. The power and authority of the Audit Committee is subject to the provisions of the
Texas Business Corporation Act, the Virginia Stock Corporation Act, the Company's
Articles of Incorporation and Bylaws, applicable federal securities laws, the rules and
regulations of the SEC and the listing standards of the NYSE.
A. The Audit Committee shall be comprised of three to six members of the Board of
Directors, each of whom shall satisfy the independence, financial literacy and
experience requirements of the Exchange Act and the listing standards of the NYSE.
The members of the Audit Committee and its Chairman shall be appointed annually
by the Board of Directors. Members of the Audit Committee shall receive no fees or
other remuneration from the Company other than directors' fees.
B. Vacancies in the membership of the Audit Committee shall be filled by the Board of
C. No member of the Audit Committee may serve on the audit committee of more than
two other public companies, unless the Board of Directors determines that such
simultaneous service does not impair such director's effectiveness.
D. At least one member of the Audit Committee shall possess the qualifications to be
deemed an "audit committee financial expert," as such term is defined by SEC rules
and regulations. The Board of Directors shall make such determination annually at the
time of its appointment of the members of the Audit Committee.
A. The Audit Committee shall meet as required, upon the call of the Chairman of the
Audit Committee. A majority of the Audit Committee members shall constitute a
quorum for the transaction of business.
B. The Chairman of the Audit Committee shall prepare a written agenda in advance of
each meeting of the Audit Committee. The Audit Committee shall keep regular
minutes of its meetings and shall report its actions to the full Board at the next Board
meeting. The Secretary of the Board of Directors will serve as Secretary for the Audit