2003 Audit Charter: CLX

AUDIT COMMITTEE CHARTER

PURPOSE AND AUTHORITY

The Audit Committee is established by the Board of Directors ("Board") for the purposes of:

1. assisting the Board in overseeing the:

  • integrity of the Company's financial statements,

  • independent auditor's qualifications and independence,

  • performance of the Company's internal audit function and independent auditor,

  • Company's system of disclosure controls and system of internal controls regarding finance, accounting, legal compliance and ethics that management and the Board have established,

  • Company's compliance with legal and regulatory requirements; and

    2. preparing the report required by the Securities and Exchange Commission ("SEC") proxy rules to be included in the Company's annual proxy statement.


    The Audit Committee will report regularly to the Board regarding its execution of its duties and responsibilities.

    The Audit Committee is empowered to obtain advice and assistance from outside legal, accounting or other advisors, and to fully investigate any matter brought to its attention, as deemed appropriate to perform its duties and responsibilities. The Company shall provide appropriate funding, as determined by the Audit Committee, for the Audit Committee's administrative expenses, and for compensation to the independent auditor and to any advisors that the Audit Committee chooses to engage.

    This charter shall be reviewed and updated annually. Additionally, the Audit Committee will perform an annual assessment of its performance relative to the purpose, duties and responsibilities outlined herein.

    COMPOSITION AND MEETINGS

    The membership of the Audit Committee shall consist of at least three directors, as determined by the Board, who are generally knowledgeable in financial and auditing matters. Each member shall be an independent director (as defined by all applicable rules and regulations), and free of any relationship that, in the opinion of the Board, would interfere with his or her individual exercise of independent judgement. The Board should determine whether at least one member of the Committee qualifies as an "Audit Committee financial expert" in compliance with the criteria established by the SEC for purposes of making appropriate disclosures in periodic filings as required by the SEC.

    The Committee will meet at least four times annually. As part such meetings, the Committee will meet, at least annually, with management, the Vice President of Internal Audit and the independent auditors in private executive sessions. Additionally, the Committee will meet quarterly with the independent auditors and management to discuss the annual and quarterly financial statements, including the Company's disclosures under "Management's Discussion and Analysis of Financial Condition and Results of Operations", quality of earnings, reserves and accruals, suitability of accounting principles, highly judgmental areas, audit adjustments, whether or not recorded, and such other areas of inquiry as may be appropriate, and to recommend to the Board whether the audited financial statements should be included in the Annual Report on Form 10-K.

    Responsibilities

    The Audit Committee's primary responsibilities include:

    Information Released to the Public: Discuss with management and the independent auditors the general nature of information to be disclosed and the type of presentation to be made in earnings press releases, and in financial information and earnings guidance provided to analysts and rating agencies.

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    Independent Auditors:

  • Appoint, retain, compensate and oversee the work performed by the independent auditor for the purpose of preparing or issuing an audit report or related work. The independent auditor shall report directly to the Audit Committee, and the Committee has the ultimate authority and responsibility to evaluate the performance of the independent auditor and, where appropriate, terminate the independent auditor. The Audit Committee has responsibility for resolution of disagreements between management and the independent auditors in the event that they arise. The Audit Committee will consider and approve, in advance, any audit and permissible non-audit services to be performed by the independent auditor (other than those de minimus exceptions permitted by the Sarbanes-Oxley Act of 2002), with applicable reporting in periodic reports required by Section 13(a) of the Securities Exchange Act of 1934.

  • At least annually, obtain and review a report by the independent auditor describing: the firm's internal quality control procedures; any material issues raised by the most recent internal quality control review, peer review, or any inquiry or investigation by any governmental or professional authorities within the last 5 years, and the firm's actions to address such issues; the qualifications of the audit team members performing the work; and all relationships between the independent auditor and the Company, including the auditor's written affirmation that the auditor is in fact independent.

  • Hold timely discussions with the independent auditor regarding:

    any problems or difficulties encountered during the audit and management's response, including any restrictions on the scope of the independent auditor's activities or on access to requested information and any significant disagreements with management;

    critical accounting policies and practices, including alternative treatments within generally accepted accounting principles, ramifications of using such alternative treatments, and the auditor's conclusions about the treatment selected by the Company;

    other reports of the independent auditor, including the auditor's attestation on management's internal control report, management letter and schedule of unadjusted audit differences.

  • Set hiring policies for employees or former employees of the independent auditors.

    n Internal Audit: Oversee the internal audit function, including:

  • Reviewing and advising management on the selection and retention of the vice president of internal audit.

  • Review internal audit activities, including budget, staffing, scope and results of work performed.

    n Financial Reporting Processes: In consultation with the independent auditor and internal auditors, review:

  • The Company's financial reporting processes and internal control structure.

  • Analysis prepared by management regarding significant financial reporting issues, accounting principles, judgments and estimates, off-balance sheet structures and taxation matters.

  • Significant related party transactions.

  • The effect of pending and newly implemented regulatory and accounting initiatives related to the Company's financial statements.

    n Compliance and Risk Management: Review management's practices to identify, manage and monitor compliance with applicable government and regulatory requirements, including:

  • Discussion with management of the status of pending litigation, taxation matters, environmental issues and other areas of oversight to the legal and compliance area as may be appropriate.

  • Oversight of compliance with the Company's Code of Business Conduct, including periodically reviewing and updating the Code, and evaluating management's activities to monitor compliance with the Code.

  • Discussion of policies with respect to risk assessment and risk management.

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    Anonymous Reporting: Establish and maintain procedures for the confidential, anonymous submission by Company employees regarding questionable accounting or auditing matters. Maintain procedures to receive, retain and address complaints regarding accounting, internal controls or auditing matters.

    Qualified Legal Compliance Committee: Act as the Company's Qualified Legal Compliance Committee, to review matters raised by the Company's attorneys with respect to material violations of federal or state securities law, fiduciary duties or similar federal or state law (as defined in Title 17, Chapter 2 of the Code of the Federal Regulations, Part 205.2 (k)) by the Company, its officers, directors, employees or agents, with the appropriate authority and responsibility as set forth in the regulations:

  • To receive, retain and consider any report of evidence of a material violation under the regulations, and to inform the Company's general counsel and chief executive officer of any such reports, as required;

  • To determine whether an investigation is necessary and, if so, to notify the Board of Directors and initiate an investigation, with retention of additional expert personnel as deemed necessary; and

  • At the conclusion of any such investigation, to inform the general counsel, chief executive officer and the Board of Directors of the Committee's recommended Company response to address the evidence noted, along with any other recommended actions (as determined by a majority vote of the Committee), including the authority to notify the SEC in the event that the Company fails, in any material respect, to implement an appropriate response that the Committee has recommended the Company to take.

    Other Responsibilities: Perform other activities consistent with this Charter, the Company's bylaws and governing law, as the Committee or the Board deems necessary or appropriate.