AUDIT COMMITTEE CHARTER
The Audit Committee ("Committee") is responsible for matters relating to the auditing
of the Corporation and its subsidiaries. The Committee is appointed by the Board
to prepare the report included in the annual proxy statement and to assist the Board
in oversight of (1) the integrity of the Corporation's financial statements, (2)
the Corporation's compliance with legal and regulatory requirements, (3) the independent
auditors' qualifications and independence, and (4) the performance of the Corporation's
internal audit function and independent auditors.
The Committee shall prepare the report that the Securities and Exchange Commission
(" SEC ") rules require to be included in the Corporation's annual proxy statement.
The Committee shall be made up of at least 3 members all of whom shall meet the
independence and experience requirements of the New York Stock Exchange, Section
10A(m)(3) of the Securities Exchange Act of 1934 and the rules and regulations of
the SEC . Committee members shall not simultaneously serve on the audit committees
of more than two other public companies.
All Committee members must be able to read and understand fundamental financial
statements, including a balance sheet, income statement and cash flow statement.
In addition, one member of the Committee must be a financial expert as defined by
The members of the Committee shall be appointed by the Board on the recommendation
of the Nominating & Governance and Committee members and may be replaced by the
The Committee shall meet as often as it determines, but not less frequently than
The Committee shall meet periodically with management, the internal auditors and
the independent auditors in separate executive sessions.
The Committee may request any officer or employee of the Corporation or the Corporation's
outside counsel or independent auditors to attend a meeting of the Committee or
to meet with any members of, or consultants to, the Committee.
Authority, Duties and Responsibilities
Relationship with the Independent Auditors:
The Committee has the sole authority to approve all audit engagements, services,
fees and terms, as well as all significant non-audit engagements with the independent
auditors. The Committee may obtain the input of management, but may not delegate
this responsibility to management.
At least annually, the Committee must obtain and review a report by the independent
auditors describing: the firm's 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 auditors' independence) all relationships between the independent
auditors and the Corporation.
After review, the Committee will be in a position to evaluate the auditors' qualifications,
performance and independence. This review should include the review and evaluation
of the lead partner of the independent auditors. The Committee should take into
account the opinions of management and the Corporation's internal auditors.
In addition to assuring the regular rotation of the lead audit partner as required
by law, the Committee should further consider whether, in order to assure continuing
auditor independence, there should be regular rotation of the audit firm itself.
Conclusions should be presented to the full Board.
Review with the independent auditors any audit problems or difficulties and management's
response, and other material written communications between the independent auditors
and management including disagreements between management and the independent auditors
regarding financial reporting.
Review and discuss the responsibilities, budget and staffing of the Corporation's
internal audit function.
Recommend to the Board policies for the Corporation's hiring of employees or former
employees of the independent auditors who participated in any capacity in the audit
of the Corporation, which prohibit an auditing firm from providing audit services
to a company whose CEO, CFO or Chief Accounting Officer was employed by the auditing
firm and participated in the company's audit in any capacity within one year of
Obtain from the independent auditors assurance that the independent auditors have
not become aware of any illegal acts and if they have, to provide a report to the
Committee regarding specified conclusions with respect to such illegal acts.
The Committee shall review and discuss:
The annual consolidated financial statements and quarterly consolidated financial
statements with management and the independent auditors, including the narrative
under "Management's Discussion and Analysis of Financial Condition and Results of
The Committee should review with the full board any issues that arise with respect
to the quality or integrity of the Corporation's financial statements, the Corporation's
compliance with legal or regulatory requirements, the performance and independence
of the Corporation's independent auditors, or the performance of the internal audit.
Discuss with management and the independent auditors any correspondence with regulators
or governmental agencies and published reports, which raise material issues regarding
the Corporation's financial statements or accounting policies.
Discuss with the Corporation's General Counsel and other appropriate senior officers,
legal matters that may have a material impact on the financial statements or the
company's compliance policies.
Earnings press releases, as well as financial information and earnings guidance
provided to analysts and rating agencies.
Major issues regarding accounting principles and practices to be used and financial
statement presentations including any significant changes in the Corporation's selection
or application of accounting principles, and major issues as to the adequacy of
the Corporation's internal controls and any special audit steps adopted in light
of material control deficiencies.
- 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 effects of alternative generally accepted
accounting principles (GAAP) methods.
- Disclosure of all accounting policies and practices to be used by the independent
auditors, and all alternative treatments of financial information within generally
accepted accounting principles discussed with management,
- The ramifications of these alternative treatments, and
- The treatment preferred by the independent auditors, and
- The effect of regulatory and accounting initiatives as well as off-balance sheet
structures on the financial statements of the Corporation.
Policies, procedures, and a review of the results of the Corporation's internal
Discuss with management the Corporation's major financial risk exposures and the
steps management has taken to monitor and control such exposures, including the
Corporation's risk assessment and risk management policies.
Disclosures made to the Committee by the Corporation's CEO and CFO during their
certification process for the Form 10-K and Form 10-Q about any significant deficiencies
in the design or operation of internal controls or material weaknesses therein and
any fraud involving management or other employees who have a significant role in
the Corporation's internal controls.
The Committee shall have the authority and the appropriate funding to engage independent
counsel and other advisors as necessary to carry out its duties (without seeking
Board approval). This funding shall be provided by the Corporation.
The Committee may form and delegate authority to subcommittees consisting of one
or more members when appropriate, including the authority to grant pre-approvals
of audit and permitted non-audit services, provided that decisions of such subcommittee
to grant pre-approvals shall be presented to the full Committee at its next scheduled
The Committee shall perform an annual performance evaluation of itself.
The Committee shall review the adequacy of this Charter annually.
The Committee shall put into place procedures for receiving accounting complaints
and concerns. This includes procedures for receiving anonymous complaints from employees.
Limitation of Audit Committee's Role
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 Corporation's financial statements and disclosures are complete and accurate
and are in accordance with generally accepted accounting principles and applicable
rules and regulations. These are the responsibilities of management and the independent