 |
Committee Charters
Audit
Committee
Committee
on Directors and Corporate Governance
Compensation
and Management Development Committee
Audit
Committee Charter
[Download as PDF >>]
Purposes
The
Audit Committee (“Committee”) is appointed by
and generally acts on behalf of the Board of Directors (the “Board”).
The Committee’s purposes shall be: (a) to assist the Board
in its oversight of (i) the quality and integrity of the Company’s
financial statements, financial reporting and disclosure controls
and procedures, including internal controls; (ii) the performance
of the Company’s internal audit function; and (iii) the Company’s
compliance with legal and regulatory requirements; (b) to interact
directly with and evaluate the performance of the independent auditors,
including to determine whether to engage or dismiss the independent
auditors and to monitor the independent auditors’ qualifications
and independence; and (c) to prepare annually the report required
by the rules of the Securities and Exchange Commission (“SEC”)
for inclusion in the proxy statement for the Company’s annual
meeting of stockholders.
The
Committee's responsibilities are principally of an oversight
nature. Although the Committee has the responsibilities
set forth
in this Charter, it is not the responsibility of the Committee
to plan or conduct audits or to determine that the Company's
financial statements and disclosures are accurate, complete and
stated in
accordance with generally accepted accounting principles ("GAAP")
and other applicable rules and regulations.
Management
is responsible for the preparation, presentation, and integrity
of the Company’s
financial statements, including ensuring that the financial statements
are accurate, complete and
stated in accordance with GAAP and, together with the other financial
information included in the Company’s public disclosures,
fairly present the financial condition, results of operations
and cash flows of the Company. Management is also responsible
for the
Company's financial reporting process, accounting policies, internal
audit function, internal accounting controls and disclosure controls
and procedures. The independent auditors are responsible for
planning and conducting an audit of the Company's annual financial
statements,
expressing an opinion as to the conformity of such annual financial
statements with GAAP and reviewing the Company's quarterly financial
statements.
Composition
The
Committee shall consist of three or more independent directors
of the Company designated by the Committee on Directors and Corporate
Governance and approved by a majority of the whole Board of Directors
by resolution or resolutions. Any director who is a present or
former employee of the Company may not serve on the Audit Committee.
The members of the Committee 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 SEC rules and regulations.
In
addition, the members of the Committee shall be financially literate
as determined by the Board in its business judgment or
must become financially literate within a reasonable amount of
time after appointment to the Committee. Members of the Committee
are not required to be engaged in the accounting or auditing
profession and, consequently, some members may not be expert
in financial
matters or in matters involving accounting or auditing. However,
to the extent possible, at least one member of the Committee
shall, in the judgment of the Board, be an "audit committee
financial expert" in accordance with the rules and regulations
of the SEC and at least one member, who may also serve as an "audit
committee financial expert," shall in the judgment of the
Board have accounting and financial management expertise in accordance
with New York Stock Exchange rules.
The
members of the Committee shall serve one-year terms. The Directors
and Corporate Governance
Committee shall recommend,
and the Board
shall designate, one member of the Committee to serve as Chairperson.
The members of the Committee shall serve until their resignation,
retirement, or removal by the Board and until their successors
shall be appointed. No member of the Committee shall be removed
except by majority vote of the independent directors of the
full Board then in office.
The
Committee shall have the resources and authority appropriate
to discharge its responsibilities,
including the authority
to retain independent legal counsel, accounting or other
consultants or experts
to advise the Committee. The Committee may also utilize the
services
of the Company's regular legal counsel and other advisors
to the Company. The Company shall provide for appropriate funding,
as
determined by the Audit Committee, for payment of compensation
to any advisors employed by the Audit Committee.
Generally,
no member of the Committee may serve simultaneously on the
audit committees of more than three public companies
(including the Company) without specific Board determination
that such simultaneous
service will not impair the ability of such Committee member
to serve on the Committee.
Meetings
The
Committee shall meet at least six times annually, or more frequently
as circumstances dictate. The Committee
will meet
at least six
times annually in separate executive sessions with
the Company’s
General Auditor, with management, and with the independent
auditors to discuss any matters that the Committee
or each of these groups
believes should be discussed privately. The Committee
may also request any officer or employee of the Company
or the Company’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.
