2004 Committee Charter : LXKMISSION STATEMENT
The mission of the Finance and Audit Committee ("the Committee") is to
assist the Board of Directors ("the Board") in fulfilling its oversight
responsibilities with respect to:
1. the systems of internal controls which management has established;
2. the integrity and transparency of the Company's financial
3. the Company's compliance with legal and regulatory requirements;
4. the Company's policies related to risk assessment and risk
5. the independent auditors' qualifications and independence;
6. the performance of the independent auditors' and the Company's
internal audit functions; and
7. the Company's financial strategy and policies, capital structure,
share repurchase and dividend policy and capital expenditures.
In performing its duties, the Committee will maintain effective working
relationships with the Board, and oversight of the independent auditors, the
internal auditors, and the financial management of the Company. The independent
auditors shall be ultimately accountable to the Committee, and the Committee
shall have the ultimate authority and responsibility for their appointment,
compensation and to assess their performance. To effectively perform his or her
role, each Committee member will obtain an understanding of the responsibilities
of Committee membership as well as the Company's business operations and risks.
The members of the Committee will be appointed by the Board. The Committee
shall be composed solely of Directors who are "independent" of management and
the Company, as defined by the listing requirements of the New York Stock
Exchange. A Director who does not meet certain of these requirements may be
appointed to the Committee if the Board, under exceptional and limited
circumstances, determines that membership on the Committee by the individual is
required for the best interests of the Company and its stockholders and an
exemption from the Securities and Exchange Commission independence requirements
exists. There shall be at least three Directors on the Committee each of whom,
as determined by the Board, shall be financially literate and at least one
member of the Committee shall be an "audit committee financial expert" as
defined by the SEC. No Committee member shall simultaneously serve on the audit
committees of more than two other public companies, unless the Board of
Directors determines that such service would not impair the member's ability to
effectively serve on the Committee.
The Committee shall meet at least four times per year or more frequently as
circumstances require. The Committee may ask members of management or others to
attend the meetings and provide pertinent information as necessary.
It is the overriding responsibility of the Committee to oversee management,
the independent auditors and the internal auditors. It is the responsibility of
management to ensure that adequate internal controls are in place and that
financial reports are completed in conformity with accounting principles
generally accepted in the United States of America ("GAAP"). The responsibility
of the Committee is one of oversight and due diligence.
- Periodically review management's actions to set the appropriate "control
culture" by communicating the importance of internal control and
management of risk.
- Review with management, the independent auditors, the Company's director
of internal audit, and financial and accounting personnel, the adequacy
and effectiveness of the accounting and financial controls of the
Company, and elicit any recommendations for improvement.
- Review the controls and processes implemented by management relating to
the financial statements and the underlying financial systems, and the
relevant standards and requirements applicable thereto.
- Gain an understanding of the current areas of greatest financial risk and
how the management monitors and controls such exposures.
- Review significant accounting and reporting issues, including recent
professional and regulatory pronouncements, and understand their impact
on financial reporting.
- Review the scope of the proposed independent audit for the current year
and the audit procedures to be utilized.
- Review the annual financial statements and the results of the audit
performed in conjunction with such statements. Review the Company's
disclosures in 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 Company's Form
10-K. Provide all information necessary for compliance with the reporting
requirements of the Securities and Exchange Commission and the New York
- Discuss with the independent auditors (a) all critical accounting
policies and practices to be used and any changes in accounting policies,
(b) all alternative treatments of financial information within GAAP that
have been discussed with management, the ramifications of such
alternative disclosures and treatments, and the accounting treatment
"preferred" by the independent accountants and (c) any other material
written communications with management, such as a management letter or
schedule of unadjusted differences. Discuss with the independent auditors
the matters relating to the conduct of the annual audit and quarterly
reviews that are required to be raised by the independent accountants
under generally accepted auditing standards, including any audit or
review problems, difficulties or issues with management and management's
response thereto and the independent auditors judgment about the quality
of the Company's accounting principles as applied in its financial
- Discuss with management, independent auditors and internal auditors the
substance and quality of reserves, judgments, and estimates used in the
financial statements, and the issues that may have an impact on such
reserves and estimates.
