CHARTER FOR THE AUDIT AND FINANCE COMMITTEE

Function and Purpose

      The purposes of the Audit and Finance Committee are to:

 

 

 

 

(1) 

Assist with Board oversight of (i) the integrity of the Company’s financial statements, (ii) the Company’s compliance with legal and regulatory requirements, (iii) the independent public accountants’ qualifications and independence, and (iv) the performance of the independent public accountants and the Company’s internal audit function; and

 

 

 

 

(2) 

prepare the report required to be prepared by the audit committee pursuant to the rules of the SEC for inclusion in the Company’s annual proxy statement.

      The Audit and Finance Committee shall aid the Board of Directors in undertaking and fulfilling its responsibilities for financial reporting to the public, shall provide oversight, shall provide support for management’s efforts to enhance the quality of the Company’s controls and shall work to provide appropriate avenues of communication between the Board of Directors and the Company’s external and internal auditors. In addition, the Committee shall review the financial policies, plans and structure of the Company.

Composition and Term

      The Committee shall be a Committee of the Board comprised exclusively of at least three (3) independent non-management directors each of whom the Board has determined has (i) no material relationship with the Company; (ii) is otherwise “independent” under the Rules of the New York Stock Exchange and Rule 10A-3 under the Securities Exchange Act of 1934; and (iii) is “financially literate.” At least one member of the Audit and Finance Committee must have “accounting or related financial management expertise,” as such qualifications are interpreted by the Board of Directors in its business judgment. The Board shall endeavor to have at least one member of the Audit and Finance Committee who is an “audit committee financial expert,” as defined by the rules of Securities and Exchange Commission (the “SEC”). If the Board has determined that a member of the Audit and Finance Committee is an audit committee financial expert, it may presume that such member has accounting or related financial management expertise.

      No director may serve as a member of the Audit and Finance Committee if such director serves on the audit committees of more than two other public companies unless the Board of Directors determines that such simultaneous service would not impair the ability of such director to effectively serve on the Audit and Finance Committee, and discloses this determination in the Company’s annual proxy statement.

      The Committee members shall be appointed for one year terms at the annual meeting of the Board, upon the recommendation of the Compensation, Nominating and Governance Committee. The chairman shall be designated by the Board.

Administrative Matters

      The Committee shall meet at such times and from time to time as it deems to be appropriate, but not less than four times each year. The Committee shall report to the full Board of Directors at the first Board meeting following each such Committee meeting.

      The Committee shall provide the internal and external auditors, the Chief Financial Officer and General Counsel with appropriate opportunities to meet privately with the Committee at each regularly scheduled meeting. Prior to the public release of quarterly and annual earnings, such public release, as well as any financial information and earnings guidance provided to analysts and ratings agencies, shall be reviewed either with the Chairman of the Committee or if the Chairman is unavailable, with another committee member designated by the Committee or the Chairman.

      The Audit and Finance Committee shall have the resources and authority appropriate to discharge its duties and responsibilities, including the authority to select, retain, terminate, and approve the fees and other retention terms of special or independent counsel, accountants or other experts and advisors, as it deems necessary or appropriate, without seeking approval of the Board or management.

      The Company shall provide for appropriate funding, as determined by the Audit and Finance Committee, in its capacity as a committee of the Board, for payment of:

 

 

 

 

(1) 

Compensation to the independent public accountant and any other public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company;

 

 

 

 

(2) 

Compensation of any advisers employed by the Audit and Finance Committee; and

 

 

 

 

(3) 

Ordinary administrative expenses of the Audit and Finance Committee that are necessary or appropriate in carrying out its duties.

Duties and Responsibilities

      The duties of the Committee shall include the following:

 

 

 

 

  (1) 

(a) selection of the firm of independent public accountant and auditors to examine the books and accounts of the Company for each fiscal year; (b) direct responsibility for the appointment, compensation, retention and oversight of the work of the independent public accountant, who shall report directly to the Audit and Finance Committee, including the resolution of disagreements between management and the independent public accountant regarding financial reporting; (c) direct responsibility for the appointment, compensation, retention and oversight of the work of any registered public accounting firm, other than the independent public accountant, engaged for the purpose of preparing or issuing an audit report or to perform audit, review or attestation services, which firm shall report directly to the Audit and Finance Committee; (d) review of the independence of the independent public accountant and auditors; (e) approval of all engagements of the independent public accountant and auditors, including all audit and permitted non-audit services, the proposed fees and the reports to be rendered; (f) evaluation of the performance of the independent public accountant; and (g) set clear hiring policies for employees or former employees of the independent public accountants;

 

 

 

 

  (2) 

at least annually, obtain and review a report by the independent public accountant 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 company;

 

 

 

 

  (3) 

review the results of the audit for each fiscal year of the Company, which review should cover and include, among other things, the audit report, the published financial statements, the “Management letter” prepared by the independent public accountant and auditors, any other pertinent reports and management’s responses concerning that the management letter and any material accounting issues among management, the Company’s internal audit staff and the independent public accountants and auditors;

 

 

 

 

  (4) 

discuss the company’s annual audited financial statements and quarterly financial statements with management and the independent public accountant, including the company’s disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations”;

 

 

 

 

  (5) 

review all material accounting policies (and changes therein) of the Company;

 

 

 

 

  (6) 

review the coordination between the independent public accountant and auditors and the Company’s internal auditing group and review the scope and procedures of the Company’s internal audit

 

 

 

 

 

work and whether such scope and procedures are adequate to attain the internal audit objectives, as determined by the Company’s management and approved by the Committee and review the quality and composition of the Company’s internal audit staff;

 

 

 

 

  (7) 

review with the independent public accountant any audit problems or difficulties and management’s response;

 

 

 

 

  (8) 

prepare the report required by the rules of the Securities and Exchange Commission to be included in the Company’s annual proxy statement;

 

 

 

 

  (9) 

review and reassess the adequacy of the Committee charter on an annual basis; and

 

 

 

 

 

(10) 

maintain procedures for the confidential and anonymous receipt of employee concerns regarding questionable accounting or auditing matters

 

 

 

 

(11) 

monitor compliance with the Company’s policies on business conduct;

 

 

 

 

(12) 

discuss, review and make recommendations, when appropriate, to the Board with respect to the following matters:

 

 

 

 

 

• 

the financial policies of the Company, including but not limited to debt ratings, short term vs. long term debt positions, debt/equity ratios, fixed charge coverage, working capital and bank lines and dividend policy;

 

 

 

 

• 

the long-range financial plans of the Company;

 

 

 

 

• 

the Company’s capital expenditure program including rate of return standards and evaluation methods;

 

 

 

 

• 

specific debt and/or equity placement activities;

 

 

 

 

• 

external financial relationships (with investment bankers, commercial bankers, insurance companies, etc.)

 

 

 

 

• 

financial public relations and communication programs;

 

 

 

 

• 

profit sharing plan investments;

 

 

 

 

• 

financial aspects of proposed acquisitions and/or divestitures; and

 

 

 

 

• 

insurance and risk management program and policies.

      The Committee shall also undertake such additional activities within the scope of its primary function as the Committee may from time to time determine. 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 generally accepted accounting principles. This is the responsibility of management and the Company’s independent accountant and auditors. Nor is it the duty of the Committee to conduct investigations, to resolve disagreements, if any, between management and the Company’s independent accountant and auditor