Member
Compensation
No
Committee member shall accept, directly or indirectly, any consulting,
advisory or other compensatory fees
from the Company,
except for
the member’s fees for services as a director
and member of the Committee and any other committees
of the Board.
| Responsibilities
and Duties
The
Committee shall:
|
| (1)
|
|
have the sole authority and responsibility for the appointment
and termination of the Company’s independent
auditors. The Committee also shall be responsible for
setting the compensation and retention terms for, and
overseeing and evaluating the performance of, the independent
auditors for the purpose of preparing or issuing an
audit report or related work. The independent auditors
shall report directly to the Committee.
|
| (2) |
|
have sole authority and responsibility to pre-approve
all auditing services, internal control-related services
and permitted non-audit services (including the terms
thereof) to be performed for the Company by its independent
auditor, subject to the de minimus exceptions for non-audit
services described in Section 10A(i)(1)(B) of the Exchange
Act which are approved by the Audit Committee prior
to the completion of the audit. 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 Audit Committee at its next scheduled meeting. |
| (3) |
|
ensure that the Committee receives from the independent
auditors the written disclosures and letter required
by Independence Standards Board Standard 1 delineating
all relationships between the independent auditors
and the Company; the Committee shall discuss with the
independent auditors their independence, including
any disclosed relationships or services that may impact
the auditors’ objectivity and independence. If
deemed appropriate by the Committee, the Committee
may recommend that the Board of Directors take appropriate
action in response to the independent auditors’ report
to satisfy itself of their independence. The Committee
shall also confirm with the independent auditors that
the independent auditors are in compliance with the
partner rotation requirements established by the SEC.
|
| (4) |
|
ensure that the Committee annually receives and reviews
a report from the independent auditors describing (a)
the auditing firm’s internal quality-control
procedures, (b) 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 or a private
sector regulatory board, within the preceding five
years, relating to independent audits carried out by
the firm, and any steps taken to deal with any such
issues, and (c) all relationships between the independent
auditor and the Company.
|
| (5) |
|
review
with the independent auditors and with management the proposed
scope of the annual audit, past audit experience, the Company’s
internal audit program, recently completed internal audits
and other matters bearing upon the scope of the audit.
The discussion will include a review of any audit problems
or difficulties, including any restrictions on the scope
of the independent auditors’ activities or on access
to requested information, any significant disagreements
with management and management’s responses to such
matters. The Committee shall be responsible for resolution
of any disagreements between the independent auditors and
management regarding financial reporting.
|
| (6)
|
|
meet
to review and discuss with management and the independent
auditors the annual audited and quarterly financial statements
of the Company including the Company’s specific disclosures
under “Management’s Discussion and Analysis
of Financial Condition and Results of Operations prior
to the filing of a report on Form 10-K or 10-Q with the
Securities and Exchange Commission. This discussion should
include (i) matters required to be discussed by Statement
on Auditing Standards No. 61, "Communications with
Audit Committees," as then in effect in the case of
annual statements, and Statement of Auditing Standards
No. 100, “Interim Financial Information," as
then in effect in the case of quarterly statements; and
(ii) major issues regarding accounting principles and financial
statement presentations, including critical accounting
estimates and judgments, significant changes in the Company's
selection or application of accounting principles, and
major issues as to the adequacy of the Company's internal
controls and special audit steps adopted in light of any
material control deficiencies.
|
| (7) |
|
recommend to the Board based on the review described
in paragraphs 3 and 6 whether the audited financial
statements should be included in the Company’s
annual report on Form 10-K.
|
| (8) |
|
review and discuss with the independent auditors reports
that the independent auditors are required to provide
to the Committee relating to significant financial
reporting issues and judgments made in connection with
preparation of the Company's financial statements,
including, among other things, (i) the Company’s
selection, application and disclosure of accounting
policies and practices that the independent auditors
identify as critical; (ii) all alternative treatments
of GAAP that have been discussed between management
and the independent auditors, including the ramifications
of such treatments and the treatment preferred by the
independent auditors, and (iii) any material written
communications between the independent auditors and
management, such as any management letter or schedule
of unadjusted differences.
|
| (9) |
|
after
reviewing the reports from the independent auditors and
the independent auditors’ work throughout the
audit period, conduct an annual evaluation of the independent
auditors’ qualifications, performance and independence.
