Audit Committee Charter

1.0  Membership. The Audit Committee shall consist of three (3) or more directors who meet the audit committee independence, financial literacy and financial expertise requirements of the New York Stock Exchange.  The members of the Audit Committee shall be elected by the Board of Directors to serve at the pleasure of the Board of Directors.  The Board of Directors shall designate a chairman from among the membership of the Audit Committee.  Upon recommendation by the Nominating and Corporate Governance Committee, the Board of Directors may remove any member of the Audit Committee at any time.  Vacancies on the Audit Committee shall be filled by the Board of Directors.

2.0  Purpose.  The purpose of the Audit Committee shall be to assist the Board of Directors in fulfilling its oversight responsibilities relating to (i) the financial condition of the Corporation, (ii) the integrity of the Corporation’s financial statements, (iii) the Corporation’s compliance with legal and regulatory requirements, (iv) the qualifications, independence and performance of the Corporation’s independent auditors and (v) the performance of the Corporation’s internal audit function.  The Audit Committee shall, except when such powers are by statute or regulation reserved to the Board of Directors, possess and may exercise the powers of the Board of Directors relating to all accounting and auditing matters for the Corporation.  All action by the Audit Committee shall be reported to the Board of Directors at its meeting next succeeding such action.

3.0  Responsibilities.  In order to achieve the purpose outlined in this charter, the Audit Committee shall be assigned the following responsibilities:

3.1       Independent Auditors.

3.1.1  Be directly responsible for the appointment, compensation, retention, oversight and termination of the independent auditors, which auditors shall report directly to the Audit Committee;

3.1.2  Ensure that the independent auditors submit on a periodic basis (but at least annually) to the Audit Committee a report delineating all relationships between the independent auditor and the Corporation, and have authority to take appropriate action in response to the independent auditors’ report to assess and satisfy itself of the independent auditors’ independence;

3.1.3  Ensure that the independent auditors submit on a periodic basis (but at least annually) to the Audit Committee a report or reports describing (i) the independent auditors’ internal quality-control procedures and (ii) any material issues raised by the most recent internal quality-control review, or peer review, of the auditors or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, regarding one or more independent audits carried out by the auditing firm; and any steps taken to deal with any such issues;

3.1.4  Pre-approve the audit, audit-related, non-audit, tax and other services to be provided by the Corporation’s independent auditors, and the related fees, pursuant to pre-approval policies and procedures established by the Audit Committee;

3.1.5  Review with the independent auditors any audit problems or difficulties and management’s response thereto, and be directly responsible for the resolution of disagreements between management and the independent auditors regarding the Corporation’s financial reporting;

3.1.6  Require that the independent auditors advise the Audit Committee of any matters identified during reviews of quarterly financial statements or audits of annual financial statements which are required to be communicated to the Audit Committee by the independent auditors under generally accepted auditing standards, and that the independent auditors provide such communication prior to the related quarterly or annual press release or, if not practicable, prior to making the related Securities and Exchange Commission (“SEC”) filings on Form 10-Q or Form   10-K;

3.1.7 Evaluate the independent auditors’ qualifications, performance and independence, including evaluation of the lead partner of the independent auditor, and monitor the rotation of the lead partner; and3.1.8  Establish policies for the Corporation’s hiring of current or former employees of the independent auditors.

3.2  Internal Auditors.  Review the qualifications and work of the Corporation’s internal audit staff, the scope of the internal audit staff’s work plan for the year including enterprise risk management processes, its budget and staffing and, as appropriate, review significant findings and management’s actions to address these findings.

3.3  Financial Statements, Disclosures and Related Matters

3.3.1  Review with the Corporation’s management, independent auditors and internal auditors, as appropriate, the following:

3.3.1.1  any major issues regarding accounting principles 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;

3.3.1.2  any analyses prepared by management and/or the independent auditors setting forth significant accounting and financial reporting issues and judgments made in connection with the preparation of the financial statements, including analyses of the effects of alternative methods under generally accepted accounting principles on the financial statements; and

3.3.1.3  the effect of regulatory and accounting initiatives, as well as off-balance sheet structures, on the financial statements of the Corporation.

3.3.2  Discuss with the Corporation’s management the type and presentation of information included in the Corporation’s earnings press releases, as well as financial information and earnings outlook provided to the public, analysts and rating agencies.