- Discuss earnings press releases and quarterly filings, as well as
financial information and earnings guidance provided to analysts and
rating agencies with management and the independent auditors on a timely
- Review the activities, resources and organizational structure of the
internal audit department.
- Review and concur in the appointment, promotion, reassignment or
dismissal of the director of internal audit.
- Review the proposed internal audit plan for the coming year with a view
toward addressing key areas of risk and appropriate coordination with the
- Review the results of completed internal audits and significant
deviations from the internal audit plan.
- Review significant findings and recommendations made by the internal
auditors and management's proposed response and subsequent actions.
- Periodically review the appointment, compensation, retention, dismissal,
and oversight of the work by the independent auditors, and report on all
such matters to the Board.
- Discuss with the independent auditors the scope of their annual audit,
key risk areas, how the audit plans responds to the risk of financial
statement fraud, and approves modifications to the annual audit plan.
- 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, 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; and (to assess the auditor's
independence) all relationships between the independent auditor and the
- Ensure the receipt from the independent auditor on a periodic basis of a
formal written statement delineating all relationships between the
independent auditor and the Company (consistent with Independence
Standards Board Standard 1) that may impact their objectivity and
independence and actively engage in a dialogue with the independent
auditor with respect to any disclosed relationship or services being
performed by the independent auditor that may impact their objectivity
and independence. After considering the disclosed relationships and
whether the provision of the services is compatible with maintaining the
independent auditor's independence, if necessary, take, or recommend that
the Board take, appropriate action in response to such disclosure to
satisfy itself of the independent auditor's independence.
- In connection with the independent auditors annual audit plan review and
pre-approve all audit (including statutory audits, comfort letters, etc.)
and non-audit services and fees planned to be provided, and approve in
advance any additional audit and non-audit services and fees proposed to
be provided from time to time.
COMPLIANCE AND RISK
- Discuss policies with respect to risk assessment and risk management.
- Understand the major legal and compliance risks facing the Company, how
management addresses those risks, what impact the risks have on the
financial statements, and how management monitors for emerging risks.
- Periodically review the results of the Company's employee compliance
assessment of its Code of Business Conduct and report to the Board.
- Periodically review with management environmental compliance policies,
programs and significant matters.
- Review with management and the independent auditors any correspondence
with regulators or governmental agencies and any employee complaints or
published reports which raise material issues regarding the Company's
financial statements or accounting policies.
FINANCE RELATED AREAS
- Review with management and make recommendations to the Board related to
the following areas:
- The Company's financing strategy
- Debt and equity financings
- The global corporate legal and tax structure
- Share repurchases
- Dividend policy
- Status and results of major capital projects
- Provide an open environment of communication among the internal auditors,
the independent auditors and the Board of Directors.
- Meet, as required, with the director of internal audit, the independent
auditors, and management in separate executive sessions to discuss any
matters that the Committee or these groups believe should be discussed
privately with the Committee.
- Establish procedures for receipt, retention, and treatment of complaints
received by the Company regarding accounting, internal accounting
controls, or auditing matters, including anonymous submissions by
- If the Committee determines it to be appropriate, institute special
investigations and/or hire and direct special counsel, experts or
advisors at the expense of the Company.
- On an annual basis, review and reassess the adequacy of the Committee's
charter and, if necessary, recommend changes to the Corporate Governance
and Public Policy Committee.
- Perform an annual performance evaluation of the Committee.
- Maintain minutes or other records of meetings and activities of the
- Report Committee actions to the Board with such recommendations as the
Committee may deem appropriate.
- Review and approve in advance the employment by the Company of any
employee or former employee of the independent auditors who worked on the
Company's account at any time during the three year period prior to such
employment; provided, however, that the Committee shall not approve the
Company's employment of any employee or former employee of the
independent auditors who performed audit, review or attest services
within the one year period prior to employment by the Company.
While the Committee has the responsibilities and powers set forth in this
charter, it is not the duty of the Committee to plan or conduct audits or to
determine that the Company's financial statements are complete and accurate and
are in accordance with accounting principles generally accepted in the United
States of America. Nor is it the duty of the Committee to conduct investigations
or to assure compliance by the Company and the independent auditors with laws
and regulations and their policies and procedure.