This evaluation shall include review and evaluation of
the lead audit partner. In making its evaluation, the Committee
shall take into account the opinions of management and
the Company’s General Auditor. The Committee shall
present its conclusions with respect to the independent
auditors to the full Board.
|
| (10) |
|
discuss with management and with the independent
auditors the Company's earnings press releases, as
well as financial information and earnings guidance
provided to analysts and ratings agencies. The Committee's
discussion in this regard may be general in nature
(such as the type of information to be disclosed and
the type of presentation to be made). The Committee
need not discuss in advance each earnings release or
each instance in which the Company may provide earnings
guidance.
|
| (11) |
|
discuss periodically with management the Company’s
policies and guidelines regarding risk assessment and risk
management, as well as the Company’s major financial
risk exposures and steps management has taken to monitor
and control such exposures.
|
| (12) |
|
review the appointment and replacement of, and meet
periodically with, the General Auditor to review the
Internal Audit Department’s Reports of Operations
and discuss any matters that the General Auditor believes
warrant Committee attention.
|
| (13) |
|
establish and maintain procedures for (i) the receipt,
retention, and treatment of complaints received by
the Company regarding accounting, internal accounting
controls, or auditing matters, and (ii) the confidential,
anonymous submission by Company employees of concerns
regarding questionable accounting or auditing matters.
|
| (14) |
|
discuss periodically with management and the independent
auditors the adequacy of the Company’s disclosure
controls and procedures, including applicable internal
controls and procedures for financial reporting and
changes in internal controls designed to address any
significant deficiencies in the design or operation
of internal controls or material weaknesses therein
and any fraud involving management or other employees
that are reported to the Committee. In addition, the
Committee shall review and discuss with management
and the independent auditors (i) the annual report
of management affirming management's responsibility
for establishing and maintaining internal controls
over financial reporting and assessing the effectiveness
of the internal control structure over financial reporting
and (ii) the independent auditors’ report on,
and attestation of, management’s report when
those reports are required by SEC rules. Additionally,
the Committee shall provide oversight over and review
the effectiveness of management’s antifraud programs
and controls.
|
| (15) |
|
confirm with management on at least a biennial basis
that the Company’s Standards of Business Conduct
and Ethics have been communicated by the Company to
all key employees of the Company and its subsidiaries
throughout the world with a direction that all such
key employees certify that they have read, understand
and are not aware of any violations of the Standards
of Business Conduct and Ethics. The Committee shall
have the sole responsibility to grant waivers of the
Standards of Business Conduct and Ethics and the Code
of Ethics to Senior Financial Officers to the Company’s
executive officers and senior financial officers.
|
| (16) |
|
meet periodically with the Company's Chief Compliance
Officer and the General Counsel to discuss and review
legal matters that may have a material impact on the
financial statements or the Company's policies and
procedures and internal controls and advise the Board
on these discussions.
|
| (17) |
|
establish policies for the hiring by the Company
of employees or former employees of the independent
auditors.
|
| (18) |
|
shall review and make recommendations to the Board
with respect to relevant financial affairs and policies
of the Company, including matters relating to capital
structure, financing activities and insurance.
|
| (19) |
|
through the Committee's Chair, regularly report to
the full Board on the Committee's activities and actions.
|
| (20) |
|
provide the Company and the Board with the report
of the Committee with respect to the audited financial
statements for inclusion in the Company’s annual
proxy statement as required by SEC rules.
|
| (21) |
|
annually evaluate the Committee's own performance
and deliver a report to the Board setting forth the
results of the evaluation.
|
| (22) |
|
review and reassess the adequacy of the Committee
charter on an annual basis and submit any recommended
changes to the Board for consideration. |
| (23) |
|
perform any other activities consistent with this
Charter, the Company’s bylaws and governing law,
as the Committee or the Board deems necessary or appropriate. |
|
