2003 Audit Charter: SJM

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(Adopted April 15, 2003)
The audit committee serves as the primary communication link between the Board of
Directors as the representative of the shareholders, on the one hand, and the Company's
independent and internal auditors, on the other hand. It is responsible for providing
effective oversight of the financial reporting process and the Company's financial internal
The committee shall have the following specific responsibilities:
1. appointment (subject to shareholder approval), termination, compensation,
and oversight of the Company's independent auditors and review of the
services performed by them;
2. prior approval of all audit and non-audit services provided by the
independent auditors, as well as the scope of the annual audit plan and the
associated fee schedule of the independent auditors (approval of specific
services may thereafter be delegated to the chair of the committee once the
committee has approved the annual proposal of outside auditors);
3. consult with the independent auditors as necessary each year concerning:
a) their report of audit, or proposed report of audit,
b) their accompanying management letter, if any,
c) their written disclosures regarding the independence of the auditors, and
d) their written report regarding the Company's internal quality control
procedures and material issues raised by such review;
4. consult with the independent auditors periodically throughout the year, as
needed, concerning:
a) the adequacy of the Company's internal controls,
b) the independent auditor's judgment about the quality of the
Company's accounting principles as applied to its financial reporting, and
c) any reportable matters identified during the annual audit or interim
5. review and approve the mission statement of the Company's internal
auditors, their annual internal audit plan, and summaries of their
6. advise and concur with management on the organization of the internal
audit function;
7. set clear hiring policies for employees or former employees of the
independent auditors consistent with Securities and Exchange Commission
("SEC") regulations and New York Stock Exchange ("NYSE") listing
8. have the opportunity on a quarterly basis to meet separately, as needed,
with management, internal auditors, and independent auditors regarding
audit or independent control issues and to meet with, at least annually, the
Company's outside auditors to review any audit problems the independent
auditor encountered in performing its audit work and management's
response thereto which such meeting shall be outside the presence of
Company management or other personnel;
9. review and discuss earnings press releases, as well as financial
information and earnings guidance provided to analysts and ratings agency
(the chair of the committee may represent the committee for purposes of
this review);
10. review the interim financial statements and disclosures under
Management's Discussion and Analysis of Financial Condition and Results
of Operations with management and the independent auditors prior to filing
of the quarterly reports on Form 10-Q (the chair of the committee may
represent the committee for purposes of this review);
11. review with management and the independent auditors the financial
statements and disclosures under Management's Discussion and Analysis
of Financial Condition and Results of Operations to be included in the
Company's Annual Report on Form 10-K, including a review of the quality
of the accounting principles, the reasonableness of significant adjustments,
and the clarity of the disclosures in the financial statements;
12. establish procedures for addressing complaints received by the Company
regarding accounting, internal controls, or other auditing matters, including
adequate procedures to allow for the anonymous submission of such
concerns by employees of the Company;
13. the committee shall regularly review legal and regulatory matters including
compliance with the Company's corporate securities trading policies, with
the Company's General Counsel;
14. prepare a Report of the Audit Committee to be included in the annual proxy
statement, verifying that the annual financial statements have been
reviewed by the committee with management and the independent auditors;
15. at least annually, the committee shall discuss with senior management the
Company's major financial risk exposures and the steps Company
management has taken to monitor and control such exposures;
16. the committee shall receive reports of any violations of the Company's
Policy on Ethics and Conduct by members of the Board, senior
management, or financial officers of the Company; and
17. conduct an annual evaluation of its performance and an annual review and
update, if necessary, of the Audit Committee Charter.
The committee shall meet, in person or via telephonic meeting, at least three times each
year, and shall report to the full Board with respect to its meetings. The committee will
determine the date and primary purpose for each of the regular meetings of the
committee from time to time.
The committee shall be comprised of no fewer than three directors. All members of the
committee shall be independent of the Company's management, shall otherwise be
"independent" under the rules of the NYSE and other applicable rules and regulations,
and shall be free from any relationship that, in the opinion of the Company's Board of
Directors, would interfere with the exercise of independent judgment as a committee
member and members. All committee members shall be financially literate, and at least
one member shall meet the SEC's definition of a "financial expert." At least annually, the
Board shall review and confirm the qualifications of each committee member.
No committee member may simultaneously serve on the audit committee of more than
three public companies (including the Company) unless the Board determines that such
simultaneous service would not impair the ability of such committee member to serve on
the committee and the Company discloses such determination in the Company's proxy
The independent auditor is ultimately accountable to the Board and the committee. The
committee shall have both the right and the obligation to consult with the Company's
independent auditors and its internal auditors outside the presence of management at
such times and in such circumstances as the members of the committee shall deem
The committee shall have appropriate resources and authority to discharge its
responsibilities, including appropriate funding from the Company, in such amounts as the
committee deems necessary, to compensate the independent auditors and any
independent advisors retained by the committee. In performing its duties, the committee
is authorized to investigate any matter brought to its attention with full access to all
books, records, facilities, and personnel of the Company as the committee may deem
necessary or appropriate.
Consistent with NYSE listing requirements, director's fees shall be the sole compensation
paid by the Company to committee members. For purposes of this charter, "director's
fees" includes all forms of compensation paid to directors of the Company for services as
a director or member of a Board committee. The total amount and form of compensation
paid to committee members shall be determined from time to time by the Board in
consultation with the executive compensation committee and otherwise in accordance
with any applicable Company plans or policies.
At least annually, the committee shall (a) review this charter with the Board and
recommend any changes to the Board and (b) evaluate its performance against the
requirements of this charter and review this evaluation with the Board. The evaluation
shall include the goals and objectives of the committee for the upcoming year. The
committee shall conduct its review and evaluation in such manner as it deems