2003 Audit Charter: DL

Current Charter
(June 2003)
corpsec\committee\audit\Audit Charter-0603.doc
CHARTER
AUDIT COMMITTEE
Role and Purpose
The Audit Committee of the Board of Directors (the "Committee") of the Dial Corporation
(the "Corporation") assists the Board in fulfilling its responsibility for oversight of the quality
and integrity of the accounting, auditing and financial reporting practices of the Corporation
and such other duties as directed by the Board. The Committee's purposes include assisting
the Board's oversight of the integrity of the Corporation's financial statements, the
Corporation's compliance with legal and regulatory requirements, the independent auditors'
qualifications, independence and performance, and the performance of the Corporation's
internal audit function, and preparing the report required by the rules of the Securities and
Exchange Commission (the "SEC") for inclusion in the annual proxy statement.
Independence and Qualifications
The Committee shall consist of at least three Directors, independent of management and free
of any relationship that, in the opinion of the Board, would interfere with his or her
individual exercise of independent judgment. Each member shall be qualified to serve on the
Committee pursuant to the requirements of the New York Stock Exchange (the "NYSE") and
the Sarbanes - Oxley Act of 2002 (the "Act") and the rules and regulations of the SEC
thereunder.
No director may be a member of the Committee if he or she serves on the audit committee of
more than two other public companies, unless the Board determines that such simultaneous
service wo uld not impair his or her ability to effectively serve on the Committee.
Committee members shall be generally knowledgeable in financial and auditing matters, with
at least one member having accounting or related financial management expertise. Further,
either (i) at least one member shall be an "Audit Committee financial expert", as such term is
defined in the rules and regulations promulgated by the SEC pursuant to the Act, or (ii) if no
member of the Committee is an "Audit Committee financial expert", the Committee shall so
inform the Corporation.
Members shall be recommended by the Chairman of the Board, submitted for nomination by
the Governance Committee and elected annually to one-year terms by majority vote of the
Board. Any vacancy on the Committee shall be filled by majority vote of the Board at its
next meeting following the occurrence of the vacancy. No member shall be removed except
by majority vote of the directors who are independent under any applicable rules and
regulations of the NYSE and the SEC. The chairperson of the Committee shall be designated
by the Board, but if the Board does not designate a chairperson, the Committee, by a majority
vote, may do so.
The Dial Corporation
Charter Audit Committee
Page 2
corpsec\committee\audit\Audit Charter-0603.doc
Meetings
The Committee will meet at least quarterly. In addition, the Committee chairperson may
hold other meetings at such times and places as deemed necessary. The Committee, in its
discretion, may ask members of management or others to attend its meetings (or portions
thereof) and to provide pertinent information as necessary. A majority of the members of the
Committee shall constitute a quorum. The Committee shall maintain minutes of its meetings
and records relating to those meetings and provide copies of such minutes to the Board.
The Committee may form subcommittees for any purpose that it deems appropriate and may
delegate thereto such power and authority as it deems appropriate, but no subcommittee shall
consist of fewer than two members, and the Committee shall not delegate any power or
authority required by any law, regulation or listing standard to be exercised by the Committee
as a whole or by a greater number of members.
Responsibilities
  • Retaining, compensating, evaluating and, when circumstances warrant, replacing the
    Corporation's independent auditors (subject, if applicable and if the Committee so
    desires, to the input of management). The Committee shall recommend to shareholders
    the ratification of the Corporation's independent auditors. The independent auditors shall
    report directly to the Committee.
  • Approving the independent auditors' annual engagement letter, including the proposed
    fees contained therein, as well as all audit and all permitted non-audit engagements and
    relationships. Approval of audit and permitted non-audit services may also be made by
    one or more designated members of the Committee, who shall report any such approvals
    to the Committee at its next scheduled meeting.
  • Reviewing at least annually a report from the independent auditors describing its internal
    quality-control procedures; any material issues raised by its most recent internal qualitycontrol
    review, or peer review, or by any inquiry or investigation by any governmental or
    professional authority, within the preceding five years, respecting any audit that it has
    carried out, and steps taken to deal with any such issues; and all relationships between the
    independent auditors and the Corporation.
  • Reviewing with management and the independent auditors critical accounting policies
    and such other accounting policies of the Corporation as are deemed appropriate for
    review by the Committee prior to any interim or year-end financial filings with the SEC
    or other regulatory body, including any financial reporting issues which could have a
    material impact on its financial statements; major issues regarding accounting principles
    and financial statements presentations, including any significant changes in the selection
    or application of accounting principles and any analyses prepared by management and/or
    the independent auditors setting forth significant financial reporting issues and judgments
    made in connection with the preparation of the financial statements, including analyses of
    the ramifications and effects of alternative methods under GAAP on the financial
    The Dial Corporation
    Charter Audit Committee
    Page 3
    corpsec\committee\audit\Audit Charter-0603.doc
    statements; all alternative treatments within GAAP for policies and practices related to
    material items discussed by the independent auditors and management, ramifications of
    the use thereof, and the treatment preferred by the independent auditors; all other material
    written communications between the independent auditors and management, such as any
    management letter or schedule of unadjusted differences; and the effect of regulatory and
    accounting initiatives, as well as any off-balance sheet structures, on the financial
    statements of the Corporation.