3.3.3  Prior to filing with the SEC, review and discuss with management and the independent auditors:

3.3.3.1  the Corporation’s annual audited financial statements to be filed on Form 10-K, and recommend to the Board whether the annual audited financial statements should be included in the Corporation’s Form 10-K, with the review to include: (i) the independent auditors’ judgment about the quality, not just acceptability, of accounting principles, the reasonableness of significant judgments, and the clarity of the disclosures in the financial statements and (ii) the disclosure included in “Management’s Discussion and Analysis of Financial Condition and Results of Operations;”

3.3.3.2  management’s assessment of and report on the effectiveness of internal control over financial reporting as of the end of the most recent fiscal year, and the independent auditor’s related report;

3.3.3.3  the Corporation’s quarterly financial statements to be filed on Form 10-Q, with the review to include the disclosures included in “Management’s Discussion and Analysis of Financial Condition and Results of Operations;” and

3.3.3.4  any significant deficiencies or material weaknesses identified by management, the internal audit function or the independent auditors in connection with required quarterly certifications, and any change in internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Corporation’s internal control over financial reporting.

3.3.4  Obtain and review a report from the independent auditors, prior to filing of the Form 10-K with the SEC, related to the Corporation’s critical accounting policies and practices used; all alternative treatments under generally accepted accounting principles that have been discussed with management, including the ramifications of the use of such alternatives and the independent auditors’ preferred treatment; and other material written communication between the independent auditors and management, as appropriate.

3.3.5  Prepare an Audit Committee report as required by the SEC to be included in the Corporation’s annual proxy statement.

3.4  Financial Matters.

3.4.1  Review the allocation of corporate resources recommended by management, including the relationship of activities and allocations with the long-term business objectives and strategic plans of the Corporation.

3.4.2  Review the financial condition of the Corporation and proposed changes to the capital structure of the Corporation, including the incurrence of indebtedness and the issuance of additional equity securities, and make related recommendations to the Board of Directors for adoption.

3.4.3  Review and approve the Corporation’s policies regarding derivative transactions (including, but not limited to, swaps, put and call options or combinations thereof, caps, floors, collars, and forward or spot exchanges) and related matters, as appropriate.

3.4.4  Review the proposed capital expenditure budget and make recommendations to the Board of Directors.

3.4.5  Review the financial status of all benefit plans.

3.4.6  Review the Corporation’s policy with respect to dividends and recommend to the Board of Directors the amount of any dividend to be paid to stockholders by the Corporation.

3.5  Other Risk Management Matters.  Review the Corporation’s policies and practices with respect to risk assessment and risk management, including discussing with management the Corporation’s major financial risk exposures and the steps that have been taken to monitor and control such exposures.

3.6  Legal and Regulatory Compliance Matters.

3.6.1  Establish 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  to the Corporation of concerns regarding questionable accounting or auditing matters; and review any complaints regarding accounting, internal accounting controls or auditing matters received pursuant to such procedures; and

3.6.2  Review with the General Counsel the status of pending claims, litigation, compliance with regulatory guidelines including the Foreign Corrupt Practices Act, and other legal matters on a periodic basis, but no less frequently than once a year on a comprehensive basis.

3.7  Committee Self-Assessment.  The Audit Committee shall annually conduct an evaluation of its performance.

4.0  Authorities.  In furtherance of its responsibilities, the Audit Committee shall have the power to investigate any matter falling within its jurisdiction, and it shall also possess the following authorities:

4.1  Outside Advisors.  The Audit Committee may retain, at the Corporation’s expense, special legal, accounting or other advisors and may request any officer or employee of the Corporation or the Corporation’s outside counsel or independent auditors to meet with any members of, or advisors to, the Audit Committee.

4.2  Delegated Authority.  The Audit Committee shall perform such other functions and exercise such other powers as may be delegated to it from time to time by the Board of Directors. 

4.3  Subcommittees.  The Audit Committee may delegate its authority to subcommittees (which may consist of one or more members of the Audit Committee) when it deems appropriate and in the best interest of the Corporation.

4.4  Reports to Board of Directors.  The Committee shall report regularly to the Board of Directors.

4.5  Committee Charter.  The Audit Committee shall review and recommend to the Board of Directors the adequacy of its charter and proposed changes from time to time as needed.

4.6  Funding.  The Corporation shall provide for appropriate funding, as determined by the Audit Committee, in its capacity as a committee of the Board of Directors, for payment of: (i) compensation to any registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Corporation; (ii) compensation to any advisers employed by the Audit Committee; and (iii) ordinary administrative expenses of the Audit Committee that are necessary or appropriate  in carrying out its duties.

5.0  Procedures.  The Audit Committee shall hold at least four meetings each year and shall meet with management and separately in executive session without management and shall periodically, but at least annually, meet separately in executive session with representatives of the Corporation’s independent auditors and internal audit department.

6.0  Limitations Inherent in the Audit Committee’s Role.  Although the Audit Committee has the responsibilities and powers set forth in this charter, it is not the responsibility of the Audit Committee to plan or conduct audits or to determine that the Corporation’s financial statements are complete and accurate and are in accordance with accounting principles generally accepted in the United States. 

Committee Members

  • David B. Burritt – Chairman
  • Daniel F. Akerson
  • Thomas J. Falk
  • Douglas H. McCorkindale
  • Anne Stevens