  • Reviewing with management, the Corporation's independent auditors and, if appropriate,
    the Vice President-Internal Audit each quarterly and annual report to be filed with the
    SEC, including both financial and non- financial information (including the MD&A),
    prior to filing (these discussions shall focus on the quality of earnings, including the
    suitability of accounting principles, the review of estimates, reserves and accruals and
    other areas requiring management judgment and audit adjustments).
  • Reviewing with management and the independent auditors the Corporation's earnings
    press releases prior to their issuance (especially the use of "pro forma" or "adjusted"
    information not prepared in compliance with GAAP).
  • At least annually, reviewing in a general manner the financial information and earnings
    guidance provided by the Corporation to analysts and rating agencies.
  • Providing guidance and oversight to the Corporation's internal audit function, including
    through inquiry and discussions with the independent auditors and management and by
    formally approving the annual internal audit plan (including the budget therefor and
    staffing thereof) and the Internal Audit Charter, and reviewing the results of internal audit
    activities. The Committee will review and concur in the appointment, dismissal and
    compensation of the Vice President-Internal Audit.
  • Reviewing the adequacy and effectiveness of the Corporation's internal controls,
    including the annual report prepared by management, as required by the SEC, assessing
    the effectiveness of the Corporation's internal control structure and procedures for
    financial reporting prior to its inclusion in the Corporation's annual report, and any
    special audit steps adopted in light of the discovery of material control deficiencies.
  • Reviewing with the chief executive officer, the chief financial officer and, to the extent
    financial information and controls are involved, the independent auditors, the matters that
    are the subject of those officers' certifications pursuant to the Act (including the design
    and effectiveness of the Corporation's disclosure controls and procedures).
  • Conducting regular private sessions with management, the internal auditors and the
    independent auditors.
  • Reviewing on a regular basis with the independent auditors any problems or difficulties
    they encountered during their audit work, including management's response thereto, any
    The Dial Corporation
    Charter Audit Committee
    Page 4
    corpsec\committee\audit\Audit Charter-0603.doc
    restrictions on the scope of their activities or access to requested information, and any
    significant disagreements with management.
  • Resolving all significant disagreements between the Corporation's independent auditors
    and management regarding financial reporting.
  • Discussing policies with respect to risk assessment and risk management.
  • Issuing a summary report (including appropriate oversight conclusions) suitable for
    submission to the shareholders as required by rules of the SEC.
  • Reporting regularly to the Board on: the Committee's activities, as appropriate; any
    issues concerning the quality or integrity of the Corporation's financial statements, the
    Corporation's compliance with legal or regulatory requirements or the performance of the
    internal audit function; its conclusions (taking into account the opinions of management
    and the internal auditors) regarding the performance, qualifications and independence of
    the independent auditors.
  • Establishing clear policies regarding hiring of employees or former employees of the
    independent auditors and monitoring compliance by the Corporation and the independent
    auditors with the conflict of interest requirements contained in the Act and the rules and
    regulations of the SEC thereunder.
  • Meeting at least annually with the general counsel, and outside counsel when appropriate,
    to review legal and regulatory matters, including any matters that may have a material
    impact on the financial statements of the Corporation.
  • Reviewing past or proposed transactions between the Corporation and management as
    well as policies and procedures with respect to officers' expense accounts and
    perquisites, including the use of corporate assets.
  • Reviewing the Corporation's program to monitor compliance with the Corporation's
    Code of Ethics & Business Responsibilities (the "Code"), and meeting periodically with
    the Corporation's Compliance Officer to discuss compliance with the Code as it relates to
    financial and accounting matters.
  • Establishing procedures for (i) the receipt, retention and treatment of complaints received
    by the Corporation regarding accounting, internal accounting controls or auditing matters,
    and (ii) the confidential, anonymous submission by employees of the Corporation of
    concerns regarding questionable accounting or auditing matters and reviewing the nature
    and resolution of such complaints or concerns reported to the Committee.
  • Securing, at the Corporation's expense, independent expert advice to the extent the
    Committee determines appropriate, including by retaining independent counsel,
    accountants, consultants or others.
    The Dial Corporation
    Charter Audit Committee
    Page 5
    corpsec\committee\audit\Audit Charter-0603.doc
  • As needed, but at least annually, reviewing the adequacy of the Committee's charter and
    recommending any changes to the Board for approval.
  • Preparing and reviewing with the Board an annual performance evaluation of the
    Committee, which evaluation will compare the Committee's performance with the
    requirements of this charter. The report to the Board may take the form of an oral report
    by the chairperson or any other member designated by the Committee.
  • Performing such additional activities, and considering such other matters, within the
    scope of its responsibilities, as the Committee or the Board deems necessary or
    appropriate.